A Working Economy Without DRM?

Tilted Equilibrium asks: "In a few weeks, our school will be hosting a panel on DRM with several respected individuals. In advance of the panel, I have been doing some research on the topic and thinking about it in my free time. In economics, we learn that the price of a product is determined essentially by supply and demand. Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net. How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"

Comments

Biased question

[swillden]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

Most likely, you don't. But in large part you're creating a strawman, by specifying exactly the situation in which it is most difficult to make a profit.

It's entirely possible that the Internet will mean the end of $200M productions, because unless you can get your money back in the theater (I'm focusing on movies because they're the only things that fit your specifications), you can't make it back.

Maybe. I'm not absolutely convinced of that. I think DVD releases with lots of extras, including some that aren't digital, are a good model. Obviously, movie theaters have a workable model. There may be other approaches that can work. Any approach that offers the consumer real value for their money will work. People *want* to spend money on entertainment.

And, honestly, outside of movies, what other media meets your requirements? Not music. Music is cheap to make. Sure, it's likely that in a fully DRM-free Internet age that musicians won't be mega-millionaires, but I consider that a good thing. I think it would be great if we could support more musicians with decent incomes, instead of the smaller number with insane incomes. Heck, even if there aren't more of them, maybe they'll live longer and make more great music if we don't give them heroin and Ferraris.

I agree with Eric Flint's essay, found in the Free Library on baen.com: Until there's some way to make music/movies/books that doesn't require musicians/actors/directors/authors, and until people stop wanting those materials, there *will* be ways to make money off of them. It's just a matter of finding them. And, perhaps, accepting that people don't really need millions for doing what they love.

Re:Biased question

[BadAnalogyGuy]

I disagree with the whole idea that it's unnecessary to protect the works of content creators. DRM is a necessary evil and assuming a world without it is simply pissing in the wind. What we need to work towards is a DRM model that preserves as much of our rights as possible while still effectively preventing the widespread copying of content.

DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards. If the data stream is protected, the media appliance will acknowledge and honor the DRM lock and you will be unable to do more with the content than is allowed by the DRM lock. This is reality and it is already here. What we want to do is make sure that things like machine-local data can be transmitted from one machine to another (deleting the original data as it moves to the next device) are preserved while things like forward-lock (which prevents copying at all) are eliminated. Working against the system when you are completely outside the system is futile.

Re:Biased question

[westlake]

Music is cheap to make.

Talk to a classical musician: ask her the price of a fine solo instrument, a piano, a violin. The basic tools of her profession.

Re:Biased question

[intrico]

"I think it would be great if we could support more musicians with decent incomes, instead of the smaller number with insane incomes. Heck, even if there aren't more of them, maybe they'll live longer and make more great music if we don't give them heroin and Ferraris."

This is an excellent point about the music industry. The traditional business model is very inequitable to the average artist. The major record labels say that people are "hurting" these artists by downloading their music. But one can make a very strong, valid argument that by forcefully marketing a select few musicians to the massess, and creating huge barriers to entry to these marketing channels for thousands of other artists who may can be just as good or better, that they have have caused the general population to miss out on all of these other artists out there. This hurts all of these other artists by effectively denying them mindshare.
 
Getting marketed by a major record label is simple a matter of being in the right place at the right time, and really is not correlated at all to the quality of the artist's work. The same of course, goes for the movie industry where quality does not necessarily equal production costs and or marketing clout. And again, the traditional setup of the movie industry ends up denying access to marketing channels for many smaller independent film producers, making it harder to get the word about their works out to the masses. In short, the RIAA-associated and MPAA-associated marketing powerhouses have fostered an anti-competitive environment at the artist level. DRM-Free media will not ruin the "working economy", but it will create a level playing field for the actual artists who produce content.

Re:Biased question

[BadAnalogyGuy]

Your last sentence is a complete non-sequitor.

DRM-free media and the playing field for music artists are wholly unrelated. Artists that are not picked up by record companies (whether large or small) are not in any way prevented from producing their own music and publishing/selling it in a non-DRM format. There are no players that refuse to play non-DRM content. Non-DRM content is simply read as unprotected content and the full functionality of the device copying mechanism is available for that data.

In fact, you could argue that DRM-encumbered media is less attractive than DRM-unencumbered media because the former restricts user actions while the latter does not. However the real problem for the artists is getting discovered, and that has nothing at all to do with whether the record labels apply DRM to label-produced content.

Re:Biased question

[Nicholas Evans]

DRM is a necessary evil and assuming a world without it is simply pissing in the wind. What we need to work towards is a DRM model that preserves as much of our rights as possible while still effectively preventing the widespread copying of content.

But until you take control of my computer away from me, we won't be able to reach something that prevents widespread copying, because at the end of the day, I am still the lord and master of all of the bits in my little reality.

Then we get into Trusted Computing, and the whole discussion goes down hill.

I recently watched Steal This Film. They're all about copying everything and handing it out, because the don't seem to think it actually hurts artists. Do I think that this is wrong? Sure. They worked to produce it, and its very reasonable for them to want compensation for their work. You don't do TBS reports for nothing, eh?

But can we prevent people from uploading CDs and movies? No, not really.

And on a slightly unrelated note...was it just me, or did Steal This Film fail to make any good justifications for piracy? Just because you can != the right thing to do.

Re:Biased question

[BorgCopyeditor]

Not to mention decades of training.

Re:Biased question

[aussie_a]

You assume DRM is necessary, but in actuality, it isn't. These people somehow make a profit without DRM (otherwise they wouldn't bother releasing the e-books). As does these people as well as these people.

Perhaps multi-million dollar movies aren't capable without DRM or Britney Spears being profitable without DRM, but the truth is that the big media cartels aren't the only people in town no matter how much they want you to think they are. And DRM isn't necessary for artists to not only make a profit, but to make a living. Not all artists will be able to make a profit or a living, but then again not all artists deserve a profit or a living. DRM isn't a necessary evil, it's just an evil.

Re:Biased question

[Shambhu]

DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks.

True. It is also a reality that DRM will always be broken. It only takes one copy to be broken and put on the network. But that still leaves the person who bought a DVD or Blu-Ray or whatever with media that will be a hassle to deal with. Maybe I'm wrong, maybe it will be brilliant and completely stay out of the user's way. I doubt it. Regardless, that pirated, DRM-free, copy will still be out there floating on the net. If you can't stop people from breaking it and putting it on the net, way hassle your regular customers?

Here is a speech that Cory Doctorow gave at Microsoft a while back. It goes into more detail and generally presents the argument better.

I don't say that content owners shouldn't be allowed to put DRM (of the non-rootkit variety) on their media, I just think they would be better off persuing other business strategies.

Re:Biased question

[the_womble]

It is still cheap to make compared with films.

That is partly because Holywood's business model has pushed up the cost of making films, but it is also because films are expensive to make.

What does make a lot of classical music quite instrinsically expensive to make (comapred to most other music) is the need for a full orchestra, so a lot of people's time is needed. The value of a good muscian's time is worth more than any insturment, even a Stradivarius (if you amortise the cost of the Stradivarius over all the performances it can be used for).

A more important point is that the cost is still low enough for business models other than pay per copy to work. I have some legit free downloads of classical music, and there is no reason there cannot be more., funded the same way.

With type of music that do not need large numbers of people alternative revenue models become even easier alternatives.

Re:Biased question

[A beautiful mind]

Clearly, that is why the classical music cd/dvds you can find in a store are the cheapest in the music section.

Re:Biased question

[BadAnalogyGuy]

We're not really talking about Trusted Computing here, though it may be interesting to see how TC impacts the availability of DRM-stripping software on mainstream operating systems.

Once the upcoming crop of DRM-enabled operating systems (Mac and Windows) only support media playback through OS API-level function calls, your "control of your computer" will have reached its conclusion. As system APIs become more plentiful, more useful, and easier to use, control is slowly creeping away from the now-productive developer and towards the central programming model/operating system.

You have every reason to be worried about losing control.

"I'll run Linux!"

With DRM implemented as an encrypted datastream and licensed to hardware/software makers, who is going to be able to bring DRM playback capabilities to Linux without also being tied to strict licensing restrictions that prohibit DRM-stripping as a feature or side-effect? These DRM systems are of course already running on Linux, just look at your favorite DVR which already implements such a system. Does this translate to your PC being able disable DRM content? Unfortunately, no. Not unless a DRM-licensee decides to break their license and provide the tools to do so. It's not out of the realm of possibility that a rogue employee may do such a thing, but the financial hardship he would face would typically be a sufficient deterrent.

Re:Biased question

[aussie_a]

There are no players that refuse to play non-DRM content.

Yet. Wait a while, and it will be illegal to produce players that can play non-DRM content.

Re:Biased question

[masklinn]

Uh, have you ever bought a record of classical music? As far as length/cost ratio goes, it's probably the best bang for your buck you can get unless you burn static noise on CDs and listen to that all day long.

Because most classical music performances are actually concerts, and I doubt classical music requires a lot of post-prod work (sound engineers and such, as well as their hardware), lowering the cost of records compared to highly edited/remixed "popular" music.

Re:Biased question

[vmcto]

There are no players that refuse to play non-DRM content.

Yes, but realistically how long will that last?

Do you think the big manufacturers are going to continue to produce devices that play non-DRM content? What's in it for them?

Re:Biased question

[gfxguy]

I tend to agree and more.

I honestly believe people should be more honest with themselves and their wallets. If something is worth buying, it's worth buying. If it's not worth buying, don't buy it. Just because you don't like the arbitrary amount someone has set for the product doesn't mean you should be able to just take it. I mean, come on! We're not exactly talking about stealing bread to feed starving children! We're talking about movies!

However, I don't agree with DRM at all, either, because if you do shell out the cash, you should be rewarded with a lot of freedoms with that content. You should be allowed to make backups, you should be allowed to listen/watch on different devices and so forth.

Now the reality - the more these idiots apply DRM, the more worthwhile it is to STEAL the content because the stolen content gives you the freedoms you should have had to begin with. I make the analogy with software copy protection, specificly from the 80s and early 90s. The copy protection became so bad, I'd buy a game and the first thing I'd do is look up on the internet (through ftp sites, at the time) how to break it. Damned code wheels and all that crap. Forget it! It's the guys that stole the game that didn't have to put up with that crap, and it's the people illegally copying the movies that can do whatever they want with it.

I'll make these analogies as well: when cassette tapes hit the markets as a cheap, convenient means to copy recordings, the RIAA complained it would put them out of business. Instead, sale of prerecorded cassettes opened up a whole new revenue stream for them. When consumer grade video recording hit the market, the MPAA cried it would put them out of business. Instead, the video sales and rental market opened up a whole new revenue stream for them; movies that wouldn't ever even have seen the light of day began returning at least some money, and movies that made hundreds of millions were making another hundred million in rentals when, if the MPAA had it's way, they'd be making nothing.

Then the RIAA complained about CDs. CDs sound so good, that cassette recordings made from them sound better than vinyl. Yeah. CD sales skyrocketed and the RIAA increased it's revenue again. Then there was DVDs and how people would record this high quality content on VHS, and they were wrong there, too - the sale of DVD quickly overtook VHS sales; the discs cost less to produce, but people payed more for them.

The bottom line is that if you give the people what they want, they will pay for it. I can download mp3s illegally, or I can pay for them. I choose to pay for them when I think it's worth it. Otherwise I simply don't download them at all.

I realize few people out there are as honest (my wife calls it brain dead honest) as I am; even people who are generally honest might not mind downloading a few things here and there. So yes, copyright violations will continue to happen, but there has to be an "acceptable" rate, which you would calculate by figuring out how much the cost of enforcement is versus how much is lost.

Frankly, the worst part about DRM is that we pay for it. We pay extra for licensing fees so that our DVD player will be crippled, and we pay extra for content itself so that it can be crippled. WE are the ones who pay for lost functionality and freedoms, and the more they squeeze us, the more ONLY HONEST consumers are hurt.

If that's not ass-backwards, I don't know what is.

So my question to these idiots is: honest consumers are paying extra for products with reduced functionality, while people with illegal copies of the content seem to have the most freedoms. How does that make any sense at all?

Re:Biased question

[Sillygates]

look at emusic. They have made a small economy off independant music artists. All without DRM.

Re:Biased question

[Anonymous Coward]

Ah gotta love the screw the artist mentality. Excuse me but why aren't you doing your job for free? Artist have far higher expenses than most and many of us spend the bulk of our money maintaining and furthering our craft. After nearly thirty years in the film industry I'm not rich but deep in debt. You talk about all the mega millionaire musicians. Hate to break it you you but that's a tiny percentage. Most are already starving. Since you don't want to pay it's up to the entertainment producers to figure out another way to make money? It's called capitalism. If you want it pay for it. If it's too much or you don't want it that badly then live without it. We aren't talking food here it's bloody entertainment and there is no Constitutional right to free entertainment. Hey I paid all this money for an iPod so why should I pay for the music? Guess what, not a dime of that went to producing music. If you buy a car do you expect to get free gas? It's already nearly impossible to make money in the independent film industry. I stopped shooting films because I barely broke even on the last one, even leaving myself unpaid. The primary reason? Piracy. The foreign markets where most independents have been making their money are nearly dead due to a flood of pirate product. I stopped renting horror films because they are mostly made for under fifty grand and are all crap. Why spend so little? Most of the low end distributors don't want to pay more than 50 grand and even then they just want to give the producer a percentage. It can take 12 to 18 months just to break even on an independent film with little hope of a profit. Why do it? At a time when it should be easier than ever to make a film it's nearly impossible. Do it for the love? Hardware costs money and non professional crews tend to make home movies. Extra content is your grand solution? Well I hate to break it to you but the extra content costs money and if you want to pay for a 200 million dollar blockbuster you're gonna need 40 or 50 million people that want it bad enough to pay for it. Most just want to see the movie so they'll just download. What exactly is wrong with the free market? You want it you pay for it. Don't want to pay for it you don't get the product. Can't aford it? It's called life. I spend all my free money on hardware and software. I don't use pirate software. I'm happy to pay because it means more will created and it's the right thing to do. It does offend me that there are downloaders that have more and better software than I have inspite of spending tens of thousands a year on it. There are upgrades and software I desperately need but i haven't the money so I live without. If I as a professional can live without it I doubt that hobbiest will drop dead because they don't have all the software, movies and music they could possibly want. When I was growing up it was a big deal if you got to go to the movies once a month and maybe buy an album. They real issue is people have gotten spoiled and feel it's their god given right and if the makers don't give it away they'll simply take it. It's wrong and saying any different is rationalizing.

Re:Biased question

[soupdevil]

As much as 10% of the cost of a typical movie is for the music licensing. The music for a $100 million picture may cost $10 million before you ever hire a composer and an orchestra for the score. Music is an integral, and expensive part of making movies.

Re:Biased question

[babbling]

Sure, it's likely that in a fully DRM-free Internet age that musicians won't be mega-millionaires, but I consider that a good thing.

Actually, any popular musician that still performs live would still be a millionaire.

Re:Biased question

[Anonymous Coward]

Do you have even the slightest understanding of how DRM works?

I mean technically.

Do you know that unprotected content plays just fine in DRM-enabled players? Is this something you're aware of?

I ask because it sounds like you've got this huge hard-on for people who don't use DRM, but you then turn around and say that no one else should use it. That's simply idiotic. Or ignorant.

I prefer to believe that it's ignorance. DRM does not mean that people who don't apply DRM to their data won't be able to distribute it. In fact, the situation for them will remain largely unchanged. The only people that are affected by DRM are the creators and consumers of DRM'd data. Since those that want to publish without DRM are always free to do so, it is useless to bring them into this conversation.

Re:Biased question

[shutdown -p now]

What we need to work towards is a DRM model that preserves as much of our rights as possible while still effectively preventing the widespread copying of content.

Nah, what we need is a DRM model that preserves all our rights. Not "as many as possible", which can by definition well be none, and which it needs to be to effectively prevent "widespread copying of content" (why limit yourself to "widespread", by the way?)

... And the only model that satisfies the above criterion is - you guessed it - no DRM.

Re:Biased question

[shmlco]

"I'm focusing on movies because they're the only things that fit your specifications."

I beg to differ. Movies, books, albums, software, games; all often have significant amounts of investment in them, not to mention lead and production times usually measured in years. Moreover, even somethng as simple as a song doesn't take just three minutes to produce, as that ignores the years of effort it often takes to hone a craft to the point where it's WORTH spending money on it.

Re:Biased question

[shmlco]

"...because at the end of the day, I am still the lord and master of all of the bits in my little reality."

Hah. Maybe, once, on your Altair 8080 or Apple II that once was true. Today, even if you're running Linux, you're on a box containing literally hundreds of millions of lines of code written entirely by other people, and that's not counting the BIOS, things like Flash and JVMs, keyboard, mouse, network, and graphic card firmware, proprietary drivers, and so on. And let's not even START getting into the applications themselves.

Any "control" you think you might have is basically just an illusion...

Re:Biased question

[shmlco]

"If you can't stop people from breaking it and putting it on the net..."

There's a difference between one person putting something on the net... and millions of people downloading it. One is lost is a sea of many, but the many make a rather significant pattern that can be found, and punished. The flip side of DRM is going to be network traffic analysis...

Re:Biased question

[Anonymous Coward]

Independent films, eh?

Are you sure you're not the owner of a Christian music store, who once threw out a couple of punks for discussing how "lete [sic]" it would be to put some of the CDs you sold on the Internet? Didn't you try to organize "a national blacklist of pirates"?

Or was that some other troll losing his livelihood solely due to piracy?

Re:Biased question

[Anonymous Coward]

Simple fact is, if you make they will hack it. Starforce was the first real attempt at something approaching OS level DRM. Not only was it hacked, but it was despised and boycotted by users everywhere. Even if the boycotting doesnt happen, there will still be piracy. There is absolutely no way short of controlling every program run on a computer to prevent piracy.

Re:Biased question

[SanityInAnarchy]

You are repeating the same misconceptions in the same ways. Look at your language:

I disagree with the whole idea that it's unnecessary to protect the works of content creators.

No one is arguing "that it's unnecessary to protect the works of content creators." We're arguing that DRM, specifically, in any form, is not worth the harm it causes, and that content creators can make a profit without it. After all, they did before DRM existed.

DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards. If the data stream is protected, the media appliance will acknowledge and honor the DRM lock and you will be unable to do more with the content than is allowed by the DRM lock. This is reality and it is already here.

If you are astroturf, you need to listen here: If that is really and truly the reality, I will wean myself off modern media. I simply refuse to spend any money on anything that has unreasonable "protection" on it. If there are enough of us, you will lose money on DRM.

That is why I refuse to buy anything Blu-Ray until I am convinced that it's permanently cracked.

If not, I simply don't care enough. There is enough entertainment in the world that comes without strings attached.

What we want to do is make sure that things like machine-local data can be transmitted from one machine to another (deleting the original data as it moves to the next device) are preserved while things like forward-lock (which prevents copying at all) are eliminated.

Current DRM models have two problems: In order to enforce any kind of protection, they require specific software/hardware stacks, which reduces user choice -- for instance, it becomes essentially impossible to have a proper open-source media center, or even to run a closed media center on an open OS.

The second problem is, much of it is online. For instance, the music subscription services -- pay $x/mo and get as much music as you can download, but if you stop paying, they stop playing. Another example is Steam: You only pay once, but it insists on connecting to the Internet periodically to get updates and to be able to shut you down if they find two copies from the same purchase online at once. The problem with this is, I'm essentially trusting the content provider not to unfairly revoke my right to use my content -- Valve could one day decide not to let me play at all, or their servers could go down, and I'd be stuck without a game.

This puts things entirely too much out of control of the consumer, who, in a very real sense, no longer owns their stuff. Think of it this way -- the rights to a book are owned by the author, and only licensed to a publisher for a finite amount of time. If you buy a book, you own that copy, and may do whatever you want with it, other than distribute copies of significant portions of the book. Yet I never hear authors screaming about how they're being completely ripped off by those damned libraries with their damned copy machines, not to mention kids with OCR who just throw the stuff up on the Internet.

Now, look at the Music industry. No real, provable signs that Internet piracy does a thing to their sales, yet publishers own artists' song rights forever, and now they want consumers to give up any concept of owning a song, the way we have for software. Oh no, now you own a license to play this song, which they can invalidate any damn time they please.

Working against the system when you are completely outside the system is futile.

Wrong. Almost all attempts at DRM are futile. No DRM will make it completely impossible to pirate something. If it does, it will be so oppressive that consumers won't take it anymore.

Here is the system that really works for everyone: For media, make it more con

Re:Biased question

[VirusEqualsVeryYes]

People *want* to spend money on entertainment.

If a seller were to make it really easy to buy songs, people would buy them. If people can click once or twice and download the song they want, fast, then they will always buy. Which is easier: meeting someone in person with the song you want, getting to their computer, dowloading the song to a flash drive or whatever, and running back to your own computer and uploading the desired song ... OR, for a price of $.99, click twice? Is the former method worth $.99 and the .001 calories needed to executed the latter method? For most, if not nearly all consumers, yes. If piracy is a concern, dynamically watermark the audio file based on the user's subscription ID or whatever so *cough* interested parties can know who the owner of an MP3 file is (or should be).

One might say that this is the model of today's iTunes. It is not quite that, because I did not factor in the headaches caused by DRM and the money necessary to buy "certified" media player(s) as opposed to whatever media player the consumer would otherwise use. That has a cost, too. It is a cost that outweighs the trouble of running over to your neighbor's house. If the music from iTunes or whatever futuristic distribution media does not have DRM, then the extra headaches and $$$ do not apply, and consumers would choose not to pirate, because it's easier to click twice and be done.

One might also say that the model I proposed wouldn't work because people don't actually need to run over to their neigbor's; they can just use peer-to-peer technologies and share music illegally. Again, there is a cost: the trouble of running these P2P programs, of searching for the desired songs, of maintaining the software, and the danger of being caught breaking the law. Is that cost too hefty? Hard to tell. So let's ask one more question. There exists abundant music piracy today; has that made music production unprofitable?

No, no it hasn't. QED

Re:Biased question

[NeutronCowboy]

Not only are we paying in terms of money, we are paying in terms of culture that is being locked up and lost forever because there is no legal way of archiving it. That, in my opinion, is the biggest cost of all and the prime reason DRM is Evil.

Re:Biased question

[Jah-Wren Ryel]

I honestly believe people should be more honest with themselves and their wallets. If something is worth buying, it's worth buying.

This will never happen on any sort of feasible scale. It isn't a matter of being "honest" (or as most people who take the same position you have, of being "moral") it is a simple matter of economics - rationale consumers will not pay for something they can get for free. That's not good or bad, honest or dishonest, it just basic economics.

Re:Biased question

[Nanpa]

Hmmm, I'd rather more Kurt Cobain's wacked out on Heroin than cheap-arse pretentious 'artists' But that's just me

Re:Biased question

[MeltUp]

Just because you can != the right thing to do.

My personal explanation is this: I won't buy this music, film or game anyway, so I don't hurt anyone by copying it and "using" it. Take the case of my brother. He's got barely any money at all, yet he has gigabytes and gigabytes of music and movies. Nobody loses any money over him, since he doesn't have the money to buy thoses anyway.

So a lot of pirating is a "win, no loss" scenario, and any good "solution" must keep these wins. Off course, a lot of pirating IS a loss for the "industry" as well, since some people would have bought the CD or DVD, and won't pay for it if thy can get it for free, even though they like it.

So it's clear a solution is needed that generates income for creator in another way, and that's where "Steal This Film" certainly fails.

The only solution I can think off, would be to pay artists by taxes, which are dependand on how much you "use" copyrighted works (not fair to pay the full tax if you watch one movie a month and rarely listen to music), and your income. This would be a very hard to implement and unpopular method though :)

Re:Biased question

[Baki]

I cannot accept this. DRM is only a reality if supported and protected by the state. If there were no laws against circumventing it, DRM would not be a reality at all. And the states actions and laws still are supposed to be the result of a democratic process.

In that sense, I am not so defaitist as you are. I think that once the majority sees how evil DRM is, and that alternative models do exist, it will go away. At the moment there is this idee fixe that without DRM protection there can be no healthy economy. That, IMHO, is the viewpoint of people and capitalists that are only protecting their own short term interests. As always in economic development, changes bring losses for some vested interests, and also offer new chances.

DRM is a fight against windmills. In the end, alternative economic models shall arise and the current models of distribution of media, for example, are doomed to fail. Some will loose (the ones that are at the moment trying to corrupt our democracy by buying laws and politicians) but the economy and people as a whole will gain from these changes.

Re:Biased question

[Aceticon]

Allow me to provide an example:

What is best for the economy as a whole (in terms of jobs and the efficiency of producing wealth):

• One hit record worth $5M and 100 flops worth $10k each?
• 100 records worth $100K each?

A DRM enabled world would most likelly cement the position of the current players which mostly go for the first option (since they relly heavilly on marketing and advertising a single album is cheaper than advertising 100)

Another example coming from a pure economic perspective:

Which markets are most efficient (i.e. produce the most value per-invested-dollar):

• Those with high barriers to entry (in which the market is typically dominated by a few big players)?
• Those with low barriers to entry (in which the market is a constantly changing constelation of players of all sizes)?

Consider that DRM can be used as a barrier to entry (if all music is required to be DRM enabled).

Note that lower barriers to entry mean increased competition which usually means product that compete in price and quality which pressures companies into increasing their efficiency/innovation in order to keep their edge in price/quality.

Also note that in a market with lower barriers to entry, the lame/weak companies are more quickly weaned-out and the resources they were consuming are redirected to the more efficient companies.

Re:Biased question

[vrt3]

I think DVD releases with lots of extras, including some that aren't digital, are a good model.

That's something that's often said, but is it really true?

I know I don't care about any extras; I've watched the director's commentary, the interviews with the actors and the other extras on some of my DVD's and I thought it was just boring. I don't watch them anymore, and in fact I don't know anybody who likes them, let alone is prepared to pay more for the extras.

Re:Biased question

[paleoflatus]

There was once a time when musicians had to play and actors had to tread the boards to earn. We've since been conditioned to accept extortion by third parties who offer only mass-produced reproduction of this performance at exorbitant prices.
We're all quite happy to pay for added services, convenience, distribution etc., while this gives the artists publicity for their live appearances.
What we don't like is supporting obscene corporate profits and drug habits etc. by being forced to pay millions of times for a single work, or performance. It's an analogous situation to proprietary software and other forms of patented knowledge.

Re:Biased question

[Flyboy Connor]

This will never happen on any sort of feasible scale. It isn't a matter of being "honest" (or as most people who take the same position you have, of being "moral") it is a simple matter of economics - rationale consumers will not pay for something they can get for free.

Weird. Computer games can be downloaded for free, or acquired for a very small fee from your neighbourhood copy-peddler. And still the game-development industry is steadily increasing its revenues. And music? People can download any song they want through eDonkey and such, and the music industry does not seem to suffer. Movies? The movie industry gets richer and richer by the day.

You might think it is rational what you say, but practice shows differently. It seems you are not taking everything into account. Probably, if you scan this thread a little more, you'll find out what that is.

Re:Biased question

[Logic and Reason]

It might not be very nice to listen to a street musician without giving him any money, but I certainly wouldn't call it dishonest. I don't think the musician has any right to demand that everyone who listens to him pay up, since he is performing in a public area and therefore does not have the right to decide who may stay and who must go.

Now suppose there were a law mandating that if you listen to a street musician for a certain length of time, you must pay him. Would that change the morality of the situation? Only if you believe that violating laws is in and of itself immoral. In your "brain-dead honesty" I see only a slavish devotion to nonsensical laws; you should decide for yourself what is right and wrong, not let the majority do it for you. I would be able to respect your opinion on "honesty" more (though I'd still disagree) if it didn't seem like you were using the law as part of the justification for your position-- believe me, I understand how seductive that thinking can be, but conflating legality with morality has led to much evil in our history.

Please don't accuse me of using convenient reasoning to justify my own actions, because I'm not. My own actions are irrelevant to this discussion, and my argument will stand or fall on its own regardless of how you perceive me.

Re:Biased question

[Eivind]

Classical music lives on state subsidies anyway. Just about every philarmonical orchestra in the world would close shop tomorrow if they didn't get subsidies in some form from government.

I already pay aproximately 90% of the costs associated with oh, say Oslo filharmoniske by paying taxes, the remaining 10% are financed with like 5% tickets to concerts, 2% donations and around 3% from selling CDs.

I don't see why free copying would influence concert-goers or donations much. So worst-case we migth need to raise subsidies from 90% to 93%. In exchange we'd get freely copyable music, and vastly increased enjoyment of the music created.

What makes most sense ? Paying $10million tax-money and getting oh say 50.000 concert-seats and 10.000 CDs (sold at normal CD-price) for the investment. Or paying $10.5million tax-money and getting an unlimited number of CDs mp3s oggs, whatever. Assuming it's sensible to give state-subsidies to culture at all, what gives the most bang for the buck ?

The instruments aren't, by the way, the expensive parts. You get a good practice-violin for around $10.000, and a excellent concert-violin that will last an entire career (and more) for 5-10 times that price. That is, the instruments a profesional violinist needs for an entire career costs only a small fraction of the salary for the same period. I'm thinking even the buildings needed for practice and concerts cost more, amortized over a career, than does the instruments.

Re:Biased question

[Alioth]

Also emusic http://www.emusic.com/ seem to make plenty of money, and are the no.2 online music store only after iTMS. They sell music in unencrypted MP3 files. They may not have Britney Spears, but they have a lot of labels and artists with chart music - people like the White Stripes, Paul Weller etc.

Re:Biased question

[Jah-Wren Ryel]

It seems you are not taking everything into account.

Actually, it's you who aren't taking everything into account. All of your examples involve additional cost factors - people who buy movies, music and games instead of downloading them are making a judgement that the cost of downloading is not only not free, but higher than the cost paying in the approved manner. That's in part because of the perception of the legal costs, in part because of the cost involved for getting plugged into the P2P networks (learning curve, perceived risk of virii, etc) and in part because of the cost of actually finding the desired product online.

None of these issues have a thing to do with honesty. Nada, zero, zip. It just basic economics.

If you would like to actually demonstrate a scalable example where a market works on "honesty" instead of basic economic principles, please be my guest.

Re:Biased question

[intrico]

You've read into that sentence too way deeply. I was referencing the question posed in the title of the original Slashdot posting, "A Working Economy Without DRM?". DRM was created by these major companies with the intent of controlling distribution of their media - part of an overall agenda to control distribution *as well as* the traditional marketing channels, two things which these very few huge media companies have obviously enjoyed a nice grip on for decades. Without these control-tactics exhibited by the media companies, "getting discovered" (e.g. scoring a contract - a lot like winning the lottery, not highly correlated to talent) would be irrelevant, as it should be, in turn creating a more level playing field for the artists.

Re:Biased question

[kamapuaa]

However, I don't agree with DRM at all, either, because if you do shell out the cash, you should be rewarded with a lot of freedoms with that content. You should be allowed to make backups, you should be allowed to listen/watch on different devices and so forth.

And you should be able to have your cake, and eat it too! The empirical, verifiable, 100% accurate take on movies, music, games that lack DRM is that they will get copied and traded over P2P networks. OK, DRM is of limited effectiveness, but for how long will that be true?

If something is worth buying, it's worth buying. If it's not worth buying, don't buy it What you suggest basically amounts to "donate company to the money if you feel like it." It simply wouldn't be able to support large industries. I've heard anecdotal tales that freeware authors who ask for contributions will get essentially nothing, regardless of the popularity of their product. How does "buy it if you feel like paying the money" amount to anything more?

I'll make these analogies as well: when cassette tapes hit the markets as a cheap, convenient means to copy recordings Copying via tape didn't destroy the industry once, therefore easily available P2P downloads are good for the industry! This "logic" is a rationalization, not an argument.

I live in China, where DRM effectively doesn't exist and bootlegs are widely available, without much chance of getting sued by the RIAA. It has killed the CHinese entertainment and everybody knows it. A recent movie of "Crazy Stone" stunned everybody by making a small profit. The key to its profitability was somehow, it took a whole week before quality bootlegs became widely available. That is a lot more important factor than the quality or basic appeal of a movie

Given the choice, people don't want to spend any money. Either you have to make new business models (typically involving all artists becoming advertisements), you have to abandon the entertainment industry, or you need DRM & copyright protection. Your system of people voluntarily giving money wouldn't work.

Re:Biased question

[TheVelvetFlamebait]

I'm impressed with the number of examples you could (be bothered to) recite, but the case of mp3s is complicated by the shift in medium from physical (limited extensively in convenience), to the intangible. It's different to all the other examples because of this. It can be transfered very quickly and fairly anonymously unlike physical media, which is limited to the speed and anonymity of the post.

Sorry to be so obvious.

However, I appreciate that the reason that the **AA complained in each case was at least slightly different, with each threat bigger than the last, and yet they still pulled through. The question is: is this change too large for the **AA to adapt to, or will they pull through as they have done before?

Re:Biased question

[montyzooooma]

"DRM is a necessary evil and assuming a world without it is simply pissing in the wind."

I'm normally and logically anti-DRM but this got me thinking about the old world equivalents. In the real world a lot of thinking are easily copied and the main reason we don't is because we either lack the time or skills to do so. Look at that factory that was busted for turning out replica Ferraris a few years ago. Same with a painting - we could pay someone to reproduce it more or less exactly but most of us aren't sufficiently excited about the painting to go to the expense. The alternative is to buy a print for a few dollars. We could scan and print out a reasonable facsimile of our friend's copy of the print but for a few dollars why bother?

The problems started when we could make almost perfect copies of things for next to nothing. Tape to tape would have been the begining of that, I think. Even then people were prepared to pay for the original because they weren't that expensive and they were still better quality. But now with CDs and DVDs we can home manufacture digitally perfect copies right down to the inlays. How to discourage us? Price CDs and DVDs cheap enough to make it pointless. A DVD costs 50c to make? Sell a million of them for 2 bucks and you've got a million and a half to play with. Put half a million into shipping and advertising and there's a million dollars to make your movie. Start making movies for a million bucks or less and you don't even need studio level backing, private investment will be enough. Creativity will reign supreme and it will be as heaven on Earth.

Yeah I now. It'll never happen but at the end of the day if the Entertainment industry is going to treat itself like an industry shouldn't it be looking at the way other industries compete? Drive costs down to the minimum (no more billion dollar stars - who needs them?) and sling the product out cheap for the mass market.

Re:Biased question

[Alioth]

In terms of music that's actually sold and created from scratch, we aren't talking about classical musicians. Most classical musicians don't compose - they just play stuff other people wrote (often hundreds of years ago) and then only to live audiences.

The kind of kit used to make recorded music is relatively cheap. I have a Roland A-90 keyboard, a nice hammer action "portable" (for arm stretching values of portable) keyboard. It's very nice. It cost US $2000, and I've now had it for 9 years I think. Amortized over that time, that's a little over $200/year even if I gave it away for free tomorrow, but I'm likely to still have it in 10 years time. My keyboard is at the expensive end of the kind of instruments that the majority of us buy - most guitars are much cheaper than this.

Notwithstanding the very high price of some ancient violin, music IS cheap to make. Also, the ability to make music is very common amongst the human population - Britney Spears and co are largely a product of the cult of personality and marketing - their talent is pretty common.

Re:Biased question

[Anonymous Coward]

indeed.

musicians live by performing to audiences. that wont change, it may actually become even more profitable if all the music on the net is distributed free of charge.

its the record labels and hollywood studios that are screwed. and rightfully so (IMO).

i bet there were a few people worried when Thomas Edison invented the light bulb, since it really was the prelude of doom fot the candle industry.

so, here is my business model for future:

- publish all music for free
- live by performing music

- show all movies in theater for profit
- after getting the production costs, release them to public domain

no more millionares, just happy people doing what they like to do.

Re:Biased question

[AGMW]

So a lot of pirating is a "win, no loss" scenario

Not sure I agree with you here. Sure, the artist isn't actually losing existing money by your light fingered brother's purloining of the content, but had your brother purchased said items the artist (and the rest of the chain from shop keepers to recording labels/studios/etc) would have got a share of the monies.

Just because it is easy to copy music it doesn't make it right to do so. The problem, as I see it, is that it is (IMHO) reasonably legitimate to be able to copy music/films/etc that you have purchased, which makes it really diffult to stop people copying the content without paying.

Sure, the artists aren't fiscally worse off after your brother's shenanigans, but someone's lost something. Do you recall the case of the programmer working in a bank somewhere in the US who thought it'd be a blinder to take all the rounding errors, the 0.002's and 0.004's of cents, and transfer them to his own bank account. No one actually lost anything as those "roundings" were discarded right? His bank account very quickly had a very large amount of money in it (unless it was an urban myth of course!). It turns out it was someone's money after all, and he had been stealing it!

Re:Biased question

[bitbucketeer]

Plain and simple: don't buy online music. Since RIAA decided to screw the artists with reduced download royalties, I purchase the CD and rip it myself. Artist gets paid what they deserve and I have a lossless hardcopy that I can format-shift and don't have to deal with DRM bullshit.

Re:Biased question

[erroneus]

Now the reality - the more these idiots apply DRM, the more worthwhile it is to STEAL the content because the stolen content gives you the freedoms you should have had to begin with. I make the analogy with software copy protection, specificly from the 80s and early 90s. The copy protection became so bad, I'd buy a game and the first thing I'd do is look up on the internet (through ftp sites, at the time) how to break it. Damned code wheels and all that crap. Forget it! It's the guys that stole the game that didn't have to put up with that crap, and it's the people illegally copying the movies that can do whatever they want with it.

Now **THAT** is what I call a winning argument against DRM.

Re:Biased question

[LuYu]

So a lot of pirating is a "win, no loss" scenario

Not sure I agree with you here. Sure, the artist isn't actually losing existing money by your light fingered brother's purloining of the content, but had your brother purchased said items the artist (and the rest of the chain from shop keepers to recording labels/studios/etc) would have got a share of the monies.

So, then, in your opinion, he should have been forced to pay. This way the artists would have got whatever he had. Or he should have been excluded from participating in his culture until he came up with some money. This sounds dangerously like those schemes where people pay taxes for copyrighted materal. Such a system steals from everybody who does not or would not purchase those things.

Sure, the artists aren't fiscally worse off after your brother's shenanigans, but someone's lost something. Do you recall the case of the programmer working in a bank somewhere in the US who thought it'd be a blinder to take all the rounding errors, the 0.002's and 0.004's of cents, and transfer them to his own bank account. No one actually lost anything as those "roundings" were discarded right? His bank account very quickly had a very large amount of money in it (unless it was an urban myth of course!). It turns out it was someone's money after all, and he had been stealing it!

In this case, is it not a matter of claims? As soon as something is discovered, people tend to claim it. Bankers, being a greedy lot, were quick to claim that some money they formerly did not claim to own was suddenly theirs. The assumption goes in their favor because the money in question was generated by their money. However, it could just as easily been classified as trash which would make it available to any member of the public who claimed it.

Re:Biased question

[syousef]

I think what irks people and leads them to piracy is the knowledge that most artists/creator aren't compensated in any case. Most of their money goes to distributors and middle men. Make it illegal for any more than 10-20% of sale value to go to middle men. Limit the price of certain articles (no more than $20 for a DVD say). I believe eventually you'll see cheaper product and even if you don't people will pay for it because they're supporting the artist not the record company. If a distributor can't distribute for less than 20% of the sale price of the product, they don't deserve to be in business.

Re:Biased question

[Schraegstrichpunkt]

No one is arguing "that [DRM is] unnecessary to protect the works of content creators."

