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Can Hollywood Learn From Intuit?
Ironica writes "Readers will recall the furor over Intuit's activation scheme for TurboTax 2002, which prompted a lawsuit and subsequently was removed from TT2002 and all future products. Here's an interesting editorial on CNNMoney suggesting that other DRM proponents could take a page out of Intuit's book ... if they have the sense."
Would the MPAA/RIAA/etc want you to pay royalties for remembering things?
In Intuit's case, they actually saw a loss on the books, and realized it was a Bad Thing. Hollywood hasn't seen any such loss, and so doesn't understand.
The problem can also be laid at the feet of the Copy protection software/hardware companies which see Hollywood an opportunity to sell their product into a new market.
They have had a devil of a time trying to sell other software companies for the last 10ish years on the idea, but now they have a new market open and this market isn't as technically sauvey as the Software Industry was back in the late 80's early 90's when we all decided the copy protection wars were not feasible.
Ted Tschopp
Fantasy remains a human right; we make in our measure and in our derivative mode... -- JRR Tolkien
No, Hollywood is incapable of learning.
But seriously, I joke, I kid...
Hollywood will learn eventually, after they've been subjected to extreme pressure, loss of profits, and humiliating defeat of any copy protection mechanism they can devise. The same goes for any group of companies that have forgotten they exist because their customers allow them to, and not by some natural right.
Is that Software has to be updated every few years. Software makers don't expect to pay coders a flat fee to produce a product and sit on the profits for the next 70+ years.
Movie makers do. They pay artists a flat fee to make a movie, grab all copyrights & sell the movie for the next 70+ years.
So - Software makers dont *need* DRM as much as movie makers.
We're going to have to wait for (or force) a change in the (frankly corrupt) Hollywood business model.
So. No. Hollywood won't learn.
TurboTax is an unique piece of software in the sense that it has a very specific goal. It is used only once, and then it needs to be replaced by a newer version. Combine this with the fact that it would appeal even to users who would never install anything else on their computers, and you get a large number of disenchanted customers. You will never get the same protest base with programs like Windows, which come largely preinstalled, or different office suites, which the user installs and forgets, until he replaces the computer.
As for entertainment products, there is a possibility of such a backlash only when the products don't work on common players. The people who want to play CDs on their computers may be vocal, but they are too small of a minority to hurt the companies' revenues signifficantly, in the case of a boycott.
So...
DRM = soufflé
soufflé = to blow (in French)
Therefore, DRM Blows!
And thats a wrap!
If brevity is the soul of wit, then how does one explain Twitter?
I've been using TurboTax for eight years now. This "product activation" nonsense was a rude surprise for me this year. I certainly did my part in bitching, pissing, and moaning as loud as I could.
And, I might take this opportunity to mention that product activation wasn't the only thing that made doing last year's taxes with TurboTax a completely disgusting, and revolting experience. Almost every other screen was filled with Intuit's sales pitches for other unrelated garbage that I didn't need, or want. First, Turbotax haggled me to upgrade to a premium version of TurboTax. All they want is my credit card number to "unlock" the extra crap; there's nothing to download. Of course, after reviewing the list of additional "features" in the premium version it was pretty clear that no more than, perhaps, 1% of people could possibly use it.
Then, TurboTax haggled me to use Intuit's electronic filing service, against for a premium cost. Then, another sales pitch to upgrade to premium TurboTax features, Finally, TurboTax wanted me to pay for storing my tax return in an "electronic vault", for safekeeping (whatever the fuck it means).
This year, doing my taxes was a totally nauseating experience. Literally, my wallet had a bullseye painted right on it, in bright red colors, and Intuit tried everything they could to grab as much of it as they can. I JUST WANT TO DO MY TAXES AND LEAVE MY WALLET ALONE.
Intuit is hoping that this controversy is over. But I hope that it's not over. Even though Intuit is now furiously backpedaling and groveling that's not enough for me. I will follow through on my promise, and no matter how many times Intuit will now swear that their spyware/DRM is history, I will still use a competing product next year. And if I like it, I'll continue to use it. If not, I'll perhaps go back to Turbotax the following year.
I firmly believe that Intuit should not be allowed to get a get-out-of-jail-free card simply by issuing a bunch of warm-sounding press releases, full of vague and nebulous promises. They must still have to deal with the consequences of their decisions, and I'm hoping that others feel the same way too, and will still use some other competing tax preparation package next year.
The FAQ:
Q: Can Hollywood Learn From Intuit?
A: No.
