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Can we do without digital rights management?
Steve Jobs claims to think so, and EMI might abolish it. It could be said that the music companies never adopted the idea in full, recall the compact disc? Burning compact discs is remarkably easy, and that practice remains the biggest copyright problem, not illegal downloads. Someone who burns a whole disc is more likely to otherwise have bought it, compared to someone snatching songs off the web. Of course, for all the complaints, the era of compact discs has been entirely acceptable for music companies.
DRM is a tax on digital consumers, compared to the low de facto restrictions put on CD buyers. So why not equalize that margin, especially since digital sales have lower overhead? Admittedly piracy is easier over the web, although for teenagers the difference is smaller than you might think. I believe that at this point a person is either an illegal downloader or not.
The deeper question is whether the move away from DRM might cause the dominant position of iTunes to unravel.
Posted by Tyler Cowen on February 12, 2007 at 11:00 AM in Music | Permalink
Comments
I don't think that fully captures what is going on here. DRM is part of the music industry's format transition. The industry would be happy to equalize the tax by adding DRM to CD's but that has been a fiasco.
I have more on all of this at http://uchicagolaw.typepad.com/faculty/2007/02/razors_and_blad.html
Posted by: Randy Picker at Feb 12, 2007 12:06:15 PM
The chief issue with DRM is that it's like a cheap lock on a suitcase. It serves to keep an honest person honest, but does nothing to stop anyone else. Actually cracking DRM is relatively easy (Fairplay has been cracked every time it has been revised), but isn't even necessary. If you can hear it, you can record it and since all players output audio, that audio can in turn be recorded.
Copy protection on CD's is just pathetic. I recall a system on a velvet revolver CD that required your cooperation in installing the software that prevented you from copying it. Want to listen to it on your iPod? Tough. Of course, having autoplay turned off prevented it from installing (as did holding the shift key when inserting the CD).
DRM is ineffective and obtrusive, so it definitely needs to go away. All that can possibly do is increase consumption of music, which I gather is in the interests of the music industry. If DRM goes away, iTunes might become stronger, as people who cannot buy from iTunes now (non-iPod owners) would be able to obtain DRM-free tracks. Volume would go up, but it is possible that market share would go down because iPod owners would be able to purchase music from other services rather than iTunes exclusively. Since iTunes has more users than the others, iTunes would lose relative position.
Posted by: John Jenkins at Feb 12, 2007 12:35:32 PM
I recently started using eMusic. It is 100% DRM free and I get the racks for about 30 cents each. None of the Big lables are there but tons of indies (even the big indies that are not really indies) are there and I have not gone a month without exhausting my allotment.
A friend uses the Rhapsody service and pays about what I pay per month, and is equally pleased with it. There is a ton more form the Majors there.
Both of these represent the way it should be, in the digital music age. If you interested in trying out eMusic can poke around the web and find a free 50 or 100 downloads offer somewhere. I don't work for them BTW, just a happy customer.
Posted by: goodnessoffit at Feb 12, 2007 12:38:00 PM
I have previously come to the conclusion that, at least for music, IP protection is not worth it as government policy. Assuming I were to take the leap to video, I present my least libertarian idea - a very cynical political ploy to implement it:
As a first step remove the IP protections on porn, and then watch the whole thing unravel. I am not really sure what I think of it, other than that it suggests an interesting bed-fellows. I am leaning towards the precedent of singly out specific types as being too damaging.
Posted by: theCoach at Feb 12, 2007 1:10:04 PM
I'd really like to see Tyler Cowen or another from the econ blogging elite actually add something insightful to the DRM debate.
I've read thousands of op-eds and opinions and discussions on this, but they always lead to the same predictable and unsatisfying conclusions.
Posted by: Giovanni at Feb 12, 2007 2:01:59 PM
Thanks for the insightful characterization of DRM as tax. I say a bit more here, and link to some rival legal perspectives on it:
http://www.concurringopinions.com/archives/2007/02/drm_dreams.html
Posted by: Frank at Feb 12, 2007 3:02:27 PM
ONe more hopefully related post on IP, especially with regard to entertainment.
Without government IP protections, big industry will likely attempt their own implementations (assuming that it is not prohibited by government).
DRM is industry effort *on top* of existing legal protections. It is hard to guess how much energy (more or less even?) would be spent if the government was not providing a backstop.
My best guess is that industry would first expend enormous resources in an ulimately failed attempt, and eventually only a very small amount of revenue could be demanded for easily reproducible entertainment. I also think that musically, things would probably get better, not worse (for sure, I could be wrong). Movies would probably get less professional but on average more interesting. Interesting might turn out to be a euphemism, though. One thing that would be interesting would be to see if there was the return of patrons of the arts. For example, would a billionaire fund a 100 million dollar epic movie as part of his legacy - what would the result look like. Fascinationg to imagine I guess, but I am not a recording executive.
Posted by: theCoach at Feb 12, 2007 4:21:34 PM
theCoach
I've been eagerly awaiting the scenario you describe for a while. I don't care about new music, but I think movies would improve.