I am. We still have copyright law, after all. Ultimately, that's why the content creators are still making money, even though every DRM system in widespread use has been broken (or fixed, depending on your point of view) to date.

I have yet to see an argument that DRM is necessary that is grounded firmly on evidence, rather than speculation. From what I've seen, the evidence suggests that DRM is unnecessary.

Re:Biased question

[somersault]

If you can display your movie on your monitor, and play it through the soundcard, won't it always be possible just to do screen grabs at 30fps, and re-encode the sound etc? Similar to the 'analog loop', but staying completely digital? Unless the media players close down other suspect applications while playing the movies. A couple of hours to record the movie in a non restricted format, et voila .. even if there's some kind of encryption on the soundcard, if you plug the output into your mic input and record from there, it's the same (unless your sound output is digital only and encrypted, that would make things more interesting).

I'm maybe missing something obvious, or not so obvious here, but if you want to pirate something, there's probably always gonna be a way to do it, and even do it at high quality. Didn't people just steal film reels of Star Wars from the cinema when it came out a couple of years ago?

Re:Biased question

[SanityInAnarchy]

You're misquoting me. I did not mean to say "No one is arguing DRM is unnecessary." I meant to say "No one is arguing that it's unnecessary to protect the works of content creators." This much is true, and I can see you agree with me -- copyright law fulfills that need to "protect the works of content creators" without DRM. I'm arguing the same thing you are, great-grandparent was just confusing the issue by using something else to describe DRM -- something which we subconsciously translate into DRM and think is bad, but which authors read literally, and think it's good, and forget about which implementation is being used -- DRM or copyright (or both). I'm just trying to clear up that confusion.

Re:Biased question

[PHPfanboy]

And on a slightly unrelated note...was it just me, or did Steal This Film fail to make any good justifications for piracy?

I'm with you on this one. I watched the whole lot and the quotes were all from people in the street who offered very shallow justifications, if any.

None of them backed themselves up with anything more than "copyright is against my morals" (WTF?) or "it's going to happen anyway" (yay for the moral collective consciousness of the internet!). Dan Glickman also didn't sound compelling. In short, it was an interesting movie about Pirate Bay, and how small countries can be pushed around by large ones (what's new?), but other than that, it was just a piece of propaganda/ advertising (which is why it is given away for free!)

Re:Biased question

[visualight]

DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards

Why do people keep saying that? Is that supposed to be some kind of self fulfulling prophecy? Like, if you say it enough it'll be true? The truth of your statement is entirely dependent on what people accept. I, and everyone I know, will never accept a computer or purchase media that is restricted/crippled/trusted. And, I think the percentage of the population that also believe that will continue to grow, not shrink. So,

DRM is a temporary social problem and to deny this is to be simply ignorant of current trends in society/politics. All new hardware will still allow people to defeat DRM standards.

Re:Biased question

[Anonymous Coward]

Do you think the big manufacturers are going to continue to produce devices that play non-DRM content? What's in it for them?

Manufacturers of devices make their money off consumers of content, not producers of content. There is no financial incentive to produce players that refuse to play non-DRM content.

Re:Biased question

[Schraegstrichpunkt]

Ah. 'No one is arguing that protecting the works of content creators is unnecessary.' Never mind then. :)

Re:Biased question

[umghhh]

Basic economics are for instance when you notice that goods you paid for with your hard earned money i.e. music CDs are not compatible with all your players and you cannot legally make a copy of some of them you stop buying. It did work for me like this - from 3/4 CDs a week I went down to 0, nada, zero, nul - I do not see the point of paying for goods that I cannot use. That is basic economics.

Let discuss the other argument you assume is true - people are paying only because they are afraid.There are for instance hotels and restaurants that do not charge for their service. The relay on customers behaving and paying. Of course they need to provide good service otherwise nobody will bother. They tend to have healthy profits too. healthy economics is it not?

And the argument about technical barrier for copying is just laughable - you mean I need a degree in computer science to be able to start up the browser? Well if the level of your computer knowledge is as high as it seems to be in economics (which contrary to common perception is not a science) then this may be your perceived reality. It is not mine and it is not any of the millions others (that do copy when they feel like it).

Funny enough people often copy illegaly and then proceed to buy legal version if they like what they got. Something the proponents of DRM and such crap are constantly forgetting.

BTW: when I stated that I stopped buying I did not mention that I do not use illegal copies either. When I cooled down from the first shock of not being able to use paid for goods as I wish I looked on what is in store and decided there is hardly something out there worth my time to watch and listen. Especially if new produce is taken into account.

Re:Biased question

[SerpentMage]

I hate this attitude "Oh he would not have bought it anyways and therefore its ok to borrow"

Beep NO ITS NOT! Ask a BMW driver if you could take their car for a spin because 1) you don't have the money, 2) don't want to buy it because you prefer Lexus. Most likely the BMW driver would tell you to bugger off.

Imagine if Microsoft took this lax attitude to Open Source. Imagine if Microsoft said, "Hey let's borrow that threading code" and not follow the GPL. I am betting you and your brother would be the first in line to demand Steve Ballmer's head! Yet you think its ok to "borrow" movies.

Movies, Music, Open Source all depend on copyright. If you break copyright for one you break copyright for all. I am a firm supporter of Open Source and a firm believer of copyright.

So next time when you "borrow" a movie or music, you are saying it's ok for Microsoft to borrow pieces of Linux code without following the GPL.

Re:Biased question

[shmlco]

Okay, the equipment is cheap. Now, how much money do you pay in rent, for food, health insurance, car payments, put in retirement, use for clothing, furnature, appliances, child care, medicine, and so on? How many people in the band should we multiply those numbers by? What does it cost to pay someone good to run that equipment? Do album covers? Photography? Promotions? Flyers? How long does it take to get enough good material together to make an album? For that matter, how long does it take to hone your craft to the point where your music is worth paying for?

Re:Biased question

[Anonymous Coward]

Also, in my country there is a extra tax/fee on empty CD's and DVD's... 'as a compensation because so many people are using empty media to store copyright material'. All this is done with a non-governmental organisation which still hasn't made its administration public (soo..how much of the tax is actually going to the artist? hmm?).

I see that this has caused a lot of frustration by the consumers, generally resulting in two things:

1). Buy your empty media in a neighbouring country because it is cheaper

and most importantly:

2). People start thinking that, because everyone buying empty media is basically assumed to guilty and fined an extra tax, people will actually download/copy more illegal material. ("I have already paid a compensation")

They're also planning to do/expand this in Germany with what is called the "iPod Tax". A tax on everything with storage capacity: media-players, hard disks, and yes, even a extra tax on computers. I've seen number that will make a modern 250GB hard disk as expensive as a completely new computer!

IMHO, if the entertainment industry was really smart: they would have ignored the fight for the illegally downloaded materials say 6 years ago, and the moment Napster was showing up: they should have bought it and create an legal, easy to use store like Apple's iTunes.

Just like Dell, they would have removed the middle men, less distribution costs, more profit. If only those people opened their eyes for possibilities instead of fighting battles...

Re:Biased question

[Saint Fnordius]

Shorter argument: DRM is necessary because it exists. And since DRM exists, you can't support media without DRM.

This is, to put it mildy, bullshit. It's like arguing that you can't use MP3 any more, just WMA or AAC with Fairplay. The response ignores the question of whether an artist can recoup production costs or turn a profit in a world where copying media is trivial and uncontrollable.

As to my thoughts, I think the artist can still survive (by artists I also include moviemakers). The studio cut may shrink, and some artists may have to find new ways to finance their works other than studio contracts, but pay-per-download can still survive as a promotion tool, and also if quality is guaranteed. Fans will still buy the merchandise, attend concerts, visit the theater for the Big Screen Feeling, have the hardbound edition in the bookcase. The biggest change will come in that media will have a freshness factor: early downloaders will pay more than later downloaders, but for the higher price they get the "see it first" warm fuzzy.

Re:Biased question

[Anonymous Coward]

That's the whole point of Trusted Computing and "secure path".
The movie won't be played by an application, the movie will be played by a kernel-level driver which runs inside a hardware-enforced subsystem.
The decoded frames of the movie will be sent straight to the graphics card, which in turn will send them to your HDCP monitor (also encrypted).
Nowhere along this path will unencrypted data be available for grabbing, not even by the most low-level rootkit/"evil" driver.
In the future, movie pirates will probably have to create custom lcd panel electronics that capture the bits as they are being displayed :)

Re:Biased question

[Kirth]

You got it. Its pure economics. Illegal copies are in fact competing with legal copies. And if you cripple the legal copies, you're shifting the economical incentives even more towards illegal copies.

Re:Biased question

[Znork]

"Just because it is easy to copy music it doesn't make it right to do so."

Just because it's easy to copy music it doesnt make it wrong to do so.

If I buy a chair and then make one just like it, it's in no way wrong. If I had a chair-copying machine, and started churning out copies, it still wouldnt be wrong. Yet you somehow appear to believe that ease of duplication should merit legal prevention of such duplication?

"but someone's lost something."

Yes, the economy as a whole constantly loses because of intellectual property. The money that brother isnt spending on buying protected material is spent on other things. If he would have had to buy the material he wouldnt have been able to spend money on those other things. This in turn would mean less wealth was created within the economy as a whole (the other stuff _or_ the ip, as opposed to the other stuff _and_ the ip), leading to an actual loss to the economy.

This problem is squarely tied to monopoly pricing. In a competetive market, the price falls towards cost of production, leading to a maximization of available wealth, and a fulfillment of as many consumers demand as possible while still being able to produce the product with a slight profit. With a monopoly right, pricing and revenue is maximized at a point where a whole lot of consumers cannot afford the product/will value it less than alternative products, even when it still could be produced with profit at a lower price, thus negating the whole point of a free market economy.

"but had your brother purchased said items the artist (and the rest of the chain from shop keepers to recording labels/studios/etc) would have got a share of the monies"

Then again, if we scrapped the monopoly copyright and instituted an IP sales tax on those actually profiting from the sales (say, 50%-75% of the price in stores or on the net) with the proceeds going directly to the artists and composers, then the artists and composers would have gotten a much bigger share of the monies, and the whole chain in between would remain competetive.

Re:Biased question

[Znork]

"If you break copyright for one you break copyright for all."

So, I lose my ability to enforce the freedom of my code in exchange for everything else actually gaining that freedom?

Sounds like a fair deal to me.

Yes, your argument has been dealt with many times before. While the GPL depends on copyright to disable the restrictions created by copyright, without copyright it would essentially be unnecessary.

"you are saying it's ok for Microsoft to borrow pieces of Linux code"

Without copyright, we would have had a merge between the codebases long since; there'd have been no problem running applications written for either API, and the sharing would have gone both ways. Microsoft would have been unable to remain a coercive monopoly, as anyone they tried to coerce could have forked the code. They would have had to remain competetive and offer value above their competition, and would probably have been a far better company shipping a far better product for a far lower price.

Provided the sharing and removal of copyright goes both ways, I really dont see the problem. Which is the exact situation the GPL creates.

Re:Biased question

[MeltUp]

I hate this attitude "Oh he would not have bought it anyways and therefore its ok to borrow"

I can assure you my brother wouldn't have bought any of the gigabytes of music he currently has. For a start he doesn't have the money for it, and secondly at least 50% of that music he wouldn't even consider buying if he was Bill Gates himself. So what exactly is the "industry" losing on him?

Beep NO ITS NOT! Ask a BMW driver if you could take their car for a spin because 1) you don't have the money, 2) don't want to buy it because you prefer Lexus. Most likely the BMW driver would tell you to bugger off.

BAD analogy, he has got something to lose here, his car! Can't you see the difference between "physical" and "intellectual" property? In this case te analogy wouldn't be copying the car, but making a perfect copy of it without the owner having any negative effect on his car.

Imagine if Microsoft took this lax attitude to Open Source. Imagine if Microsoft said, "Hey let's borrow that threading code" and not follow the GPL. I am betting you and your brother would be the first in line to demand Steve Ballmer's head! Yet you think its ok to "borrow" movies.

Another bad analogy, code is not the same as music. And besides, my brother isn't making any money of it. I wouldn't agree if he made money by selling music he downloaded.

Movies, Music, Open Source all depend on copyright. If you break copyright for one you break copyright for all. I am a firm supporter of Open Source and a firm believer of copyright. So next time when you "borrow" a movie or music, you are saying it's ok for Microsoft to borrow pieces of Linux code without following the GPL.

As I said, your analogies and logic is faulty... I could personnaly live with copyright that only permits the creator to make money from the work, but leaves all other uses free.

Re:Biased question

[Znork]

"Make it illegal for any more than 10-20% of sale value to go to middle men."

Another model would be to allow any copying, but put a sales tax of, say, 50-80% of any end price to consumer, with the proceeds going directly to the artists and composers of the particular work generating the revenue. That way anyone could run on-demand cd presses, sell mix CD's, set up an online music store, or come up with pretty much any distribution and marketing model conceivable, while the artists and creators would get paid much more than today. Heck, such a model could support pretty much any media form, ranging from books to live performances to broadcasting.

Re:Biased question

[bentcd]

One of the main problems with classical economic thinking is that it assumes all people are 100% selfish. While this may make for some useful models, it can also lead to some astonishingly erroneous conclusions.
I have seens studies done on people's behaviour in various social situations and it would appear that about 40% of us are quite cooperative people who don't go out of our way to get a free lunch but rather prefer to pay up even when we could have chosen not to. This is the demographic you would be selling to in a non-copyright, non-DRM world.
That there are then 60% who may or may not get the product without paying for it is of little interest except to pathological control freaks.

Re:Biased question

[Aladrin]

I hadn't heard of fictionwise, but I had heard of their competitor, http://www.baen.com./ They were the first company to give books away for free, and I suspect they did drm-free before fictionwise, too. I have read at least half of their free books, and they are pretty darned good. I've also bought quite a few from them now, as they were sequels to the ones I read for free.

I could simply have stolen them from usenet. Instead, I paid for them because I like the company, I like their products, and it was the right thing to do.

I will -never- buy DRM protected books. I will use the -shudder- library first.

On the same note... http://www.allofmp3.com/ sells drm-free music. We ALL know how easy it is to steal music, and yet they manage to sell it. Price and convenience, plus the fact that nobody really -wants- to steal. (Well, except mentally-deficient people.) A combination of pressures (monetary, etc) forces them to. I won't even go into that. Everyone has their reasons and very few 'just felt like it.'

DRM-free content CAN WORK. It just has to be the right price with the right customer service, convenience, etc.

Re:Biased question

[Peter La Casse]

Ah. 'No one is arguing that protecting the works of content creators is unnecessary.' Never mind then. :)

Now that you mention it, why is it necessary to protect the works of content creators? It's not like content creators will all stop creating content if all content was public domain. Some industries would fail, but it's not our responsibility to prop them up with artificial business models. Some content, like $300 million movies, might not be created, but people would still make movies, and people would still pay to see movies in theaters. People would still watch TV and listen to the radio, because that's convenient, so those business models might not change much right away.

Follow-up: if it is necessary to protect the works of content creators, why is it necessary to protect them this much? Someone yesterday suggested changing copyright to 7 years. How is the current situation better than that? Or better than 15 years? Or 20 years?

Re:Biased question

[cshotton]

I disagree with the whole idea that it's unnecessary to protect the works of content creators

This is old school thinking.

A reputation-based economy solves this problem (and many others). As soon as an infrastructure exists that allows a managed exchange of reputation in a market that values it relative to one's contributions to society and the inherent value of the information/data/software/media you have created, there is an easy conversion between the reputation economy and hard goods/currency economy. Then, all you need to protect is the relationship between the content and the creator so that the real author is known and forgers and pirates cannot make a claim on the resulting reputation value.

It is a technical challenge to develop a ubiquitous system for reputation "trading" that works as well as existing stock markets and currency exchanges, but our network and crypto systems are up to the task. It's just a matter of there being a compelling economic reason to switch from currency to reputation as a means of compensating the creators of digitally represented products. A trusted network of reputation exchanges that are managed as part of our existing markets isn't hard to build, just hard to deploy. But it is a model that completely eliminates the need for DRM.

In short, downloads == reputation. Provide a means to convert reputation to currency (a one way conversion, mind you), and you're done.

Re:Biased question

[Znork]

'No one is arguing "that it's unnecessary to protect the works of content creators."'

Actually, there are a whole bunch of us who do. Monopoly protection is inherently damaging to the economy, hinders the creation of wealth, art and knowledge, and slows down the progress of the arts and science.

That's an entirely separate issue from the possible usefulness and desireability of creating further economic incentives for content creation beyond what the free market can provide; it simply means that with efficiency levels at fractions of spent resources, it's become obvious that a monopoly is among the absolutely worst ways to create an economic incentive for a particular activity. We'd get more value for the actual money spent (as in creators supported per dollar cost to the economy) if we simply paid for the production outright with such a bad economic construct as taxes, and without all those negative effects.

"and make it cheap enough that no one cares."

With monopoly rights that's not going to work. Revenue maximization for a monopoly simply isnt created that way; when you have no competition, you raise prices until a certain number of consumers simply must do without, at which point you have the highest revenue. As piracy is more or less the only competition, that means the less piracy the higher the price you can set, which creates the imperative to prevent piracy while maintaining the goal of raising price.

The whole issue is a natural result of monopoly rights; no matter how much we wish it wouldnt be an issue, that the industry would lower prices to solve their sales problems, that the artists and composers would get paid more, etc, it simply isnt going to happen as long as the incentive remains a monopoly right. The economic incentive _is_ to raise prices, pay the artists and composers as little as possible, maintain control of channels, limit consumer choice, etc.

As the problem is inherent to the construct, it simply isnt possible to resolve within the current framework.

Which is why I will restate; it is _necessary_ that we stop protecting IP and start paying content creators instead.

Re:Biased question

[Anonymous Coward]

How noble of you to want "archive it" for future generations. The truth is people are pissed about DRM because it makes it harder to pirate. DRM isn't evil it's a knee jerk reaction to being robbed blind. The poster child for legal downloading is iTunes but the ugly truth is 50X to 100X as much music is dowloaded illegally as has been sold on iTunes. Obviously it doesn't represent legitimate sales since people are downloading thousands of songs they'll never listen to. People steal music because they can and it doesn't always reflect want or need it's on some twisted principal. I had a portable cassete player in the back of my car. It was used in a shop and covered in paint. It was completely worthless but some one saw it wanted it and broke my window to get it. The box was worthless but the window cost me $150 to replace myself. I'd have happily given the radio to them to save my window. Another time some one broke another window in a car of mine because there was a blanket in the seat and they thought it was hiding something. I'm sure they were unhappy they went to all the trouble to break my window for nothing but I was out a window. Some people steal strictly because they can get away with it. What is wrong with the freemarket system? If this isn't about getting something for nothing then don't buy the music but also don't download it without paying for it. People sell music to make money. If they can't make money at it they won't do it, period. This isn't about the greedy music companies it's about cheap bastards refusing to pay for music and movies so they can aford to buy more toys. I didn't own a VCR until I was 26. These days people are spoiled and want everything without working for it. Earn money buy things then people can aford to make more stuff for you to buy. It's called capitalism. The other system is communism. Music downloading isn't even that it's more like dash and grab robbery. You aren't kids grabbing a pack of gum in a convenience store you're stealing thousands of dollars of some one else's hard work. They deserve to be paid so they can eat. If you want it stick a crowbar into your wallet and pay for it ya cheap bastard. DRM isn't evil but illegal downloading is.

Re:Biased question

[Silver Sloth]

I know I'll get modded off topic, but, hey, I've got karma to burn, and I had to say thanks for the link to Girl Genius. I'll get back to work after I've read just a few more strips (honest!)

Re:Biased question

[delinear]

Beep NO ITS NOT! Ask a BMW driver if you could take their car for a spin because 1) you don't have the money, 2) don't want to buy it because you prefer Lexus. Most likely the BMW driver would tell you to bugger off.

That's an asinine analogy - the two things aren't even vaguely comparable. By driving his physical BMW you are devaluing his property (by adding wear and tear and mileage) and incurring a risk of damage. How does this even begin to compare to making a digital copy, which leaves the original intact and unharmed?

A better analogy would be if you asked the BMW driver if you could use your Super-Duper Cloning Machine to make an exact copy of his car and you drive the copy - but even that isn't entirely accurate as the BMW owner may perceive that the value of his expensive car will go down the more people there are driving it. The opposite seems true for music - the more popular it becomes the more money is generated by the artist. Maybe a better analogy would be if you copied his BMW without his knowledge, in the middle of the night, then the next day, without explaining why, ask him if he feels any better or worse than he did yesterday.

Imagine if Microsoft took this lax attitude to Open Source. Imagine if Microsoft said, "Hey let's borrow that threading code" and not follow the GPL. I am betting you and your brother would be the first in line to demand Steve Ballmer's head! Yet you think its ok to "borrow" movies.

Again this analogy is badly flawed. The reason being that a good percentage of people who download (especially the "hoarders" who just download for the sake of it) argue that they wouldn't have bought the CD anyway, so it has lost the artist no sales. In your analogy, on the other hand, if MS had not "borrowed the code" they would have had to have paid for it (either with cash, or by accepting the GPL). It would be impossible for them to put up a case that they simply wouldn't have included the functionality if it weren't there for the taking - because they would have gone through lengthy business processes identifying that the functionality was required and would generate benefit to the business.

The other difference, of course, is that MS would have taken the code fully intending to make money from it by selling it on, and I don't think even the most hardcore downloader (that is, a downloader who is hardcore, rather than a downloader of hardcore) would condone selling on someone else's work for personal profit (this is what I would define as a true "pirate"). This blatantly does cost the copyright owner a sale (because it proves the person buying the copy was willing to pay some price for it). If, on the other hand, some guy just stuck a chunk of the code into his personal copy of windows to make some tasks at home less onerous, then nobody gets hurt.

I'm all for differences of opinion and I can respect that you have your own opinions on copyright, but if you so strongly believe in what you're saying, at least be prepared to have some valid reasons for saying it. Otherwise you just muddy the waters.

Re:Biased question

[ArwynH]

If you would like to actually demonstrate a scalable example where a market works on "honesty" instead of basic economic principles, please be my guest.

Simple. In most cases relying on the customers honesty is cheaper that not doing so.

I can think of a few examples, but instead I'll just go with the logic of the costs envolved. With DRM'd media you have the R&D cost, which is usually quite large and keeps on growing when someone cracks it. Without DRM you have the possibility of reduced sales due to piracy. If the cost of R&D is greater than the loss due to piracy, then it's cheaper not to have it.

In the case of AV media I suspect it would be cheaper not to have DRM. Do you really think people would stop using iTunes if they dropped fairplay? I know I'd spend more money on songs for my mobile if I could play them on my Linux PC as well as on the phone.

Media companies disagree with me of course, for various reasons, hence the DRM. They believe it will stop the copying and bring them more money. Even if it does succeeds, I doubt it'll be enough to offset the cost of keeping it successful. Because only a small fraction of those free downloads will turn into sales numbers. One of these days, maybe a few years down the line, the media companies CFO's are going to do a thorough cost analyses and drop the whole DRM idea. By then it'll probably of cost them quite a bit for little or no visible returns.

Re:Biased question

[SammysIsland]

Finally!!! Someone who accepts the idea that things change. Just because a system is in place and someone makes a ton of money from it does not mean that they are entitled to that money forever.

These changes mark the beginning of a time where the masses have the advantage and the access to what was previously unavailable. According to the laws of economics, supply and demand rules the marketplace, not the other way around.

Data is simply not of any value unless it is kept secret, and as soon as I purchase something, it can no longer be kept a secret any longer. Company trade secrets and recipes and such are the only things that can truly be considered intellectual property.

Re:Biased question

[dlsmith]

All of your examples involve additional cost factors. ... None of these issues have a thing to do with honesty.

For many people, there is a "cost" associated with dishonesty. That moral cost makes dealing honestly the "cheaper" option. ("For what shall it profit a man, if he shall again the whole world, and lose his own soul?") In general, I think many consumer-based businesses would fail without the assumption of goodwill in customers. How many movie theaters, for example, have sufficient security in place to guarantee profit in the presense of consumers who only consider financial cost and risk of punishment in determining whether they buy a movie ticket?

Re:Biased question

[afabbro]

Because most classical music performances are actually concerts, and I doubt classical music requires a lot of post-prod work

The CDs are usually not concerts (music records better in a studio and classical listeners want perfection) and classical music is one of the most heavily post-prodded genres. Engineers typically take sections from multiple performances to produce the final version, sometimes down to a note-by-note level. Plus, mixing is hell...a three-man rock band may have a dozen mics at most. A classical orchestra has dozens of players, hundreds of mics...

Re:Biased question

[Digital Vomit]

Now the reality - the more these idiots apply DRM, the more worthwhile it is to STEAL the content because the stolen content gives you the freedoms you should have had to begin with. I make the analogy with software copy protection, specificly from the 80s and early 90s. The copy protection became so bad, I'd buy a game and the first thing I'd do is look up on the internet (through ftp sites, at the time) how to break it. Damned code wheels and all that crap. Forget it! It's the guys that stole the game that didn't have to put up with that crap,

I don't think software theft is that big of a problem what with the internet making it trivial for people to share software and all. And besides, people that stole videogames would have the code wheels and license keys. It's the people that copy the software that would be missing these things.

Re:Biased question

[delinear]

Unfortunately I doubt that would work with the current model. The middle men would just increase the price until that 10-20% was equal to what they're currently earning, which would mean higher prices for everyone. The only way for artists and consumers to win here is to get rid of the middle men, and the internet is a huge asset if that's your goal. Which explains why the middle men are now squirming like crazy and litigating anything that moves.

Re:Biased question

[Flyboy Connor]

So you are saying that the fact that of the 1500 DVDs I own none of them is an illegal copy, is because I am afraid that I get prosecuted. Sorry, no, the chance that I would get arrested for owning illegal DVDs is zilch. I can easily get most DVDs I own from the corner black-market guy, for 4-5 euros per movie, instead of paying 10-15 euros per movie. But I never did. And why? The main one is that it is not the same product that is offered. First of all, I like to browse. My neighbourhood dealer gives me a list of titles and I have to mark those that I want. No browsing, just titles. Not how I want to conduct business. Secondly, I distrust the quality of rips. And, as I understand from people who do buy from our local fence, rightly so. Thirdly, when I buy a DVD to give as a present, I want to give the real thing, and not a rip. Fourthly, my interest is not so much in the big blockbusters, but more in 'quality' movies (whatever that may be) and high-quality editions (think Criterion). That is not what the peddler offers.

The point is that the 'legal' movies will keep my business as long as they offer a product that I prefer over what the black market offers. Unfortunately, the 'legal' market is quickly getting spoiled, because of stupid stuff like DRM, region codes, Macrovision, quick-and-dirty editions, ridiculously high prices, forcing the quality shops out of business because they only want to deal in the high-volume-stuff, releasing four different editions of the same movie over the course of a year, etc. etc. We are dangerously close to the borderline where the product offered by the crooks is actually a lot better than the legal product (and maybe we have already crossed the line).

The music industry has already lost my business because of a few bad experiences. I am not yet downloading stuff, since my interest in pop music is pretty low and I already have all the classical music I need for the coming decade. But a tell-tale sign is that I have stopped browsing music in shops. If I do not browse, I will not buy. Make browsing easy, informative, and enjoyable, and there is business.

And, yes, that is economics. Practical economics.

Re:Biased question

[Anonymous Coward]

As previous posters have noted, DRM was tried and failed with games. One must take a step back and look at the bigger picture: What the MPAA and RIAA are scared of is the fact that tech is reducing the barriers to entry for those who wish to make movies or music or books or other works. Before, it cost megabucks for the tools to produce and distribute a work, now tech has reduced the cost to the point that anyone determined to do so can create a work and distribute it for free. As others have posted, talent will continue to be rewarded; we will become patrons, and those artists we like will receive our financial support in order that they can continue to create.

The discussion must be reframed. It isn't piracy, it's control that is at stake. The trade groups, actually their members, act as toll booths, extracting payment for a "service" that is, with tech's help, is not as needed and is becoming actively resented. When we focus on DRM as the problem to be overcome, we play right into their hands. The MPAA and RIAAand their DRM will ultimately fail. DRM didn't work with games, and once the public finds out the magnitude of the industry's theft-and it is theft- of their rights, they'll do the right thing.

Re:Biased question

[DaveV1.0]

I like the way you completely side-step his perfectly valid question by saying it's biased. You own bias is showing quite well.

Creating music requires spending money. It takes money to buy the equipment and media. It takes money to rent the space to record. It takes money to hire engineers and crew. It takes money for the computer and internet connection. You say "Music is cheap to make" Tell me, how long have you worked in the music industry? How long have you been a professional musician? How much does it cost to "make music"?

Making movies requires spending money. Money for cameras, media, location fees, permits, actors, crew, special effects, sets, etc. You speak of an "end of $200M productions". Many movies that don't make enough money to cover production cost at the box office end up making that money from DVD sales. If one could just download the movie for free from the internet, why would anyone buy the DVD? The result will be less movies with questionable popular appeal being made.

You speak of people doing what they love. Yet, how often will you do it if you have to work a full time job to be able to pay the rent? And, what about people who aren't "doing what they love"? What about the stuntmen, the gaffers, the riggers, the sound engineers, the electricians? Do you think they will work for little or no money?

You look at the stars making $20 million a movie and ignore the rest of the crew, many of whom make less than $50K a year. You see the group making $100 million and ignore the roadies, drivers, riggers, and recording engineers.

You are ignorant and short-sighted.

Re:Biased question

[kthejoker]

You don't think the producers of content won't PROVIDE a financial incentive to refuse to play non-DRM content? The same people who sue all of their customers? Sony just has to walk down to its own manufacturing factory and say no. Toshiba, JVC, Hitachi, Microsoft, Apple all have partnerships with major labels.

Once all the labels have a good DRM that works, they can all just walk out on iTunes and anyone else who doesn't want to play by their rules. And the DMCA and other laws are there to help them. It's not about the market and choice any more. It's about legislation, collusion, and the shift to a "you rent your content" philosophy. Fight it or die trying.

Re:Biased question

[SlamMan]

Nobody write documentation because they love doing it.

Re:Biased question

[syousef]

I'm not one to often fall back on the concept that the market will sort it out, but when a CD costs $300 instead of $30, I think you'll find people just can't and won't buy it. There will still be demand for a $30 CD though so someone will step in and fill the gap. Meanwhile it makes publishing online and without the current publishing cartels all the more atractive.

Also you could mandate a per minute limit on entertainment. Yes publishers could reduce the quality and include rubbish but as they're already doing that it would be hard to increase the ratio of crap without turning people off.

Of course you could go to an extreme and make record/media companies illegal - force the artist to negotiate their own studio and cd pressing time. For that matter they could organise their own tours. Yes that takes them away from the creative process. Yes many artists aren't good at those things. So limit the collaboration to a small number of people only allowed to take a small cut, or otherwise just accept that artists without the ability to distribute for themselves will perish. Got to beat what's going on today and where the trend is headed.

Re:Biased question

[Anonymous Coward]

And, honestly, outside of movies, what other media meets your requirements? Not music. Music is cheap to make. Sure, it's likely that in a fully DRM-free Internet age that musicians won't be mega-millionaires, but I consider that a good thing.

1. music is not cheap to make
well it's cheaper than a movie for sure, but it's not cheap to do a professional world class cd.
get the fee schedule for any major producer by calling their agent.
check out the price of an SSL console (which is only one small part of the signal chain)
engineers cost around 60-300 an hour (they have to make the payment on that SSL console)
add in studio musicians and co producers
add in the marketing to get the artists name out there
add in the payola (that's a myth about payola being dead)
add in the cost of the physical media you need to send to distributors
I assure you that Fergies next alblum will cost more to make than many indy films by the time it's all done.

beyond that:
2. musicians rarely make mega millions from alblum sales
musicians make the real money by touring. a 28 dollar ticket at a 60k seat venue is worth 1.6m gross sales if sold out.
they make a few pennies per cd sold unless they own a stake in the distribution
record/publishing companies are the ones that get fscked by the music sharing. You can say "they are large evil corporations" etc, but without them you wouldn't be able to buy a cd or even know an artist existed.

that being said, I think that record companies are charging too much for cds which is the root of the problem. Most are overcompressed (resulting in crappy sound quality) to make them "loud" at the behest of the music companies.

Bad quality + over priced = a real problem for your revenue stream. Record companies are reaping what they have sown, but stealing their product by copying it and giving it away is illegal.

Most musicians aren't in it for the money, but saying they don't deserve to reap the rewards for good work is flat out stupid. Tell that to a sports figure, doctor, or an actor. If they generate that kind of cash and their work is excellent, they deserve a chunk of it. When everyone steals copyrighted material they are fucking people, plain and simple. Not everyone can do what musicians do. Talent should be rewarded. Without a reward system, you would never have anyone with talent bothering to go through the trouble of promoting themselves to be heard(or having anyone to help). You are essentially denying yourself what could be your favorite song, memory cues to good times, by stealing because you are helping to crush the incentive for people to go to the trouble of doing it and getting it out to be heard.

-AC

Re:Biased question

[Chowderbags]

Since when has DRM made it harder to pirate... anything? Is there a single example of something that DRM has actually protected from any copying? There are thousands of groups who will break any DRM that is put out there, and so long as DRM exists, they will too.

I also fail to see how your broken car window is similar in any way to the downloading of music. In your case, there was actual destruction of property. If I go and use bittorrent to download an album, that doesn't mean that I've destroyed the master copy in the recording studio.

As to those who would stop making music if they didn't get money for it... GREAT! I'm tired of marginally talented people who just want a quick buck. There will still be music out there from people and bands who actually enjoy the creative process of music. Will they make money? Probably. They could take direct donations, or go on tour, or bundle physical CDs with interesting goodies.

And you really don't want to get started on capitalism vs communism in a debate on copyrights. Copyrights are a government granted monopoly (i.e. an intervention by the government into the economy). If you want free market economics, then copyright must cease to exist. Yeah, you might work your ass off on your CD of "The Songs of Austrialian Goat Herders", but no matter how much you sacrificed for it, it doesn't mean you'll get money off it.

Re:Biased question

[Anonymous Coward]

This will never happen on any sort of feasible scale. It isn't a matter of being "honest" (or as most people who take the same position you have, of being "moral") it is a simple matter of economics - rationale consumers will not pay for something they can get for free.

Weird.

Not really. People think other people think like they do - it's human nature. Thieves think everyone steals, honest people are more likely to leave their car doors unlocked.

Which is why media goons think they need DRM and why the fellow you quoted thinks as he does; he's obviously not a very honest person, and he believes everyone else is as dishonest as he is.

On the Planet Crap forums years ago when game developers often posted, Warren Marshall (Epic) stated more than once that he "pirated" all his software when he was in college. Little wonder he thinks illegal copies are a threat to him.

Maybe most people ARE dishonest, but I don't think so.

Re:Biased question

[RingDev]

"We're not exactly talking about stealing bread to feed starving children! We're talking about movies!"

Too be fair, I have some friends in the business. Not actors or directors, but grips, lighting techs, and other supporting non-cast jobs. These people's livelihood is just as dependant on the movie industry as Tom Cruise's multi-million dollar life style. While I do think leading actors/actresses are significantly over paid, I think writing off the entire industry is a bit blind to the huge number of people who are employed in or by the business.

-Rick

Re:Biased question

[Anonymous Coward]

Computer games can be downloaded for free, or acquired for a very small fee from your neighbourhood copy-peddler. And still the game-development industry is steadily increasing its revenues.
Not true. http://arstechnica.com/news.ars/post/20060315-6390 .html

Re:Biased question

[SpecTheIntro]

Your post isn't making a lot of sense to me. At first you say:

If I buy a chair and then make one just like it, it's in no way wrong. If I had a chair-copying machine, and started churning out copies, it still wouldnt be wrong. Yet you somehow appear to believe that ease of duplication should merit legal prevention of such duplication?

which would imply that you reject outright the idea of intellectual property. But then you go on to state:

Yes, the economy as a whole constantly loses because of intellectual property.

which seems to be a contradiction, but then the rest of your post concentrates on the generation of wealth and the evils of monopolies.

It seems to me that there needs to be a moral judgement made at the very beginning: if someone else has invested time/money/whatever into creating a unique good, and it is their intent to sell it for profit, do you (or anyone else) have the right to benefit from their work without compensating them? I would argue that you do not, because theft is not restricted to monetary loss alone. (And so the argument made earlier by another poster, "it's ok because I wouldn't have bought it anyway," is intellectually bereft.) If you are unwilling to pay for the work of another, and they do not offer it for free, you're not entitled to it, plain and simple. There's not really much more to the morality of that argument, as I see it.

However, that does not justify DRM in its current form. I think the most rational solution to the problem is one that we won't be able to get to for another fifteen-to-twenty years: we need to lay down a wireless network over the entire world, and have all music be accessible from a central repository, from any handheld device. So, if I buy any version of an album, I am guaranteed access at all times to that album in the central server, and any portable device (or networked computer device) can access the server at any time. If a music file is "protected" but that protection is transparent to me, then I don't really care. What bothers me about DRM is not the attempt to enforce copyright (although that entire industry needs serious reform), but the fact that DRM prevents me from taking a legally purchased song and moving it around. I want to be able to play media at any time, from any location, period. If they can allow me that freedom while making sure others can't access the music illegally, then I say let them. (Although I'll be honest, I'll probably be cheering the loudest if record companies went belly-up.)

Re:Biased question

[vertinox]

If you would like to actually demonstrate a scalable example where a market works on "honesty" instead of basic economic principles, please be my guest.

Black market gun sales and drug dealers.

There are no legal or economic ramnifications in those illegal areas, and yet most of the time the buyer and seller have nothing to go on other than honesty...

And of course threat of force.

Re:Biased question

[Mr. Slippery]

Sure, the artist isn't actually losing existing money by your light fingered brother's purloining of the content, but had your brother purchased said items the artist (and the rest of the chain from shop keepers to recording labels/studios/etc) would have got a share of the monies.

So what? If you sent me $50 for reading this message, I'd have $50. That doesn't mean that if you don't send me $50, you're stealing.

Sure, the artists aren't fiscally worse off after your brother's shenanigans, but someone's lost something.

No, no one has lost anything. Failure to make a desired gain is not a loss.

Re:Biased question

[DevStar]

Weird. Computer games can be downloaded for free, or acquired for a very small fee from your neighbourhood copy-peddler. And still the game-development industry is steadily increasing its revenues.

There's a difference between something being free and your ability to steal it. If I could go to a legit website or to my local Best Buy and get all games for free or pay for them -- guess what? I'd take them for free.

Now I don't copy music, because it is illegal, and frankly I don't music so badly that I'd copy it. With games it's even trickier since if I'm not getting games from a trusted source, who knows what I just installed on my computer (see Rootkit).

Re:Biased question

[Anonymous Coward]

t's entirely possible that the Internet will mean the end of $200M productions, because unless you can get your money back in the theater (I'm focusing on movies because they're the only things that fit your specifications), you can't make it back.

Well that's kind of the heart of the issue. So can you create technology that prevents movies from showing up on the internet? Is it right? Is it wrong? It's a two sided argument here that nobody has connected the dots fully on but I have to give part of it to the media people because it has already been shown that the market will sustain huge $200m movies and mega bands with millions of dollars and their stadium shows and ferarris. The counter argument is that if it's free, people won't pay for it, I can't say that I think that's a very interesting argument.

How much money you feel like musicians should make doesn't matter in any way, how much can they make? Does DRM allow them to realize more of their potential income? Can you show a gap between what they do make without DRM and what they make with DRM, that's the point.