From the article:
"Customer reviews on Amazon.com (AMZN) tell the tale. For the 2001 version of TurboTax (which had no activation feature), the average customer-satisfaction rating was four and a half stars. For the activation-enhanced 2002 edition, the average rating dropped to one and a half stars, and the reviews bore titles such as "scumbags," "disaster," and, perhaps presciently, "the demise of TurboTax.""
I think the lesson the DRM-and-associated industries will take from this is the Boiling Frog story.
For those not familiar with it (there might be a few), the theory goes that if you put a frog into a pot of boiling water it will immediately jump out. If you place that frog in a pan of warm water and slowly raise the heat to boiling, the thing won't budge until it's dead (and then it still won't budge. =)
In other words, the lesson learned is "erode their rights slowly, don't yank the carpet out from under them all at once. Start with the minor potatoes like so-called "fair use." They're entitled to protection from litigation if they're copying something for their own use but that doesn't mean we have to make the item copyable so we can leverage the DMCA for all it's worth. The politicans are cheap. Consider them as insurance or rent money -- just another cost of doing business. The consumer (and oh how I love that word) won't even know they have rights nevermind miss them in 20 years. Just do it slowly."
Oh yeah. Holywood can learn. The question is "can we?"
My
Limekiller
One might argue that this is because Intuit has competition, while Hollywood is in fact several dominant companies working together in a de facto monopoly.
Providing an alternative to the MPAA that will be as attractive to an average consumer is not really feasiable, but for the RIAA it can be done.
Imagine a P2P sharing network that contains only legal content (how? probably something to do with only allowing non-anonymous posting, and a DMCA-protected login (flame away), among other things). Consumers have a legal, non-threatening way to get so much new music RIAA can feel a two-digit-percentage sales drop (on top of the current situation). You'll effectively be cutting off the RIAA's "ear supply", if you will.
In less than a year, they'll sign up for accounts to post some of their own tainted music.
In the dog-eat-dog world of tax preparation software, there's nothing worse than being assaulted by a product made down the hall from you - which fits in an entirely different niche.
Worse fate than death, I tell you.
In the meantime, Intuit does have competition from H&R Block and a few others.
These two words to not go together.
This is a small article in a relatively unknown magazine, and even there, Intuit's claim that the consumer backlash was "completely unexpected" tells the real tale:
They still don't get it.
This isn't about technology, rights or anything. This is about simple plain good business sense. This is about bad management. It is a fallacy for a company to think that their product is so delightful that people will put up with being treated like a criminal for the right to use it. Intuit only has one major competitor (H&R Block's Taxcut). The RIAA has thousands of small labels that are chomping at the bit in anticipation of the market the big labels are about to surrender.
The nice thing about a market economy is that the RIAA's folly is our opportunity. It's actually in the small labels' best interests for the RIAA and Microsoft to continue down the DRM path.
So let's keep this news quiet, okay?
They can't even grasp basic economics. They flood the market with trash like Dumb and Dumberer and Final Desination 2 and wonder why, according to Jack Valenti (can he be trusted at all?), they gross an average of only $52M a year. The movie studios basically know how to make a movie that will bring in heaping piles of cash. Look at the Matrix and LOTR. The problem is that they are so greedy that they can't accept that at the end of the day, if they produce a few good movies a year and call it even, they will more likely than not come out ahead more easily than if they put out many times that.
The music industry has an excuse, music fans are often fickle and can throw out a band after one CD because their style "isn't cool anymore." Most music is disposable because people don't want anything artistic or refreshingly original. I listen to old stuff by The Cult occassionally as well as more recent stuff like Stabbing Westward. You don't see that kind of rock anymore. It's the same tuned-down, crunch-your-head-off distortion filled, 3 power chord bullshit. I mean WTF is up with a band like the All American Rejects? I just started playing bass a week ago after having been playing guitar on a semi-active basis for 5 months and can play at least one of their bass lines they're that fucking simple! Swing, Swing has only 4 notes in the entire bass line and you just hit them as 8th notes in sets of 8. Again, pathetic... even I a total newbie write cooler bass lines than that. I want my recording contract now that I know that the bar has been thrown out, not lowered.
The IP cartels are greedy and they're not bound to full market forces. Whoever heard of a Korn CD competing with a TRUSTCompany CD? They don't, except for this week's $15 allowance. Buy one this week, buy the other next week. They won't learn because the government is going to step in like a good fascist state and save them from the pirhannas of capitalism that are now about to descend upon them. America will slip backward, other countries will take our economic lead, but a bunch of neocons will be able to sleep peacefully at night knowing that the market is safe for Britney Spears and Limp Bizkit. Too bad that a bunch of our IT sector will be in ruins and our economy's growth will be fizzling out. "Property rights" will be have been protected, except for your right to modify your DVD-R/RW or DVD player so it can play non-CSS DVD-Rs. Hey, property rights in the neocon world belong only to those who produce, not those who consume.