Posted by: BillWallace at Feb 12, 2007 5:49:56 PM
"Would a billionaire fund a 100 million dollar epic movie as part of his legacy - what would the result look like:"
The Phantom Menace?
Posted by: jaywalker at Feb 12, 2007 6:41:25 PM
As The Economist points out (Feb. 10), Steve Jobs is shifting with the wind, which is increasingly toward openn competition. What he doesn't see yet is that there will come a time when music downloading is free of DRM-related encumbrances. As a first mover and a great innovator, Apple stands poised to continue its dominant position, although nothing is guaranteed.
The battle over IP will begin in earnest in about a year, when Michele Boldrin and David K. Levine publish their book Against Intellectual Monopoly (Cambridge U. Press). This will be the anti-IP, pro-freedom salvo heard round the world. They will be to free trade and IP what Cobden and Bright were to free trade and the corn laws.
What the world needs now is an Anti-IP League.
Posted by: Bill Stepp at Feb 12, 2007 7:02:40 PM
Of course, it should be noted that as a business proposition The Phantom Menace was a fantastically successful venture for George Lucas and Co.
Posted by: Peter at Feb 13, 2007 4:13:05 AM
Admittedly piracy is easier over the web
Well, yes, but that has nothing to do with the DRM on downloads issue because, obviously, DRM-free CDs are not just copied in full, and not just ripped and put on the owners iPod, they are ripped and shared online. CD ripping is where nearly all pirated tracks come from, not DRM-cracking.
Bottom line -- music companies cannot stop selling CDs. And CDs will not have DRM (these efforts have failed spectacularly). Therefore, music companies might as well sell DRM-free digital downloads, given that DRM-encrusted downloads just have not taken off in a big way and the reason they have not is the pain-in-the-butt inconveniences of DRM.
Posted by: Slocum at Feb 13, 2007 7:59:45 AM
solcum,
how have digital downloads not taken off in a big way? Apple is the fourth or fith largest seller of music selling only digital downloads while the other top sellers sell cds.
i agree that tyler's post did not much to freshen this debate, but see The Effect of File Sharing on Record Sales in the new JPE by Oberholzer-Gee and Strumpf. They find that file sharing does little to affect the sales of CDs.
One thing I would very much like to see is a sales comparison of "indie" songs that are sold via emusic for ~ $.30 without DRM and on iTS for $1 with DRM.
We need more data in this discussion and less demonizing, apple, DRM, RIAA. Even if 2 of the aforementioned deserve to be demonized.
Posted by: tTt at Feb 13, 2007 9:54:06 AM
how have digital downloads not taken off in a big way? Apple is the fourth or fith largest seller of music selling only digital downloads while the other top sellers sell cds.
Regardless of Apple's ranking, the fraction of music being sold over the web is still very small compared to that being sold on CD.
And the thing is, given that CDs have no DRM, the record companies really gain very little in insisting on DRM for online sales. And they're losing a lot in stunting the growth of online sales, because the online distribution channel is cheaper and more efficient than the physical one, and shelf space is never a problem.
Posted by: Slocum at Feb 13, 2007 12:11:06 PM
slocum,
i completely agree with your last point. and it is so painfully true and yet some how not obvious to many until jobs pointed it out, and yet still people seem to want to argue about jobs motives and preferences rather than tackle the bit about sales of things without DRM.
i am an emusic subscriber. i have also made a couple purchases from iTS (almost all with gift cards). my friend is also an emusic subscriber. his frequent claim is that the reason that more people are not downloading from emusic is that the shopping experience is more complicated than iTS.
and you would be right to point out that the market share of emusic is tiny in the overall music market. but i still think there is a lot to be learned by comparing emusic and iTS sales of the same tracks.
Posted by: tTt at Feb 13, 2007 4:34:55 PM
The last time i recall a strong DRM type debate (ca 1985), Microsoft won by decreeing $20 upgrades. The model is somewhat different, but with fads what they are, perhaps the notion still functions. It worked for Gates.
Posted by: rluser at Feb 16, 2007 3:43:56 AM
To DRM or not to DRM is that really the question? The true root of the issue is artist compensation. Until a new model comes about, consumers and fans (big difference there to me) are stuck with the current situation. Jobs is pro-DRM... he just wants it to be his DRM. Ever tried to play an iTunes track on a non-Apple device?
We are working on a new model that will be debuting this fall. If you are in or around St Louis in late September, stop by the Play:STL Festival... Sept 21-23.
Posted by: Cannon at Jul 28, 2007 9:56:22 PM
To DRM or not to DRM is that really the question? The true root of the issue is artist compensation. Until a new model comes about, consumers and fans (big difference there to me) are stuck with the current situation. Jobs is pro-DRM... he just wants it to be his DRM. Ever tried to play an iTunes track on a non-Apple device?
We are working on a new model that will be debuting this fall. If you are in or around St Louis in late September, stop by the Play:STL Festival... Sept 21-23.
Posted by: Cannon at Jul 28, 2007 9:56:33 PM
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