I'm not a pro-DRM guy but I do respect copyright (hell, I'm a software engineer and it pays my bills) the vast majority of the real evidence out there suggests (doesn't prove, but strongly suggests) that with DRM the copyright holders realize more of their potential max income. Strawman or not, can you refute that? Copyright violation is common, there is evidence that does suggest that it affects the bottom line, not proof but evidence, and there is not much that suggests that copyright holders would be in any position to realize anywhere near their potential income without DRM. There are some nice ideas but but not a lot that make me think that any media providers will make nearly as much without DRM as they can with it.

We're not talking about what the market will bear, we're changing the rules. The market clearly will bear rich musicians and mega blockbuster movies, that has been demonstrated. It's a pure capitalism issue, is it wrong for them to try to maximize their profit by protecting their copyright with DRM type stuff? You already admit that sans DRM they won't make as much money (at least musicians won't) will there be as much media? I'm guessing not. I can't say that I've seen a lot of great imported media from China or any eastern block country, more of it is our stuff being ripped off than stuff they produce because they don't produce much. Similarly ironic, how come American movies and music are popular around the world but a relatively smaller amount of foreign product is popular in the US? It can't all be bigotry and racism or even the language issues, there have been very popular non-English movies in America. It could be that since they can't realize as much profit, they simply don't create the media in the first place, it's not proof but evidence.

It seems to me, if you're really against DRM, then don't buy or support any DRM enabled products. Don't buy DVDs, don't buy playstation and xbox games, don't go to see movies, don't listen to popular music, don't watch digital satellite or cable TV. Simply don't put your money in to any of those things and that's the best way to combat it. Otherwise it's just an arms race, I think they are well within their rights to try to maximize their profits, everyone else does in every other business. There is real proof that the market is willing to spend. All they have to do is come up with hard enough DRM and price their media right such that it's not cost effective to circumvent it. video game consoles are already there, only a tiny little percentage mods their hardware and pirates games, if they ratchet it up a couple more notches they will practically end piracy in the console market. itunes is there, it's cheap enough that it's simply not worth the time for the vast majority of users to decrypt the music. In the mean time I do fear that we'll have 200 different DRM technologies and as companies come and go we'll actually lose media and the ability to play it.

Re:Biased question

[autocracy]

All new hardware from major manufacturers will support DRM standards. If the data stream is protected, the media appliance will acknowledge and honor the DRM lock and you will be unable to do more with the content than is allowed by the DRM lock. This is reality and it is already here.

All serfs will support their Lords. If their Lord demands something the serfs will acknowledge and honor the demand and you will be unable to do anything but obey. This is reality and it is already here. Honor thy Lord & King.

No... damn that. I will never accept such a thing and be happy with it because you tell me "that's just the way it is." Blacks are slaves and women don't vote. That's just they way it is.

Re:Biased question

[mencial]

Here in Spain, people do beautiful movies that get almost no money in movie theaters. How they do it? Government grants. They are shut off the theaters by the US majors. If there were no US big-budget, big-publicity-campaign movies, there would still be a ton of good movies to see.

All those Clint Eastwood spaguetti westerns were pretty cheap. And they are amazing.

Re:Biased question

[HeyMe]

Despite the industry hype, DRM is "for the artists", it is for the "industry". Musicians make their money touring, not from album sales. Album sales drive ticket sales. The RIAA and MPAA will continue to fight tooth-and-nail to prevent any precieved threat to their profits. The really interesting thing is that CD sales were climbing every year until the RIAA went after (the original) Napster, so it would appear that their strong arm tactics have in fact, backfired.

Re:Biased question

[AmberBlackCat]

And, perhaps, accepting that people don't really need millions for doing what they love.

That's cool until it's your job on the line. This could be the same argument for why outsourcing US engineering jobs to India is okay.

Re:Biased question

[Anonymous Coward]

The idea of "acceptable loss" is already written into the recording contracts for the artists. When record labels were shipping vinyl records, a certain percentage would show up at the record stores broken, therefore record labels started sticking it to their artists to take the hit on those broken records. These terms are still in contracts, even though CD's rarely show up broken and MP3s are almost impossible to have show up broken (corrupted maybe). Why couldn't those same terms in the recording contract be applied to "acceptable copyright losses"? It's already there to protect the record labels, it already screws the artist, so why not just give it a different term and have it apply for this too?

Re:Biased question

[Mr. Slippery]

Another model would be to allow any copying, but put a sales tax of, say, 50-80% of any end price to consumer, with the proceeds going directly to the artists and composers of the particular work generating the revenue.

This is very similar to the "royalty-right" model that I've been advocating for years.

Copy all you want, but selling copies requires a royalty to the creator. It's similar to songwriter's performance royalties today. I can sing "(Keep on) Rockin' in the Free World" in the shower or at a party for free, but when I play it at the bar Neil Young gets his nickel.

Making copying has now become as easy and as much a part of the culture as singing songs. Copy protection does not and never has worked. It's time to replace copyright with a royalty-right.

Re:Biased question

[mencial]

I will run Linux. I will just pass on all the new stuff, if it is DRM'd. I will have my huge library of free stuff that I have been accumulating for years. And I will share that stuff with others like me.

They can keep the latest Christina Aguilera album for themselves. I still have to sit through the eight seasons of Futurama, the complete Monthy Python Flying Circus, the discography of Def Leppard, hours of MP3 that a friend recorded while in college, and more than 10,000 books in Project Gutenberg.

They can only DRM the new stuff. The old stuff is there. They are trying to outlaw the public domain, but they might as well try to outlaw teenage sex.

Re:Biased question

[PMuse]

You assume DRM is necessary, but in actuality, it isn't. These people somehow make a profit without DRM (otherwise they wouldn't bother releasing the e-books). As does these people as well as these people.

[heresy] These examples are not drawn from the scenario we're discussing: a world with no restrictions on transmitting electronic copies. These examples come from today's world. These examples benefit from the overpricing of similar works of similar quality, unavoided advertising, and the largess of purchasers whose political convictions motivate them to pay these artists when it could be avoided. In a world where all potential purchasers customarily have trivially easy access to zero-price versions of all works, potential purchasers would cease to expect to pay for works of these kinds. Advertising is no more resistant than DRM to technological stripping. Thus, there is little reason to believe these examples would continue to prosper. [/heresy]

Here's hoping they do!

Re:Biased question

[tbannist]

What you have just proven is that DRM is evil. It forces people to pay for material they wouldn't have otherwise had to pay for.

You see your argument that the "the artist (and the rest of the chain from shop keepers to recording labels/studios/etc) would have got a share of the monies", is tantamount to the argument that breaking windows is good for the economy. It's not, instead of paying for the CD, the purchaser will be using his money on something else. Thus he gets the music and the something else and everyone is net better off.

This is the problem with DRM and Intellectual Property. It artificially creates a scarcity in order to allow some specific groups to make money off of it. Now you may say DRM is needed to support "200 Million Dollar Movies", my response is simple: Why do we need "200 Million Dollar Movies"? DRM and IP is propping a bloated an inefficient movie industry that wastes huge amounts of money on what are frequently bad actors who have "name cred". Did you see what they did to "The League of Extraordinary Gentlemen"? These are people we're supposed to protect?

There are a lot of people who need a wake up call. Musicians don't make much money from CD sales, if they sell a million copies of the CD, they make $100,000 split between the band, so to make a middle class income, each band of 4 needs to sell more than 2 million CDs a year. Plus the band often has to cover recording expenses so it's more like 3 million CDs a year. So how do musicians become rich? Mostly concert appearances, since few studious allow the musician to own the rights to their own music. Now concert appearances are an actual scarcity. The number of people who can go is limited by the number of people the venue can accomodate.

In a DRM free world the people who loose the most are the recording companies. Why should we support leeches who provide no value?

You're almost correct on the rounding thing, he was stealing the banks money. Essentially he created a number that the bank owe him in money so he was definitely taking money from someone. That doesn't apply to the music copying example because it creates no obligation for the artist to pay me for listening to his music. Piracy is a victimless crime, and in many cases, it's a crime only because of the criminal actions of the companies being pirated.

No matter how you look at it, DRM is evil. The only question that exists is whether it's a necessary evil, I don't think so. Everything will be DRM'd regardless of actual value, on the off chance that there might be profit to be had by restricting it, and Life + 75 years is a ridiculous extent of time, and even once that term is over, it's still illegal to circumvent the DRM to access public domain material. Stop for a moment and ask yourself how many songs from 1930s are you still listening to? How many musicians who died in 1930s are you listening to? For the vast majority of people those are both 0.

Re:Biased question

[poot_rootbeer]

But in large part you're creating a strawman, by specifying exactly the situation in which it is most difficult to make a profit.

I disagree. The high creative capital + no manufacturing cost + no distibution cost scenario is a real-world one, facing every creative artist in the digital age.

People *want* to spend money on entertainment.

I disagree. People want entertainment, period. They are willing to spend money on it, but it is merely a means to an end. There's a reason why broadcast TV networks have viewerships many times the size of premium cable networks like HBO, and it's mostly because the former is free (as in beer).

Music is cheap to make.

I disagree. Recording costs for music may be down to the point where 72 minutes of audio can be preserved for $5,000, but there's no guarantee that the audio will be Music. Musicians invest a lot of time and often a lot of money developing their craft to the point where you would want to listen to what they create.

accepting that people don't really need millions for doing what they love.

I do not accept that. As a musician, I should have the opportunity to do what I love AND make millions. It is not and should not be a binary choice.

Re:Biased question

[medarby]

Ask any musician that is serious and there is signifcant costs in materials and training.

The original point is still valid: music is cheap to make. I can go online and download any number of open source music software tools, and with enough time and patience, come up with some decent sounding stuff band upload it online. What is your classical musician going to do when the technology becomes so powerful and easy to use that I can create a violin concerto that sounds indistinguishable from their performance? Not a dang thing.

What the real musician has over any digital work is the ability to intereact with other real people, e.g. live performances and teaching. The reproduction of music electronically is becoming just a tool to market the live perfomrances or validate teaching credentials.

Re:Biased question

[Anonymous Coward]

I'm sorry, but I can't take any one who says "virii" seriously.

Re:Biased question

[tbannist]

It seems to me that there needs to be a moral judgement made at the very beginning: if someone else has invested time/money/whatever into creating a unique good, and it is their intent to sell it for profit, do you (or anyone else) have the right to benefit from their work without compensating them?

Unequivocably, yes. There are a few exceptions where that is not the case, and that usually involves trespass or using someone else's property without their permission. Ideas can't be patented, trademarked or copyrighted.

would argue that you do not, because theft is not restricted to monetary loss alone. (And so the argument made earlier by another poster, "it's ok because I wouldn't have bought it anyway," is intellectually bereft.) If you are unwilling to pay for the work of another, and they do not offer it for free, you're not entitled to it, plain and simple.

See this is where things get complicated. I can't ethically compel someone to do work for me, but should someone be able to ethically compel me to pay for their work? Theft is a simple concept you take something from someone without their consent. I can't steal music, I can only steal the medium the music is stored on. Now you have to understand is in the case of pirated music someone paid for it. The musician has been paid. The people who are loosing money are the people who make the physical storage devices for the music, they aren't getting paid because people aren't buying their music storage devices because the internet obsoletes them. Now you might argue the musician hasn't been paid enough for the music, that's the main argument the music distribution companies make, because they give a very small portion of the money they make to the musician, they claim you're robbing the musician by refusing to pay for a physical copy of his music, regardless of the reason. They cite declining CD sales and say it's because of piracy, they do that to justify increasingly draconian legislation to support the declining business of music distribution.

There's not really much more to the morality of that argument, as I see it.

The problem here seems to be that you don't unstand the actual situation, and buying into the distribution company's agenda-driven simplification.

Re:Biased question

[dctoastman]

I call bullshit. If it weren't for copyright, the GPL would be ineffectual. Microsoft would take all of the best bits without contributing back. The GPL is not about "teh free stuff", it is about the ability to modify what is yours. Making all software free (as in beer) does not achieve the goal, because the goal is not to commodotize software. When Windows goes open source, then the GPL's objective will be achieved (for Windows at least).

Re:Biased question

[rhakka]

National Public Broadcasting.

Re:Biased question

[Casualposter]

The trouble with the original question is that it is based upon erroneous assumptions. The internet is not free. It costs energy to move all those bits around, and while that energy is tiny from a per bit stand point, it is NOT free. (There is a nice piece on the fact that it takes 10MW of energy to maintain the big server sites. I found that reference on Digg.com. That is a LOT of electical costs). Hardware and software are required to establish and maintain the delivery system. Hardware and software are required to translate the music file into sound. TIME is require to listen to the music download the music, sort the music, etc. So distribution is not free.

The supply is also finite. There is a large, but fixed number of connections to the database for downloading. Occasionaly I get an error from my download service telling me that I will have to complete my download later.

It requires money and time to create and maintain databases of music and to create the software and hardware to play the music. Taken in context, the whole experience of listening to music is not free. From the artist point of view, the Record, CD, DVD, MP3 is advertising. Most artist make their money from live performances rather than recordings. From the record company's point of view, the artist is an expense, and the recording is the profit maker. The fact that an artificially high price has been maintained on CD/DVD music is the result of price fixing and monopolistic behavior on the part of the distributor of the music rather than a supply/demand relationships (Here I refer to the class action law suits against the record companies). Music, once created is a commodity-like thing. It has a low profit margin per unit, and a low cost per unit. So does gas and electricity. (Drilling a well and the associated equipment is expensive, many barrels of oil must be sold to pay off this investment.)

I think that the idea that music creation requires a huge investment is wrong as well. It may take a lot of time, but it does not require millions of dollars of money. Decent musical equipment is available and has been available to the general public for decades at prices that are affordable. (And anecdote: As I recall the Beach Boys got their musical equipment by purchasing it with the money their parents had left them to buy food for about a week. I think I heard this on the old American Top 40 radio show back in the 80's.) The challenge for the artist remains the same: how to get the sales volume or profit margin up so that a living can be made. This was true in Mozart's day. With the low cost of distribution, the artist has the opportunity to invest the majority of his money in music creation rather than record/CD/DVD production. The stage show is where the cash is to be made. The online music drives the concert crowd. While the online music will make a little bit of money, even at itunes $0.99 per tune, the artists gets what? a nickel? a dime? So optimistically, the artist gets a dime a song and needs around $30,000 per year to live like a school teacher in Louisiana. That's 300,000 songs per year sold electronically at a price that we know will generate sales. Assuming, of course that the artist doesn't have to split that dime with anyone else.

The profits are to be made: Distribution: someone has to make the songs easy to find. Someone has to introduce me to new music that I like. Someone has to provide easy to use software and hardware to play the music on. Artist: Make a lot of good music. Distribute it online for advertising and make a small amount of money. Then use the music sold as a way to drive concert ticket sales. The thing here is similar to other markets: high volume, low profit per unit, good quality across all units. Yep, that is the way to go with online music.

As a note, most professional musicians do not make a lot of money. Neither to other artists, such as writers. The other factor to consider is this: there is a non monetary factor in the whole creation process that is a reward to the creator. This reward is not usually considered in the typical supply/demand economic model.

Re:Biased question

[enjo13]

I can't give you an example where 'honesty' trumps economic principles, mainly because honesty IS an economic principle. Basic economics teaches that people response to incentives for their own personal self interest. The self-definition of being 'honest' is in many cases so important that it itself becomes an incentive. Some people feel pressured to be moral, and as such act in moral ways out of fear of being perceived as dishonest. Some people take great pride in their honesty, and thus act honestly to maintain that. The reasons are varied, but it doesn't change the fact that honesty itself can be quite a strong factor in making economic decisions.

The book 'Freakonomics' had an interesting example.

It highlights a business in which a person delivered bagels to offices. They would simply take a baset of bagels into the office along with a shoebox. It worked on the honor system, slip a dollar into the box and take the bagel. It was entirely possible to just steal a bagel, there was very little stopping you. It turns out (and I don't remember the exact numbers here) that something like 90% of the bagels where properly paid for. This varied according to time of the year, size of the office, etc... but overall the results where definitely encouraging. Here you had a situation that relied on economic honesty, and the business was quite succesful at it. Given the business model, I'm positive that is quite scalable as well.

Re:Biased question

[SanityInAnarchy]

Read up on monopolistic competition. That's essentially what we have now. There is very real competition from sites like mindawn and magnatune, and even between top artists, you have a choice which one to buy. For a given song, yes, there's a monopoly, but how picky are we about our music, really?

Certainly, if you're arguing that the government should sponsor the artists, we can't be that picky. The current model means that music nobody likes won't be funded -- government isn't nearly as efficient as any kind of market, free or not so much.

And if we're not that picky, then Metallica can only raise their prices for so long before metalheads will start turning to Sevendust, Mudvayne, or Slipknot, assuming those prices are different.

While I realize there are some people who argue the way you do, I don't want to complicate the matter by letting **AA astroturf use your argument as a strawman to argue in favor of DRM. It is possible to have the current model work without DRM -- in fact, it's probably not possible for the current model to work with DRM.

Re:Biased question

[pv2b]

I live in China, where DRM effectively doesn't exist and bootlegs are widely available, without much chance of getting sued by the RIAA. It has killed the CHinese entertainment and everybody knows it. A recent movie of "Crazy Stone" stunned everybody by making a small profit. The key to its profitability was somehow, it took a whole week before quality bootlegs became widely available. That is a lot more important factor than the quality or basic appeal of a movie

Given the choice, people don't want to spend any money. Either you have to make new business models (typically involving all artists becoming advertisements), you have to abandon the entertainment industry, or you need DRM & copyright protection. Your system of people voluntarily giving money wouldn't work.

There is a big difference between the situation in China, where pirate copies on DVD are readilly available for a few yuan on every market, and widespread file sharing.

The main factor here is convenience. It is no less convenient to buy a pirated DVD at a market in China, then to buy a legitimate one. Also, from what I've heard, even most mainstream stores carry pirate copies. There is negligble value added to the commercial DVD, because it's neither more convenient to purchase, nor better than the bootleg in any meaningful way.

Why pay more for a DRM-laden "official" disc when you can pay less for a bootleg with no copy protection, if the convenience in doing so is the same?

The same thing applies to downloads on the Internet. Downloading a movie off bittorrent is pretty inconvenient, if you face it, compared to how convenient it *could* be if we get nice DRM-free services from the movie industry.

Either way, I don't think many copyright reform people believe in a complete elimination of the commercial copyright. One reasonable proposal for copyright reform would involve retaining exclusive copyright for commercial purposes for 5 years, and allowing unlimited copying for personal or non-profit use. This is the position the Swedish Pirate Party takes, for example.

Quite simply, you can't compete with a product that is cheaper than the real thing and just as good. But you can compete with free, if you add value beyond the actual movie itself, such as the convenience of downloading it. This is because those who sell bootlegs actually make money and have an incentive to be on the markets, making it convenient to buy their copies. There is no such incentive in a peer to peer network.

The Movie Industry could make a killing if they started competing with free by streaming movies. No, not the streaming kind where you need to stream it every time you watch it, but the kind where you download the movie and can watch it as it downloads. If the download speed is faster than the video data rate (quite reasonable with current residential broadband in Sweden), there is no concern for skipping, because the buffer just gets progressively larger. Would you pay 50 yuan / 50 kronor / $5 / 5 for the convenience of getting to watch the movie immediately without waiting for the download, and without messing with torrent sites? I just might if it were convenient enough and worked on my Mac.

pv2b
Member of the Swedish Pirate Party.

Re:Biased question

[Mr. Slippery]

Talk to a classical musician: ask her the price of a fine solo instrument, a piano, a violin. The basic tools of her profession.

And classical musicians don't make much of their income from selling copies of recordings.

Anyway, an fine instrument is a one-time investment of a few thousand dollars. It's still comparitively cheap to make music verus making, say, automobiles.

Re:Biased question

[Anonymous Coward]

I agree with you, but please: the word is lose, not loose. Every year I see more and more people misspelling such a simple word, and I've kept my mouth shut for this long, but no more. How on Earth did the current generation get to the point where they can't spell a four letter word correctly?

Re:Biased question

[cpct0]

Agreed ... And many people listening to classical music are audiophiles or enjoy good quality in general.

Besides, there is nothing worst than a harsh-sounding violin, or a shifty instrument.

A very good example is this DVD: http://www.anderszewski.net/discography/view_disc. cfm?disc_id=8 (Diabelli Variation by Piotr Anderszewski). It is very well recorded, took days and days of gruesome work, and so on. Only for a "stupid" piano.

Even then, the first variations are from another take, another mic configuration, and it shows... and it pisses me off ;) So imagine having a full orchestra.

Re:Biased question

[hippiasmajor]

You're mostly on the mark about the market following market principles (in this case, data dissemination over IP networks). To extend the point back to the originating question, any claim by an intellectual property owner that a new media (or distribution) technology will disrupt the owner's ability to derive revenue means that the owner's revenue model is obsolete in the current market. In the case of the RIAA/MPAA complaints, any instance of piracy indicates that they aren't providing customers a service in a way customers can derive value from the service. Napster stood up and provided the service that customers wanted and was hugely successful (that it was later determined to be illegal is irrelevant). iTunes and the like later stood up and continue to be successful because they are providing, more closely, a service that provides value to their customers.

In the end, DRM is poor (some say "evil", but I don't know that any of this is a moral issue) because it doesn't provide value to the customer. Only when service or product providers are able to align their offerings with customer demands should those providers generate revenue. The concern that piracy is killing business and DRM is necessary is completely untrue. What's true is that those complaining rely on revenue models that the free flow of data has made obsolete.

Re:Biased question

[lamplighter]

One question this brings up is: What is content?

If we're talking about a movie (which everybody seems to be doing), the "movie" is the film that's being fed through the projector at a theater near you. A DVD contains a digitized version of that film and its soundtrack that has good enough resolution for a TV, but it'd be pretty blurry and sound pretty bland if that version were somehow shown in a movie theater. (And I'm not even mentioning films that get panned and scanned for 4:3 screens.) I suppose there are DVDs with Dolby Surround, and HD-DVD/Blu-Ray movies will have higher quality still, but I still don't think they'll have the same image resolution as the film.

Then there are movies formatted for PSP or other tiny low-resolution players -- how much quality reduction can there be before it's no longer really the movie?

My point is that although the digital version can be copied, it's already one step removed from the original to begin with. There will always be people who want to see movies in the theaters, as long as those theaters have decent sound, cleaned and focused projector lenses, non-sticky floors, etc. You are already buying/downloading a low-quality copy.

Re:Biased question

[crabpeople]

I'm sorry, whats dishonest about breaking copyright law for no personal financial gain? The artist made something to be looked at. I am looking at it. Theres nothing dishonest or honest about it. I guess honesty would mean not lying if im ever faced with persecution, which i would gladly do. I preserve culture from evil corporations.

And i will *never* fund the industry. They are the ones that have no honour. I live an honourable life, I don't steal. I do however infringe peoples copyright. If it brings the global economy to its knees faster than wars, profiteering or the american federal reserve, then i'll admit defeat and eat my hat as the cause of all the worlds financial problems. Untill then i hurt no one and get a tiny bit of entertainment to make this world just a tiny bit more liveable.

"If you would like to actually demonstrate a scalable example where a market works on "honesty" instead of basic economic principles, please be my guest."

Well since you asked so nicely i will tell you. Bittorrent works this way. As long as you have a decent client that keeps some kind of ratios, honesty would be uploading to others as much as your downloading. Last time i checked, the bittorrent market was doing just fine sustaining itself this way.

Re:Biased question

[j79zlr]

But who would want to be a musician without the prosepct of heroin and Ferraris? I sure wouldn't!

Re:Biased question

[Anonymous Coward]

Not only are we paying in terms of money, we are paying in terms of culture that is being locked up and lost forever because there is no legal way of archiving it. That, in my opinion, is the biggest cost of all and the prime reason DRM is Evil.

Uh...copy and paste works just fine for me. I guess you've never actually worked with any kind of DRMed file, but they behave just like normal encrypted files.

Also, there's the insignificant fact that for every DRMed file there is an unencrypted source -- not exactly "lost forever".

Re:Biased question

[Anonymous Coward]

I agree with you, but please: the word is lose, not loose. Every year I see more and more people misspelling such a simple word, and I've kept my mouth shut for this long, but no more. How on Earth did the current generation get to the point where they can't spell a four letter word correctly?

We can spell four letter words, fuck wad.

Re:Biased question

[AGMW]

Or he should have been excluded from participating in his culture until he came up with some money.

I'd really like to go to Glastonbury next year, but I can't afford it. Perhaps the Government should subsidise my trip so I can take part in the culture?

If I want something, I save up until I have enough money, or I borrow the money, then I buy it. What you are saying sounds remarkably like the Baby's Rules of Ownership :-

If it's blue, it's mine
If it's shiney, it's mine
If it makes a noise when squeezed, it's mine
If I can see it, it's mine
If you have it, but I want it, it's mine
... er ... profit?

Re:Biased question

[Anonymous Coward]

These people somehow make a profit without DRM (otherwise they wouldn't bother releasing the e-books). As does these people as well as these people.

Uh, you're an idiot. Quoth Fictionwise's FAQ: "While we prefer to offer eBooks in MultiFormat, we need to support secure formats that prevent unauthorized copying to give our members the widest possible selection, including national best-selling authors.". In other words, they use DRM.

Also, Penny-Arcade and GIrl Genius both make their money from advertisements and merchandise, neither of which have anything to do with DRM.

Not all artists will be able to make a profit or a living, but then again not all artists deserve a profit or a living.

With no form of copy-protection, you're punishing the most popular artists. Regardless of what you personally think of them, why should an artist not be able to profit from that popularity?

Re:Biased question

[AGMW]

Blimey.

I can't ethically compel someone to do work for me, but should someone be able to ethically compel me to pay for their work?

So you're saying that if someone comes round to your house to re-shingle the roof or paint some doors that you are under no obligation to pay for the work afterwards? I must be missing something because that just sound so stupid.

I would agree that it would be bad for musicians (for example) to be able to play outside your house uninvited and then ask you to pay for the music, but if you go ask for them to turn up and play, you'd better be willing to pay afterwards or have some way to protect your windows from projectiles!

The musician has been paid

Hmmm. So the first person who buys a copy of the CD pays their 10 bucks and the musician has now been paid? There'd be no musicians. I grant you that most of the problems stem from the middlemen who all want their pound of flesh, but the distributors are there to make it easier for the musicians to spread their wares. In the beginning if you wanted to hear some music you went and found the musician and he played for you. The music on the CD, or the mp3 on the website, is an extension of that. It allows you to hear the music more cheaply than hiring the musician, and it allows the musician to increase his earning potential to make it worth their while being musicians.

I like free stuff as much as the next man, but unless the musician (or the musicians representatives) have offered the music up for free download you are depriving him (or his representatives) of some income. They are being deprived of something, so it is stealing.

On the other side of the coin, I agree that the whole DRM debarcle is stupid. The record companies are so set in their ways that all they can see is that they need to protect the old way of doing business. Unfortunately for them, it is doomed and they'd be far better off getting some people in who have a clue and working out a new way that uses the new mediums.

Re:Biased question

[Java Ape]

High-quality instruments are indeed expensive, but they tend to last a lifetime if well cared for. Most professions have substancial equipment costs associated with them (i.e. mechanics). While I love music, and wish that musicans were, in gerneral, better compensated, the instrument cost is a small percentage of their total costs.

Many professionals buy instruments as status symbols or collector pieces rather than focusing purely on sound quality. For example, I can purchase an absolutely stellar violin for two to three thousand -- easily good enough to perform anywhere in the world on. Or I can spend a million or more for a Stradivarius. Despite the mythology, a 2k instrument can compare very favorably in sound quality, the Straivarius is just a status symbol.

My wife played jazz Saxophone professionally. Her instrument (a Selmer) retails for about 5k new, but can be had for ~3k lightly used. I used to play guitar professionally, and just bought the nicest instrument I've ever laid hands on for about 2.5k form a Canadian luthier named Trevor Kronbauer. Most other instruments (except basses, harps, and grand pianos) fall into the same price range. The instrument cost isn't the problem, the 20k annual salaries are!

Re:Biased question

[AGMW]

Hmmm.
As an author, musician, programmer, or whatever style of artist, it must be possible to be paid for the work you do, or no one would do it. Is it wrong to copy a book? I guess we'd disagree on that, but I can't see how it could be reasoned that it is OK?

If an artist makes a living from selling copies of their work, and you don't pay for your copy, then you are depriving them of their living.

I guess I'm not coming up with a good enough explanation of why I think it is plain wrong, and your explanations haven't convinced me that there is any "right". Maybe it's the new religion, 'cos your position is just as unfathomable to me as I suspect mine is to you!

Re:Biased question

[Anonymous Coward]

Is there a single example of something that DRM has actually protected from any copying?

Strawman. You assume the DRM is to prohibit all copying. It isn't. It's intended to restrict copying to fair uses.

Will they make money? Probably. They could take direct donations, or go on tour, or bundle physical CDs with interesting goodies.

Who pays for the touring? Who pays for the CDs and "interesting goodies"? How would you like it if your job required you to pay for everything you need to do your work, with no promise of compensation?

I guess that leaves donations. Oh boy, that's some reliable income there.

Re:Biased question

[tbannist]

So you're saying that if someone comes round to your house to re-shingle the roof or paint some doors that you are under no obligation to pay for the work afterwards? I must be missing something because that just sound so stupid.

You did, you presume I entered into a contract to have the work done for a price. If I didn't ask him to re-shingle my roof or paint the doors, you can be sure as hell I'm not going to pay him for the work. Similarly, as much as might like my neighbour's lawn being well manicured and as much as it might increase the sale price of my home, I will not be paying him for the privilege of living next to his beautiful lawn. Should everyone who sees a painting be morally required to pay the artist? What about everyone who sees a picture of the painting? If someone takes a picture of the painting are they morally required to pay the artist because they took the picture?

Hmmm. So the first person who buys a copy of the CD pays their 10 bucks and the musician has now been paid? There'd be no musicians.

Believe or not, musicians predate the invention of CDs by at least a decade or two... Heck, they were even around before Edison invented his music recording device.

More specifically the argument was that if I copy a song, the musician didn't get paid for it. Well he did, but not by me. But then again he didn't perform the song again and so didn't do any work for me to have to listen to the copy of a copy of a copy of a copy of it.

I like free stuff as much as the next man, but unless the musician (or the musicians representatives) have offered the music up for free download you are depriving him (or his representatives) of some income. They are being deprived of something, so it is stealing.

No, absolutely not. By your definition it's just as much stealing to not buy the CD as it is to pirate it. Either way I'm depriving him of the exact same income and therefore either both are stealing or neither. It is not logically consistent to treat them differently under your definition.

Here's the problem, you're stuck in an old paradigm where people sell copies of a work. This paradigm works only when it's difficult to copy, thus DRM is natural product of that world view when faced with a world where copies are essentially free to make. You create barriers to make it more expensive to make copies. Classic monopolist behaviour. You have to step back and look at the situation again. Then you'll realize that maybe we shouldn't have to pay for copies of the music when they can be made for free. There's no strong ethical justification for it, merely copyright laws, which for most of human history didn't exist. Believe or not, people wrote books, played music, and lived their lives for most of history without copyright laws.

Copyright laws were extended to sound recordings because it was feared that the phonograph would bring about the end to live performances, and therefore musicians would no longer be able to make a living. So far that hasn't happened, maybe we should reconsider whether copyright is actually necessary.

Re:Biased question

[R2.0]

"I agree with Eric Flint's essay, found in the Free Library on baen.com: Until there's some way to make music/movies/books that doesn't require musicians/actors/directors/authors, and until people stop wanting those materials, there *will* be ways to make money off of them. It's just a matter of finding them. And, perhaps, accepting that people don't really need millions for doing what they love."

Don't forget that Baen Books puts their policies where their mouth is. Baen's Webscriptions http://www.webscription.net/ have almost all of their catalog available for paid download in multiple formats, all unencumbered and non-expiring. The prices are reasonable, and the download process couldn't be more convenient - I mean, they take Paypal, fer Chrissake.

And guess what - they make money at it.

In the article's scenario, Baen couldn't possibly be doing this - once one person spends the $6.99 for the download, the book would propogate all over the net, and Baen wouldn't see another dime. Yet that doesn't happen. Why?

- Most people are inherently honest, and don't mind paying for quality
- Those honest folks, when asked to post the books on file sharing networks, generally tell the requestor to stop being a cheapskate and buy the damned thing. It's cheap and convenient, and if you still don't want to pay, go to a public library.

Is there filesharing with these? Sure, but like Eric Flynt said, it's like stealing penny candy.

BTW, Jim Baen, the publisher of Baen Books and the driving force behind their digital publishing policies, recently passed away. Whether you like what he published or not (and many don't, especially the military sci-fi), he was the ONLY mainstream publisher with the balls to try the business model being advocated so much on slashdot. Put your money where your mouth is, go to webscriptions, and buy some books. Or buy hardcovers and donate them to a school or library.

Re:Biased question

[SpecTheIntro]

Unequivocably, yes. There are a few exceptions where that is not the case, and that usually involves trespass or using someone else's property without their permission. Ideas can't be patented, trademarked or copyrighted.

You're arguing against the concept of private property here. I'm not saying somebody's work in general, or an idea--I am directly referencing a good that someone else produces for the sole purpose of selling for income. If someone cuts down a tree of their own volition, you are not obligated to pay them, certainly--but if that person cuts down a tree to sell its lumber, and you take some of that wood, you are taking advantage of his/her work. If the person had said earlier that you were welcome to wood as long as you paid him for his labor in cutting down the tree, and you refused to do so, there's no doubt that you have no right to the wood. This is a pretty big distinction. If you don't believe that private property is valid, then we're arguing the wrong thing altogether.

See this is where things get complicated. I can't ethically compel someone to do work for me, but should someone be able to ethically compel me to pay for their work?

That depends on the circumstance. If their work was not requested, then of course not. But in this case, you are consciously deciding to take advantage of what someone else has produced, when they have clearly stated they wish to be paid for its usage. They have every right to ethically compel you to pay for their work--you decided it had value, and thus you decided to use it. Its usage is not free, by their decision, so they've got the ethical high ground.

I can't steal music, I can only steal the medium the music is stored on.

That's a silly distinction to make. That's like saying: "I can't steal air, I can only steal the compressed air canisters that happen to have usable air inside of them." Well, yes, clearly--but the air is of no use to you unless it is in that form. Likewise, the music only has value to someone if it is in a format that they can consume. (Consume being used abstractly here.) So it's not a big leap to go from: "I steal the medium on which music is stored" to "I steal music." The two are functionally equivalent. I understand that you are trying to separate the intellectual property (the music that the musician created) and its means of distribution (CDs, tapes, etc.) but to do so makes no sense, because the former is essentially useless to us without the latter.

Now you have to understand is in the case of pirated music someone paid for it. The musician has been paid. The people who are loosing money are the people who make the physical storage devices for the music, they aren't getting paid because people aren't buying their music storage devices because the internet obsoletes them.

This is not entirely true--your logic is sound, but it doesn't accurately reflect the market. When a musician is contracted, yes, they are paid a lump sum, but this is an advance, not an independent payment. The artist actually ends up paying it back in royalties, assuming he/she is successful. The artist also pays back numerous other sums too--really, the recording artist gets fairly dicked in the recording industry. But if enough albums are sold, the royalties exceed the costs and the artist actually starts making money. So what happens if he/she stops selling albums? You guessed it--the artist is screwed. (Check here for a succinct, if simplistic, summary of how music royalties work.)

So it's not really how you've painted it to be--the musician getting paid is in fact directly related to whether or not people are buying his/her albums. If the musician is smart, he/she will try to use his/her fame to secure an endorsement deal, or arrange for private appearances (if the contract allows it), but

Re:Biased question

[arminw]

....What we need to work towards is a DRM model .....

The problem is that binary bits are all alike and can be inherently copied flawlessly. That in fact is the biggest advantage of going digital. In the digital domain it is possible to transmit information perfectly for as many times as desired, without the slightest loss. A perfect image copy of any DRM file can be made, DRM and all and there is NO way any human or digital device can tell the difference between the original and the copy. That is basically what some of the wholesale "pirates" who copy for commercial gain do. DRM only stymies and frustrates the ordinary users. Only one perfect, DRM free copy on the internet breaks the business model. DRM is basically security by obscurity and we all know how secure that is.

Re:Biased question

[Anonymous Coward]

I'll make these analogies as well: when cassette tapes hit the markets as a cheap, convenient means to copy recordings, the RIAA complained it would put them out of business. Instead, sale of prerecorded cassettes opened up a whole new revenue stream for them. When consumer grade video recording hit the market, the MPAA cried it would put them out of business. Instead, the video sales and rental market opened up a whole new revenue stream for them; movies that wouldn't ever even have seen the light of day began returning at least some money, and movies that made hundreds of millions were making another hundred million in rentals when, if the MPAA had it's way, they'd be making nothing.


The problem with this argument is two very important factors -- distribution and cost. The RIAA complained about tapes and duplication putting them out of business and were wrong. MPAA complained about VHS putting them out of business, and they were wrong. But why were they wrong, and does it still apply today?

I think it is different today, for one single reason. The Internet. Let's say you duplicated a movie to VHS. Let's also say it's a real popular movie, about as popular as Snakes On a Plane is right now on isoHunt. (I'm seeing, as of this writing, about 37,000 Leechers alone for a single downloadable copy.) Extrapolate that into the cost of distributing your popular VHS movie to the same number of users, and I think it's pretty clear why the current distribution capabilities are scary for RIAA/MPAA, etc.

Will they discover other revenue streams through this new distribution model? Most likely. Will it kill them? I personally don't think so. But the game has changed, and because it is so much cheaper and easier to distribute what you copy, it doesn't compare to previous eras so readily.

Re:Biased question

[SpecTheIntro]

A better analogy would be if you asked the BMW driver if you could use your Super-Duper Cloning Machine to make an exact copy of his car and you drive the copy - but even that isn't entirely accurate as the BMW owner may perceive that the value of his expensive car will go down the more people there are driving it.

That's not a good analogy either, because it ignores the team of scientists and engineers who originally designed his car. They are the ones who made money off of his purchase, and they are the ones who want you to pay for their product. Just because you couldn't afford the car doesn't mean you have the right to steal it because "you wouldn't buy it anyway." You are reaping the benefits of their work and they have asked to be compensated for it. A good has been produced, and it has a price associated with it. If you can't afford it, too bad. You do not have the right to steal any part of it, including its intellectual property--which is what you would do if you stuck it into your cloning machine. If the good were so easy to conceptualize and produce, then its price wouldn't be as high as it is. This is not a victimless crime; viewing theft as valid only when it affects physical property is a very juvenile way to look at the situation.

Re:Biased question

[dwandy]

accepting that people don't really need millions for doing what they love.

I do not accept that. As a musician, I should have the opportunity to do what I love AND make millions. It is not and should not be a binary choice.

I don't read PP as saying an artist is precluded from making millions, just that making millions is more incentive than is required.

As many actors and musicians start off waiting tables making in the order of $20-$30k per year it is not unreasonable to assume that if they can make $50k acting/singing/arting then there is a $20-$30k incentive to do this over waiting tables.

Even if suddenly our entire artistic talent pool came from lawyers the definition of economic incentive would still kick in 'round the $100k-$250k mark which is still far less than the millions that the current system pays mid-to-high-end artists.