I'm a neo-liberal/libertarian and yes, I openly and freely admit that I vehemently hate neo-conservatism and wish enlightenment for them first, and if that doesn't work a pox on them.
Click here or a puppy gets stomped!
That was without macrovision: http://slashdot.org/articles/02/06/13/1650225.shtm l?tid=172
They didn't want to pay the MV royalty. Tapes are a pain in the ass to copy and DVD's are encrypted. The bottom line involved was not one dictated by consumer satisfaction.
They really thought that creating softwer that when installed actually wrote something on my MBR was not going to upset me?
How dumn are they?
Up till this year I used turbotax for the past several returns, but this year I use TaxAct. And although their interface was not as nice as turbotax, it saved me money and didn't tamper with my machine!
This is just sig!
Think Intuit is giving up on drm?
Maybe timothy and the slashdot crowd should check their facts first, before crediting Intuit with anything.
Looks like Intuit's spin is working wonders.
This could easily backfire and put more power into the hands of MSFT. Since they're currently the only (IFAIK) OS distributor that is "enabling the consumer by adding DRM to the core OS", some software companies may turn to them in an effort to protect their stranglehold on consumers. I'm not necessarily saying that TurboTax was doing this, but the RIAA certainly is; and as such, they're very likely to help push MSFT's propaganda and ultimately help proliferate DRM.
Here's the bottom line, if we (media users) don't act responsibly and avoid the urge to pirate videos, music, and software (at least buy it or otherwise support the creator somehow), these companies will force DRM onto us.
As consumers we do have significant "wallet" power, however, if we don't act responsibly, the powers that be will make sure that we do [act responsibly].
Call me conservative, but the creators of digital content (videos, audio, etc) should be able to make a living; however, they also shouldn't be able to destroy consumers by partnering with an unavoidable monopoly either.
If we don't take responsibility for our actions (and our peers' actions) now, we can't complain about losing our [said] rights in the future.
Don't think that a small group of dedicated individuals can't change the world. It's the only thing that ever has.
Intuit gets to sell you the same software each year with minimal changes. Sure they create bloatware versions with videos and extra garbage that nobody uses, but the core product is the same thing they were selling five years ago. They update the tax tables, make the changes for any changes in the law, and sell you the product all over again.
Intuit realized that many customers were sharing their product with others and that probably looked like lost profits.
But if someone lets a few others copy TurboTax, odds are one or two of those people will buy their own copy next year rather than hassle with chasing down the shared CD to install the program. Instead Intuit alienated the users that purchased the product as well as those who didn't. When they asked their buddy to borrow the copy of TurboTax, they were told "Sorry, the CD has some lame copy protection stuff". Now the purchaser and his/her buddies say "Intuit s**cks".
"We make our world significant by the courage of our questions and by the depth of our answers." Carl Sagan
So Apple sold 2 million songs in about 2 weeks at 99 cents each, right?
Why would these people buy these songs instead of just downloading them for free on Kazaa/Gnutella/etc?
Getting a song for free:
- cost: $0
- ease of use: pretty easy
- time to get: depends
- availability: depends
- quality: depends
- platform: mp3s will play on any system
- usage restrictions: none
- legality: not legal.
Getting a song from apple:
- cost: 99c / song, $9.99 / album
- ease of use: really easy
- time to get: really fast
- availability: about 20% of commercial music
- quality: guaranteed good.
- platform: mac only
- usage restrictions: medium-restrictive D.R.M.
- legality: legal.
And those are basically all the issues.
So apparently, ease of use + time to get + quality + legal vs cost + platform + restrictions results in $1 million a week for apple. Not too shabby!
Now what if they dropped the last two strikes against them (besides cost).. platform and usability restrictions? As they upped their cd library they'd soon find the ONLY advantage Kazaa would have would be price, whereas apple would now win (or at least tie) in every other category! How much money would they maybe gross then?
They make $1M a week now right? Let's say opening up the service to non-mac users (95%+ of the users) only triples their revenues. Let's say dropping all restrictions on use again doubles the usage. Finally, let's say them quintupling their collection to include everything ever recorded doubles their revenues again. It looks like they stand to make about $625 Million a year from this service.. if they'd just loosen up on the DRM (and complete their selection)!