Keurig to drop DRM: “We were wrong”

“Quite honestly, we were wrong.”

With those words Keurig’s Brian Kelly confirmed what consumers and some industry experts had known for months: Keurig’s relationship with DRM coffee would only end in tears.

Unfortunately for the company it hasn’t been a brief fling. It’s been a protracted affair where logic went flying out of the window, followed by money, dignity and then the trust of those most important to them.

“We underestimated the passion the consumer had for this,” Kelly said during a recent talk with analysts.

“We missed it.”

It’s believed that Keurig Green Mountain will get rid of their DRM policy going forwards.

These comments and U-turn form part of a bigger picture. The company’s financial results were released recently and they didn’t make for pretty reading: Adjusted earnings were far lower than expected and investors pulled the plug on stock, wiping almost 10% off the company’s valuation in a whirlwind mid-week blitz. From a price of $116 per share at the beginning of the month, that figure now stands at $101 at the time of writing.

At the heart of this sudden crash has been poor sales of the Keurig 2.0 brewer, which dropped by 23%.

“We heart loud and clear from customers,” Kelly continued, “who really wanted the My K-Cup back.”

The My K-Cup function was removed with the introduction of the 2.0 machine, which ruffled the feathers of many onlookers and caused outrage amongst some of Keurig’s loyal customer base. In theory it was a move that would secure revenue streams and remove unlicensed products from competitors from their market. The party line may have been about improving drink quality, but in practice it only served to divide.

Of course, it wasn’t long before the machine was hacked. But the damage was done.

It is interesting to see what will happen next. Keurig will probably have a load of old, DRM-managed coffee that they can’t sell.

But can they emerge from the other end of the tunnel?

Admitting they were wrong and rectifying their mistake is a start, but is it too late?

photo: ActuaLitté (flickr), used under Creative Commons