Re:Biased question

[AgentGibbled]

"None of these issues have a thing to do with honesty. Nada, zero, zip. It just basic economics." Excellent point. Precisely the reason why I would buy a CD. There are reasons beyond what you've mentioned that make p2p unattractive, but those have been discussed at length elsewhere (inconsistent quality, etc). And realistically, honesty factors into it somewhat as well. Basically, buying the legitimate media makes sense when it is a better value proposition than the alternative. As I see it, though, DRM changes the balance. It makes the "legitimate" media a lower-value product. Why would I buy a DRM-limited CD, when I could go and get an illegitimate mp3 copy from my favorite p2p site and use the files however I want (even burn them onto a CD to play in my CD player)? Based on the "economics" of it, I would expect to see DRM cause copyright infringement to *increase*, not decrease. You can't charge more for an inferior product and expect to sell very many. Since you're never going to compete on price with p2p, you'd better make it higher quality and more convenient. DRM, as far as I can tell, essentially does the opposite.

Re:Biased question

[fyngyrz]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

For music, I''d suggest that performers lose the "videos", which are extremely effort-intensive, make recordings to distribute, and perform concerts for income.

For movies, I have no suggestions. They're expensive to make (and the better they are, the more they cost) and I see no potential for a split between live performance and recorded output.

In the end, it seems to me that copyright is a misguided concept, and ownership would be better. I realized this is a highly unpopular view, but it is what I think. Copyright simply does not work in the digital world; ownership gives both consumers and artists some teeth.

Re:Biased question

[arminw]

...n the future, movie pirates will probably have to create custom lcd panel electronics ....

Why so much trouble? Just grab the bit stream at the play head and send it to the record head. Makes a perfect, still encrypted COPY, which the pirates can then sell cheap. A simple box with a player, some elementary electronics in between it and the recorder is all it takes. DRM is never decoded, so there is no violation of DMCA. All bits are inherently copyable. A whole motherboard encased in epoxy nor other technical acrobatics will EVER get around that simple fact.

Re:Biased question

[swillden]

As a musician, I should have the opportunity to do what I love AND make millions.

You should? Justify why you *should* be able to make millions. Note that I don't object to you making millions if you can find a way to do it without harming others (and DRM is harm), but it's a big step from that to your apparent sense of entitlement.

Re:Biased question

[2nd Post!]

Once all the labels have a good DRM that works, they can all just walk out on iTunes and anyone else who doesn't want to play by their rules. And the DMCA and other laws are there to help them. It's not about the market and choice any more. It's about legislation, collusion, and the shift to a "you rent your content" philosophy. Fight it or die trying.

Once all the labels have a good DRM that works... they still need a storefront to distribute said music.

Apple is the online equivalent to Walmart right now. Apple can shut out music companies, but music companies can't shut out iTunes.

The first company to walk out on iTunes loses millions. Money that will be, incidentally, made by the companies who DON'T walk out. That is the problem with oligarchies such as OPEC. If 9 out of 10 companies collude, the 10th company that steps out of line reaps all the reward.

Re:Biased question

[Anonymous Coward]

You stupid shortsighted bitch. DRM is meant to prevent fair use. Wake up, already.

All your arguments would be moot if the market, rather than the media conglomerates, decided whether or not DRM was useful.

The old ways are dead. The single source is over.

What you are seeing now is the furious scramble to make all the money possible before irrelevancy.

Re:Biased question

[Anonymous Coward]

if I'm not getting games from a trusted source, who knows what I just installed on my computer (see Rootkit).

A trusted source like Sony? (see Rootkit).

Re:Biased question

[Anonymous Coward]

DRM is only evil because the DRM producers have the force of government on their side. If the DRM producers couldn't buy laws, DRM would be laughed straight out of the market, and the industry would revert to a business model compatible with the free (voluntary) market.

Re:Biased question

[mikewolf]

you write all this assuming that the business model for all artists is in selling copies of their work. i would argue that is the incorrect business model for musicians, and possibly even for movie makers.

the movie industry is currently set up to make money 3 ways: 1. selling rights to theaters so poeple can watch the movie there, 2. selling rights to TV stations so the subscribers can watch, 3. selling media so people can watch in the convenience of their own home. The reason DVDs/VHS tapes hit the price point they have hit is complicated, but is mostly b/c of costs involved in production and distribution of the media... once the production/distribution costs became minimal, the industry instead of passing the savings onto the consumer, just kept the price point the same to realize more profit. good business decision, but bad for the consumer.

the music industry is set up to make money from 1. concerts, 2. album sales. rather than focusing on having artists tour and selling concerts, they have tended to focus on increasing album sales as a way for them to make money... but thats not what the market wants. it is perfectly possible for a musician to make money mostly off of touring (how do you think most classical musician's make a living?) if it is essientally free to reproduce and distribute the album, then there is really no demand from the consumer to pay $15 for it.

now, if these stupid industries would think a little outside of the box, they could create a demand for buying the media (like say, by packaging it with limited edition stickers, t-shirts, autographed liner notes, including vouchers for free concert/movie tickets in some, creating a rewards point system where you can get other free stuff the more you buy, etc...). If they could actually make the media more valuable than the content, then they could give the content away for free, and some people would still buy the media, probably at a price point higher than what it currently is (but certainly not everyone would buy it).

honestly, i really think both industries have priced themselves out of the market, anyways... they have continually added to the price of media to raise their profits, meanwhile it has become cheaper and cheaper to reproduce the media. if a movie cost 5 bucks to buy the DVD, i would honestly rather buy it than download it, b/c it takes so long to find a good quality download and then so long to download... but at 20+, its too expensive to just throw down for every movie i wanna watch. the same goes for music.

Re:Biased question

[dgatwood]

Yup. Unless the key is encoded in an RFID tag, mag stripe, separate optical band, or similar that isn't copied with the media, you're precisely correct.

Re:Biased question

[Monsuco]

Talk to a classical musician: ask her the price of a fine solo instrument, a piano, a violin. The basic tools of her profession.

True, for a small artist, music can be pricy. But do you really think that U2, Fallout Boy, and the like spend most of that on their instraments. I am guessing they spend more on their convertables that on their amps and guitars. Plus do you think it really cost the RIAA more money and time than the artist to make an album? A band can make a decent recording with a few thousand dollars, and they don't need to sell each CD for $20. If they are any good, they could sell a CD for $5 (if the RIAA didnt take a portion) and make well enough to live off of and record things. Add in concert cash and you have money.

Also, DRM cost a massive amount of cash to impliment. Which do you think cost, say Sony more, paying thousands and thousands of dollars to produce a rootkit based DRM and then get the crap sued out of you because it is spyware or piracy? Which do you think also cost Sony more, if they sell Blu-ray drives that will be unable to ever play Blu-Ray movies as they haven't created DRM for them yet, which will probably kill the Blu-Ray format too, or just sucking up any losses due to piracy and possibly beating HD-DVD in exchange and making money of of disk sales (remember, Sony is a media and hardware company).

Also, you can prevent piracy without DRM! Yahoo recently sold a few "watermarked" tunes. Instead of using DRM, they embeded a few bytes of code inside a standard MP3 file. This code wouldn't strip your rights from you, instead, it would simply allow them to trace the file to you if it was found on a P2P network.

DRM is also breakable, Windows DRM, iTunes DRM, DVD CSS, certain e-book DRM, rip guard DRM, Sony Rootkits, the XBox copy protection (and the 360's sort of has), the PS2 drm, the PS1 drm, and others have been broken. AACS will probably be defeated too. My grandma could learn to decrypt a DVD, it is very easy to do. You have a few media developers vs. millions of users, somebody in the millions will figure it out. It only takes time and skill. As for TC, would it ever be possible to either crack the TC checks that software does or to emulate the TC chip? I suppose it would.

Films don't have to have millions and millions of dollars in their budget. Look at the movies 16 Candles, The Breakfast Club, Napoleon Dynamite, Monty Python and the Holy Grail, as well as many others, they didn't spend insane amounts of money, but were very profitable. (Even if you don't like one of them, they made a profit dispite their resonably low budget.)

Well, of course, there are always theators and concerts, you cannot duplicate the experience of going on a date with your girlfriend to the movies or going and seeing your favorite band live in concert.

Re:Biased question

[aussie_a]

Since those that want to publish without DRM are always free to do so, it is useless to bring them into this conversation.

Someone said that it is impossible to make money without DRMing our culture. I proved otherwise. That's all my post was intended to do.

Re:Biased question

[aussie_a]

No problem :) I've read the first paperback and half of the second before I willingly stopped reading it for free and ordered all of the books on Amazon (I'm waiting to read the rest in book format). Yup. Providing DRM-less content sure hurt the people working on Girl Genius.

Re:Biased question

[Jah-Wren Ryel]

I can't give you an example where 'honesty' trumps economic principles, mainly because honesty IS an economic principle.

Only in niche markets where there is a direct cost associated with being 'dishonest.'

Your example from Freakonimcs is a case of the iterated prisoner's dilemma because each day is a new iteration and thus is only 'scalable' in that you have a group of niche markets (each office) that are effectively independent of each other.

That model may possibly scale to large numbers of individual offices, but Levitt's own reporting on Feldman's bagel business indicated that the larger the individual office, the less 'honest' people were.

Essentialy, you have just proved my point with your own example.

Re:Biased question

[Jah-Wren Ryel]

Well since you asked so nicely i will tell you. Bittorrent works this way. As long as you have a decent client that keeps some kind of ratios, honesty would be uploading to others as much as your downloading. Last time i checked, the bittorrent market was doing just fine sustaining itself this way.

The bittorrent market is not based on honesty. It is not the clients that keep ratios, it's the tracker. Plus, private trackers routinely ban "clients" who try to spoof them too.

I am not even going to touch the inherent problem that all the bits in the "bittorrent market" were paid for outside of the market, making it all a false economy.

Re:Biased question

[Jah-Wren Ryel]

honest people are more likely to leave their car doors unlocked.

Lol. You are confusing honest with stupid. I have never stolen a car, yet I never leave my car unlocked.

Maybe most people ARE dishonest, but I don't think so.

Gee, when I said it has nothing to do with honesty or dishonesty you insist in framing the issue in that fashion. I like what Steven Levitt, author of Freakanomics, had to say about people like you: "Morality, represents the way that people would like the world to work - whereas economics represents how it actually does work."

Re:Biased question

[laughingcoyote]

Except here we're not talking about ownership of anything. Except perhaps the brother's hard drive-and the brother owns that and the bits on it. What others don't like is the way in which he's shuffling -his- bits around.

Re:Biased question

[AGMW]

By your definition it's just as much stealing to not buy the CD as it is to pirate it. Either way I'm depriving him of the exact same income and therefore either both are stealing or neither. It is not logically consistent to treat them differently under your definition.

By your own use of langauge - "not buy the CD" vs "pirate it" - you refute your own statement. In the real world, "not buying" a cup of coffee is not the same as having a cup of coffee and doing a runner without paying. Obviously not a good analogy as it's harder to copy coffee, but in my mind it's the same deal, especially if they had free refils - who have you actually deprived of coffee? ... and you wouldn't have had the coffee if you had to pay, so you haven't deprived anyone of the price of the coffee either. Excellent. Free Coffee for everyone. How soon before shops stop handing out coffee?

I do see your point though. The artist has performed the "art" once, and why should they get paid for it over and over. I think part of why the sales model came about is because it is more expensive to get the artist to play for you than to buy a copy of the music. You win, because you have a copy of the music you like at less than the cost of hiring the artist. The artist wins because they can sell multiple copies of their music at lower prices. The problems arise when people decide they no longer want to play the game and are jealous of the apparent riches showered on the successful artists. But what of the less successful artists, and why shouldn't a popular artist get rich in small increments if enough people like their art?

I think the pirates who really think they have a right to other people's art, for free, are just being selfish, but it's not helped by the money grabbing record company execs who repeatedly release old 'art' on new media for top prices. Look at the Beatles back catalog and you'll see the most expensive CDs in the store. Surely the recording companies made their money the first time round - they are really not doing themselves any favours there!

Re:Biased question

[AGMW]

Interestingly, I pretty much agree with everything you say here, but the conclusion I draw is that the recording companies/movie companies are just a bunch of sharks. It doesn't make me think it's OK to take the content without paying. Ferraris are really expensive and they make too much profit, so it's OK for me to just take one? No.

What we should be doing is campaigning to get the prices reduced. I do this by not buying CDs or DVDs if they are more than 10 UKP.

I'd agree with you on the 5 bucks too. I reckon if the recording companies halved the price they'd sell more than twice as many!

Re:Biased question

[LuYu]

What you suggest basically amounts to "donate company to the money if you feel like it." It simply wouldn't be able to support large industries.

Who was talking about "support[ing] large industries"? Are we talking about supporting artists or businessmen here? I do not think anybody "honest", "moral", "dishonest", "immoral", or otherwise really cares at all for businessmen's needs. And if it comes down to only supporting some fat cats with suits, I doubt anybody would cough up a dime for "legitimate" music. If Jack Valenti's assets were confiscated and donated to the public, Net users worldwide would experience untold euphoria. This is a discussion about supporting artists. It is not a discussion about supporting businessmen.

I live in China, where DRM effectively doesn't exist and bootlegs are widely available, without much chance of getting sued by the RIAA. It has killed the CHinese entertainment and everybody knows it.

That is sort of odd. I live in China, too (Taiwan), and although there is a service here that allows downloading of all the un-DRMed MP3s anyone might want for a fee, and although nearly all college students have FTP repositories with thousands of MP3s, the record stores are typically packed. The only exception I can think of is Tower Records which went out of business -- rightly, in my opinion, because they were so bloody expensive. Many of my friends -- yes, they are real Chinese people -- often buy CDs even though I actively encourage them not to and regularly tell them how the Record Industry is evil and supporting it harms their freedom.

When I was a teenager, CDs were generally too expensive for me to buy. Here, kids spend all sorts of money on such things. This is even though nearly everybody has an Internet connection in their household and even though people do not care if brands are "legitimate" or not. I daily see T-shirts that would be the subject of lawsuits in any Western country. In the face of all this, the Record Industry survives and makes a profit. In fact, it gets bigger and uglier every year. Clearly, their whinings are purely speculative.

Re:Biased question

[LuYu]

No, that is not what I am saying. I am saying that cultural expressions -- music, news, well-known opinions, political speech, etc. -- cannot be the "property" of any one person. Yes, these things have creators, and yes, those creators should be compensated in some cases (I say "in some cases" because you would hardly expect to get paid every time you spoke or did something to communicate. If you go to a night club and dance, nobody pays you for the show). The problem is that when news, movies, or music are widely distributed in a culture, people who are denied access are denied the ability to be knowledgable participants in their own culture. Other cultures are a separate issue. If you cannot afford to know what your friends know, should you be excluded from their conversations? Culture belongs to everyone. Claiming ownership of pieces of culture is stealing from everyone. Information is not land.

Re:Biased question

[Decker-Mage]

What universe do you live in? It sure isn't the real one. I'm your worst fragging nightmare, a born multi-disciplinary engineer and mathematician and I know for a fact that what one man or many men can invent, one or many men can break via one mechanism or another. I can visualize a mechanism that would work for DRM, which I will not describe for obvious reasons, but even that will not work in the consumer market. So long as DRM is used as a mechanism to protect outdated/superceded market mechanisms it will be rejected by the consumer, and yes I'm an economist besides. When/if the media industries get a fragging clue and embrace the digital market, then their revenue streams will either recover or they will be out of business, just as the scribes of yesteryear went out of business when Gutenburg did his number on publishing the first time around.

Re:Biased question

[gfxguy]

I'm just like you - never 3 or 4 CDs a week, but ultimately my collection grew to hundreds (about 300) and just stopped. I haven't bought a CD in years. I have downloaded a few songs (legally).

It is true that there will be many people who will not pay for content, but it is also true that if you make it easy and reasonable to pay, the vast majority of people WILL pay. The problem is that the people who steal have no incentive but to steal all they can, so a miniority of people make the situation seem a lot worse than it is - these people are stealing because they can, not necessarily because they want the content.

Funny enough people often copy illegaly and then proceed to buy legal version if they like what they got.

See, now here's where I'm "brain dead" honest about things... I buy the legal copy of something I'm sure I want, then I proceed to break it or download the illegal version. I have thousands of mp3s, you will not find one on my computer that a) I didn't buy, or b) I don't have on CD or vinyl.

BTW: when I stated that I stopped buying I did not mention that I do not use illegal copies either. When I cooled down from the first shock of not being able to use paid for goods as I wish I looked on what is in store and decided there is hardly something out there worth my time to watch and listen.

Can I get an AMEN?

Re:Biased question

[gfxguy]

I agree with you and more...

Something I didn't mention in my post (GP), that, for example, the RIAA complained about consumer level cassette tapes, saying it would cost them thier business, but then people started buying prerecorded cassettes...

But there's something else missing that I didn't touch on - people started buying more records, too! Why? Because now they could make a copy of it and listen in their car. Now they could make a mixed tape of their favorite songs. Now they could record the fragile vinyl and store it away while they abused the tape.

The bottom line is people will buy MORE of your content if you make it more versatile for them. I believe people would actually spend MORE at iTMS if they sold just plain MP3s. I know I would.

Re:Biased question

[gfxguy]

The problem with your argument (which I agree with), is that only dishonest people argue that EVERYBODY is dishonest. You will never win them over in an argument to the contrary, because they justify their bad behavior by the "fact" that "everybody does it."

So now try convincing the MPAA and the RIAA that there exist honest people.

Re:Biased question

[gfxguy]

I think a better example is mymp3.com (I think it was called that). Here we had a company that was providing versatility for the consumer's legally purchased content (you had to insert your CD into the drive in order to access the mp3s). They were providing a service for people who could, at least, provide a CD indicating a purchase of music.

They were shut down due to a technicality; the mp3 copies people could download from them were not copies of their own CDs.

The proof here is that the RIAA and MPAA don't care about keeping people honest, they care about control. They argue that you are paying for content, not physical media when you buy a recording:

If you are paying for only physical media, you are free to do what you want with it, so they claim you are paying for content. Well, if I've payed for content, then they should not have a problem with me enjoying the same exact content from somewhere else, on another device, etc.

So they are lying, plain and simple... mymp3.com was only providing an alternative medium for content people had already legally purchased.

Re:Biased question

[gfxguy]

I'm sorry, whats dishonest about breaking copyright law for no personal financial gain?

Well then you can justify any kind of theft at all. "I stole that CD from the music store, but it was so I could listen to it, not for any personal financial gain."

I live an honourable life, I don't steal. I do however infringe peoples copyright.

And I personally think that's an oxymoron. Somebody worked to bring you that content, and while I agree the RIAA and the MPAA are filled with a bunch of lying bastards, you don't have any kind of right to take it upon yourself to change the rules in your favor.

The bottom line is if something is not worth paying for that doesn't give you the right to just take it. Your lack of respect for other people's work is not honorable.

We have to put this in the proper context: we're not talking about food for starving people, or breaking copy protection on e-books of classic works that are no longer available in the store or in the library. What we're talking about is entertainment. You have no "right" to entertainment. If you want access to that entertainment, there's legal ways to do it. If you really had any personal convictions about how horrible the industry is, you would simply do without rather than "steal."

Re:Biased question

[gfxguy]

No, if you think a street musician is good, and you stand there and listen without paying, it's because you're cheap. If he's standing in a public place, he's giving away his music for free and asking for donations. There's nothing wrong with not paying, it'd just be nice if you paid. And you prove a point - there are musicians who make a living this way. It's because many people DO want to pay for something they think is worthwhile.

I never made a point, and never would, that morals=law. People made the content, they worked hard, they spent time and money using expensive equipment to make a product. Morally: if I don't think it's worth what they are asking for it, I don't buy it, but I also don't just take it. Either it's worth buying or it's not worth having. Frankly, we shouldn't have to have copyright laws, it should be common sense... someone else made the product, they can decide what to do with it. If I'm not happy about it, I can make my own content and give it away (and isn't that how the FSF got started?)

And let's be clear: we're talking about songs and movies. We're not talking about stealing bread to feed hungry children. That's what makes copyright violation, in this case, so grevious... the frivilous nature of what your taking.

Re:Biased question

[gfxguy]

I wrote: However, I don't agree with DRM at all, either, because if you do shell out the cash, you should be rewarded with a lot of freedoms with that content. You should be allowed to make backups, you should be allowed to listen/watch on different devices and so forth.

kamapuaa wrote: And you should be able to have your cake, and eat it too! The empirical, verifiable, 100% accurate take on movies, music, games that lack DRM is that they will get copied and traded over P2P networks. OK, DRM is of limited effectiveness, but for how long will that be true?

I never said they wouldn't - you're arguing as if I advocate copyright violation and want the industry to remove DRM to make it easy. I'm not arguing that at all - there will always be copyright infringment, just as there was when cassettes tapes were made available to the consumer market. My argument centers around the "vefifiable, 100% accurate" fact that the harder the industry makes it to use legally purchased content, the more people will be inclined to steal it - the more incentive there is to obtain a "cracked" version of the content so they can listen to it on their terms instead of somebody elses terms.

It happens in the Linux community, since DRM products are not well supported on Linux. It happens everywhere someone has a non-Apple MP3 player and wants to use iTMS.

So there's got to be some sort of "happy" medium where the industry accepts a certain amount of copyright violation and honest consumers are buying enough for them to make a healthy profit without crippling the fair use of the content they've purchased.

Everytime they add DRM onto a product - that's you and me paying for it, not them. Every time a new technology goes into DVD and MP3 players that restricts the use of the content, that's you and me paying for it, not them. Every time they sick a lawyer on some college kid for downloading 10,000 songs he would never have purchased in a million years anyway, that's you and me paying for it, not them. They get 100% of their money from the honest consumers. And not only do we pay for it financially, we pay for it in reduced functionality.

The more something like that happens, the less I will be buying. I won't be stealing, but they simply won't get as much (if any) of my money. And it's not because I don't want to buy that DVD, it's because it costs to much for the value I'd get from it, and that's THEIR fault.

Re:Biased question

[gfxguy]

...I purchase the CD and rip it myself. Artist gets paid what they deserve and...

That's highly debatable.

Keep in mind though, they have already made attempts to restrict CDs, too. Someday they might be successful.

I think the way of the future has already started - artists recording their music independently and selling very inexpensively on collective websites gets more and more common, as does some big name stars who are experimenting with releasing music only themselves on their own websites. As I recall, some big artists (Prince?) do this already, but then they have the bucks for their own recording studios and so forth.

I've bought CDs from independent artists online. I guarantee they made more off that $5 CD than they would have if I paid $20 in the store.

Re:Biased question

[gfxguy]

"We're not exactly talking about stealing bread to feed starving children! We're talking about movies!"

Too be fair, I have some friends in the business. Not actors or directors, but grips, lighting techs, and other supporting non-cast jobs. These people's livelihood is just as dependant on the movie industry as Tom Cruise's multi-million dollar life style. While I do think leading actors/actresses are significantly over paid, I think writing off the entire industry is a bit blind to the huge number of people who are employed in or by the business.

I'm sorry, I'm not trying to be argumentative and want to understand your argument. The quote you have there is meant to imply that it's even more grevious to "steal" movies and music because of the frivilous nature of what your taking. I think you took it the opposite way of "Hey, it's only movies, so who cares?" which is not how it's intended at all.

The point I was making is that there's absolutely no justification for stealing this kind of content, you can't use the "Robin Hood" tactic when talking about movies and music.

Re:Biased question

[RingDev]

Ahhhhhhh, I see. I agree, that is a much more valid point.

-Rick

Re:Biased question

[cfuse]

Weird. Computer games can be downloaded for free, or acquired for a very small fee from your neighbourhood copy-peddler. And still the game-development industry is steadily increasing its revenues. And music? People can download any song they want through eDonkey and such, and the music industry does not seem to suffer. Movies? The movie industry gets richer and richer by the day.

You might think it is rational what you say, but practice shows differently. It seems you are not taking everything into account. Probably, if you scan this thread a little more, you'll find out what that is.

There are many people who don't use the internet at all, or don't know how to use it effectively. Whilst they might know that they could download content, they often don't know how to do it. As shocking a concept as that is for those of us with an always on connection constantly pumping the internet into us.

Case in point, I've become the defacto 'go to' person in my family and circle of friends when it comes to finding and downloading content. My family and friends aren't idiots, they just don't have the time or inclination to learn how to use the internet to the level that I do. These are the same people who just want to get stuff done on their pc's without having to think too much about it, to them it's just a fancy typewriter, etc. I've worked in a IT support role before, and I do IT support for my family and friends - exactly the same way every techie ends up doing. This is just more free tech support as far as I'm concerned.

In 5-10 years time, when the teenagers who download everything like second nature have grown up, then we will have a very different landscape to the one we have today. They know that cartels are adding nothing to the product, that they are merely gouging the market, and like me, many of them don't like what they see going on. I think that we are seeing the beginnings of change with things like the 'pirate party' - some bright young person has figured out that you can turn a flash mob into a political party and effect change. I would think that is a bigger deal than the death of the MPAA/RIAA (who are already doomed in my opinion), simply because it represents the threat of real democracy entering politics - career politicians should be scared (but they won't be scared until it's too late for them, these are the same guys who bring you 'the internet is a series of tubes').

Re:Biased question

[Logic and Reason]

I never made a point, and never would, that morals=law.

Then I apologize for misunderstanding. You used the word "illegal" or "illegally" three times in your post, which led me to the conclusion that legality was a major factor in your position.

Morally: if I don't think it's worth what they are asking for it, I don't buy it, but I also don't just take it.

What, exactly, would you be taking? You deprive the creator of nothing. "Potential revenue" is not something one can possess, and he still retains all the information he had previously. That's why I made the analogy to the street musician: he has no right to demand that people pay him, because they are not on his property and they are not depriving him of anything he owns.

Re:Biased question

[twelvethirteen]

As a musician both classically trained and self-tought, I have to say that the musical instrument business is a racket in itself. The price of an unused drumset or trombone or piano or guitar is easily twice that of a used one. Guitars can run up to 2000 dollars, drumsets up to 9000 dollars. There are studio-quality snare drums that cost on the same order. The point is that music production is unnaturally expensive. Is music cheap to make? It can be. It usually isn't, but it should be.

Re:Biased question

[gfxguy]

Look, I know where you are coming from, but what you're saying is you don't respect the author creator to compensate him for his IP. By taking it you are getting some benefit for which you are not willing to pay what the author is asking.

Unless you can argue there is absolutely no value to IP, then by simply taking it without compensation is indeed stealing from the creator.

And if you believe there is no value to IP, then you aren't missing anything by respecting the creator of that IP and not using it at all.

Re:Biased question

[LuYu]

The current model means that music nobody likes won't be funded

Music nobody likes will always be funded by Starbucks and McDonald's, as is much of the music that everybody likes -- at least when the artists get their start or are "waiting for their break". Are you saying that musicians need a 24/7 creation schedule to produce good music?

Re:Biased question

[Logic and Reason]

Look, I know where you are coming from, but what you're saying is you don't respect the author creator to compensate him for his IP.

That's not what I'm saying at all. What I'm saying is that the creator does not have the right to force me to pay for the privilege of using "his" information. Whether or not I choose to compensate him in some way for his hard work is a separate question, just as in the case of the street musician.

Unless you can argue there is absolutely no value to IP, then by simply taking it without compensation is indeed stealing from the creator.

I disagree. Stealing is by definition depriving someone of his own property, and as I have stated, no such deprivation takes place. Semantic issues aside, you already agreed that passers-by should not be forced to pay the street musician even though his music certainly has value, so how is copyright different? It makes no difference whether the creator worked with the expectation of making money in a certain way; after all, enterpreneurs fail all the time when their business models don't pan out, yet we aren't making laws to guarantee them a certain way of making money.

My assertion is basically this: if I am not depriving a given person of the fair use of his property, that person has no right to force conditions upon my behavior. We benefit from others all the time without paying for it; for example, I might enjoy the sight of an artificial pond my neighbor built, but should I have to pay him for the pleasure of looking at it? No, and the reason has nothing to do with how much work he put into the pond, how much benefit I derive from it, or with what expectations he built it. What matters is that I am not impinging upon his property rights, and therefore he cannot tell me what to do, period.

Re: Biased question

[Dolda2000]

Unfortunately, I am quite convinced that you're wrong. You're assuming that with DRM, the media is secure, which I just cannot believe. There will always be a way to crack it, and the larger pirates will be able to do so, be it by stealing the encryption key from the source, finding a bug in Windows or by simply cracking the system. As long as there is the capability to play back the media losslessly on someone's system, there will be the capability to capture it.

Thus, the pirates have little to lose with DRM (the only thing it will do is to make it harder to copy something, but not impossible), while the average customer just wanting to make a mix CD for his car or tape a TV show has much more to lose, since they usually will be unable to crack the encryption (and there will always be companies that place to restrictive terms on their media). In fact, the larger pirate networks may even support DRM, since it may be able to make the media companies feel falsely secure. Needless to say, once a single pirate has cracked the protection on piece of media, that piece of media is free for all, forever.

The conclusion is the DRM has no positive consequences for anyone.

Re:Biased question

[tbannist]

By your own use of langauge - "not buy the CD" vs "pirate it" - you refute your own statement.

I'm afraid not. I'm trying to show you how two artificially distinct situations are not the same.

In the real world, "not buying" a cup of coffee is not the same as having a cup of coffee and doing a runner without paying.

Yes, but the real world analogy of "pirating" music isn't doing a runner with a cup of coffee. That's a lot more like stealing CDs from a music shop. Pirating is a lot more like walking by a busker and not tossing a quarter into the basket. Music used to be like coffee, when it came exclusively on records, tapes and CDs, now it's like music again. Some people want to keep selling music like it's coffee, but it's not.

Re:Biased question

[gfxguy]

How is it different? You aren't seriously suggestion that giving away content for free and asking for donations (like the street musician and many OSS project creators) is the SAME as someone asking for compensation before giving you their creation, and in fact denying you the right to use their creation without compensation?

I'm saying people who create IP are free to disseminate it as they see fit, you don't have any "right" to disseminate someone elses content (to yourself or anyone else), unless the creator of that content says you do.

In the case of OSS, they are giving you consent to take and distribute that content without compensation. The street musician is giving you permission to "enjoy" that content while he's playing it on the street without compensation.

Whether or not you donate to these people is up to you because the content creators have left it up to you. But most commercial recordings do not leave it up to you, they are very specific about how their content is distributed, and they ask for compensation up front. If you don't give it to them, you are NOT entitled to their content.

So there's two extremes, and there's plenty of things that fall in between. For example, sometimes you can sample songs, sometimes you can get one song for free in the hopes that you'll buy more, etc., etc., but in each case it's up to the content creator to decide how the content is distributed.

Your pond example is absolutely ridiculous. Your neighbor built the pond for his benefit, and if he wants to leave it out in the open for all to admire, then good for him - but it's HIS decision, it was HIS decision where and when to build it, and to build it at all. And if he wanted to, he could build a wall around it and charge admission. By your assertion, since you wouldn't be depriving him of his property, you could then climb over the wall and admire the pond without compensating him.

So, you can climb over the wall at the zoo, you could sneak into a movie theater, you could sneak into Disney Land, because hey! You're not depriving any of these people their right to sell tickets.

Re:Biased question

[tbannist]

This is not entirely true--your logic is sound, but it doesn't accurately reflect the market. When a musician is contracted, yes, they are paid a lump sum, but this is an advance, not an independent payment. The artist actually ends up paying it back in royalties, assuming he/she is successful. The artist also pays back numerous other sums too--really, the recording artist gets fairly dicked in the recording industry. But if enough albums are sold, the royalties exceed the costs and the artist actually starts making money. So what happens if he/she stops selling albums? You guessed it--the artist is screwed. (Check here for a succinct, if simplistic, summary of how music royalties work.)

I'm amused by the fact that performers aren't paid when their songs are played on the radio, but the publishers are.

The theft of medium (and thus music) does affect the musician, and you had asserted that it does not--unfortunately, this is not the case.

The problem here is simple, performance artists are taking a gamble that they will sell more CDs than they the recording company would be willing to pay them up front for the performance. Whether or not that gamble pays off for them is not my problem. Like any other gamble it's a risk and you can't complain if you lose.

However, the real issue is you deliberate choice to obsfucate the truth. The theft of medium is a crime, the medium has been stolen. Whoever you stole it from has one less CD/Tape/Record in their possession. This is clearly theft. The "pirating" of music, however, is a much more ethically neutral area. The music file still exists where you downloaded it from, they didn't lose anything. How is it theft? You might say "well the performance artist who played it didn't get paid", and you'd be right in that he didn't. However, he doesn't get paid when it's played on the radio either. So why is one theft and not the other?

To truly understand the issue you need to step even further back and look at the intent of copyright in the first place. Essentially, you need to understand that copyrights are essentially a faustian deal. We created them to encourage the creation of more (good) music, however, that deal was developed under a system where music creation and distribution were expensive. This is no longer the case.

In fact, you could reasonably make an argument that musical copyrights are now being used a way to limit the number and success of new musical creations. The rents from the monopoly support a very aggressive music industry that frequently directly or indirectly tries to quash any music it doesn't own. Payola isn't just about selling more CDs it's also about tactically limiting the public's exposure to non-payola music. Additionally music companies have an inherent interest in keeping the stable of successful performers small. Most of their profit is earned from economies of scale. It costs much less to produce (and market) 1 band that sells 10 million CDs then it does to produce (and market) 10 bands that sell 1 million CDs each.

My original assertion holds--downloading copyrighted music (that is intended to be sold) is theft. You can try and say: "But it's theft from people who don't deserve their money," which is its own ethical statement (and worthy of debate as well), but in this case that's not true--the theft still directly affects the recording artist.

You need a reality check. Downloading music can never be theft, for one very important reason, you have not deprived anyone of something they had. You might think that's a technicality, but it's about as important as the fact that a circle isn't a square because it's doesn't have any corners. It can never be more than copyright infringement, that is making a copy you don't have permission to make. So it's as morally wrong as photocopying a picture of a painting. The quality of the people who receive the money is part and parcel of the question, "are copyrights working as intended". Which is a question tha

Re:Biased question

[Logic and Reason]

How is it different? You aren't seriously suggestion that giving away content for free and asking for donations (like the street musician and many OSS project creators) is the SAME as someone asking for compensation before giving you their creation, and in fact denying you the right to use their creation without compensation?

You have missed my point. It does not matter whether or not the creator asks for compensation first, because he HAS NO RIGHT to demand anything from me in the first place. I could stand on a public street and demand that people pay me in order to pass, but clearly I have no right to demand this, regardless of how much work I may have put into making my signs. Therefore, even though people are aware of my demands before they choose to pass or not to pass, they are under no obligation to accept my terms.

I'm saying people who create IP are free to disseminate it as they see fit, you don't have any "right" to disseminate someone elses content (to yourself or anyone else), unless the creator of that content says you do.

Someone else's content? Define that. Suppose person A writes a poem, and person B later composes the same poem independently. Does that information "belong" to person A? How can we say that information "belongs" to anyone, when it is not a physical entity and does not reside in one place? Information does not naturally have the kind of scarcity that physical goods do, which is the only reason we have property in the first place: to allocate scarce goods. If physical goods could be duplicated as information can, then we would have no need for property at all.

By your assertion, since you wouldn't be depriving him of his property, you could then climb over the wall and admire the pond without compensating him.

Wrong. You missed a crucial word in my assertion: I said what's not allowed is depriving him of the use of his property, which includes trespass because one use of property is to decide who gets to be on it. In any case, this is clearly irrelevant to IP unless you're asserting that some form of trespass is taking place.

Re:Biased question

[SpecTheIntro]

I'm actually reviewing intellectual property right now online--I'm beginning to realize I have a much more extreme stance on the ownership of that which the intellect creates than is considered the "norm," and is protected by law. I do believe that someone's intellectual property can be "stolen," and I see the downloading of music as intellectual theft. (Provided of course the artist has asked to be compensated for his/her work.) I view the copyright and patent laws as means of rewarding someone for previous labors--whether they're achieving that is, as you said, worthy of debate. (I agree with you, coincidentally--I don't think they're working either.) But the nature of copyright law is something I agree with: if someone expends their time and energy creating an idea (or a piece of music) then they have the right to determine how that idea (or music, or whatever) is distributed. (I actually believe they own the idea, but this is something that is considered "extreme" so I have to do more research to find some counter-arguments to my position.) Any attempts to circumvent the limits they impose constitutes intellectual theft. But, like I said, I need to read more--I was unaware of how far from the current body of law my position is.

Re:Biased question

[SanityInAnarchy]

I am saying that just like any other job, you have to do good work or you don't get paid.

Re:Biased question

[gfxguy]

Wrong. You missed a crucial word in my assertion: I said what's not allowed is depriving him of the use of his property, which includes trespass because one use of property is to decide who gets to be on it. In any case, this is clearly irrelevant to IP unless you're asserting that some form of trespass is taking place.

How are you depriving him of his right to his property? You sneak over the fence at midnight when he's asleep, or when he's on vacation. You argue, hey, he wasn't there to collect the money anyway. You haven't deprived him of anything!

Your argument is ridiculous - you should respect people's intellectual property the same way you respect their physical property. It has very little to do with "depriving" someone of something.

And this...

You have missed my point. It does not matter whether or not the creator asks for compensation first, because he HAS NO RIGHT to demand anything from me in the first place. I could stand on a public street and demand that people pay me in order to pass, but clearly I have no right to demand this, regardless of how much work I may have put into making my signs. Therefore, even though people are aware of my demands before they choose to pass or not to pass, they are under no obligation to accept my terms.

How can you even make this comparison with a straight face? (Not that I can see it). Someone has IP and says you can see it for a fee, you refuse, case closed. Now you're arguing the same old street musician argument... someone standing there on the corner playing an instrument and demanding that you pay because you were in ear shot is ridiculous and you know it, and it's not how any of this protection of IP works. Don't pretend you don't see the difference.

Re:Biased question

[Logic and Reason]

How are you depriving him of his right to his property? You sneak over the fence at midnight when he's asleep, or when he's on vacation. You argue, hey, he wasn't there to collect the money anyway. You haven't deprived him of anything!

Since you seem to be so hung up on this trespassing thing, would it help if I re-worded that part of the assertion to be "using his property" instead of "depriving him of the fair use of his property"? I was reluctant to use the former wording because the term "intellectual property" has confused the issue of what is property and what is not-- but see my next paragraph below for my argument on why "intellectual property" cannot really be considered property at all.

Your argument is ridiculous - you should respect people's intellectual property the same way you respect their physical property. It has very little to do with "depriving" someone of something.

I don't, because they are NOT THE SAME. As I stated in my last post, information and physical objects are fundamentally different: physical objects are scarce, while information is not. Therefore, I claim, the construct of "property" which we apply to physical objects is not appropriate for information. It's like trying to fit square pegs into round holes, and it's why we are having so many problems related to IP today: the concept is fundamentally broken.

Someone has IP and says you can see it for a fee, you refuse, case closed.

Except that's not the only situation in which IP applies. IP applies even if I never interact with the creator directly, e.g. if I download an mp3 from some third-party site. My claim is that the creator has no right to tell me what I can and cannot do with the content of that mp3, since it is information and therefore cannot be "owned" by anyone. The situation is, of course, different if I am interacting with the creator directly: he may certainly refuse to let me see his information under whatever conditions he sees fit.

Furthermore, you use the phrase "has IP" as if IP were a physical thing one could possess. It's not; it is a construct of law, and I thought we already agreed that law is not a basis for morality.

...someone standing there on the corner playing an instrument and demanding that you pay because you were in ear shot is ridiculous and you know it, and it's not how any of this protection of IP works. Don't pretend you don't see the difference.

Of course it's ridiculous. That's how reductio ad absurdum works, and it is a perfectly valid form of argumentation. You can't refute it simply by saying "don't pretend you don't see the difference."

