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Friday, February 29, 2008

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Justfree

Its a matter of cost vs. benifits from the user's perspective that will determine whether DRM successfully slows down piracy and protects content owners or whether it just ends up encouraging more piracy. If the benefits of using legitimate sources and providers is lower than the benefits users perceive they get from using these pirate providers, they will go with the pirates. If DRM is to be pursued, it has to be done in a way that creates higher perceived benefits for using legitimate sources than perceived benefits of using illegitimate sources. If DRM is to be pursued, then think of ways that would give the consumer a big incentive to abandon the pirates without inconveniencing ther ability to transfer digital information for their own personal use. In one of Bob's presentations he points out the "need to create platforms enabling true superdistribution, where consumers become distributers and benefit economically." That is a possible solution and I speak primarily from a user perspective.

David James

I think the perfect real world example of this is the recent Nine Inch Nails release. Trent Reznor has no record company to slap DRM on his music, and he's mainstreaming the Torrent networks to get his music out. Rather than fight the system, he's figured out how to get the 5.00 per sale revenue, and work with the consumer rather than try to 'corner' the market like the major labels do with artists.

Bottom line, more artists will have their contracts expire, and they will move this way.

Frank, your article hit the nail on the head. Perhaps somedays the Actors and Directors won't need the studio to push out the entertainment. They can have their DRM then, frame it on the wall, look at it, and think how their fear of losing something that was never theirs to begin with forced them to create their own demise, licensing something that really boiled down to their ability to press CD's and shove them in a plastic case.

Frank Rose

I appreciate your comments, Bob, but I'm afraid you're missing my point. The music industry did not fail to monetize because its product was provided on CDs without protection. "Protection" on consumer products, be they CDs, DVDs, or digital files, is irrelevant to piracy because (a) in the vast majority of cases, the files are uploaded to pirate sites by industry insiders long before they ever reach the consumer; and (b) should that fail to happen, there will always be a handful of consumers who have the wherewithal to break the protection code anyway. DRM penalizes the legitimate consumer while providing little or no protection against piracy. The music industry has failed to monetize because in its obsession with piracy it has ignored, or neglected to learn, the cardinal rule of digital distribution, which is: If it exists, it will be made available online, whether by someone who owns the rights or by someone who does not. This applies equally to bootlegs (concerts recorded by fans, say) and to legitimate releases, which a music label generally tries to hold back until CDs can be shipped to retail outlets. In both cases, an act's biggest fans--the ones most likely to pay--find that the only way they can get what they want is illegally. The music industry tried to protect retail outlets by not making digital downloads available before CDs reached stores, while at the same time suing people who might otherwise have been paying customers. The result? Tower Records is out of business, Wal-Mart is downsizing shelf space for music, piracy is up, CD sales are tanking, and digital download sales seem unlikely ever to make up for the lost income. As I argued in my piece, the home video industry needs to pay heed.

Michael

I think there's another factor here as well: bandwidth. Movies are just much bigger and harder to move around the net -- especially at high quality -- than songs. Napster was effective even back in the dialup days because almost transparently lossy mp3s are only a few megabytes. Movies, even terribly degraded, start at 3/4 of a GB and go up.

This will only limit piracy so long. As high bandwidth "broadband" connections proliferate, piracy of movies will be trivial for most of the country.

Finally, DRM really can't be trusted to stop this. CD's lack of copy protection didn't make getting songs on Napster easier, it just made it easier to rip your own music to your iPod. The fact is that somewhere in the world, someone will be able to break the DRM and then post the clean file on the net. All it takes is that one person and the stolen song or movie can be bounced around on P2P systems forever. Locking down consumer media just makes it tougher for average consumers to move around their licensed content and makes unlicensed content more appealing.

An example: Ripping DVDs is easy due to the weak DRM used, so moving a movie to, say, an iPod or a laptop is just a matter of converting it with readily available programs. However, recently there have been more discs with additional copy protection. While there exist Windows tools to break even that, on the Mac, there is no easy way to get around this new DRM. The upshot is that to use a movie you own legitimately on your iPod, it's easier to download it than it is to copy from your own disk. The movies are just a few clicks away online, despite the DRM; only the consumer's positive experience of movie ownership is damaged.

I think the piracy problem is largely a matter of convienence for many people. Negative "legitimate" experiences send the wrong message. DRM doesn't make P2P go away; it just makes it more attractive.

Ryan

Piracy does not honor release windows. I think the point is that Hollywood will no longer have the control it used to have. Release-quality movies are available on pirate networks on or before the day that the title is released to DVD, a month before it's available on VOD, and a year before it's available on cable subscription networks.

DRM is a pain for some but probably isn't the central issue for consumers. It just slows adoption of consumer technology when you have competing standards. Not a big problem for most consumers if all devices use the same standard. I think the ubiquity of the iPod takes the sting out of DRM for most consumers. With video the race is less clear. iPod could very well lock up the personal device portion of the market, but until then there is a lot of confusion about which digital services work with which devices. The bigger problem for Apple is that they only offer 1000 titles. Even the most robust services offer 6-7K titles which is pitiful. There is no digital one-stop shop today. You can't even get the short head of movie releases, much less the long tail.

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