Re:Biased question

[Alioth]

But you don't need DRM to do ANY of that. eMusic is the second largest seller of music online (second only to iTMS) and it doesn't use DRM nor do the record labels that sell through eMusic require them to have DRM. The vast majority of people, if they can easily buy the music they want rather than pirate it WILL buy it. Those who don't will still find a pirated copy, DRM notwithstanding. I personally do not pirate music - I use both eMusic and iTMS - although as soon as I get a track from iTMS it gets the DRM stripped off by jHymn because I want to be able to listen to the song while I work on my Linux workstation, too.

In all it boils down to DRM being a pointless and expensive waste of time. Of course, the software vendors who sell DRM technology love it.

In any case, for every band that the record companies promote, there are perhaps 50 bands that are just as good and worth paying for. A good band hoping to make money really is a lottery - a lottery on which get noticed and which have the prettiest faces that the record companies think can sell music.

The insidious part of DRM is the record companies next tack (and companies like Apple and Microsoft will be very happy to go along with this, because it increases lock-in) is that eventually, music players such as what will be formerly known as MP3 players, and computer based players will BY LAW only play DRM content. Non-DRM content won't be a valid file format. That way, record companies can regain their own lock-in on artists before things such as bands selling directly through MySpace, their own websites or eMusic make them irrelevant. Already, there has been a very high profile case of a band "making it" without a traditional record company (The Arctic Monkeys) and THAT is what terrifies the record companies and is what is driving them to insist on DRM - because if they hold the DRM keys, they can nip this dangerous development in the bud!

Re:Biased question

[shmlco]

Hey, way to switch arguments. Nice move from the cheap equipment so music should be cheap line...

How? Ask Apple

[SuperKendall]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"

Ask Apple, they are doing so today. Sure they use DRM but the way they work sales would not really be hampered much by them not doing so - after all, I can download any song for free today but I choose to buy through ITMS.

you don't...

[twiggy]

You don't.. you sell something other than the tracks.

You create a completely different model now that people expect the tracks in digital form for free (or will risk an RIAA lawsuit to get them).

you make your money on tours, tshirts, or making amazingly badass CD packaging (see: Tool - 10,000 Days) that makes it worth picking up a hard copy.

Or, you make your money by giving people valuable merchandise or preferred seating at concerts for joining your fan club.

You can't create demand for something that can be infinitely and freely copied.

Re:you don't...

[QuantumG]

You can't create demand for something that can be infinitely and freely copied.

Wow. How can you say all that and still miss the point. There's no problem "creating demand", there's only the problem of "limiting supply" and you can actually do that, but to do so requires you to be so fuckin' evil that you're willing to get in everyone's face and prevent them from helping others.

Re:you don't...

[shawb]

So... kinda like musicians make their money today. There are a very few artists that actually see some money from CD sales, but most of them really don't. It's touring and merchandising that gives them money, and CD sales are seen more as advertising. On the other hand, record companies view tours as advertising for the CD sales.

Re:you don't...

[westlake]

You don't.. you sell something other than the tracks

--- or you move on to another market.

older, perhaps, but certainly with different tastes in music and media. and without the time or patience to extract what it wants from the P2P nets.

what do we lose when a talented young musician decides he doesn't want or need to meet the terms and conditions of the file sharing demographic? no grinding concert tours. no hustling tee-shirts at every gig.

Re:you don't...

[Anonymous Coward]

10,000 days is awesome, cd cover is awesome, Tool is awesome. Totally worth the ~ $15 it costs to purchase this album.

Re:you don't...

[ZachPruckowski]

Yes. Someone else gets it. Most bands (and I work a lot of concerts, so I have a lot of interaction with small-to-medium size bands) make their money on merchandise or being booked for a show. They have the songs on myspace and give away a few free CDs at their shows. The same for comedians. They sell merchandise and live performances - they make little on their CDs or brief Comedy Central appearances (late night talk show appearances or their own show notwithstanding). In fact, one of the comedians we had went so far as to say "One of you needs to buy the CD, and the rest of you need computers". The same holds for movies - theater showings, posters, action figures, t-shirts, going around as guest speakers. Some lesser-known actors can charge up to $10,000 or more for appearances

Re:you don't...

[Russellkhan]

what do we lose when a talented young musician decides he doesn't want or need to meet the terms and conditions of the file sharing demographic? no grinding concert tours. no hustling tee-shirts at every gig.

I dunno, I guess about the same thing as what we lose when a talented young musician gives it up after being rejected by a few record companies because he doesn't fit their top-40 demographic mold (He isn't Britney Spears or NSync or whatever the current pop thing happens to be).

Re:you don't...

[Jesrad]

His point still applies: it can be infinitely and freely copied, in all actuality. Making it illegal won't make it impossible: DRM doesn't work at that because it provides the legit buyer with the encryption method, encrypted content and decryption key.

I think you are the one who missed the point here.

Re:you don't...

[forkazoo]

You can't create demand for something that can be infinitely and freely copied.

Wow. How can you say all that and still miss the point. There's no problem "creating demand", there's only the problem of "limiting supply" and you can actually do that, but to do so requires you to be so fuckin' evil that you're willing to get in everyone's face and prevent them from helping others.

Actually, I think that there is a point to that. Sure, there is some amount of demand for something that can be infinitely and free copied. But, you can't really create demand for it. Not to say that there isn't any demand, but it's very hard to create new demand. Everybody who wants it will get it without any issues, so extra advertising won't be especially useful.

Now, imagine you go to a concert and if you show your copy of the CD, you get better seating. The better seat can't be infinitely copied, so you are able to make your CD much more attractive, hence people will be more interested in it. Once you abandon the idea of selling something that can be infinitely copied, then you can increase demand to the point where people will pay more for it.

Also, my room mate loves having physical CD's so that he can lend them to friends, play them in his portable CD player without the expense of an iPod, etc. Downloading and burning a physical CD takes some time. It also has some cost. Not huge, but the notion that a CD can be pirated "infinitely" is actually very wrong. It can be pirated easily, but not with zero investment. Therefore, just buying a physical CD can be a convenience win.

Re:you don't...

[Myopic]

holy damn Tool artwork is reason enough to buy the CD. but forget CD sales, i dropped five hundred dollars to see them live, including airfare from Alaska. it's a farce to say bands can't make money if they can't control distribution.

and that 3D shit on 10,000 days is a real trip.

This is a question that has begged discussion.

[Anonymous Coward]

How will we ever be free of our music executive overlords if we don't offer something *tenable* in terms of a workable economy...will people be moved to support the artists beyond having a "warm, fuzzy feeling?"

Potentially no marketing cost......

[nbehary]

The thing is, if you market the shiny case, people will buy it. At least, the market thus far proves that to be true. Me, myself, I tend to be a huge "pirate", but I'll pay for something I think is worth it, even after getting it for free. That can't be said for most. But, irregardless, the masses will pay for it. At least so far. I guess my point is, make quality, make people think it's worth paying for, and I'd hope most would. Maybe I'm an idealist though......

Re:Potentially no marketing cost......

[xoran99]

Me, myself, I tend to be a huge "pirate", but I'll pay for something I think is worth it, even after getting it for free. That can't be said for most.

Sorry if this seems to be directed at you, but I'm going to rant a bit. I can't help but roll my eyes at people who freely admit to pirating copyrighted material as though it were nothing wrong, and immediately afterwards cast themselves in a noble light by saying that they pay for it if they like it. YOU WERE SUPPOSED TO PAY FOR IT IN THE FIRST PLACE. If it's worth it to you to keep it on your hard drive, it's worth obtaining legitimately.

Re:Potentially no marketing cost......

[nbehary]

If I keep it on my hard drive (or burn it off to disc).....I do pay for it. Hell, if I watch, or listen to all of it, I pay for it. (unless I'm really bored and sit through crap. sometimes I do, but it's not that often)

I agree with you though....that's where my "most wouldn't" comment comes in. And, it's true. I guess that's the submitter's question. What about them? I did answer that. Again, I'd hope most people weren't "evil".

Re:Potentially no marketing cost......

[supersocialist]

Piracy hurts Blockbuster a lot more than it hurts Miramax. I'm willing to download just about anything; I'm willing to pay only for things I like. If I watch something more than once, chances are the second time is off an honest-to-god physical disc. Your outdated ethics are not compatible with these new-fangled internets.

Re:Potentially no marketing cost......

[AP2k]

I believe this to be true as well. As far as music goes, I have pirated around 5k songs. I would only consider buying the albums for the best bands, and one of the main reasons is the cover art (not to mention the CDs have better sound quality).

I would be interested in how people would repsond to the same question if music was replaced with software? The absolute only reason I would ever consider buying software was if it was subscription based (DRM, obviously), had great non-digital extras, or was from a company I respect (id for example). As easy as it wuld be to get a completely working copy of all three original Doom games, I still bought the trilogy pack because the game is so great. Same with Quake4. I loved the extras on the DVD version so I ran out and got that, nevermind the fact that my computer didnt have DX9 hardware support, I still enjoyed the bonus Quake 2 and its expansions.

But lets take two pieces of software that I didnt pay for and wont: O&O Defrag Pro and Partition Magic. Partition magic f!cked up my partition, so I sure as hell wont be buying it. But despite how well O&O does its job, I simply cant find it in me to pay for it. (Sorry, guys)

The only possible way to get me to buy a software program that doenst have extras, would be to have fully working trial versions. Considering that is DRM, it hardly solves the topic's issue.

Re:Potentially no marketing cost......

[ozmanjusri]

If it's worth it to you to keep it on your hard drive, it's worth obtaining legitimately.

That market model will only be fair if the movie/music makers agree to refund my money when I pay for one of their products, listen to/watch it, then decide it's crap.

In many ways, these guys brought this on themselves. They use paid shills and astroturf to market the hell out of shitty movies like Snakes on a Plane, while virtually ignoring a beauty like Thank You for Smoking, then whine when ripped off consumers look for better ways to preview the products.

The thing is, for me at least, this isn't about the $12 I have to pay for the movie. It's about the value of my own time. Other people are prepared to pay upwards of $120/hr for my attention and I don't believe I should value it any less. When I decide to watch a movie, I normally get a few, start watching and if any are crap, they'll be ejected and the next one loaded up.

With your business model, I pay just as much for the 10 minutes of timewasting crap as I do for the watchable movies. There's no market pressure on the suppliers, so they'll keep producing pap.

Re:Potentially no marketing cost......

[goldspider]

You're confusing "quality" with "taste". Beauty is, afterall, in the eye of the beholder.

That's where your argument that people will be willing to pay for "good" music and continue to pirate "bad" music falls short.

Lots of people are just cheap and/or feel entitled.

Re:Potentially no marketing cost......

[nbehary]

You make a good point. I did add the caveat "I'd like to think" onto my opinion. Works for me, but it may only work for a small percentage of the people who will pirate things. I dunno.

depends on who is trying to make the money...

[Anonymous Coward]

that's the real question.

if you want the publishing company or the middle-man to make money.... you're raised the big question.
if you want the creator to make money, then there's money to be had in licensing
and if you want the actor/writer/musican to make money, then non-replicable experiences (personal talks, live concerts, live theatre, etc.) are the way to go.

(personal appearances recommended by an anonymous coward.... i have nothing else to add to this one).

scale?

[Yaa 101]

The answer is scale, or rather lack of it.
I think the future landscape is better suited for small players, unless of course the landscape is ruined.

Doesn't that sound familiar?

Re:How? Ask Apple

[EnsilZah]

So basically what apple is selling is not the song itself, but rather the assurance that it would be of a certain quality, the time saved on searching for it, and also the assurance that RIAA commandos won't break into your house in the middle of the night and proceed to fuck you in the ass.

Target profit

[in2mind]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"

IMO,you set a target profit amount for the product & once that is achieved,the company should not worry about the no. of copies that has been made.

My 2c.

Re:Target profit

[Anonymous Coward]

Economics 101...
1. If your marginal cost of producing a unit is zero then any marginal revenue above this amount will earn you a profit on each unit sold.
2. If demand for your product is elastic, lowering price will increase volume so that total revenue increases.
3. So don't charge $0.99 per track, charge $0.0027 and volumes will increase enough to increase your total revenue. At that price where is the incentive to pirate? Sure there's less money for the record company executives to spend on coke, but who cares?
4. Consider that Napster charges $9.95 for an all-you-can-listen subscription. Say you devote 8 hours every day to listening to music: 31 days * 8 hours * 15 songs/hour = 3,720 songs. $9.95/3,720 = $0.0027 revenue per song.

extra's

[bm_luethke]

To a large extent I think there is some truth to having an issue with making money by selling the virtual parts. It becomes even truer the more that is what you are selling.

However there is something to be said for convenience. I'm willing to pay some premium for always high quality recordings, no viruses, good selection, and other things that file swapping has a great deal of difficulty with. This depends on what you time is worth and how much is charged. Itunes has made pretty good with this even though many still do not use it (I don't - I don't like enough music to bother).

The other is many people (especially myself) like physical copies and the extra's that go with them. Nice jacket insets, quality backup (though this is much less the case now - most are skimping on quality control), hard copy manuals, all sorts of things. Just stuff I can not get by downloading.

And, lastly, support. For consumer items this may not be such a big deal - what support on downloaded MP3's? But for software with a business that can mean a whole lot. Really, what most businesses are paying Microsoft is thier support. This comes in several forms - large list of supported hardware, listening to important demands, and other types of things (little to none is getting phone support, you have your IT staff or another company to deal with that). For most businesses that switch to linux this also tends to be the case - Microsoft didn't listen to the demands, found some peice of hardware didn't really work well (for instance you need real time data encoding and you can not set the Kernel to the modes you need), or maybe need to dink with the code.

In short, there are lots of things to sell. In some markets it may not be that great, in others it may be where all the money is. It also depends on what you are viewing as your product - if it is only the string of bits being copied then you are screwed - DRM or not (it *will* be broken and once it is then back to unlimited supply, and probably broken quickly and much cheaper than the DRM that you produced). In the end, that is reality and you can not fight it succesfully. You can debate if it will end up good or not, but it will not stop it from occuring.

Public goods

[SiliconEntity]

Without DRM, information goods are what economists call "public goods". Public goods are non-excludable, which means that if you supply them to one person you are effectively supplying them to everyone. And they are non-rival, meaning that if you give them away, you still have them.

Public goods sound nice, but unfortunately they cause big economic problems. It is a classic theorem of economics that public goods are under-produced. There is no effective way to get paid for the investment needed to produce them because there is no way to charge for them. A canonical public good is clean air. Pretty hard to get people to pay money to clean the air, because clean air benefits everyone and cannot be limited to just certain people.

DRM turns information goods into private goods. Now they can be sold and owned. They become excludable. The investment needed to produce them can be recovered by charging for their sale.

Further, it is a theorem of economics that in the long run, competition will force prices to the level of manufacturing costs. As goods become popular, the investment needed to produce them will dwindle in proportion to the number of goods produced, and their prices will fall. In a DRM system, popular information goods will be inexpensive, and well supplied. There will be no shortages.

DRM is an optimal way to manage information goods.

Re:Public goods

[Jesrad]

Information is a public good, you say. I see nothing implying it shouldn't be a public good. You define under-production as a problem for information, are you so sure of that ? For one, information can be infinitely and freely reproduced, unlike the public goods studied by economics that suffer the "tragedy of the commons". Also, you're wrong in assuming there is no way to charge for it: material support for information is not a public good. I mean this in the very large sense. There always has to exist a physical support for information for it to reach one's mind, and that's how you charge for it, be it through concert tickets, a paper copy, a DVD, electrical signal down your phone line or whatever means currently exist for that.

There is demand for new information, so there is money to be made in the production of this new content. Once distribution of an "old" work is done, very little money can be made on its distribution, so production of new information is desireable by the distributors. That's where the concept of "first publication right" of the author becomes useful. This is a concept put forward by some members of both the french and german Pirate Parties. In practice, it goes like this:

Authors (whether promising new ones or established old ones, there's market for both) get hired for creating works by, for example, a private P2P network (where money is made through subscriptions, because people are paying for being the first to get their hands on some known artist's works, or because they value the selection that the network does), or a public ad-supported P2P network. Once the works are distributed, the network's users can record, copy, share for free or even distribute them for profit.

Think this model cannot work ? Think again, that's how television channels work, although I'm not allowed to sell DVDs of my recordings of series... yet.

Re:Public goods

[medarby]

...competition will force prices to the level of manufacturing costs.

IANAE(conomics)M(ajor)

Competition? What competition? Aren't we really facing multiple monopolies? It's not like Big Summer Movie #1 is offered by multiple companies. It's only offered by one. Competition is good if you consider the demand for ALL movies, but that's not really what happens. If I really want to see 3 movies this summer, I'll save my money and go to them, and not the 97 others that are released. Big Summer Movie #1 is not really competing with Big Summer Movie #2 or Crappy Art Movie #9864.

Each DRM product is a monopoly and not affected by other DRM products. The only thing to consider is the demand for an individual product and the fact the the supply for that product is monopolized.

Re:Public goods

[Sloppy]

DRM turns information goods into private goods

That's the error, because DRM doesn't do that. If your premise is that unDRMed goods are not excludable (because your customers will violate copyright law) then it follows that DRMed goods are also not excludable (because people will break the DRM). It gets you nothing in that scenario. The DRM-cracked version remains a public good and the private-good DRMed version has a smaller market. DRM puts the producer at an even greater disadvantage in their competition with pirates, than they would be without the DRM. If you're going to compete with pirates, you need advantages not disadvantages.

So instead of being "an optimal way to manage information goods" it becomes a great (though probably not optimal) way to reduce profit.

stupid question

[RelliK]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

The same way it worked before DRM. You are making a ridiculous assumption that DRM is the only thing that prevents someone from distriduting copies of copyrighted works. That is utterly false. There is this thing called copyright law that works just fine without DRM. Photocopiers didn't kill the book publishers. Tape recorders didn't kill music industry. VCRs *multiplied* the profits of the movie industry, despite the fact that certain studios nearly had them outlawed.

For this reason your question is either biased or stupid or both. Turns out it is entirely possible to have a viable economy without infringing on the consumers' fair use rights or first sale doctrine. Who would have thunk!

Re:stupid question

[nitrogenx]

I think you are forgetting about the aspect of scale in your arguments. For every song bought legally online, there are at least 20 illegally downloaded. Has this scenario ever been the case with tape copy or paper copy? The shear ease of copying has created a situation very different from the Photocopy/VCR situation.

Re:stupid question

[QuantumFTL]

You are making a ridiculous assumption that DRM is the only thing that prevents someone from distriduting copies of copyrighted works. That is utterly false. There is this thing called copyright law that works just fine without DRM. Photocopiers didn't kill the book publishers.

Copyright law is hardly what keeps most people from using photocopiers on books, but rather the expense and time/effort required in the copying process. P2P apps make the only real problem finding the content you need. People don't obey laws that are rarely enforced, make little sense to them, and are inconvenient. The "law" has done little to prevent millions of Americans from downloading whatever they please.

Re:stupid question

[Dhalka226]

For this reason your question is either biased or stupid or both.

Well then let's be fair: I think your comparisons are biased or stupid or both.

Photocopiers didn't kill the book publishers.

Because there is a significant time investment in standing around and copying all of the pages of a book. Not to mention that when you're finished, you end up with a stack of papers, not a book.

Tape recorders didn't kill music industry.

No, they didn't. Then again, tape recorders--in terms of piracy (which is what we're really talking about when we talk DRM--require that I know you and live nearby you. They require that I be able to hand you the physical copy. This is still a problem with CDs.

VCRs *multiplied* the profits of the movie industry

Again, for me to pirate you a movie, I have to be able to give it to you. Sure, I could mail it or something, but that's more work and expense for me. That fact means it's largely limited to me pirating things for my close friends, family or neighbors.

The issue with digital piracy is that you can create as many exact copies as you want with no quality issues, and distribute them around the globe with essentially no effort. It also costs essentially the same to make and share one copy with one friend as it would to make 10,000 copies to share with 10,000 random people (ignoring data transfer costs--which most people, at least in the US, don't pay specifically for anyway; they pay for the speeds of their lines, not how much data they squeeze through those lines in a month).

I don't support DRM for many reasons, but to pretend that my ability to make exact digital duplicates of a CD (or DVD or what have you) and distribute those copies to anybody in the world with a 'net connection is somehow akin to what I could do similarly with VHS tapes or cassettes is naive at best and disingenuous at worst.

To avoid having to make a second post, I'm going to go ahead and give my answer to the submitter's questions:

I'm perfectly willing to pay for, for example, music downloads, assuming that the price is fair. Here is clue #1 for music companies: If it would cost me roughly the same amount of money to buy each track on a CD digitally as to go to the store and buy the actual CD, you're charging too much. I should not have to pay the same amount for lower-quality copies of songs with no case, no insert, no artwork and no CD-pressing manufacturing costs, that I would for higher-quality versions with all that. That is just plain silly.

Clue #2: I want to be able to choose the quality of the song I download. If I really love a song, I want to be able to get a high-quality rip. On the contrary, if I don't really love a song, or if I'm just downloading it again for some reason (for example I took my laptop to school and noticed a few songs I had forgotten to transfer over, I re-downloaded those), I'd like to be able to get a lower bitrate--and to pay a lower price accordingly. A bit rate range of 128 to 320 (for MP3) seems fair. If you want to offer lossless options, hey, more power--but I personally could not hear a difference between 320 and lossless, so it means very little to me.

Clue #3: Choosing formats is nice. It's not particularly important to me, but I know it can be to a lot of people--and really, when you get right down to it, if you're doing steps #1 and #2 already, then letting people chose their format in addition to their bitrate is simply not that much more work, neither to code for nor on the server doing the jobs.

Clue #4: Probably the most important one, and the one that most specifically addresses the question posed in the submission: Once I buy the song from you, IT IS MINE. Get the hell off my back about what I can do with it. I don't want DRM. I don't want you to tell me how many different CDs I can burn it to, or what devices I can play it back on. If you charge reasonable prices, permit me to choose my for

Re:stupid question

[Anonymous Coward]

Except that copyright only works when it is enforced. And when the RIAA or MPAA tries to do that by prosecuting offenders, all of Slashdot cries foul over that, too.

Unlike with tape recorders and VCRs, it's extremely easy to distribute digital copies to other people since it costs nothing, not even the cost of a tape. To distribute movies and music on any large scale through tapes, you would have to set up a fairly large operation and collect fees to cover the costs of the tapes and the time to record them. That also makes it easy for the copyright holders to find and prosecute you. With digital copies, that type of mass distribution is everywhere, and it's impossible for the copyright holders to stop everyone. The only thing they can do is target a few individuals, and then it's not entirely certain that they're guilty because there are so many ways the digital evidence they have can be wrong.

With tapes, the copyright holders could stop the majority of people, making the supply of illegal copies low enough that most people would be forced to buy them. In today's digital world, the copyright holders have no chance in hell of stopping enough people to even make it difficult to get an illegal copy of nearly anything in a matter of seconds. Instead, they would have to make their profits from the lawsuits themselves, which would obviously never work.

There is no simple solution to this.

Re:stupid question

[SanityInAnarchy]

Where do you get your statistics from?

Oh, and how about we compare every song bought legally, period, versios how many illegally downloaded? Your statistic, even if true, is misleading.

Re:stupid question

[gaggle]

It seems poignant to point out that neither photocopiers, tape recorders or VCRs are capable of duplicating the original perfectly. If you were visiting a friend and saw this fascinating book, what would you do if you could take a perfect replica home without having to do anything more than click a button? No need to fiddle with a difficult photocopier. And the legal solution is walking all the way to the nearest bookstore, not an easy alternative.

IANAEconomist, so what do I know, but I have my own unrealistic take on a solution:
I think people want to pay for their entertainment. If I'm at a friends house and I hear some music, a) make it ridiculously easy for me to get a legal copy, and b) give me perks for taking the honest route: For example the song is automatically sent wirelessly to my ZunePod. And I can access my music library from any available computer. And it's an integrated and slick experience regardless of the device I use.

To the DRM-using industries: At the very least make it fucking hasslefree first before going on about how the world's going to hell in a handbasket if we don't get prohibitive DRM, don't wonder why I tend to go with the MP3s when I don't even have a proper legal alternative. Jeez.

Re:stupid question

[SanityInAnarchy]

Again, for me to pirate you a movie, I have to be able to give it to you. Sure, I could mail it or something, but that's more work and expense for me. That fact means it's largely limited to me pirating things for my close friends, family or neighbors.

With what a blank tape cost, and what a movie cost, this could still be reasonably done. It's more illegal, and it's easier to track down, but nothing like this has killed the movie industry. VCRs have, in fact, strengthened it.

Even without that, the movie industry's track record with VCRs, and the music industry with DATs, suggests that either they are completely incompetent at recognizing whether a technology will kill them (or how to make money off that technology), or that they are using piracy as an excuse to gain lockin for an ulterior motive. For instance, the fact that DVDs scratch fairly easily, and that the movie industry theory is that you should only watch the same exact disc, right off the disc, suggests that they really want DRM on DVDs, not because of piracy, but to force us to buy the same thing over and over again.

For that matter, buying the same thing over and over again is an RIAA/MPAA pattern.

I agree about your AllofMP3 assessment, though. I prefer lossless or Vorbis if I'm going to buy something, but the main criteria is cheapness and lack of DRM.

Re:stupid question

[Jah-Wren Ryel]

There is this thing called copyright law that works just fine without DRM. Photocopiers didn't kill the book publishers. Tape recorders didn't kill music industry. VCRs *multiplied* the profits of the movie industry, despite the fact that certain studios nearly had them outlawed.

You are wrong. Plain and simple.

All of your contrary examples, and any more that you can think up, are all based on fixing the copies in a physical medium. Cassette tapes, video tapes, photocopy paper, etc - all physical products that inherently limit the feasibility of wide-scale duplication.

Digital information combined with digital networks is a whole new beast, with no real analogue for comparisons. Whereas previous forms of copying all required a significant marginal cost per copy, the marginal cost of a digital copy is so small that it is effectively zero.

This difference in marginal costs makes copyright laws uneforceable. In the past, if you wanted to make a million bootleg copies it took significant resources - the cost of time and materials was such that relatively few people could do it, so the scale of infringement was small and law enforcement could concentrate their efforts on that small group of people and get a good "return" on the effort invested in cracking down on a bootleg operation. Even then, there was never a shortage of bootleggers.

But now, everybody and his brother can make a thousand copies of something for practically nothing. It is just not feasible to enforce the law in such a situation, the effort to bust a single bootlegger is now more than it was when bootlegging was concentrated in high-volume and high-visibility situations. It's almost impossible to catch someone who only makes a couple of thousand copies, and when you do catch him, 100 more people take his place. So your "return" on the effort of copyright enforcement is almost nil.

It is almost always a stupid idea to make analogies when talking about non-rivalrous and non-excludable goods like digital information, but I'm feeling stupid so here goes.

Back in the days before the printing press, if copyright had existed it would be like setting the national speed limit to 300mph. Basically a law with no effect because almost nobody has the ability to violate it.

After the printing press became widespread, copyright law was the equivalent of setting the national speed limit to about 150mph. A few very determined individuals could violate it, but they would sure stand out if they did and would be easy to catch if the cops were looking for violators.

With photocopiers and cassette recorders, the speed limit got down to around 100mph. Just about anyone can exceed 100mph, but few people do it because the effort is rarely worth the reward. Anyone who routinely exceeds 100mph will get busted pretty quick, but the casual violator usualy gets away without getting caught.

Now, with the internet, its like setting the speed limit down to 10mph. Anyone can easily exceed the limit, in fact it so easy to do so, that people naturally break the law without even thinking about it. It is just not possible for the cops to arrest everyone going faster than 10mph because (a) so many people do it, which means hardly anyone stands out from the crowd and (b)there is just not enough hours in the day to make a dent on the number of people breaking the law.

It's time for the law to change to reflect the changes in technology. We need to put that speed limit back up to at least 100mph, if not higher.

Re:stupid question

[Eivind Eklund]

You are assuming that a 20:1 ratio of legal vs illegal songs is a market problem, or an actual (as opposed to emotional) problem for artists. This is not at all clear.

There are four kinds of copying:

1. Copying where the copier would have bought the original without access to a copy, and does. This is neutral for the content provider and positive for the copier (or else he wouldn't copy.)
2. Copying where the copier would have bought the original without access to a copy, and doesn't. This is negative for the content provider and positive for the copier. The reason for not buying may be having access to the copy, or it may be that the thing copied sucks so much that no way the copier would support more of that.
3. Copying where the copier would not have bought the original without access to a copy, and buys it after copying. This is positive for the content provider and positive for the copier.
4. Copying where the copier would not have bought the original without acess to a copy, and does not buy it after copying. This is neutral for the content provider and positive for the copier.

Notice that all categories are positive for the copier, that only category 2 copying is negative for the content provider, and that copying is only net negative for the content provider if category 2 is larger than category 3. The statistics seems to indicate that category 3 is larger than category 2, and copying lead to overall increase in purchase of content.

On a personal level, I can very much relate to that - I've never bought as much music as when I used Napster actively, by a wide margin. My overall consumption of music just went up.

My stand on this is that (A) it is not at all clear that somebody should be allowed to monopolize a part of culture and not have it copied - that's a temporary thing we granted in a different world, and may no longer be for the best, and (B) it is not at all clear that copying leads to less purchases overall. On this basis, it is definately not clear that there should be laws prohibiting this "crime".

Eivind.

Re:stupid question

[Don_dumb]

[In response to] - Tape recorders didn't kill music industry.
No, they didn't. Then again, tape recorders--in terms of piracy (which is what we're really talking about when we talk DRM--require that I know you and live nearby you. They require that I be able to hand you the physical copy. This is still a problem with CDs.

In the UK the music Industry claimed that they were destroying the industry, not due to tape-to-tape recording but recording radio broadcasts of music. They argued this to such a successful extent that it is illegal to record radio broadcasts in the UK.
I sometimes hear DJs joking about the slogan "Home taping is killing music".

I understand your point was specifically about tape-tape copying, but it is worth noting that FUD very much like the FUD from the music industry today, was present in the 80's and was ultimately wrong. More interestingly, no changes to the hardware we brought were ever made or enforced (that I could tell), tape recorders with radios were very prevalent and nothing was done to stop recording the radio by messing with what we brought, which is different to today when the industry is successfully getting electronics firms to break their devices in order to prevent copying.


And (like the parent), I will provide my answer/opinion to the submitters question -

Point 1 - I buy CD's (so I can always re-rip if my HD goes down or I dont like the format they are in) and I dont just copy or download illegal content, partly becuase if I did then when I moan about DRM I have no leg to stand on.
If the public didn't copy so much (they aren't copying as much as the RIAA claims but I think we all know friends who have large stacks of 'formerly' blank CD's and areas of their hard drives with music they didn't buy) then DRM wouldn't be an issue. In a sense we have only ourselves to blame.

Point 2 - Don't punish the legal customer with DRM when they are the ones buying the CD, especially if the illegal alternative is no DRM. All you are doing is making the illegal version more attractive by decreasing the real value (usefulness) product you are selling. I will happily strip protection off of content that I have a permanent license for, I am not going to distribute, I just want to convert the format or move the content to a new computer (if I get one).

Point 3 - If DRM is going to be the future, then lets be honest about it. No longer are we buying, we are renting, reduce the prices, allow us to bring the CD back for a replacement and everything else that goes along with hiring not purchasing. Tell me *exactly* which devices I can and cannot play my CD in. Saying "some devices" is not good enough, if my CD does not play in my player, I cannot return the CD (shops will only accept physically damaged goods) and I will not buy a new player.

Point 4 - As we are still officially buying our products, you can't hide behind a EULA (I dont think you should ever hide behind it, but that is another argument), if I take my CD or PC game home and disagree with the EULA, I cannot take the media back to the shop for a refund (see point 3). I brought the media from a shop, my financial agreement is with them not the producer of the media.

Point 5 - Even if one accepts the principle of DRM, there should still be limits to its scope. Creating processes that run when the CD is not being played, installing rootkits, requiring an internet connection (especially an insecure one) and anything else that grossly impinges on my privacy are outside the juristiction of a music company and they damage my PC. That is too far.

Re:stupid question

[cliffski]

Photocopiers were (and are) expensive, and the paper costs money. video tapes cost money and VCR duplicators were expensive. Bit torrent and a hard drive are not expensive, practically free.
Thats the HUGE difference between then and now. Even if I'd wanted to copy a novel for 2,000 friends in a week, it would cost be big time in money and effort. I can distribute photoshop to 2000 people while Im asleep or even while Im web surfing.
Piracy ahs always existed in a small, tolerable sense. the existanc of p2p file sharing and (arguabley worse) the cultural belief that its not harmful, is pushing that piracy to a level where its starting to make the entire entertainment business model fall to bits.
Thats not good news, unless you never want to read a new book, listen to new music, or use new software / games.

Re:stupid question

[Schraegstrichpunkt]

Assuming you are correct, how does DRM change any of this? Keep in mind that content 'protected' by DRM (even with "Trusted Computing") will always be available anyway, since preventing all copying of data will never be possible.

Re:stupid question

[Sam Ritchie]

I don't support DRM for many reasons, but to pretend that my ability to make exact digital duplicates of a CD (or DVD or what have you) and distribute those copies to anybody in the world with a 'net connection is somehow akin to what I could do similarly with VHS tapes or cassettes is naive at best and disingenuous at worst.

I think this is a furphy. Copying music or movies from people on the 'net is exactly like copying cassette tapes or VHS; it only differs by the quantity of copying allegedly taking place. The content owners' argument is that this quantity crosses some sort of magical tipping point that will suddenly cause the entire entertainment industry to become unprofitable. Note that we currently only have their opinion on that.

Incidentally, although it's certainly technically feasible, I don't think I've ever seen an 'exact digital duplicate of a CD' shared via p2p applications - they are invariably (and often quite considerably) lower quality compressed versions.

Re:stupid question

[Anonymous Coward]

I think your analogy is interesting. Have you considered other things like the road (who "owns" it, who can build a new one), destination (who decides where), getting lost,... and what the "corresponding elements" would be?

Re:stupid question

[poot_rootbeer]

Here is clue #1 for music companies: If it would cost me roughly the same amount of money to buy each track on a CD digitally as to go to the store and buy the actual CD, you're charging too much.

You assume that the music companies WANT you to download those digital tracks.

If you decide a CD is the better value, the record company still gets your money, plus the get to postpone the demise of the physical media distribution business model just a little bit longer.

Re:stupid question

[Anonymous Coward]

Then again, tape recorders--in terms of piracy (which is what we're really talking about when we talk DRM--require that I know you and live nearby you. They require that I be able to hand you the physical copy.

It doesn't matter, I've always had enough high friends in low places with record collections as large as mine that there would be no possible way to listen to it all. That, and I lived in St. Louis, where KSHE plays seven full albums back to back every Sunday night (and back then, more than once a week).

That didn't keep me and everyone else I knew from buying music, any more than P2P keeps anyone from buying music today.

I taped Tom's copy of Are You Experienced, for example. Great album. I bought the next two albums the days they were released. Since they weren't playing Hendrix on the radio, had I not had the opportunity to tape Are You Experienced I would not have bought the next two albums.

I heard Dream On on the radio and hated it. Little did I know that Dream On was the only song on the album that sucked; that every other track rocked! They COULD have gotten a sale if I'd heard the rest of the album. If I'd taped it I'd bought Toys In The Attic the day it came out, but it was years before I finally heard and bought it.

Re:stupid question

[AK Marc]

I don't support DRM for many reasons, but to pretend that my ability to make exact digital duplicates of a CD (or DVD or what have you) and distribute those copies to anybody in the world with a 'net connection is somehow akin to what I could do similarly with VHS tapes or cassettes is naive at best and disingenuous at worst.

You miss the point entirely. The entertainment industry has claimed that ??? would kill their profits. They even tried to get VHS outlawed. They saw it as a problem so copy protections are on VHS. They keep claiming it will kill entertainment, and have been wrong every time. If Chicken Little runs around claiming the sky is falling over and over and it is proven that the sky isn't falling, why are you listening to them this time?

They are fighting, not because it actually is bad for their business, but because they fear the unknown and claim every change will kill the entertainment business, even when no change ever has. They are proven to be 100% wrong 100% of the time. The question is, why do you still give credence to their arguments? Fool me once, shame on you, fool me twice ... can't get fooled again. And yes, I do understand there is a difference, just as rentals was a difference, VHS was a difference, MiniDisc was a difference, 8-track was a difference. They survived those, they will survive this, even if the future becomes uncertain. As you point out, if they give the people what they want, they will still make money. But that's effort for them that it's easier to go lie to Congress to prevent.

Re:stupid question

[nitrogenx]

I see the merit in your argument, namely, that people are now buying music who would not otherwise buy music. However, I can't see how DRM is unfavorable for the content provider. Economics fleshs this out. If it were favorable for content providers to freely distribute content, then they would. And maybe they are. With what Universal plans to do with ad-supported, free content distribution, the business model is definatly changing. However, I'm not sure if they will make nearly as much money as they would if given enforced 100% copyright protection. Don't get me wrong, I like what is happening here. If someone is making a killing off of someone else, there will be counter-vailing forces. I'm just saying I don't think content providers are evil for acting in their self interests, just like everyone else.

Re:stupid question

[QuantumFTL]

Assuming you are correct, how does DRM change any of this?

DRM makes it harder to get free copies of things. It's much easier to find high quality songs (assuming they are on there) on iTunes, and pay for them, than it is to find them on P2P apps, with all of the broken files, hosts signing off mid-transfer, different bitrates/encodes/rips, and bad spelling/naming.

Re:stupid question

[Eivind Eklund]

I see where you're coming from, alas, there's some assumptions underpinning your argument which you may not even be aware of - and that I disagree with.

You're assuming the content providers are perfectly informed and perfectly rational in their actions, so their policy will be in their own best interest. I see them as emotionally driven by fear, and irrational. This has borne out in all their previous actions, where they've been opposing new technology (cassette tapes, video), and when the technology has been allowed through by the courts anyway, they've suddenly had a larger market.

You're further assuming that "content providers" acts as one entity. They don't. It's a group of different providers, and from game theory we know that there could be forced to a lower equlibrium by "grabby" behaviour by individuals. Example: Trees. Overall, trees would have more energy to run their immune system, produce seeds, and other really essential tasks if they didn't grow so tall. However, each individual tree has to compete with the other trees, and the individual tree has an advantage by growing a little taller than its neighbours - which force the neighbours to grow, negating its advantage.

As for evil: Isn't self-interest without regards to how you affect others more or less the definition of evil?

Eivind.

Re:stupid question

[Schraegstrichpunkt]

DRM makes it harder to get free copies of things.

Yes, that's the typical claim, but I have yet to see any convincing evidence of that. Got any?

When you're downloading songs/movies from the Internet, it doesn't matter to you what kind of DRM was used, since by the time you're downloading, the DRM is gone. The only thing DRM can do is to make it harder to make the 'original' free copies of things, but DRM has not made that all that difficult in the real world, to date, and I don't think the ??AA has ever been too worried about friend-to-friend copying.

Folks still buy Hamlet

[Spazmania]

Why do folks still buy copies of Shakespeare's plays or Beethoven's symphonies? They aren't even protected by copyright let alone by DRM.

There is always a business to be made out of selling value, even if the content itself is free.

Besides, given a reasonable choice most people will be mostly honest most of the time. If they're able to buy music or a movie they want at a price they consider fair in the format they want most will choose to do so. Take the money where you can get it; don't worry about the rest. As for the rest of the folks, most of them wouldn't buy your music or movie if they couldn't copy it. Its not important to them; that's why they were willing to make do with a mere copy.

Re:Folks still buy Hamlet

[icegreentea]

well, much of the value from printed versions of shakespeare is the wonderful little definitions that they include. makes reading shakespeare for students (highschool) possible without spending forever wondering what this particular metaphor made with rarely used words means. not to mention that a book is a much better way of reading, rather than off a screen, or off a stack of paper (wasn't that the point of books to start with?).

Re:Folks still buy Hamlet

[ewhac]

Why do folks still buy copies of Shakespeare's plays or Beethoven's symphonies? They aren't even protected by copyright let alone by DRM.

Actually, this is not precisely correct.

One of the most highly convoluted pieces of copyright law surrounds the production and use of phonorecordings. In some ways, phonorecording rights are more strict than "simple" copyrights. In your example, the musical score of Beethoven's symphonies is public domain -- you may freely perform them yourself without having to pay anyone. But the recorded performances of said symphonies are covered by copyright.

Schwab

Re:Folks still buy Hamlet

[kfg]

Why do folks still buy copies of Shakespeare's plays or Beethoven's symphonies?

Because the printed editions of the works are covered by copyright.

If you wish to make your own transcription of Beethoven you can do that, because Beethoven's orginal content is in the public domain, but you cannot photocopy the sheet music you buy in the store because that is covered by copyright. Just try to enter a music competition with a photocopy of a score. Unless you have some form of proof that you didn't "steal" that score you'll get tossed on your ass for having a "stolen" copy of a public domain work.

Ain't modern copyright law grand? Publishers have found dodges to keep works that have been in the public domain for centuries effectively locked up.

This is why Project Gutenberg is now covering sheet music as well as literature. Unless people make transcriptions and donate them to the public domain, public domain musical works are not freely available to the public.

KFG

Re:Folks still buy Hamlet

[SanityInAnarchy]

Screens are getting better, and a new generation doesn't care much whether it's a book or on a screen, so long as it's a decent screen. e-ink will change all of this, even for older/pickier people.

Re:Folks still buy Hamlet

[Tim C]

Why do folks still buy copies of Shakespeare's plays

Personally, it's because reading it on my monitor utterly sucks compared to reading it in book form, and to have the book, I must buy it. Until we have ebook readers that I find acceptable, that isn't going to change, for me at least.

The situaiton is entirely different for music; there, I couldn't care less about its physical manifestation, as it sounds identical to my ears.

Re:Folks still buy Hamlet

[phantomfive]

Not entirely true....once the edition has been out 80 years or so and the copyright expires, it can be distributed freely. If you would like to find free scores from the great composers, look at the sheet music archive. Furthermore, even buying a print version of, for example, the complete Beethoven Sonatas is only a little more than the cost of printing.

Re:Folks still buy Hamlet

[arose]

What's a measly 80 years compared to a human lifespan?

Re:Folks still buy Hamlet

[kfg]

Not entirely true....look at the sheet music archive.

Quoting from their webpage:

"Note: PDF files made by the SMA are copyright, and may not be sold, re-distributed, or used to derive other PDF files, without express written authorization."

I'm learning the Bach solo violin sonatas and partitas. I'm working from photocopies of a manuscript in Bach's own hand (rather sloppy by my standards), but I might well see myself in court for photocopying the photocopy, because I did not make the original photocopy myself. Such is the nature of modern copyright law.

SMA was free to make copies of works that are now in the public domain, but their copies of the orginal are "theirs" and you may not copy them without permission. This is logically absurd, but legal, because the copies are deemed to be works in their own right.

. . .even buying a print version of, for example, the complete Beethoven Sonatas is only a little more than the cost of printing.

In a perfect bound "study" edition, yes, if by cost of printing you mean my cost to print with an inkjet. For an individual performance version it's considerably cheaper to print myself.

KFG

Re:Folks still buy Hamlet

[srpatterson]

I recently bought Beethoven's symphonies on CD, as I would much rather own a physical copy first that I can listen to on a decent stereo and if I want to listen to it with a computer humming in the background its trivial to play the cd there or rip it to oggs.

Re:Folks still buy Hamlet

[esme]

If they're able to buy music or a movie they want at a price they consider fair in the format they want most will choose to do so.

This is the point that I think most often gets lost in DRM discussions.

DRM allows media companies to set unreasonable limits on movies and music -- limits we'd never tolerate in a grocery store, clothing store, etc. Instead of relying on the basic goodness of the average user, the media companies are driving many people away from DRM'd content and into the P2P and other sources.

For example, I'd love to buy music from iTunes Music Store. The integration with iTunes and my iPod is wonderful. The selection is good, and the experience overall can't be beat. Except for the DRM. The first time my computer wouldn't let me play one of my songs, because it had gotten confused about how many computers were authorized, I realized the music wasn't really mine as long as it was DRM'd. Hymn/JHymn break the old iTunes DRM, but the new DRM is still uncracked (for now...).

So what do I do? I go to a lot more effort and inconvenience to get my music elsewhere, so I can do with it as I please. If I want MP3s so I can play them on my linux box, too, why does Apple have a problem with that. If I reinstall my OS and forget to deauthorize before, why do I need to convince Apple of this? It's this kind of crap that has convinced me that I'll never buy any content with (unbroken) DRM again.

-Esme

Re:Folks still buy Hamlet

[Anonymous Coward]

Take the money where you can get it; don't worry about the rest.

Now you try telling that to stockholders, CEOs, and prima donna rockstars. Tell me how well it flies.

Re:Folks still buy Hamlet

[westlake]

Why do folks still buy copies of Shakespeare's plays or Beethoven's symphonies? They aren't even protected by copyright let alone by DRM.

Allow me to suggest an experiment:

Download ten classical works in the public domain translations available from Project Guttenberg. Read the same texts in the current Penquin Classics editions. Tell me which you want on your shelves.

Re:Folks still buy Hamlet

[Zeroko]

You assume that audio recordings must be made by people performing a song & therefore likely wanting compensation. It is entirely possible to convert the musical score into a MIDI, render it with a free SoundFont, & then post it on a web site, though I have not seen that done very often (perhaps I have not been looking in the right places).

the carrot rather than the stick

[macadamia_harold]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

Simple: in addition to selling the music, you give people something else that requires no manufacturing cost, but is in finite supply, such as special "pre-sale" access to concert tickets. Fans are a lot more willing to give you their money when you offer a carrot, rather than threaten the stick.

Re:the carrot rather than the stick

[Anonymous Coward]

Wow, that's a great idea I'd not thought of before. I'd love to see a business model like that. Now that I think about it, offering coupons for downloads, having neat free offers, or just offering ANYTHING in addition to the music creates a value for somebody that's paying. Sure, you get your music either way, but your music AND a guaranteed chance to see you favorite artist live or some nice schwag for every 5 songs purchased would be nice.

Free for non-commercial use?

[A Nun Must Cow Herd]

You could make money off of any companies that want to use your song/movie/whatever, while still providing it freely to the masses.

If your target audience is only joe six-pack, and you're providing something that can readily be duplicated (with the duplicate being just as good as the original), then I'd say you don't have a great business model anyway. I don't see a clear case for any inherent moral right to make money in that situation.

Since when has DRM done anything

[CrazyJim1]

Only thing I saw DRM do is stop a Backstreet Boys CD from working on my exgf's portable CD/DVD player.

DRM doesn't stop online piracy anymore than a speedbump in your driveway slows interstate traffic.

Re:Since when has DRM done anything

[deek]

Only thing I saw DRM do is stop a Backstreet Boys CD from working on my exgf's portable CD/DVD player.

Yeah, but what about the negative side of DRM?

Re:Since when has DRM done anything

[patio11]

Only thing I saw DRM do is stop a Backstreet Boys CD from working on my exgf's portable CD/DVD player.
Isn't this enough reason to accept, nay, praise it?

Re:Since when has DRM done anything

[stud9920]

Is she your ex because she liked the fag street boys?

Ask Baen Books

[Anonymous Coward]

http://www.baen.com./

Scroll through the obit, then go to the Library (Free Samples) section, and see what author Eric Flint has to say. Or, just pick a book and read it!

Enormous, multi-year in some cases, initial creative effort? Check.
Profit? CHECK!

Baen gets it.

Re:Ask Baen Books

[lowe0]

By and large, I imagine that most people don't want to read a book on their computer. What Baen's offering is not an equal substitute for the original product.

Since the dawn of the iPod, however, an MP3 is a perfectly acceptable substitute for a CD track for many people. This has held true even longer for the 18-24 set, who often live in dorms or small apartments where their computer can perform double duty as a sound system.

Three reasons

[Lord Ender]

1. Alturism
2. Advertising
3. Entertainment of the creator (hobby, appreciation of fame, etc.)

Merchandising

[Venik]

What would get me away from my computer and cause me to get my lazy ass over to a music store to buy some overpriced CD? Free apple-glazed jelly doughnuts. But seriously, I have thousands of MP3s (all of them absolutely legal, naturally...), well tagged and organized. However, there's little pride that comes with such a collection. Everyone and their uncle have tons of MP3s. I even sold my iPod on ebay ever since my boss got one.

Why do people collect stamps and not digital photos of stamps? Because there is some material value in the former and none in the latter. When someone comes over to my house and I wish to brag, I don't show them a CD folder and say: "Hey, here are the hundreds of movies I ripped." No, I show them my collection of thousands of DVDs that cost me lots of money.

Music CDs and CD cases look too utilitarian. There's no art there other than music on the CD. Perhaps the industry should think about redesigning the old and tired jewel case. Make it the size of an LP case. I am not joking: if I am to spend $20-30 on a CD album it might as well come with 12 x 12 cover art.

Re:Merchandising

[Hydroksyde]

The problem with that is, when I buy music, I am primarily looking for music. A larger case is not only more delicate (law of mechanical advantage), but requires more storage space. Jewel cases fulfill their primary function quite well. It's one thing to add functionality, but doing so in a way that inhibits the primary function is ridiculous.

Make it easy.

[Anonymous Coward]

With themarket, as with the law, your goal should be to make it easier to do what is right than to do what is wrong. If you do anything else, you encourage people to do wrong, and you reduce the level of respect for the 'wrong' distinction.

Witness Napster, Kazaa and other P2P software applications. They didn't win in the marketplace of people's time BECAUSE they had legal issues; they won IN SPITE of those issues. Look at how popular i-Tunes is. I-Tunes has a massive mark-up. I mean hell, you pay 75% or more of the same price required to support making and shipping and selling tons of plastic, without that overhead. And it has DRM, and lower quality than the CDs.

If you had a music sales system where:
  * Music could be sent to directly to _any_ player,
  * Where it was easier to find quality music that you wanted to hear than I-Tunes,
  * Where you didn't have to whip out your credit card every two minutes,
  * And you could have the high-quality music for your home stereo system, and the smaller, lower quality music for your portable, without restrictions ... why would you go to a P2P network without the administrative wherewithall to support that.

Compare spending 99 cents and getting a song and a squishy happy feeling to not spending any money and getting who knows what, but definitely not the squishy feeling.

Re:Make it easy.

[Kalvos]

Very good points, and lost in the crowd.

Anonymous C, could you please contact me so I can attribute a quote to you?

Thanks,
Dennis
http://maltedmedia.com/bathory/

economics?

[Anonymous Coward]

Ultimately, as a whole human race, we are interested in producing capital, products, ideas, etc which are of some value to us. Economics is a fairly successful mode of organization, but ultimately we have no reason to be interested specifically in supply and demand, or other artefacts of economics, unless economics happens to be the way in which we choose to organize ourselves. The open source movement has shown that we can produce things of value without the guidance of traditional economics, so when looking to the future we must broaden the question that we ask: not "how can open source software take part in a traditional economy?", but "what can we learn from open source about different, non-economic modes of organizing a civilization?"

Product placement / in-art-advertisement

[jtogel]

I don't see anything wrong with getting paid for mentioning / exhibiting brands (or even arguments) in your art. This is already commonplace in movies, and has been done on occasion by high-profile musicians and novelists.

Given that most people seem to have little against advertising, as long as the ads are good (but typically has a lot against many very bland commercials that litter our mass media), this seems like a win-win situation to me.

But that's with ideal models.

[Anonymous Coward]

But those theories are all based around ideals of perfect or near-perfect competition. We are, obviously, nowhere near that in most markets. This is especially true of the entertainment field. The music industry is best described as an oligopoly, with there being a small number of major labels who hold a vast portion of the market. Sure, there are minor labels, but they push nowhere near the volume of the major labels.

It's questionable how well such elementary theories hold up when you consider the often convoluted legal and tax systems of many western nations. Those can have a significant impact on the ability of people to freely enter and leave markets, which in turn impacts directly on the validity of many of the Economics 101 theories.

Contrast it to existing models

[Anonymous Coward]

Music sale profits vs touring profits: Bands make more from touring than they do music sale profits.

Wow.

[Broken scope]

I don't know this person. However im really suprised at some of the responses. A few were quite... rude almost. What ever. Don't assume someone really understands this whole issue. On subject. If there was no drm and everyone got free copies of stuff, people would still go and buy a hardcopy like a CD. I know many people who are still to lazy to go an download something. Many people I know still can barely put a song on their IPOD. The number of tech idiots around still make it very easy to make money in a DRM free market. People also still buy things that are public domain. As someone said earilier, shakespear is still paid for now a days.

P O R N P O R N P O R N H A S T H E A N S W E R

[Anonymous Coward]

y e s t h a t i s t r i g h t p o r n i s d o i n g t h i s t o d a y a n d t h e y h a v e a l w a y s m a d e m o n e y

Four ways to make money.

[thedletterman]

Given the presented variables, there are serveral ways to still make money.

1. Distribute the product yourself for free, request donations.
2. Merchandise goods that do not meet the same criteria.
3. Recreate the initial (creative creation) stage in live venues.
4. Control physical access to content.

Given the current "stage" with no shortage of supply of talented musicians, cheap manufacturing, and distribution mechanisms available, I'd personally like to see a revolution of internet radio where artists upload their tracks for free, stations stream their tracks to users, users rate their favorite tracks, and the station's advertising revenue distributes royalities to the artists and station manager. It creates like a democratic system of which artists get paid the most on which stations, and creates a very populist system for music completely destroying the 'mainstream' or even 'indy' model where station managers pick and choose their playlist and present that as the only options. As someone in the executive side of the music industry there's just way too much good talent and cheap processes for the ivory tower industries to remain standing. The business model is going to have to shift and adapt, or the people will throw everyone out of the ivory towers. No amount of intellectual property laws and drm is going to stop that.

Re:Four ways to make money.

[cliffski]

There already exists a method of democratically assigning rewards to those people who create the most popular works.
It's called the free market, and it worked fine until piracy exploded on the web.

Re:Four ways to make money.

[shmlco]

"As someone in the executive side of the music industry there's just way too much good talent ..."

And 80% of everything is crap. Station managers, editors, reviewers, and the like weed through it.

Re:Four ways to make money.

[thedletterman]

Actually, the 'free market' for music allows you the choice of music provided to you by commercial entities. It's like political elections for a communist government. Central to a democratic system would be a "free and open exchange" of music.

Re:Four ways to make money.

[thedletterman]

There's certainly enough crap out there, no doubt about that. I get thousands of demo tapes sent to our office in a year, and alot of the stuff we think is worth playing never passes one of the many levels of protectionist boundaries created by the music industry. On the other hand, there's also more than enough people who listen to music to listen to all the crap and help emerge the truly talented. Alot of good music is stifled by the "system" that generates multi-million dollar revenues from each of their catalogue artists by keeping the supply of music artifically scarce.

Re:Four ways to make money.

[Kalle Boll]

This article by Wired might have some arguments for the panel. According to the article the problem really is the management model and revenue distribution. This economic model favors the artist without cutting the management people out of revenues (of course the problem is in the end that big music companies don't want to cut profits and keep absurd percentages - witch ends up in so few peoples pockets that its a ridiculous disadvantage for any society). It also solves the DRM problem since any artist (or a group of artist) can choose to make any song Linux playable if the want (and of course they do want as many as possible to hear their songs). http://wired.com/wired/archive/14.09/nettwerk.html ?pg=2&topic=nettwerk&topic_set=

Re:Four ways to make money.

[cliffski]

eh?
there are dozens of music companies, if not hundreds, and thousands of bands, plus thousands of retail and online stores selling music, often competing opn price. How is this vaguely communism?

In fact, making everything people produced a public good (free exchange of music), THAT is communism. Seriously.

The problme isn't what it appears...

[ThomasBHardy]

The core problem is the base assumption that record companies and via them, that music and movie stars deserve to make tens of million of dollars for doing what they do.

Sure you can talk about limited talent that drives up demand... and I can point you at any technical or challanging industries where that is true also but where the salaries for pop stars are not dished out to the coroprate IT guys.

Sure you can talk about how hard it is to train up for and performn in an action movie... and I can point you at any number of physically challanging and dangerous jobs. Just stop by the local fire station.

Somewhere in the past 60 years we developed the notion that stars deserve to be ridiculiously rich. Sure I wish them well, as much as any other person who does their jobs well. But they are not demigods. They are not superior human beings. They are just highly overpaid for their jobs.

The solution will be when a few things come together...

1) Digital distribution arrives fully, so that crowded theaters with annoying people and cell phones are a thing of the past unless you want to go to them, and can enjoy first run movies at home.

2) Prices of all media drop as the cost of perpetual CGI improvemnets removes the need for such extravagent movie costs

3) Stars of all types begin making more sane profits from their works than the current model.

Then we'll have the chance to listen to and watch what we want, in our own homes and it can be priced affordably enough that we won't mind paying for it versus downloading it illegally.

Like many, I do not mind paying for the content that I consume. But I do object to paying too much for it and for being forced to watch it in theaters (which I have come to detest) if I want to see it the same year it's released. And I am truly angered byu hamfisted DRM implementations that deny me the ability to enjoy what I paid for by telling me how I'm allowed to watch it.

The recording industries are sufering from clinging to the old model. They milked that model until it generated so much money that they are fat and deluded. They fight, and will continue to fight, the necessary revamping of the industry until their final breath. But in the end, progress happens, no matter how much you fight.

Re:The problme isn't what it appears...

[aadvancedGIR]

Although I agree they are ridiculously overpaid, I think this situation makes sense because the studios release dozen of dispendable films every months. Many people don't go to the theater with a clear idea of what they want to see, but just want to buy 2h of average quality entertainment and tend to chose the names they already know. Make the sequel to last year hit or have a big star and you're pretty sure to get your money back reguardless of the quality of your film, So those few people who can guaranty the succes of a film are not paid for their talent, but rather for their name, and in most cases, it is an interesting deal for the studio.

Re:The problme isn't what it appears...

[Anonymous Coward]

1) This can already be done, which is why we are here babbling on about this topic and why we will be doing the same thing tomorrow and every day after.

2) This isn't likely to happen because the price to the end user is determined by supply and demand rather than cost to the entity creating the movie.

3) What constitutes a sane profit? Which model is sane: a)One that offers the public a product that they can choose to purchase or not and distrubutes the proceeds to those involved in providing that product, with the whacking up having been determined beforehand, voluntarily, by all involved. b)Some other system where all of those steps are determined via some (presumably) governmental regulation.

Re:The problme isn't what it appears...

[abb3w]

Sure you can talk about limited talent that drives up demand.

If you're going to blather about economics, try and blather with the correct terminology. Limit on talent is a restriction on supply, with fixed relative demand: that gives an increase in price.

Re:The problme isn't what it appears...

[ThomasBHardy]

I was referring to a limited number of talented individuals, which raises demand for their specific services versus the less talented, not a limit to the overall supply of talent.

Holding back progress

[robogun]

Early in the 20th Century the state of transportation was suddenly improved with something called the "automobile."

Similarly, early in the 21st Century the state of information exchange was suddenly improved with something called the "internet."

The article title will be as laughable in the future, as something from 1906 titled "A Working Economy Without Buggy Manufacturers?" is now. Because if the buggy manufacturers had their way, instead of properly evolving or dying as conditions changes, by causing Federal law to lock in their obsolete business models, the progress of the country would have been retarded to the extent that world history would have been changed.

Not that anyone has done this before but...

[JumperCable]

Try holding your items hostage until your price is met ala "Free The Maps".

If your work is of enough value, people will make enough small contributions to pay off.

Re:Not that anyone has done this before but...

[shmlco]

"If your work is of enough value, people will make enough small contributions to pay off."

That's called buying the CD.

And if the current system doesn't work because all you need is one jerk to upload the song to the PHP networks, what happens in the future when that same jerk does the same to your hostage?

You either value the work, or you don't.

Maybe some things...

[kruhft]

...can be made with little inital cost.

Undercutting the ones that need a huge investment are the ones that will dominate.

Supply and demand are important, but some of us can create with no investment.

Think about it.

We will pwn.

EOT.

--
kruhft

Real World Example

[Anonymous Coward]

I hate the current trend in DRM. It literally is the end of individual freedom on the Internet and in using your own computer. Having said that, I know one important example where low cost copies helped distroy an entire creative community: Hong Kong cinema. Rember all those great Chinese language martial arts movies? Bruce Lee, Jackie Chan? That entire kind of film making ended because of piracy. The movies would be copied before they were shown. All those studios (Golden Harvest, if I remeber one name) are gone. So just saying that DRM is bad, and somehow there will be creative people doing big projects is naive. I'm NOT in any way a defender of the current Hollywood system, but movies cost money. Anyone who thinks different should try and make one...

See http://en.wikipedia.org/wiki/Hong_Kong_cinema, and skip down to the section on Mid=1990 Post Boom: Rampant video piracy throughout East Asia. I've attended showings (at UCLA) where this issue was raised.

Re:Real World Example

[ewhac]

Rember all those great Chinese language martial arts movies? Bruce Lee, Jackie Chan? That entire kind of film making ended because of piracy. The movies would be copied before they were shown. All those studios (Golden Harvest, if I remeber one name) are gone.

So Crouching Tiger, Hidden Dragon, Hero, House of Flying Daggers, Shaolin Soccer, and Kung Fu Hustle were all figments of my imagination, then?

Schwab

Re:Real World Example

[geekoid]

ummm, except the movie industry is thriving in china, and many movies have made it to the US.

Good movies make money. People , in the US, generally perfer to pay for what they want. However, if it isn't available reasonably, they will do things on the black market.

Smell sells the bread

[w33t]

Plays and music have, until recent times, been about performance.

I am friends with a signed band, and it seems common knowledge that the artist makes the most money from concerts and live performances (not to mention the merchandise sold at these shows).

For film, I admit it is a bit trickier situation.

You have to offer something that the recorded medium alone does not.

The way I see it, a recording is just a memory, albeit a great memory, but a memory nonetheless.

A great memory will prompt you to recreate the situation which created that memory in the first place.

With movies it seems that the theaters are where the "performance" should take place - and that merchandise would likewise be the actual "bread" the the visual "scent" sells.

Basically, DRM is an attempt to force you to enter the store before you can smell the baking - when it is that very odor that should (and would) bring you into the store in the first place.

The industry should stop viewing the recordings as the product and instead the creators themselves.

Re:Smell sells the bread

[babbling]

For film, we have:
- Product placement
- Donations
- Commercial use of trademarks (Maccas can't use them to sell happy meals without paying up)
- Cinema contributions (people will still want to see movies on the big screen)

Re:Smell sells the bread

[cliffski]

how do you 'perform' photoshop then?

I've been thinking about this

[Aqws]

OK, just a heads up. I havn't fully thought this out, but here goes.

Data is not like apples and oranges, there is (almost) nothing lost when someone gives someone else data. All the cost is in the initial development. How about people pool their money together, as sort of a bounty for a certain product. And when someone writes that piece of software, they get that money. I know, who decides if they meet the requirements? How about having some kind of review board, like the lieutenants who deal with the patches to the linux kernel. Obviously there are a lot of details to work out, but I think I've posted the gist of it.

Live Performances

[shawnmchorse]

The answer (for music at least) really seems to be a return to the "business models" that existed long before the advent of pre-recorded media with worldwide distribution. Musical artists need to stop emphasizing the packaged album concept and go back to emphasizing live performances. People will obviously pay (often through the nose) for the live performance and the whole concert atmosphere. If you think back to classical music as an example, composers were generally paid for live performances and for teaching. The fact is that their actual music was widely copied and so that's not where they were even trying to make their money. If something has infinite supply, then it seems obvious that the money will not stem from that but instead will come from a scarce resource (each live show is unique).

History is your guide

[gaines]

If you look back through history, there are many examples of people predicting that a technological revolution would put an end to an industry. We see it in everything from spinning/weaving to live performances. In the eighteenth century fabrics were made by a series of artisans who did everything from spin the wool to weaving the fabric. They were actually successful for a while at stopping the use of machinery for textile production, but now take it for granted that the industrial revolution in fact boosted the economy and provided jobs. When recorded music was first being made, musicians were worried that if you could record music then nobody would want to pay to hear a live performance. This has obviously proven to be false as this is now the primary method that most musicians receive an income from their music.

Copyright was invented to protect cost of printing

[Swordfish]

The whole purpose of copyright was originally to protect those people who invested in the typesetting of printed works against unscrupulous printers who would then set up their printers only for the proven best-sellers of the other printers who took risks.

Nowadays, the cost of typesetting and printing (or composition, arrangement, recording etc.) is borne by the artists, and the publishers do nothing of value that a kid in a garage can't do. So there is no further need of copyright to protect the printing investment. Anyone can record, print and distribute for essentially nothing.

The question is now whether monopolies should be retained when the cost of publishing is essentially zero. The answer is clearly no. If all copyright on music is removed, the result will be a flowering of music and literature from artists who otherwise would have been strangled and suffocated by the dominance of the monopolists.

In short, technology has made the protected markets of music and literature publishers obsolete. Considering the trashy sounds that pass for published music these days, I don't know why anyone keeps buying that rubbish. At least 10% of people nowadays can produce much better music in their garage. So why not just stop buying the commercial garbage and just get unencumbered music off the net for free?

Freaking Value Add, sheese...

[IBitOBear]

Like liner notes in CDs and manuals in games and ease of access and reliability of service and certianty of availablility.

The same way that Red Hat sells Linux.

And T-shirts at the concert.

It's not that tough people.

The premise of your confab is a bit slanted to be a "so see, we need DRM" failure. For the most part the signal isn't a comodity, and it shouldn't be.

There is a P2P model where you make the content free at a degraded rate, and bind it directly to a means to buy full quality while the share would continue as "default" to the degraded image for non purchasers. (Build the player into the P2P client etc.) Soemone _could_ share the non-degraded image but that would be "Effort".

The P2P model virtually elliminates the distribution cost.

e-purchases would give you (essentially) coupons towards the purchase of related merchandise. Examples not just being T-Shirts but thinks like, if you buy a bunch of songs from an album, you end up being able get the actual CD mailed to you for a very deep discount. Then you can do tie-ins and clubs.

In short, stop treating the signal as if it is precious and _start_ treating your customers _are_ precious. Get them involved. Spiff them to come to gigs and tie-in events. Get them buying your gear. Get "sponsers" to sponser things from their sites (buy these sunglasses and get a cupon off anything in the U2 collection.)

Buy five movies, get the poster for (ont of these hot new releases) for $10. You just got people to _buy_ an _advertisement_.

There is a reason that "free radio" worked.

Flawed assumption

[DMouse]

Your assumption is that people only buy product. In short, the aim of a creative company is to build up a back catalog of items to sell, where in fact, customers are actually interested in future content. Thus, people will buy copies of Firefly, even after having watched downloaded copies, because they are intent on sending a signal that future content along the lines of Firefly should be produced.

Assume a spherical cow

[abb3w]

Further, it is a theorem of economics that in the long run, competition will force prices to the level of manufacturing costs. As goods become popular, the investment needed to produce them will dwindle in proportion to the number of goods produced, and their prices will fall. In a DRM system, popular information goods will be inexpensive, and well supplied. There will be no shortages. DRM is an optimal way to manage information goods.

...provided that you have no externalities, neglect information costs, have no economics of scale and scope, have goods that are homogeneous, all market utility is pecuniary-metric, time-value utility effects are neglected, and there are no barriers to market entry. Any takers?

Also note that one fundamental assumption of the original question (zero marginal manufacturing cost) is incorrect. Costs are de minimus, not zero; there are marked differences in economic effect.

Re:Assume a spherical cow

[xoran99]

BURN!

Re:Assume a spherical cow

[abb3w]

Wrong spelling.

Re:How? Ask Apple

[BakaHoushi]

I'd say so. If I download a song, I have that, an MP3 file of a song. If I buy a CD, I have a physical back up of all the songs, a case in which to store it (which often looks snappy if placed correctly) and a mirade of other features and bonus work that, while not essential, is nice to have. The same can go for movies. Plus, it avoids, for better or worse, things like the "DO NOT WANT!" version of SW:EP3.

I've often followed the tradition of only downloading either to sample a group (how I met some of my favorite bands, like Bad Religion and Weird Al), or when the CD isn't easily available or sold in America at all. I know not everyone follows this model, but it does show some people will at least always be willing to support that which we like.

Love, not fear

[SuperKendall]

So basically what apple is selling is not the song itself, but rather the assurance that it would be of a certain quality, the time saved on searching for it, and also the assurance that RIAA commandos won't break into your house in the middle of the night and proceed to fuck you in the ass.

Yes, except for the whole "assurance/commandos" thing can be replaced by "feel good knowing the artist gets some money for their work".

Many people buy legally out of love for music, not fear of reprisal. We still use P2P for other things...

Re:Love, not fear

[gfxguy]

Yeah, that's great, I feel so good that the artist makes $0.001 for each song downloaded, while the RIAA gets the lion's share so that they can hire more lawyers pay more royalties to companies coming up with new and better DRM.

No, I don't illegally copy music, I do use itms (and other legal services), I mostly have just stopped buying music because I realized that full CDs are almost always a rip off (yes, I've bought CDs where I like every song on them, but they are few and far between), and downloads are crippled enough that it's not even worth the $1 they want. In order to use my itms purchases on my mp3 player, I need to burn and rip a CD. The quality just isn't there.

I like these guys who are producing their own stuff. I like the idea of completely bypassing the riaa. That's the model we should strive for. I even go way back before mp3s were popular and I've bought CDs from artists on the web. $5 could buy you a very interesting CD at the time.

totalitarian media marketing will become archaic

[ruedesursulines]

In the future, it will be very difficult to make considerable profits off anything that can be put into digital form because piracy will be so pervasive.

The grand old idea that you can control the distribution of a film, a song, or a piece of software is coming to an end. But if you still want to attempt to control it top-down style, and keep all profits to yourself, make efforts to prevent others from having it unless they pay you, and basically be a gangster, then you could always go the avenue of embedding advertising, just as they do in films with product placement, but there is a limit to how much can be done before it becomes a nuisance and artistic abortion that nobody will be interested in.

Open source and other altruistic style collaborations are the future of software and media production in the long run, though big screen movie theatres will have their appeal for productions with a lot of spectacle.

Pay for labor, not for copies.

[Kadin2048]

I've discussed this in other threads before, but I think the way that you make money without DRM is by not trying to make entertainment on speculation.

Basically the entertainment companies go out right now, and make a movie/song/whatever, and spend a whole lot of money doing it, in hopes that they can then go and sell the end product over and over and over to make up the investment. There is really not any way to do this, without DRM. As I think DRM is fundamentally flawed, so is this business model. That doesn't mean it might not stick around for a few centuries, but it's eventually doomed.

The problem is that DRM tries to artifically limit the supply of something that requires very little labor in order to reproduce. The n-th copy of a digitally delivered Brittany Spears album costs virtually nothing; it's only the first copy that really costs a lot to make. (Okay, so this sets aside that the net value of any given Brittany Spears album may in fact be negative.)

In the past, since the recording companies basically controlled the means of producing more copies (vinyl/CD stamping factories), they could artificially inflate the cost of the marginal (that is, n-th) copy, in order to pay for a bit of that first one. The only reason this works is because they have a monopoly on the means of producing more copies. That's it.

What digital delivery, and computers/the Internet in general, do is make widely available the means of production. (Apologies if I'm sounding a little Marxist here, but it's tough to avoid the terminology.) When anyone can make that 'one last' copy, you can't fix the price of it anymore. You just can't. DRM is an attempt to put a finger in the dike, to make it artificially hard again to make an additional copy, but they have a whole lot of information theory working against them. There is no practical way, that I can envision, to allow people access to digital media which does not inherently give them an opportunity to copy it, particularly since copying is inherent to the digital distribution process. And this is only going to get more difficult in the future.

So given this, what to do? The answer is to make people pay in advance. There will always be a demand for new content; even with the entire past produce of human civilization on tap, it is the nature of people to want things that are fresh, that have been created specifically for them (whether individually or as a group). Rather than trying to make money up off of the marginal copies, which have little to no inherent value, charge for the first copy. Charge interested parties, in advance, for creation of the work. If people aren't interested in funding its creation, it doesn't get made. If fans want an artist to continue to produce, then they can pay to commission more albums. Rather than paying an inflated cost for each copy, which has some portion of the original labor's cost built into it, they will pay for the cost of that labor up front. It is the labor which is valuable, not the copies.

This of course would force a re-evaluation of both how we think of the relationship between artists and their public, and also of how much art we as a society produce (right now I think it's clear that we produce a surplus; we produce more new art than the public really demands, and one must understand that in a pay-in-advance system, this would no longer be supportable), but I don't think there's anything fundamentally wrong with it. As people demand new content, they will pay for it to be created. Either they will pay what it costs to create it, or it will not be made.

This is the way the market should work: as people desire novelty, the business models would be formed around the demand. Instead of a top-down approach, it's bottom-up; allowing consumer choice and demand to drive how people will make money. There are lots of ways that they could do it, from straight work-on-commission to more subtle crediting schemes, or donationware/threatware (e.g. "I'll write the next installment of the

Re:Pay for labor, not for copies.

[Xiroth]

Yep, this is pretty much the direction I see most creative medias taking. For an example, take a look at webcomics. Lots and lots of comics, all of them released for free - most of the creators do it for the fun of it. The better webcomic makers make a reasonable amount of money off it. The best make enough to live on. If you applied that model to music, then you'd get a similar result, but better: Artists would be making money from donations and swag, and the rest from touring. It seems like a good model which works for all involved - except the music labels, of course, but that's life, I'm afraid.

Re:Pay for labor, not for copies.

[kamapuaa]

Of course, nothing would ever get made this way, but the idea plays well to the Slashdot crowd who are more concerned with bluster than finding a real, practical solution.

Re:Pay for labor, not for copies.

[shmlco]

The basic problem with your premise is that now an author (let's say) need only convince a small, select number of people that they should finance his work for a year. Further, once that work is completed there are many mechanisms the market can be use to judge that work (reviews, word-of-mouth, ratings, picking it up in a store and flipping through it) and find out if it has value to them, and is worth the twenty bucks.

Now, let's compare that with an assurance contract, where I have to convince a LOT of people that I can produce something of value, doesn't generate an advance so I can actually get on with creating it, and really provides no guarantee to the end user that it will be a quality product, or one suitable to you (you were expecting killer hard-code SciFi, not a time-travel romance novel). Once I produce it according to the contract, you have to pay for it, with no recourse.

I don't see paying in advance as the answer either, as it limits the available selection to "known" authors who've already made a name for themselves. Stephen King might be able to get a 100,000 people to pay in advance for the next chapter of his new book. A new and unknown author certainly can not.

Further, I tend to see it generating "more-of-the-same" content. Weber may be getting ready to branch out, but what happens when his fans only want to pay up front for more HH? How much of the storyline of The Matrix do I have to reveal before I can convince several million people to kick in $20 up front?

Finally, the up-front "salary" kills the dream as far as I'm concerned. Every author, singer, actor, and director dreams of the "great american novel" or hit song or blockbuster movie. Those dreams convince them to take risks and experiment with new ideas. I don't want those dreams dampened with a "just a job" mentality, working for minimum wage...

Re:Pay for labor, not for copies.

[SanityInAnarchy]

Interesting idea. There are major downsides, but at least this has worked in the past -- it's called a concert.

Re:Pay for labor, not for copies.

[JDisk]

Stephen King might be able to get a 100,000 people to pay in advance for the next chapter of his new book. A new and unknown author certainly can not.

Well, not $100000, but even relatively unknown, 'midlist' authors can make money that way. An example would be
Lawrence Watt-Evans, who published one of his books, The Spriggan Mirror in small pieces, only releasing the next chapter when he got enough money. We are talking $100 per short chapter here, so it is not in the order of millions, but he was happy with the result and is thinking about doing it again.

Note that he is a professional writer and did not do this as a hobby.

Re:Pay for labor, not for copies.

[rohan972]

How is it that music and theatre happened before recordings were possible? They either had benefactors (paying for it to be created as the GP suggested) or they charged for live performance. Since this model has worked in the past and works now, I fail to see why it would not work in the future.

Re:Pay for labor, not for copies.

[arkhan_jg]

These problems are the same as any small business has getting off the ground. How do I get new customers when they could just go to the big chains they already know?

The answers are the same. You take out loans to pay for marketing, promotions (giving stuff away free), and then pay them off when you're established and making a profit. You might even have to work two jobs to support yourself while you follow your dream and get established.
Not everybody makes it. Either they have a product that not enough people want, or people didn't find out about it, and they go under. That's the free market.

It's very little different to how artists work today. Unknown artists struggle to get exposure, so do bread-and-butter work and 2nd jobs to get by.
Giving away some of your work for free, especially digitally where it costs you virtually nothing, is great marketing. The 'tip-jar' method does work sometimes, as does getting people to pay for higher quality versions of your material. Give away the low-res one, maybe with adverts embedded (hellooooo, radio) and use that to get people to pay for the high-res version. After a few cycles of that, people will pay in advance for the new one to get it made, or released if already made.

The old method of charging many times what something cost to produce is dying. The whole point of the free market is for new businesses and new business methods to be tried out, and live or die in the attempt. DRM is the complete antithesis of the free market as it uses government law to prop up an artificial and failing business model, and removes the freedom of the customer to choose alternative providers. DRM on physical products warps the meaning of physical property itself for the purposes of the big media cartels.

My singlle player version of Half-life 2 DVD is a great example of the evils of DRM on physical media. It's encrypted, so I can't use it without Valve unlocking it for me online. I can't resell it, as my key is now used. I can't even give it away, as the key is tied to my steam account which has other older versions of my games in, and I can't delete the key or move it. The physical DVD in my hand might as well be a blank piece of plastic with a number printed on it, and to add insult to injury, when the game was first released I had to put my DVD in the drive for the DRM check, while people who'd bought it online didn't. It's over a year later, and I'm still pissed at Valve.

Re:Pay for labor, not for copies.

[syousef]

Sorry but you're wrong. I know I'm not the only person who won't put a down payment on a creation that hasn't been made yet. There's no guarantee or recourse if that creation doesn't come to fruition or turns out to be a piece of hulking junk.

Since the dawn of time it's been like this. If you create something, you take a risk doing it. If people like it, it may pay off.

What you need is a way to compensate the artist/author/inventor taking nito in proportion to the amount of work put in, and the quality and usefulness of the creation. Of course the problem is you have to define and measure these things and that's not easy.

Re:Pay for labor, not for copies.

[n0rr1s]

This is exactly what I've been thinking, but you explain it much better than I can. Can I copy it?

Re:Pay for labor, not for copies.

[Anonymous Coward]

That's what I've been thinking for a while would be the best solution. It seems to work for webcomics, and it has worked in past for music, though it does mean that musicians don't get paid that much (a lot of classical composers were poor, but most got enough to live on, as did the orchestras giving concerts). It also works for e-books, but most people still want their books on paper, because it's nicer to read, so authors will still get published the old way.

Re:Pay for labor, not for copies.

[n0rr1s]

I don't see paying in advance as the answer either, as it limits the available selection to "known" authors who've already made a name for themselves.

First, that's true for current authors/artists too: it's very difficult to get a company to back your multi-million $currency movie without some prior work to show them. In this new system, artists would have to produce their first works out of their own pocket or with a loan, and gradually work their way up, much like an entrepreneur starting a small business (as another reply pointed out).

Further, I tend to see it generating "more-of-the-same" content. Weber may be getting ready to branch out, but what happens when his fans only want to pay up front for more HH?

Then he has the choice of working for the money and doing what the fans want, or pursuing his own interest and working for less this time. Sure, many will follow the money, but those who feel most passionately about their art will not. And again, this is similar to today's situation in which we see many movie remakes, sound-alike artists, etc.

Finally, the up-front "salary" kills the dream as far as I'm concerned. Every author, singer, actor, and director dreams of the "great american novel" or hit song or blockbuster movie. Those dreams convince them to take risks and experiment with new ideas. I don't want those dreams dampened with a "just a job" mentality, working for minimum wage...

I don't think it would "kill the dream": an established artist in great demand could charge a large upfront fee for their work. Many artists make a great deal of money from their fame in other ways too. And if does turn out to make them less rich, I'm ok with that: I'd prefer them to be in it for the art rather than the money anyway.

I think grandparent is on the right track. I'd love to see that sort of system in place, though I know it will take many years for that to happen (if it ever does).

Re:Pay for labor, not for copies.

[SolitaryMan]

As I think DRM is fundamentally flawed, so is this business model. That doesn't mean it might not stick around for a few centuries, but it's eventually doomed. The problem is that DRM tries to artifically limit the supply of something that requires very little labor in order to reproduce.

In other words, DRM tries to enforce conservation law on the matter that does not obey conservation law -- information. The problem is that for many years social laws were based on two fundamental principles: property(things) and service(energy). Both obey conservation law. Now, information does not. What surprises me is that instead of trying to adopt social laws, we are constantly trying to adopt mother nature and enforce conservation law on information. DRM goes even further: it tries to deny the fundamental "share with your neighbour" principle. This approach is never going to work, but what frightens me is that playing gods like this can lead to major disasters.

Re:Pay for labor, not for copies.

[Anonymous Coward]

So given this, what to do? The answer is to make people pay in advance.

I'm not a fan of theirs, but Marillion's business model is interesting.. They're not exactly A-list, but seem to be doing OK for themselves, with their recordings & tours financed by their fans. And there's no making people pay. The fans want more product, and happily stump up the money for production. Subscribers get their copy of the new releases, plus subscriber-only extras. And, most useful of all to the band, a sense of ownership, so they won't blithely download the albums without paying. And the band can negotiate much better (fairer) contracts with distribution companies, once the die-hard subscriber fans have had their special edition CDs.

Re:Pay for labor, not for copies.

[Nikke Nakuttaja]

BTW this is happening already. For example Prog-Rock band Marillion did "ask their fans to buy their next record in advance. For £16, a fan would receive a deluxe copy of the CD with an additional bonus CD, and their name printed in the sleeve notes. Tens of thousands agreed, paid up front and left Marillion in the enviable position of having a massive advance to record the album they wanted, with guaranteed sales and no A&R/promotions executives demanding a more Noel Gallagher sound on the guitar."

The album was Anoraknophobia and it sold over 100,000 copies without a martketing budget.

Quote from http://www.soundonsound.com/sos/sep03/articles/mar illion.htm

Re:Pay for labor, not for copies.

[Hurricane78]

And this is exactly how i will disdribute my next game:

make a trailer with a actual development status, and how much money is needed for the next step, any why exactly it is needed.
Then everybody paying (donating) something gets a copy of it when it's done, really nice package and all, and the right to play the game of course.
In fact everybody else gets that right too, but only of a user who spend his money for a copy gives it away for free.
If he thinks that's right, then go on... But if he spend hundrets or more dollars he will want something for it. And he will be protected by my license to be allowed to do that.
Same thing for someone who spend even more (aka "investor"?): He is allowed to earn money with it.
BUT: He is not allowed to even complain about other payers giving it away for free.

That way i always get the money i need.
And if i see that the development is too expensive for someone to pay for it, i have to work more efficient, drop the price, or cancet the project and give the donators their money back if they don't want the source of what is done already.
On the othor hand: if i see that i get much donations because of "public interest" i can raise the price, and make the game and my life even better. This will be my right because poeple paying say "he yeserves it". If not they'll stop paying and i go back to normal.

No problem. Eveything in natural flow... does sound great doesn't it? :)

Re:Pay for labor, not for copies.

[Hurricane78]

You seem to think of the "old world".

We in 21 century have youtube, myspace, and bloglike stuff like crazy...
You can reach thousands in seconds with just a word-of-mouth-spreading.

What do you think how google got popular in the first place? ;)
And now the're kicking stuff around like microsoft. (ok. not good but... wow. ;)

Re:Pay for labor, not for copies.

[Kadin2048]

By all means. I would appreciate attribution (credit/backlink/whatever), aside from that you can do with it what you will.

Re:Pay for labor, not for copies.

[Kadin2048]

While I certainly can't argue with you about your personal feelings on commissioning work or not, I think you're very mistaken to say "Since the dawn of time it's been like this. If you create something, you take a risk doing it. If people like it, it may pay off." That's quite untrue. In fact, the whole 'at-risk' business model of entertainment is fairly new in terms of being universally dominant.

Throughout most of human history, artists made great works basically on commission, at least until they had developed enough of a reputation to ensure a market for their work. We hardly even remember the people that bankrolled the creation of much of our reportoire of classical music (unless it happens to be named for them), and yet without them it might not exist.

Traditionally, a person might get their start by working on direct commissions that offer very little creative control to the artist. An example might be a commissioned portrait, or a piece of music where the end-product is spelled out rather precisely ("I want an opera in the Viennese style, about ..."). The client takes very little risk, because the acceptance criteria are clear, and the artist gets some income and develops their reputation. Provided that they can develop a market for their work, then in the future they can produce in advance, knowing that the next time someone comes through their door, they'll be able to sell them the previously-produced symphony/painting/whatever.

You say that you wouldn't put a down payment on a creation that hasn't been made yet, but I suspect that you do this all the time without really thinking about it. If you've ever paid a wedding photographer, you've done exactly that; you're commissioning artwork, by paying in advance (or agreeing to pay) for somebody's time. If you've ever had a house built, same thing applies: you're paying a "creator" (the tradespeople/contractors who do the construction) to make a "work" (the house), according to an agreement (perhaps plans, or perhaps just your general idea of what you want). A better example might be an architect; they design you a building based on your (potentially vague) criteria and desires, in return for payment. This might not seem very 'artistic,' but it's the exact same concept. And in the economic model I'm suggesting, there's really not much difference between a general contractor and an architect and a painter and a performance artist. They are all skilled tradespeople, and all get compensated for the time that they spend on projects, based on the demand that exists for their trade.

The current economic system favors tradespeople who can produce works which are easily reproducable: you can't take the same house and sell it 10,000 times over, but you can do that with an audio recording; thus a recording artist seems like a more potentially lucrative career than a carpenter. However, once technology collapses the inflated-value bubble that one could previously create by selling copies, the recording artist is left in the same posistion as any other skilled person; their income arrives as a direct result of finding people who will pay for them to do whatever it is that they do.

Re:Pay for labor, not for copies.

[kent_eh]

Hre's one possible way of financing your project.

http://www.mymilliondollarmovie.com/

$10 isn't much of a risk, and there is a potential to make a few dollars back.
Or at least, you'll get your name in the credits. And isn't that worth $10?

Re:Pay for labor, not for copies.

[Kadin2048]

This is an excellent point. I honestly don't understand that much information theory, but when you put it in those terms, it makes the flaws in the "intellectual property" business model seem even more fundamental than they already are.

There are certainly ways to monetize information, but attempting to simply force it into a 'conservative' (in the 'conservation law' sense, not the political or economic one) distribution and business model, as if "information" are widgets that can be bought and sold on something approaching a commodity market, is not the way to do it.

Rather, services which interact with information in some way are salable. E.g., when you pay some one to research a topic for you, you are paying not for the information that they return, but for their labor involved in finding and summarizing and presenting it to you. (Though it may seem to be the information that you're paying for, since that's why their labor has value to you.) The information itself, once transcribed into a non-conservative realm, has little real inherent value; the way to monetize it revolves around where the information interacts with more traditional property and service markets, not by attempting to sell the information itself.

Re:Pay for labor, not for copies.

[PMuse]

There will always be a demand for new content; . . . Charge interested parties, in advance, for creation of the work. If people aren't interested in funding its creation, it doesn't get made.

Please account for the free rider problem. Since all potential purchasers in this scenario know that the work will become free after it is made (i.e., no DRM exists), each has an incentive not to pay in advance in the hope that some one else will pay. Will anything get funded under these conditions? If so, will the price received by the creator match the demand price for the same work under the old system (where it was, at least in theory, impossible for potential purchasers to get the work for free)?

Re:Pay for labor, not for copies.

[enderwiggen]

While you're not the only person who won't put down a down payment for the creation of something, there are lots of people who do that every day. They tend to have titles like "banker", "investor", or "venture capitalist". Try starting a business without one. They need not have millions of dollars either. You can have friends and family buy in to your idea early at a lower valuation if you need capital, and a lot of the time if they believe in you they will invest. It's no different here. Independent and new artists (or businessmen) get a few people to believe in them and they accumulate some cash which enables them to dedicate their time to the production of something of value. If the idea or art they are pitching to you has no value to you, you don't invest. In business, the investment is likely to pay off with financial gain. In art, the investment is likely to pay off with entertainment. That's truly the hard thing to measure... is this entertainment worth the $x dollars that I'm going to throw down.

Re:Pay for labor, not for copies.

[Anonymous Coward]

Please account for the free rider problem. Since all potential purchasers in this scenario know that the work will become free after it is made (i.e., no DRM exists), each has an incentive not to pay in advance in the hope that some one else will pay.

The burden of proof is on you, not the parent. Art was funded by patrons and commissions for thousands of years before copyright laws existed. Plus, you ignore that this problem is self-correcting. If everyone follows your logic and refrains from donating, then the work will not be released. If you haven't noticed, humans are not by nature very patient people.

Will anything get funded under these conditions?

Yes

If so, will the price received by the creator match the demand price for the same work under the old system?

The price received by the creator for the work will far exceed the price under the current system, since right now they don't make a dime for the work. In fact they end up incurring massive debt by creating the work. They do this in the hope of making their money back via profits realized in the distribution chain, which we have by legislation made artificially expensive and have granted them a monopoly over. The overall profits generated by a work, distribution included, will probably not be as high. But why the hell should they be? Why should profits in a genuine economy match profits in a fictional economy?

Re:Pay for labor, not for copies.

[Anonymous Coward]

Well, you're not being realistic about the extent of the commercial content market here either. While it's fun to talk about rock stars, movies and best selling novels as though you really have some important advice on these topics that only effect a tiny, tiny minority of select people the reality is that these glamor topics represent a tiny fraction of the paid content market. Educational publishing is bigger market in term of dollars than Hollywood and all the paperback bestsellers put together. Ironically, it's these boring markets where things are really interesting.

Re:Pay for labor, not for copies.

[DuncanPickard]

The stuation as it presently exists allready has free riders. They are called "pirates". Why whould an individual buy a game or movie or other work when they know that within some reasonably short timeframe they will be able to download it for free. No DRM scheme devised to this point has survived for too long, and if you are willing to accept quality loss almost none have survived for more then a few weeks, so DRM fails to prevent copying.

People will pay because they want to see the content, and unless they pay the content will not be made.

The problem with the current model for copyrighted matereal is that it is runing up against economic reality. The marginal costs are quickly convergeing on zero. In te future you will only be able to ever sell one copy of your creation, so how do you as a content creator get paid enough for that one copy to make createing it worthwhile?

Re:Pay for labor, not for copies.

[Saint Aardvark]

Bingo! Thanks for saying exactly what I was thinking, only 'way better.

Re:Pay for labor, not for copies.

[jafac]

I agree.

Say I'm a hypothetical poor college student. Why would I pay Green Day (or whatever) to incent them to produce another album when: A) They may not do it, or B) it may end up being crap, or C) I can always download a free copy from Pirate Bay after other people pay them?

Additionally - the only people who would get commissioned under such a system, are established big names, so we'll be stuck once again with a system that emphasizes Promotion and Salesmanship over Creativity and Innovation. New artists, who may be innovative, who may have new ideas, who are unknown, and not the children of established artists, would not get any exposure, and will be drowned out by the noise of the money-makers. No different than the situation today.

The root of this entire problem is: while Promotion and Salesmanship are necessary to link sellers and buyers, the old model of Promotion and Salesmanship (giant monolithic media megacorporations) are no longer the only method. Social networks (like Napster in the 1990's) and information tools like search engines and such, can go a long way to "removing the middle man". The artists just haven't realized it yet.

I think that the deliciously ironic situation of Apple Computer not being able to be a Music Producer due to contractual agreement with Apple Records, is precisely the situation that's blocking the wholesale elimination of the "old guard" in the Music industry.

If an online music distribution agent such as Apple iTunes Music Store ever got into the Music Production business, and worked directly with artists (or, if the big RIAA members ever got their shit together with a decent online distribution scheme - with more laid-back DRM like Apple's FairPlay) - then the market would finally flow in the natural direction of least resistance - which is where most of us net-folk inherently sense it must eventually go.

DRM is a desire to "control". It's a tool for control.

DRM can be lax, or obnoxiously in-your-face. It can be a carrot, or a stick. It can be a line painted on the ground, or it can be a barbed-wire fence with armed guards, dogs, and mines.

There's an obvious, value-add appeal to lax-DRM. Apple's success in the market so far proves this. For me - Apple's price-point is too high. But the millions of iTMS customers disagree with me, apparently.

The problem with DRM, in general, as Lawrence Lessig pointed out, like 10 years ago, is that it lets a software engineer (and the media company exec who pays him) play the role of Legislator, without the inconvenience of having to be elected, or answer to the Constitutional yardstick imposed by a judiciary.

We don't want media execs making our de facto laws for us (enforced by software code).
But we don't want our Legislators writing our software applications for us either.
Quite a pickle.

In the meantime, I believe the market has spoken.
Someday, the folks who stand to make actual money will give up their childish and unrealistic desire for "control" - and realize that; VHS made Hollywood trillions. MP3 can do the same for the music industry, if given the chance.

Re:Pay for labor, not for copies.

[tbannist]

And we all know no one has ever worked their way up from a small self-funded work to something bigger. It never happens!

Re:Pay for labor, not for copies.

[Thimble]

REALLY really interesting idea.

Unfortunately, it won't happen.

Why pay for something when you can wait for others to pay for it first then get it for free?

eg. say 100,000 pay a dollar each for a new steven king novel to be made. instead of being one of those 100,000, i could just wait it out until it's release, then jack a copy off someone who did pay.

What I think will happen instead is that we'll just have to reduce the cost to produce a movie, tv or album.

People are quite willing to pay pennies for a song rather than go through the inconvenience of searching for a bootleg copy. The success of iTunes shows that.

The problem is that you can't make a profit off of 25 cents a song unless you sell it to an incredibly large number of people. Songs costs too much to produce.

What'll happen is that the various industries will look to a lower cost model. We're already seeing evidense of this on TV in reality shows. Honestly, how much does it cost to produce an episode of American Idol? And with digital media making it cheaper and cheaper to record high quality media, the "low cost" model will inevitably become the first choice model.
Permalink

Re:Pay for labor, not for copies.

[Anonymous Coward]

"Finally, the up-front "salary" kills the dream as far as I'm concerned. Every author, singer, actor, and director dreams of the "great american novel" or hit song or blockbuster movie. Those dreams convince them to take risks and experiment with new ideas. I don't want those dreams dampened with a "just a job" mentality, working for minimum wage..."

Art will continue on wether or not the artist has the potential to earn millions of dollars. Much of the greatest art in the world was made for a very low price and/or for no glory. Artists create art, because it is human to create. Famous example of a painter: Vincent Van Gogh made so little money, which he always spent on paint, that he eventually began eating(drinking?) his paint. Famous example of a writer: Henry David Thoreau forsook his possessions to live by a pond in the wilderness and study. And although he did not pay his taxes, he was by no means aiming to become rich. Famous example of a Musician(s): The Ramones recreated 1950s surf in the middle of the 1970s, because they wanted to make music. At the time in rock history when the Ramones showed up rock music required tons of technical prowess and money... the entire punk movement aimed to destroy that.

If you look throughout human history you can find incalcuable numbers of artists not mentioned here whose passion and minimum wage job was Art. This does not mean that Art aiming for tons of money is worse/better than "minimum wage" Art. Art will continue whent he lights go out on the RIAA/MPAA and the money is gone. We already have a plethora examples in place today of Art without promise of fame and fortune.

Fuck DRM,
Justin

Re:Pay for labor, not for copies.

[WolfWalker545]

First off, new authors DO have to write their books on speculation, and hope a publisher picks it up. The problem is, most first books by new authors don't earn enough to pay off the advance on royalties, so the publisher is taking a gamble with new authors, in the hopes that they'll a) be good enough and b) attract enough fans to be profitable later. As for David Weber, the Honor Harrington series is NOT his first or only series of books. It's just been the most successful one. He's got the Roger Ramius series with John Ringo, the Bahzell Bahnakson series, the Fifth Imperium series, and his new series with Tor (he doesn't plan to do any more of the Starfire books).

Re:Pay for labor, not for copies.

[Kadin2048]

You answered your own question. The "low-cost model" is the answer, because it's what the market will really support. It's what people are willing to pay for. Under such a system I think you'd see the end of multi-million-dollar megaproductions and a lot more very-small-budget stuff, whether music or movies or writing/publishing. Frankly, I think it would probably get to the point where whole secondary and tertiary industries would spring up, in order to aggregate content according to partiuclar tastes. (I.e., you'd subscribe to a service where somebody who's taste you trust would comb through the 'net and review stuff; paying not for the content per se but for the reviewing and filtering.)

As to the free-rider question, I attempted to answer this in another post further up in the thread (a reply to another reply of my original post); basically free riders are not a problem, they're just indicative of demand not being what you think it is. The current system essentially forces people to constantly purchase new entertainment-art, because it's so difficult to get to the "back catalog." The actual societal demand for new work is limitless: it will never be saturated no matter how much stuff you have out there; however it is not that big. It's a relatively small, constant demand for new material. So in an unfettered, unmanipulated market, "entertainment" would probably not be the industry that it is today. There just isn't the demand for it -- as you pointed out, given a choice, quite a few people wouldn't pay to bankroll new productions. This is fair, and it would mean that some new stuff wouldn't get made, because there wouldn't be a market for it. But as people get bored, their demand for new content increases, and eventually someone will pay for something new to be created (even if this just means giving a case of beer to their friendly local college band). Viola -- new content.

I think it would get to the point though, where "freeloading" in the way that you describe would be almost a form of aesceticism. Sit around all day and watch "other people's" art? Stuff that was made for them and to their tastes instead of yours? In a world where everyone else is getting works custom-made for them, it might be a very marginal existence. It would be like filling your house full of the little fake photos that come inside WalMart picture frames when you buy them. Because everyone knows that non-custom-made content is free, its perceived value would disappear quickly.

Sure, you can wait and hope that somebody else will pay for the new content, and just get it afterwards; that's your choice as a consumer and free agent in the market. However, when you're sitting in a sea of previously-created art, suddenly the value of new work (particularly custom work) would go up. You might pay for something to be created so that you'd have your name in the credits, or just for personal consumption, or as a gift/tribute/whatever, but doing so wouldn't be much harder than hiring any other type of skilled tradesperson. It would be available if you wanted to do it; and if you didn't want to participate, if you just wanted to "freeload" and listen to music that had been written for and about other people, and watch movies from the vast back catalog that would be available, that's OK too.

The net result of freeloading means less money spent on entertainment, sure, but that's not all bad. It means that only the amount of entertainment that's demanded (and people are willing to pay for) is what gets created, and that more money is available for other things. You're still going to spend your income somewhere -- if not on entertainment than on hardgoods, or put it into savings -- so there's really no net loss. By removing distortive controls (of which DRM is one), we allow supply to match demand over time, and this is a good thing in general; it ensures that we aren't spending more effort as a society than we should be on 'manufacturing' entertainment.

Of course, since this would mean the demise of the 'entertainme

Re:Pay for labor, not for copies.

[Dravik]

This is how all artists made there living until about a century ago. This kind of system created all the great artistic masters of history and fed the millions throughout time we have never hear of.

Re:Pay for labor, not for copies.

[mitmyriad]

This is definitely the solution. Most intellectual property is dying a slow death as we type, and payment before creation is the only tenable solution.

Re:Pay for labor, not for copies.

[PMuse]

Feeding the AC.

Please account for the free rider problem. Since all potential purchasers in this scenario know that the work will become free after it is made (i.e., no DRM exists), each has an incentive not to pay in advance in the hope that some one else will pay.

The burden of proof is on you, not the parent.
That burden was carried in the previous post, when the case in which the proposed solution fails was demonstrated. The burden thus returns to anyone who contends that the proposed solution overcomes that case. Of course, since its almost a certainty that the characteristics of zero-marginal cost goods have long sinse been thoroughly explored by economists, what we really need is an actual student of economics to stand up and explain things to us.

Art was funded by patrons and commissions for thousands of years before copyright laws existed.
Perhaps a patronage system will work for creation of mass popular entertainment. However, there are several differences between mass popular entertainment and older patronage models that should make us nervous. As to paintings, sculpture, and the like, the patron was paying for creation of originals he would keep. In the oldest patronage models, the work could not be replicated by anyone but the artist anyway (that is, there were no marginal cost zero copies). The patron has less incentive to pay for creation where he might be able to ride free with a copy of work paid for by some one else. As to musical compositions, these were created for performance to paying audiences.

Most importantly, the patron decided what type of work would be created. If creation of entertainment tomorrow is to be funded by patrons, how will those who can afford to pay only small amounts get works that suit their tastes?

Plus, you ignore that this problem is self-correcting. If everyone follows your logic and refrains from donating, then the work will not be released.
Is it self-correcting? Is demand high enough to overcome the free rider incentive? Will the group of works that gets made be larger, smaller, or the same? These problems take some actual market data to solve and I have no idea what the results will show. People who think they can make predictions with no data make me nervous.

Suppose the population contains 10000 potential purchasers and the creator and distributor need $5000 to justify creating and distributing the work. Under a fee per copy system, that work would have gotten made if 1000 purchasers would spend $5 for it. Now, suppose a world where the copies are free once the work gets made. Some of the 1000 that would have paid $5 will now refuse. With a smaller group of paying customers, the price goes up. Even if the distributor can be eliminated, will there be enough paying customers remaining to pay the creator? To be sure, there will be some few who want the work badly enough to pay a high price, but will there be enough? Works can fall through the cracks and not get made depending on the shape of the demand curve.

Re:Pay for labor, not for copies.

[syousef]

There's a huge difference. Venture capitalists are few and far between because it's high risk. You're asking the whole population to take these risks repeatedly knowing they'll be burnt again and again. That's unrealistic. It only works for those who have very large disposable incomes. Have a close look at how hard it is to get funding for the arts.

Re:Pay for labor, not for copies.

[shmlco]

"We in 21 century have youtube..."

Yeah, there's just tons of professional-grade content on youtube...

Re:Pay for labor, not for copies.

[sjames]

It's very little different to how artists work today. Unknown artists struggle to get exposure, so do bread-and-butter work and 2nd jobs to get by.

There are a number of publishers out there well known for insisting on terrible contracts with poor royalties (and perhaps cheating on top of that). They stay in business because they take chances on reletively unknown authors. Of those, the ones who succeed almost inevitably publish their subsequent works through other publishers. At the extreme end is the vanity press where the author pays for publication.

What all of this really comes down to is recognition that the work really comes in two parts. The simple act of copying the work is anything but scarce. It costs practically nothing and requires no skill. The scarce part is the original act of creation. That's the only part that has any value above the marginal cost.

The only reason it was ever done the way it is now was the lack of a means of instant two way communication with a large audience. That model could work because the marginal cost of production was high enough to bear 5 or 10 points going to cover the original creation. It still could, but at 10 points on $0.01, you'd never recover the production cost.

Re:Pay for labor, not for copies.

[novus ordo]

You both made a valid point, but what you have come up with is a worthy question. Should an artist get paid before, or after a work? As you have shown there are problems with both models. However, why either and not both? As I see it, it is a more interesting proposition to be watching an artist work and seeing what it produces and how it reflects us in that process. Internet makes it possible to see the creation as it is being made and offer support($$) along the way. Some people might catch later on and can do so then. I think the "build it and they will come" methodology is most helpful here. Look at YouTube. Everyone and their grandmother is making amateur videos and experimenting with technology. What is really needed are the tools to make the big recording studios and movie studios green with envy at what a few inexperienced and uneducated 'amateurs' can do. The rampant 'expertism' has been getting erased from the heights of "professional journalism" by those amateurs, and they are not so easily dismissed anymore. We would like to put the 'burden of creation'($$) on the artist and the artist would like to put that burden on the fans. I think the tit-for-tat mentality that made bittorrent popular would be just as useful here. If you are making something that nobody(yet alive?) wants, how the hell do you expect to live off it?

Re:Pay for labor, not for copies.

[smcleish]

This sounds like something that classical music groups have tried in the UK, and it seems to work well. The scheme I know a bit about involved the Birmingham Contemporary Music Group's Sound Investment http://www.bcmg.org.uk/sound_investment.asp; supporters get closely involved in the commissioning of new works.

In the rock world, didn't Marillion get members of their fan club to finance a new album when they were dropped by their record company?

Re:Pay for labor, not for copies.

[bensch128]

You could sponser artists through government grants.
The canadian government does this alot and thats why their computer graphics businesses are the best in the world. (Discounting Pixar and Dreamworks) It's too bad that the US government doesn't pay much attention to their public arts funding.

I really find your idea of using escrows for arts appealling. Having 10000 fans of an author donate for the authors next book could almost work. Wait, but then, each author would really need to get the best PR firm possible to promote the fact that he's willing to produce an another book. And then the PR firm would demand a large cut for pushing his talents so much and handling google/yahoo/ad agancies/etc. and you're back to having large media companies managing artists which they think will produce great work in the future.

Guess you can't really escape commercialization.
Ben

Perhaps by not alienating your customers?

[Anonymous Coward]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost

Perhaps (and I'm thinking of the music industry here although the motion picture industry isn't far behind) by selling the product at an honest price rather than be caught in price fixing scandals, by not cheating the artists who produce it and that the customer actually would like to support, by not crippling the product with DRM or infecting the customers computer secretely with rootkits, and by either offering the consumer what they want or at least not filling albums with 95% crap that they have to buy to get one song they like.

If people culd buy a CD quality single at a fair price I believe that many would. But when the only ways to get a single are to but an over price artifically price fixed album (that might be crippled), buy a DRM crippled low quality audio download with artifacts that will be lost not if but when their Ipod dies, or download an illegal copy that works on any player and can be moved to the next player they get. then I uderstand the impulse to download the illegal copy. I haven't bought or downloaded music in years, but I expect I never will buy an album again after what I've seen of the RIAA and their goons.

What does Richard Stallman have to say about this?

[Anonymous Coward]

Probably something about the 'long tail economy' kicking in.

Capitalism isn't the last stop on this train ride we call human history...

It's the end of the world as we know it and I feel fine...

create a community

[Anonymous Coward]

The trick is to create a community. Baen (http://www.baen.com) shows how to do it.
You get contact to the authors, previews of the books while they are written, free ebooks (even from the bestsellers).
It is also possible to buy Tuckerization rights, ie your name in one of the future books (higher price for surviving characters :).

Ransom method

[Anonymous Coward]

Here is a method in which an artist can realize profit from creating a work. (Note: this may or may not apply to bigger budget media like movies). At first, the artist releases material (or whatever) and builds up a reputation. Maybe he makes a pitch and gets a bunch of consumers interested enough to contribute to a ransom fund. Until the fund reaches a high enough level - nothing really happens other than some promotion (which can be very cheap on the net).

Those who contribute get the first crack at seeing the work or get immediate delivery once the work is finished. If they share afterwards, the author doesn't really care. He's already been paid by the ransom. In fact, it would be in his best interest for the work to spread as it can increase awareness and perhaps fund future ransoms.

The value a contributor obtains can be from sponsoring the arts, possible bragging rights, front seat access, or whatever.

ps. I can't claim any credit for the idea. I first came across it under an rpg context. http://www.detwillerdesign.com/

miraculous multiplication of loaves

[ruedesursulines]

Basically, it comes down to this:

if we had an unlimited supply of bread that could be reproduced and distributed to everyone at no cost, would we expect people to continue paying for it?

Sure, someone has to bake the initial batch, but that doesn't count for much as we approach infinity.

In other words, the rice ladle has gone down the river and it ain't comin' back!

Re:miraculous multiplication of loaves

[Anonymous Coward]

I listen to a lot of UK Hardcore music. And those guys have already gotten the hang of digital distribution and how to make money from it. They are not super rich, but they have enough money to do what they love full time. They own the record store and distribution channel (eg www.nuenergy.co.uk) but they make money from the whole cycle.

First they will start playing the tunes live. They wrote the tunes themselves, so they get first chance to play them and exclusive usage of the tracks for a while, increasing the value of their live performances over everyone else that might play their tracks.

New tunes often come out publicly on compilation CD's first eg hardcore heaven or bonkers, in unmixable (ie already mixed between tracks) form. This is a way of getting the sounds out to everyone but djs cannot use these tracks to mix music. Often these compilations may end up on P2P or whatever but it can't be avoided. Benefit of this approach is that new tunes are exposed to a wide audience and they get to make some money from them but djs cant use them.

Next step is tracks being released directly to vinyl at about AU$15-30, possibly up to a month or two later. This is most valuable for a DJ because this is their first chance to get a mixable copy, which they pay a premium for.

They delay the mp3 release for about 4 weeks. When this time is up, the tracks come out on MP3 which you can pick up for about $2 each.

The key is that they are constantly releasing fresh music, and the freshest music comes at a premium and is non digital, delaying slightly its introduction into P2P. But more importantly, they devalue P2P because in only 4 weeks you can pick up a DRM free version of the track for a reasonable price and also choose from the entire back catalog. Why bother with P2P? I know I don't. If i was leet dj or whatever and I absolutely needed the latest tracks before everyone else I would pay extra on vinyl, and good on me. I also go to all the gigs because I know that I will be able to hear tracks there that I wont hear anywhere else.

They add individual value to each stage of the chain (Live performances, compilation cds, vinyl then finally mp3) and thats how they make their money.

Re:miraculous multiplication of loaves

[MassEnergySpaceTime]

People wouldn't pay for free bread, but people would pay for an entire sandwich, or a full steak dinner that included free bread.

How about...

[Anonymous Coward]

Donations, except require a fixed ammount of before you release.

Parent is the juggernaut, bitch!

[ruedesursulines]

Mod up!!

What huge initial creative investment

[Anonymous Coward]

huge initial creative investment

What the??? Bands don't need $millions in marketing or $millions in music leasons to make music. Someone with exceptional creative skill and some borrowed equipment can make a decent album.

Maybe if there wasn't the marketing money chasing the stupid acts, the creative people would have a chance. There is no huge initial creative investment.

Biased question my ass

[Anonymous Coward]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?
Most likely, you don't... (I'm focusing on movies because they're the only things that fit your specifications), you can't make it back.

Yeah, right. If "huge" were an absolute term, that is. Huge is not just the Star Wars billion dollar budget. For a writer that needs a year full time to write a novel or a textbook, even the money to live a NORMAL life (=no private jet, beverly Hills manor, Rolls Roice: just a normal apartment, internet connection, food, utilities...) for that one year is "a huge initial creative investment". And even recovering just that money (or getting somebody to pay that to you in advance, that is the mytical "work on commission") is something that would be very difficult, or impossible, to achieve without any copyright. And if you just rely on commissions from governments and mecenate millionaires, you'll only get the creations that billionaires and governments want you to have.

All the "Screw drm, let's abolish copyright, there will be other ways to make money like live performances" arguments invariably come from those with so little brain, imagination, education and good taste that they almost never read, and only "consume" bad Hollywood movies or Britney Spears-like music (that the establishment ADORES because they dumb the masses down). Because the latter are the ONLY cases in which these arguments work. A complete abolition of copyright and DRM would indeed hurt authors and culture in many other cases.

Re:Biased question my ass

[Anonymous Coward]

All the "Screw drm, let's abolish copyright,

Odd. I have never seen anybody say that copyright should be abolished. In fact, just the opposite. There are many who wish to do away with method patents (esp as it relates to software), but not copyrights. Now, there are a NUMBER of ppl who want to see the copyright laws as laid out originally adhered to. That is, a limited lifetime, as well as they want their rights to fairuse be re-enforced. I would bet that 99% of everybody has no issue with copyrights.

Re:Biased question my ass

[Anonymous Coward]

Odd. I have never seen anybody say that copyright should be abolished... I would bet that 99% of everybody has no issue with copyrights.

That may depend from the context. 99% of the general public simply doesn't understand the difference between copyright and Fermat's last teorem. I was thinking to the Slashdot and file sharing crowd. And in that case you would surely be wrong.

In these circles, the idea that copyright (in the sense of being right that one can restrict redistribution and claim money for EVERY single copy of a work, no matter how easy and cheap it is to make them) is always, surely, completely stupid, evil and harmful is deeply rooted. Even if they don't say it explicitly, it's just written between the lines of most posts. Just look at this thread: the idiocy that "money should NOT come from simple copies" (and that this would surely not harm culture) has already popped up. And what is that if not an assumption and hidden opinion/request that copyright be abolished??

Infinite supply is not new

[monoqlith]

As far as I can tell, things have been mechanically reproducible, with little overhead, since Gutenberg. What has made book and news publishing a viable business is the quality of the works they publish and the widespread demand for leisure, informational, and research reading. While copies of any work are in limitless supply now that they are in digital form, the supply of *quality* work is definitely limited, and as such the price for good works will remain high even if it can be infinitely reproduced. There will have to be slight changes to the music and movie business model, of course: for instance, one of the reasons why people buy and read books is because of the physical aura of the book. They like to hold it in their hands and rflip through the textured pages. On the internet, this physicality is lost, and so an investors' purchase of an item will have to depend on other things: the comprehensiveness of the inventory, the freshness of the inventory, on what variety of media devices it plays, how easy it is to transfer to those devices, how reliably it plays, and what additional content can be viewed when it gets to those devices. Music companies need to learn to deliver the best product possible, and have to stop depending on an artifical supply limit for their ability to charge premiums.

RIAA companies have been holding this specter of their defenseless, victimized interests over our head. Basically it's just a way for them to lock us into preserving their current business model: sign mediocre artists, over-produce mediocre music, sell it at inflated prices, reap most of the benefits, and screw (by underpaying) the parties responsible for their having any content at all. Now that the barriers to reproduction are gone, they'll have to innovate on their business model as I have already described. It's not rocket science. It's adapting to a new marketplace. All companies have to do it, and rigid DRM restrictions are not going to work forever.

I don't see DRM going away entirely - rightfully, I think, since reproduction is now virtually *free* and media formats are so versatile and transmissible over the Internet. It's the same reason why we have security systems at stores. But security systems aren't as conspicuous and constraining as the ridiculous DRM systems are now. Mostly stores rely on the inherent value of the product they are selling and the integrity of their customers. Likewise, the DRM just needs to be much more flexible. In other words, RIAA companies need to stop treating their customers like theives and more like the reason they stay alive. This, or else things are going to start moving more rapidly toward a long tail model where the independent publishers win(I vote for this, since it allows us to start taking things back from the oligopolies and re-democratize our economy.)

You charge for the time you spend working on it...

[Mr2001]

... just like anyone else who performs a service. Performing songs, filming movies, etc. can use the same business model as fixing cars, preparing tax forms, or painting houses.

The only real difference is that creating an artistic work tends to involve a lot more effort, so it's hard for one person to fund an entire album out of his own pocket. But that's not really a problem, because you can assemble a group of people who are all interested in the album and have them pool their money together to fund it. (Look at political campaigns for a working example: they raise millions of dollars from a lot of small contributions, and those contributors don't even get anything for their money unless their candidate wins!)

Mod parent up

[Anonymous Coward]

.... he said it much more eloquently than I did

Ideas

[derEikopf]

"In a few weeks, our school will be hosting a panel on DRM with several respected individuals. In advance of the panel, I have been doing some research on the topic and thinking about it in my free time. In economics, we learn that the price of a product is determined essentially by supply and demand. Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net. How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"

The problem is you're assuming that content is something to which supply and demand are applicable. Supply and demand are inextricably linked to actual physical things. Content is basically ideas, and ideas can't be owned or bought or sold--they aren't tangible, and the only way for someone else to get an idea from you is through a physical representation of the idea (which is not the idea itself). Technology is testing the extremes of intellectual property, and the absurdities of IP are becoming clear to its victims, and probably even to those wielding it. In the case of digital music, the Internet provides an almost free and limitless physical medium with which to represent ideas (the music itself), and that is helping expose the absurdity of ownership of ideas or processes (in this case, sounds arranged in a certain order).

How about less pain?

[iknowcss]

The thing that keeps me from legally downloading music as it is right now is pain. Pain from what you might ask? Pain in paying. It's not easy for me to purchase music right now as I'm not old enough to have a checking account, a credit card, or a paypal account. iTunes has the right idea with their pre-paid cards.

The more invisible you make the payment process, the more likely people are to forget how much they're spending anyways. I don't know how you'd pull off a more painless program, but that'd really get the cash flowing.

Re:How about less pain?

[SanityInAnarchy]

Paying isn't the only thing that needs to be more convenient, but yes. Tying it to a checking account might work, if you can cosign with an adult. Prepaid cards are another idea.

The concept of DRM isn't evil

[AntonDevious]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply? I personally am not bothered by the concept of an artist in the electronic media being able to control sales of their product. Paying $0.99 a song is fair. If the artists don't get paid, they won't continue to produce work. A good example is compare the quality of paid television to YouTube. Sure there are enjoyable clips on YouTube, but they don't have the production value that our TV and Movies have. Where DRM fails is it doesn't protect the creative, it protects the device the creative is played on. I don't have a solution, but as a collective intellegence, we should be able to come up with a non-commerical standard of encrypting files that ties the unencryption to the user not to the device.

Re:The concept of DRM isn't evil

[databoss]

Although I this DRM is evil, I just want to re-emphasize the above poster's extremely important point: current DRM technology does not protect creative works, but prevents them from being transferred legally from one device to another. The use of copy protection is debatable, but preventing interoperability is undeniably monopolistic. In my opinion, that is why current DRM technology is undebatably unacceptable.

Re:The concept of DRM isn't evil

[Schraegstrichpunkt]

I don't have a solution, but as a collective intellegence, we should be able to come up with a non-commerical standard of encrypting files that ties the unencryption to the user not to the device.

No, that is simply beyond the reach of modern Physics and Neuroscience. Cryptography is not a panacea. Do a little research into secure Internet voting if you want to see another example of a problem that cryptography cannot solve absolutely (it's a trade-off between various desirable properties).

That's the entire problem with DRM. DRM technology cannot accomplish its goals, and it comes with a huge pile of related problems.

Don't be too quick to draw that line.

[Shivani1141]

But you forget, the Major venue that a classical musician in these days will make his or living is in Performances. A mentionable chunk of those same musicians will also supplement thier income with Musical tutoring. a Cellist(for example) primarily makes his living working for an opera, an orchestra, or some other like institution. If they don't, they arent considered professionals. To a Classical Musician music is not something they own a copyright to. they perform the works of others, they provide music as a SERVICE. And as for the extremely expensive, rare instruments? Afaik, and I am not an expert on such matters, those rare instruments are provided to classical musicians by patrons of the arts.

You change the product

[Turn-X Alphonse]

Instead of looking at the old models which is "Please give us money so you can enjoy what we make", we need to switch it round so it's more like the musicians on the street (or Jonathan Coulton if you perfer), so "heres my music, I hope you like it. If you like it would you mind giving me some money so I can continue to play?"

Instead of asking for money for something you ask for money so you can continue to do something. The problem with this is things become their real value (instead of super expensive things because of some famous name attached) and the low level bottom feeders (middle men) just get in the way of the system.

So in short. DRM is holding evolution back by shooting the bald monkeys, the few that escape get to evolve and become another thing entirely, which may or may not be a better set of monkeys. Sorry it's not cars, but it makes sense in my head at least.

Flawed use of economic concepts...

[mveloso]

"we learn that the price of a product is determined essentially by supply and demand"

That isn't quite true. What you should have learned in economics is that "all other things being equal, the price of a product is determined by supply and demand" which basically means "in this incredibly simplified model that we have built, things probably work like this." Generalizing outwards from the models used in economics is dangerous at best, because in general all other things are almost never equal.

There are numerous examples in the Real World that show that price is not determined by supply and demand at all, except for commodity goods...and for many commodities, the perception of supply is more important than the supply itself.

You haven't followed tech advances

[Anonymous Coward]

The stupid distributors are hanging onto prices from 15-20 years ago! That's why! Is it any wonder they are bitching about sales? Why the hell arent we seeing music cds for 2 bucks and dvd movies for 3$ on the shelves? They could do it and anyone who says they can't GO TO HELL YOU LIAR. Make it impulse item cost and you'll sell them, plenty of them, and still make profit. If you can't be content with making over 100%, then screw it! 2-3 dollars a disk would still make serious profit. they don't want a business, they want a contunation of a license to print money for doing *not much*. too bad, it's a new world out there, get with the program or get stuffed! GOUGING people when they know that either downloading is very cheap (even iTunes is a rip for pricing) or stamping out disks is very cheap is NOT the way to keep customers. Until those millioniare idiots understand they are GOUGERS, and change, they will continue to remain clueless and keep futzing with DRM schemes. It's their own fault, too, greedy bungholes never passed on the tech advance pricing models that they could have. People don't like being ripped off, so they react to THIEVES accordingly, as in "they don't care anymore". You get your "piracy" then. It's human nature, I didn't invent but you'd have to be a sub-moron to not know people don't care about ethics when it comes to dealing with thieves. The producers and distributors started it by being thieves, by arranging cartels, price fixing and seeking to restrict technological advances to themselves, to the point of perverting and subverting the legal system to cover their embedded thievery mindset. Tit for tat, they got what their karma deserved.

Me-I don't download, nor do I buy the cartels over priced crap, but if they want to know the "why" about filesharing and why they think they need DRM, they need look no further than into their own greed-is-good black hearts.

Re:How? Ask Apple

[aussie_a]

but the way they work sales would not really be hampered much by them not doing

And yet if asked to stop, they would refuse to. Funny how that works.

Because no one would write songs without DRM!

[twitter]

It is a classic theorem of economics that public goods are under-produced.

Oh, do tell. You obviously have the public good formost in your mind. Still, I don't think your abstractions hold up beyond themselves and are meaningless.

How do you explain music, poetry, stories and all that which people created before machine presses and copyright? People have been singing and dancing forever and they will continue to do so despite your inability to profit from or diminish their joy.

DRM turns information goods into private goods. Now they can be sold and owned. They become excludable. The investment needed to produce them can be recovered by charging for their sale. ... DRM is an optimal way to manage information goods.

Let's turn this on it's head. If it were possible to effortlessly and infinitely reproduce bread, would you degrade that process? Do you think it's more important for big commercial makers of wheat and bread to profit than it is for others to eat? Why do you want to do that to information? Music and knowledge are bread for the mind and soul. It is insane to limit their distribution for the benefit of "owners." Ideas are not property and trying to make them so is stupid and wasteful.

I'd like to tell you that DRM will be circumvented by customers, but the market will do it first. Companies that cling to DRM will have no customers when confronted by reasonable competition. Now that's an optimal way to manage information.

Re:Because no one would write songs without DRM!

[shmlco]

"If it were possible to effortlessly and infinitely reproduce bread..."

That's the problem. It's not, and as such most people still need to buy it... including authors, musicians, actors, and developers. Yes, in a utopian world everything would be free. But I don't live in that world, and neither do you.

Re:Because no one would write songs without DRM!

[jb.hl.com]

Companies that cling to DRM will have no customers when confronted by reasonable competition.

As I've said in previous posts, if this was true then the iTunes Music Store would be a footnote in e-history along with Napster (the store, not the P2P app), MSN Music etc and AllofMP3 would have 100% market share.

As that hasn't happened, I'm inclined to believe that most normal people don't give a fuck whether their music's DRMed or not, so long as they can play it.

Re:Because no one would write songs without DRM!

[logicpaw]

How do you explain music, poetry, stories and all that which people created before machine presses and copyright? People have been singing and dancing forever and they will continue to do so despite your inability to profit from or diminish their joy.

Of course, but what percentage of the population could afford to do that instead of some non-artistic day job? What percentage of good art comes from artists who are employed for their art instead of just doing it in their free time? How good are the ballerinas who dance full time, versus those who dance weekends after 40 hours of office work? Etc.

Let's turn this on it's head. If it were possible to effortlessly and infinitely reproduce bread, would you degrade that process?

Likely not. But would there be as many artisan bakeries borrowing from the bank and investing in new machinery to bake new and interesting breads?

The Good Old Days

[Vinegar Joe]

Only alittle over 100 years ago, musicians made their money and reputations by performing live. Of course, they didn't have private planes, live in Neverland or make $100,000,000+ per year.

Merchandise

[Paul Slocum]

Here's a good example. 95% of their content is free on the internet -- 5% accounting for extra content on the DVDs and CDs. Never even had any ads on their site. And they make a healthy living off merch. They quit their day jobs on just T-shirts!

As people have said, no DRM doesn't mean everybody's going to throw a pirate party and that selling digital content is over. But there are even business models that allow for giving the content away.

Re:Merchandise

[IHC Navistar]

That is because Homestarrunner.com is actually entertaining enough for people to want to buy their DVDs and CDs. The problem isn't necessarily a business model, but rather content that people will actually want to buy. Cheap content is disposable, and MAYBE something that people will want to download, but not something that captivates and entertains them enough to want to buy it.

Movies, are a different story. The price of theater tickets is very high (around $10.00 where I live), not to mention the fact that a large popcorn, 2 large Cokes, and nachos cost me $17.50 (yes, sadly, I actually paid that). People do not feel that they want to risk the price of a ticket on the gamble that they may either be genuinely entertained (a positive outcome), or they may end of wasting the price of a ticket (or more, depending on how many tickets they bought) and however much time the spent in the theater insted of doing something that they would have enjoyed much more. So, logic prevailing, people have begun to pirate the movies they think they may want to see, and if they like them, they are satisfied. If they don't like them, then they didn't waste any money. Hollywood has gotten into a rut of churning out crappy, boring, cinemagraphic commercial hack-work. Nobody wants to go through the trouble to see a movie that they will more likely than not, consider a waste of time, energy, and money. Music is the same way. When you buy a cd, chances are (unless it is the Beatles or Rolling Stones) that you are only buying it for one, two, or even three songs on the disc. What's more still, is that finding singles CDs with just the song you want is pretty rare, and also costs around $3.99 for ONE song. If you decide that you don't like most of the music on the CD, except for a few songs, then you just shelled out $19.99 for only 2 or 3 songs. So, if I download a song illegally, and I don't like it, I didn't lose anything in the gamble (c'mon...no jokes now). If I like it, then I keep it (yes, it is still illegal). I don't have to spend a ton of money on something that is mostly what I don't want. It's the same reason some people decide to build their own computers - You get what you want, and you get what you pay for.

Homestarrunner.com offers stuff that people enjoy enough to want to pay for, and are mostly satisfied with it.

The MPAA and RIAA are starting to realize the hard way, that people have figured out how to get what they want, not what they are offering.

-----

Sig Sauer

You introduce a 'service' component

[Quiberon]

There's a couple of things that you clearly should not allow the possessor to duplicate; 'dollar bills', and 'theater tickets'. From there on, things get less clear. Bands can (if they are good) make a living playing concerts; and there's no reason why the 'traditional' copyright laws should fail to hold. DRM (and criminalisation such as the DMCA) strengthens the position of the rights-holders to the detriment of everybody else; to the point where I can't reasonably allow DRM material in the house, in case I commit a crime with it.

Re:You introduce a 'service' component

[geekoid]

"There's a couple of things that you clearly should not allow the possessor to duplicate; 'dollar bills', and 'theater tickets'."
I disagree. You should not be allowed to use or distribute the copies, but you should be able to make them all you want.

Marketing, convenience, traceability, FUD

[okoskimi]

Like someone already said, you don't need DRM to protect copyright. It is just one method (albeit an efficient one) of enforcing it. You can also sell digital content without DRM and still sue people who try to sell it in an organized fashion. This is in fact how a lot of digital content is handled today. Effectively, the people supplying pirated copies are your competitors who have a huge advantage in price but suffer a similarly huge disadvantage in marketing, convenience and legal status. And the pirates actually also suffer a disadvantage in price, because they cannot get any money for the content itself (who would pay for pirated music?), although they can get some money from advertisements.

Hey, Apple sells lots of music, even though they same music is also available for free as pirated MP3's.

So, your basic formula for success is something like:

1. Marketing. This is the only way to reach the great masses, and pirates can't do it efficiently (well, they can send spam...). Also, since the content is free to reproduce, you can keep you customers happy by frequent bonus offers, discount clubs, monthly freebies, and the like. A nice example of taking advantage of free reproduction is the DaZ3D website which sells Poser content. You have got to admire their marketing savvy. And the success - I mean come on, their business case is so good they have created a free version of Poser (DaZ|Studio) just to sell more content! And none of the content is copy protected mind you.
2. Convenience. Giving the users convenience means you have to put effort into organizing the content, into web site design and management, making sure content installation is painless, etc. Effort requires money. If you are a pirate, you are likely not making enough money to do this.
3. Traceability. Discourage people from copying your content to each other. If all content contains a hidden watermark which identifies the original buyer, people are a lot more reluctant to copy content even to their friends (how many of your friends do you trust not to copy the content any further?).
4. Create as much FUD about pirated content as possible. Only legal content is virus-free. Pirate web sites install trojans which will steal your money. Etc. There is enough basis in fact to make it work. And it works in politics well enough...

Re:Marketing, convenience, traceability, FUD

[philipgar]

Seems to me the pirates have lots of marketing here on /. Anytime an article on DRM is brought our we get hoards of people talking up how great allofmp3.com is.

Phil

Just ask Linux

[Kamiza Ikioi]

Not a biased question at all. It's the question asked daily at Novell, RedHat, IBM, etc, etc. Some sell backend services and support (equivilant to live concerts for artists). Some only charge for hard copies, but give the content away for free download (buy the CD, but feel free to purchase the CD with art, lyrics, a wall poster, and extras). Some don't make money at all through their users, except for donations, and the jobs they get because of their expertise (think Christian musicians who basically give away their music to radio stations free, because most stations, like most people, aren't rich... but make money back at wildly sold out concerts of very devoted fans).

There's an economy when the creation costs much, but manufacturing and distribution approach $0. Linux already does it. Music and Movies just need to figure it out as well. And, I have to say that the creative quality and scope in Linux far exceeds that of companies still under the old supply/demand model. Maybe the same could happen with media. Just look at all the crap music that's "popular" (I don't know with who, I suspect major $Payola$). The real break out artists are broke, indie, collaborators (including rotating band members) and just love what they do.

I wasn't even going to mention The Grateful Dead... that'd be too redundant and obvious here, regardless of the fact that its exactly what I'm talking about.

Re:Just ask Linux

[dwandy]

Like these guys : http://en.wikipedia.org/wiki/The_Arcade_Fire

Wikipedia already has this covered

[tylernt]

I think http://en.wikipedia.org/wiki/Post_scarcity says it best. A related topic is also Technocracy, which makes for an interesting read, even if you think they're all a bunch of crackpots.

Work for hire, Copyright Law, reasonable prices

[GodWasAnAlien]

If you want to benefit from a useful invention or work of art, encrypting it with DRM adds no extra value and instead decreases the usefullness of the work.

How do you profit in a better world with more information freedom?

1. Create information/art as works for hire. Software/music/goverment company pays you to complete the work. The motive comes from the companies desire for the work, not from greed of profit. open source content works well here.

2. Existing copyright law already allows monopoly protection on a work for a near infinite amount of time. This existing law is more than sufficient.
  - sell your music on your website at reasonable prices. People will not waste time digging for an hour finding some copy online, if one can just buy the song for a dollar.
  - report other sites providing or selling your music, if you wish. That's what the laws are for.

Wow.

[mcc]

Anyone else think it's kind of fucked up people are even asking how the "economy can survive in a world without" something that wasn't even really invented yet five or ten years ago? I can't really think of any DRMed media that predates the Sony Minidisc in 1992 or so, and funnily enough, not only did both the media and other economies get by just fine before the Minidisc, after the Minidisc came out it was mostly ignored and the DRM-like features were widely cited as a major point against using it as a format for music.

DRM was a necessity for digital sales of music online, because the oligopoly that controls professional music recording in this country demanded it before they'd willingly do business in that market. That doesn't exactly mean it's necessary to make the economy work, or that consumers have to put up with it; it's just a term of sale that some media producers desire.

Pay for product placement.

[camperdave]

Another model (and I shudder even thinking abut it) is to embed commercials within the product. Levi-Straus could get a Country & Western singer to moan about how his girl dumped him for the guy in the new jeans. Weird Al could be paid to parody it for Heinz ketchup. Essentially, a lot of musicians are doing this already. Their music isn't about the art of music, it is about getting their name in front of the teens and tweens who will buy their clothing lines, and their fragrances.

Hi, my name is Lizzy Faire!

[Travoltus]

Tell it, patriot!

No profit means no music.

That's been true since the dawn of time.

[parody off]

Biased question-Social answer.

[Anonymous Coward]

"DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks."

DRM technology is the flip side of the anti-social using consumer technology to pander to their baser instincts.* Not everyone does it, and you'll certainly hear examples of those who don't abuse technology. However the anti-social and the social don't wear tags identifying themselves. And enough of the anti-social are doing it that it causes problems for society at large. (That and the fact that the social aren't doing anything about it)

BTW a couple thing to keep in mind when discussing copyright and DRM.

One copyright infringement isn't something that the "poor" consumer does to the "rich" corporation. It's something that a majority does to a minority. Aka the "Everybody Does It!" reality.

Two DRM isn't just whatever the media companies come up with. It will represent itself in much more pervasive ways by more common people. e.g. the use of Flash to make it more difficult for some to lift content wholesale. There's also watermarking by individual artists who have archives on the web. The same artists will also have only thumbnails online(1), and leave the good stuff for purchasers. Musicians will only offer snippits online, and leave the good stuff for paying customers. The E-book industry will grow very slowly because dead trees is still the best ARM (analog rights managment). There are plenty more examples, and you'll see more as the anti-social become ever bolder.

Three basically copyright infringement hurts more, the smaller the one it's done to. And it does nothing to correct the present relationship between artists and media companies.

Four. Note the irony inherit in the position of using technology to infringe, while strongly dismissing the usage of technology to prevent infringement.

*Another way to look at it is that technology removes social inhibitions towards incorrect behaviour.

(1) Some also put a "bug" right in the middle of said art making it only useful for evaluation purposes.

Public funding!

[Peter Eckersley]

Having written a PhD thesis on the subject, my conlcusion was: use public funding. Collect levies on blank media/internet connections, or just plain old income tax, or some combination of the two. Pay it out to authors/artists/web publishers according to the amount of use that their works get. Do not give the government any control over this process: run it like a big online election.

Other solutions which people have discussed, such as getting people to pay in advance, don't work very well.

Some answers to your questions here

[chainLynx]

http://www.questioncopyright.org/node/1

Missing the point

[4e617474]

...$200M productions

Music is cheap to make.

If you reduce the section you quoted to a formula, you have

n - 0 / infinity

Harping on him for specifying that the value of n was large doesn't change the fact that it makes for a bad profit equation for the beancounters at the corporations whose views on DRM you'd like to sway. When 80% of the target demographic that buys 80% of your product (like 63% of all statistics, those were made up) has the means and know-how to get your product for free if you do nothing, you will probably feel like doing something.

Oh, and most of the musicians that generate huge sales numbers don't see much money because the record company doesn't acknowledge having gone into profit. Not that that isn't as bogus as DRM is evil, but you're not likely to get them to open the debate with that concession.

Give It Away Now

[Doc Ruby]

We give away ads, and the luckiest get passed on by consumers to each other, carrying the best recommendation possible. Content is the best ad, as the most popular quickly becomes folklore, part of the society's indispensible identity.

Content should be encouraged by its producer to be shared. It should include pointers to more goods that can actually be charged for access. Like performances, logo'ed merchandise, licenses for cross-promotion of other goods. The premiere of content in a market can carry access fee for its earliest consumers, before the content exploits the free, efficient and recommended distribution by consumers among themselves.

Even physical goods require promotion by creating content that we give away as ads. The best economy gives away the cheapest, most popular distributed content. Now we can skip the ads and use the content to sell the rest of the package.

Any economics that ignore the costs of promotion and the value of the free, enthusiastic promotion by content sharing is too naive to be taken seriously.

Re:Give It Away Now

[Jesrad]

I think you got it in reverse: ad is a content, not the other way around.

Think about it: why do people buy an advertised product more than a non-advertised one, even though it means (all things being equal) that they pay the cost of advertising ? That's because they value the advertising itself as a form of art where the advertised product is the subject, commissionned by the maker of said product. That's also why viral marketing has had some successes. In this sense, advertising is a "degenerate art" sponsored by marketing departments, which (hopefully) pays for itself through the public, which chooses to fund it.

Re:Give It Away Now

[Doc Ruby]

So what makes using the content as an ad for the rest of its operation that produced it "backwards"? Nothing. Reversing the relationship is the insight that content companies like record labels have been unable to get past. I offer the insight free.

My post is content that advertises the idea. It's easy to redistribute, and side effects of its popularity are changing the economy to actually work, which is in my interest. QED.

Re:Give It Away Now

[Jesrad]

Ad is content is ad is content, etc. agreed.

I just wanted to introduce the fact that there currently is a very popular form of art that exists for its own sake: advertisement. This shows that there is no reason to assume that insecurity of profit means no art anymore.

Re:Give It Away Now

[Doc Ruby]

I really enjoyed the movie Dennis Hopper presented, called Best Sellers in the English version I saw. They present the interchangeability of art and advertising, especially after the 1980s saw so many film/art directors produce ads and vice versa.

Music for free...

[RexRhino]

Judging by the fact that the vast majority of musicians don't make a living from their work, I would say we are in no danger of losing music if the market dies. People will still make music for fun, or because they want to pick up chicks, or whatever. I used to work for a record company and at the time it was impossible to listen to all the demo tapes and CDs because of so many people sending stuff in... most were so desperate for attention they would easily cut a record for nothing.

As long as being a popular musician gets you respect, and gives you sex appeal, there are going to be people making music. I am not exactly living in fear of the day there is no longer a market for recorded music!

Actually, Stallman suggests...

[patio11]

... that we institute a tax on every computer to pay for software. And establish a gigantic governmental organization to distribute the tax out to various programmers. But you can get a tax credit for donating to a software project of your choice.

Basically, he's totally out of his gourd. This would get us overpriced computers, squash Moore's law flat (since every computer upgrade would make you pay a non-productive tax again you'd be hesitant to upgrade), put the IRS or its successor agency in charge of software development (I'm sure I'd LOVE to see all paid development paid for by a group in Washington -- oh wait, I sell software and can't afford a lobbyist, this doesn't look like a winner for me), and provide nothing of value to anyone. Except neo-Marxists who get a frisson off of taking potshots at capitalism. (See GNU Manifesto, search for "Software Tax": http://www.gnu.org/gnu/manifesto.html )

New Millenia, Media & Free Market Auctions

[BoRegardless]

Is a good video worth $10 or $20, just because it cost $120 million to make with Tom Cruise? What if all DVD copies were sold via eBay or Amazon each day via auction? After the initial 2-4 week release, how much would a DVD sell for, a download sell for, then after 6 months? Once media is "old", why should it still be worth 'new' pricing of $10-$20. Ever see the 'old' stock reduced at Barnes and Noble to $4, yet it is 'new' and unused.

If materials are priced at the auction market price for whatever delivery medium and format desired at a given date in time, then might not the artists and their managers receive the highest value for their work?

What happens if a user just wants to access a work one time for one day or one week, and would pay $1, and access the work only on a web site? That might be less expensive than driving to the library.

All these things might occur, but they will require the artists and their managers to find a way to maximize exposure in the 21st century and use 21st century methods to distribute to suit the desires of the buyers at a price the buyers will pay. There will always be people who borrow books, tapes, CDs, DVDs, and digital files, and that has gone on since the time of Christ, and no borrower commonly paid a fee. Should he?

The expectation that any work of artistic merit has an inherent value is false. Price a book at $100 and put paper covers on it, and you will be lucky to sell a few. If it is a good book, a few more. If it seems to be a classic in the making, a bit more will be sold. As a leather bound book $200 may be fair. Make it available in digital form and put 100 copies up for auction each day, and they will sell for different prices.

If the author also "gives" the legitimate buyer private access to extra content over time, might that cement more of a relationship that drives "value" between buyer and seller? Will that make a $3 video or $1 book worthwhile, as opposed to trying to find and download for free? Will the 95% of the artists that never get "contracts" or "publishers" or "studios" to back them see this as a way of self-promotion, allowing them to earn a wage?

There are lots of ways to look at how to do the selling of works of expression and create value in relationships that artists need to look deeper into how to experiment and advance the state of the relationship with their supporters (buyers). It will take work. But who ever said there would be a free lunch. Making money as an artist has always been hard work, with minor exceptions.

Though I like the concept of "copyright" everyone knows that we have entered a new millenia irrevocably, and that new ways of looking at business relationships need to be analyzed. Using "copyright" to justify never lowering the price of a work below $20, even though books are "remaindered" at $1 all the time, is stupid on its face. Works have lower value over time, and in different 'formats'.

DRM suffocates innovation

[grumpygrodyguy]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

Viral marketing. Case in point:

1) Valve software releases Half-Life in 1998, a successful single-player FPS/RPG.
2) Half-Life sells relatively well, recouping initial creative investment costs.
3) The Half-Life engine is designed in a modular and highly modifiable way, allowing enthusiasts to create mods like counter-strike and day-of-defeat.
4) About 10 times the number of people who bought half-life for the single-player experience are now buying half-life simply to play counter-strike with their friends.
5) Massive and totally unexpected profit

So here's an example of a product that was developed well(good software practice, open standards, extensibility, etc.) that made enough money in the initial selling not to cause a panic...but ended up making a fortune after modifications made by players and enthusiasts requiring people to buy the game in order to play the mods. The hysteria following the counter-strike phenomenon also fueled tremendous hype and marketing clout for the release of Half-Life II.

So, Valve built their game to be open and modifiable and that decision ended up rewarding them ten times over, and none of that was by way of planning...it just happened naturally (i.e. the market recognized the product's value and Valve was rewarded).

In the same way, if something like Napster was still around and people could download music without fear of the RIAA many old and new bands would get lots more publicity and exposure to the younger generations and they'd be selling out concert venues left and right. It used to be that the radio and records were designed to entice people to go see live performances, the RIAA has almost killed that through DRM. The same thing may very well happen to video if the MPAA continues to emulate the RIAA. Word of mouth about talented actors and directors will be more and more stifled as less people are inclined to risk being disappointed again by another bad movie. The MPAA can always secure the right to show films in a theatre, so why not allow people to trade DVDs and .MPGs before the theatre release in order to increase word of mouth(more viral marketing) so that friends will tell friends how great a certain film is? Then when it opens next week, there will be lots and lots of people who've heard all about it and can't wait to see it on the big screen.

Ultimately the biggest problem is that companies have undervalued the power of word-of-mouth, something which is becoming more and more important with blogs, youtube, e-mail etc. Spending a bunch of cash to generate marketing hype about products that must be good because so much money was spent making them is absurd. Many consumers are exhausted by the empty hype and continuous disappointment of seeing movie after movie that doesn't deliver what they expected based on previews. These industries need to dramatically decrease the ammount of money they spend on ads and instead use those funds to support newer and more risky ventures. Valve discovered a gold-mine by accident by simply doing the right thing(opening their product to free modification), and there are plenty of other unforseen opportunities like that just waiting to happen. Companies need to be more open, more trusting of consumers(which actually become producers if you let them), and more willing to take risks if they want to hit it big. DRM stifles their ability to do so in almost every way, and creates a great deal of customer dissatisfaction with the company and the product (impressions like that don't go away easily, and do in fact hurt sales).

Doing this for software or games today is a more difficult problem however. In a sense if 40% of the people using your software pirated it, then you are still benefitting from viral marketing and wor

How do you create a market for bottled water?

[SmallFurryCreature]

After all water (for us lucky enough to be born in the "west") is in infinite supply at a neglicible cost. I can tap as much of it as I want for a nominal monthly fee so why does Spa exist?

Taste is one, in holland it depends greatly on were you live but in for instance amsterdam the water is "hard" and it tastes like drinking chalk. Bottled water just tastes clearer. Yes I can really taste the difference but lets face it, you pay through the nose for it.

Bottled water is a market where a far more costly product that is less convenient to get still manages to sell to compete with a 100% legal product that is far cheaper, is already bought by the customer anyway, and a lot more convenient.

So how come content has such problems competing? Well first lets look at price, for all the price difference between say Spa and tap water drinking only spa isn't going to break the bank. A bottle a day costs 50 euro cents (at AH) so times 30 that comes to 15 euro per person in your household. Not exactly shocking.

Yet if I had to pay for all the content I download I would have face a price far greater. Even quit moderate behaviour will give you bill off a few hundred euro's. Especially if you download weird foreign stuff that costs a fortune to import.

We mass consume content but the price for it is too fucking high. Imagine if somehow we lived in a world were tap water did not exist and we all had gotten used to shower with perrier water and then someone came along and introduced tapwater.

Content is too expensive at the moment. Just how come that when we went from VHS to DVD and the industry saw a HUGE price reduction in manufacturing costs, transportation costs, localisation costs, shipping costs and stocking costs prices went UP? In a normal world DVD's should costs less. They do not. They should also be easier to use, yet many are a bitch to skip the first part. Unskippable ads anyone? More money for a less convenient product.

Spa tastes better then tap water but a DVD is inferior in every single way to a DIVX rip of it and a shit load more expensive. That is the fundemental problem. It ain't to hard selling stuff that is vastly more expensive provided you got at least one advantage over your cheapo competitor. I can sell you a can of coke for 3.50 euros just by making sure that it is the only drink around (well unless you carry a can with you the whole day and don't mind it being warm) say a amusement park.

DRM is like say a movie theather that doesn't allow food to be brought in and then sells you food for insane prices. Lucky for the theather owners is that there is a social stigma against bringing in a shopping bag of food on your date so we fork out the money. There is no social stigma against breaking DRM so we don't.

Pricing your product is always a difficult thing to get right and the content industry has failed miserably. They are like the supermarket that has slowly raised it prices in line with inflation and a little extra to pay for all those extra's because the market is booming and then the market ain't anymore and customers are staying away and going to the cheap no-nonsense place that saves them a few euro's each and every day.

The content industy has had decades where they could just set any price because they were the only game in town. Like the amusement park refreshment stand they could just ask any price and you either paid or went thirsty or put up with a far inferior product.

But then the internet came along and ruined it all. The internet is to the content industry what ppipeless fresh clear tap water would be to the amusement park industry. If you could just carry a small tap with you and get fresh cheap water anywhere for a nominal monthly fee wich you are paying already anyway would you still shill out 3.50 euro's for a cup of soda?

And the problems for the content industry versus the internet "pirates" are far far greater. What about rare content? The dutch "free record shop" owner (a music store) wanted to introduce a syste

Yikes

[XanC]

I had no idea; that's pretty scary. At least it's got no chance of happening! ...right?

Re:Yikes

[Schraegstrichpunkt]

Right, and I don't even think he suggests that anymore. He wrote that back in the days when computers were still largely funded by government grants, there wasn't that much software around, and the Internet explosion hadn't happened yet. It wasn't really all that unreasonable, given the circumstances at the time.

Ask Jim Baen

[Todd Knarr]

Well, you could've if he hadn't've died not too long ago. But anyone at Baen Books could tell you, since that's exactly what they're doing. They publish books in electronic form, with no DRM or other technical restrictions on them. HTML is one of the formats. Some of the e-books they give away, others they sell in both electronic and dead-tree format. And you know the odd thing? The books they give away actually sell more copies. Just look at what Eric Flint has to say on the front page of the Baen Free Library. People not only buy the e-book form of the very books they can get for free, they buy the dead-tree form too. And they buy other books by the authors who have their work up in the BFL. Enough so that those authors have actually seen their back-list sales increasing. That never happens, or at least never until the BFL appeared.

You want to know how to make money with freely-available content? Go ask the people who're doing it today.

Re:Ask Jim Baen

[Anonymous Coward]

Regrettably , to ask Jim Baen is no longer possible, as he passed away this June, following a massive stroke http://www.baen.com/.

It will be interesting to see if Mr Baen's forward-thinking approach to publishing is continued by the company. According to the above-linked obit, they do intend to maintain current policies.

73

Re:Ask Jim Baen

[infolib]

Yes, and Flint has even more to say on DRM, free books and the future of publishing.

It's evil I tell you. EEeeeevil! I happened upon the free library, and now Baen has my soul and my wallet. Be forewarned.

kind-of-wierd

[Anonymous Coward]

if we go back in time a few hundred years
we would be greeted by farmers who couldn't
read or write. then came from atop a "mountain
a good man" and invented a cheap / fast /easy
way to make *gasp* books. cheap. fast. easy.
people got saw these thing called "books"
and wondered what they do. once told that they
can tell stories and knowledge people started
to learn to read and write.
so time goes by.
some american guy who wanted to be able to read and
write and night and succeded in doing so later
thought, why can i not "store" what i want to say
without losing the character of my voice. again
he succeded and the grammophone was invented.
now it was possible to store and record many-a-great
music. people who coulnd't afford to go to the opera
could buy this grammophone thingy and listen to some
great music.
so time goes by.
beatles, elvis, beach boys, etc. it grew and grew and grew.
so time goes by.

NOW, TODAY, we ARE going back in time. it's all about
MAKING obstacles, not getting RIAAd of them.

Owners of music

[SuperKendall]

And yet if asked to stop, they would refuse to. Funny how that works.

Yes, the owners of the music would stop providing it. That does not mean Apple would not be happy doing so. Apple has no choice right now.

.06 - .10

[SuperKendall]

Yeah, that's great, I feel so good that the artist makes $0.001 for each song downloaded,

Actually, (especially in the early days) artists were making around $.10 per song - WAY better than just about anything else.

Currently the studios are browbeating artists into taking something less, I thin around $.06 - still WAY better than CD sale percentages (on a per song basis).

Yes the RIAA also gets money. But I am willing to live with that if it means helping artists I like and increasing thier popularily. You can't throw out the baby with the bathwater.

Re:.06 - .10

[philipgar]

And buying the bands cd may not really directly help the band. Very little money goes to the band for each sale. However, the kicker is the band is often given living money by the label while they produce the cd. If the record label wasn't making anything of the band because their cd sales sucked then they'd drop them. Period. By not giving the label your money to purchase the cd you don't hurt the band right now as they're not getting much from cd sales, but you may cause them to get dropped by their label and possibly decide to break up or stop making new music.

The whole key is to be honest. Many of the true music lovers out there still pay for CDs or to buy music. Some of the casual listeners will stop buying, and so what. Less of the crap that's on the radio today. I personally own hundreds of CDs, and yes much of this money has gone to bands on major labels. Much has also gone to smaller labels, etc. I also download music, and listen to stuff, and download live shows of bands I like. Do I feel this is wrong? Not really, as I have a set budget, and can't really afford buying more than maybe 3 or 4 cds a month. Also much of that stuff I listen to once or twice, and if I do like it I end up buying at some point anyhow.

The label wants a hit, and we dont give a shit -
Phil

Re:Copyright was invented to protect cost of print

[firewood]

The whole purpose of copyright was originally to protect those people who invested in the typesetting of printed works against unscrupulous printers who would then set up their printers only for the proven best-sellers of the other printers who took risks.

Rewarding successful risk-taking is the key. Some forms of art seem to primarily be the result of companies taking risks, and making gambles. A lot of these efforts fail. If the odds are poor, then the payoff had better be a windfall in proportion to the risk, or else smart people would not invest in the risk. If copycat publishers can cherry pick only the successful ventures without spending anything on the failures, then they end up lessening the profits of the artists who take the actual risks.

The purpose of IP is to encourage risky art and other ventures by providing occasional jackpots. Without IP protection, legal or otherwise, less people will invest the time and money in these art forms, and the world of commercial art will change, probably for the worst, since riskless art is usually the most boring.

DRM Doesn't stop anything

[homebrandcola]

The question implies that DRM stops people releasing unprotected tracks to the Internet for illegal download. But it doesn't. It is a trivial matter to bypass any DRM and extract the content. No ammount of DRM has even slowed illegal downloads, if anything it has added to it. People would rather have a non-DRM copy. If you want to know about an economy without DRM talk to emusic, or Audio Lunch Box. It might not be all the music you are interested in personally, but they have a business model based on non-DRM music downloads.

Nash Equilibria, Prisoner's Dilemma, etc

[jd]

Ok, time tu curn out the old favorites. :) Seriously, you can use Professor Nash's work (for which he won a Nobel Prize, so it had better be right! :) which demonstrates a cooperative economy is a viable solution, and that a competitive economy MUST fail to reach an optimal level of performance. That alone won't do anything, but it is the cornerstone on which you would need to build an anti-DRM argument.

How does this work? Well, DRM costs money to make and to maintain. It takes resources away from the DRM'ed device, reducing the amount of product you are capable of selling. However, the DRM has no intrinsic value in itself. Thus, it must reduce point-of-sale profits and it must increase the costs of producing the product in the first place. (Programmers and hardware engineers with the expertise to produce any meaningful DRM won't come cheap.) It also means you are taking staff away from producing more material, thus reducing what you have to sell, which will also reduce profits.

How does the Prisoner's Dilemma fit in to this? Well, you want to have stronger DRM than competitors, so the pirates will target them and not you. At the same time, you have to be working with them and with hardware vendors, so that your DRM is still readable on other people's systems. Unreadability kills sales - just ask Sony's Betamax division. Oh, and at the same time as providing all this information, you can't provide so much that an outsider can break your DRM scheme.

The solution? There isn't one. The constraints are mutually exclusive. You cannot simultaneously be open and closed, different and the same, restricted and unrestricted. This is the problem that corporations have faced with tape copying, floppy disk copying, or the copying of any physical medium whatsoever. The moment you aim for one ideal, you eliminate any possibility of achieving another, and all of the ideals surrounding DRM are contrary to the ideals surrounding sales.

So how do we deal with piracy, if not with DRM? Not having DRM will maximize sales of those who are interested, but piracy has the potential for reducing that number. (I'm playing devil's advocate here, as there is no data to support that claim, but as it is widely believed, you may as well have an argument that works with those who believe it.)

The first thing you need to consider is shelflife. Most products really have a very short shelflife. Sure, there are some classics, but there really aren't many of them. There are far, far fewer old products that still sell than there are new products that sell. Furthermore, there are even fewer old products that sell AS WELL as new products, even after taking into account that no development needs to be done on something that has been around forever and a day.

Widespread piracy takes time. Most distribution channels are slow, error-prone and unreliable. They work - they work very well - but only over a long timeframe. Over a short timeframe, they are often pretty useless. Most don't scale well and rely on self-propagation to get any kind of performance. This doesn't happen overnight... unless linked to from Slashdot.

What is wanted, then, is increased turnover, shorter software lifecycles, less bundling, more fluidity. Instead of slowing the pirates down, speed the market up. It's all about relative performance, so the two have the same effect on how many will be interested in buying. What does this do to the bottom line, though? Well, now you eliminate the Dilemma altogether. By relying on high dexterity, rather than heavy armour, you don't need any extended cooperation from others, you are limited only by what the media readers are capable of. Nothing else.

What does this do to the division of labour? Well, those who would have been involved in PRing the DRM can now be selling the product. Those involved in researching, developing and implementing the DRM can now be making new products. You have the same number of people

"reply"

[Anonymous Coward]

The assumption seems to be that the only reason people ever buy content is because DRM prevents them from getting it free.

There are other factors -- transactions costs, imperfect information, and the economy is more than econ 101 taught.

People pay money for content for the following reasons (there are more than I can list here I'm sure):
-ethical
-convenience
-packaging (boxes, pretty pictures, et cetera -- yes these people exist)
-the experience (I don't like to shop, but lots of people do)
-lack of technical knowledge
-their friends pay money for entertainment
-guilt
-#feel free to add to this list

Also, there is the argument that if people are freely able to try before they buy, they are more likely to buy. Now, with stores refusing returns of opened entertainment media, it's riskier than ever to commit to buying entertainment. I realize that this is because DRM is not effective, but the no-returns policy stems from the same FUD as DRM.

Oh, and it helps if the producers have content worth the money... ... perhaps the problem is that some content is priced above the equilibrium *because* of DRM (assuming it's effective).

For all practical purposes, if DRM is not effective, and we still have a market for entertainment, and suppliers are still making more than enough profit, then you should retract your post. ;)

Performance-based

[Sathias]

Once upon a time musicians used to get paid on a performance basis, not just sit on their arses and let their virtual recorded selves float around entertaining people. Same for playwrights, which I guess were the equivalent of a visual entertainment medium such as a movie or TV show. These days the creation of entertainment is seen as the initial investment, then the box office, DVD sales, rights to show the product on TV/Radio, international sales etc etc are the long list of ways that a company will try to squeeze every last ounce of profit out of the product. This is the reason that Bill Cosby and Jerry Seinfeld are still making buckets of cash to this day, even though they have produced very little recently.

What it boils down to is an entertainment-based economy is fraught with danger. You have to either make your product that high quality (whether being the content itself, or the quality of the recording) or in that much quantity that copying it is more of a hassle or cost than buying it. People shouldn't take it upon themselves to take that which they haven't paid for, but the reality is that they will, unless a series is too big to download, or it is so good that they want to have a high quality version of it rather than a compressed one.

These days a lot of people do it hard, and with rising costs of home-ownership, petrol prices, and employers wanting to squeeze every last drop of productivity for their dollar, if someone has a choice to buy extra clothes for their children or buy a DVD, the necessities will win out. It doesn't make it right to take your entertainment for free, but if your industry isn't in a position of creating products that people need then its the risk they take, sadly. This is a big problem for a country such as America which has a high proportion of IP exports. A lot of the manufacturing base has been pushed off-shore, and it relies on entertainment for quite a lot of dosh. The FTA with Australia reflects this, with a huge proportion of it dedicated to IP.

The solution? Personally I think it could be limiting the supply, rather than putting restrictions on the product. Take Steam for example, every game that people play through it has been paid for. Maybe the answer for movies will be to wait until internet is at the point that high-speed streaming is possible, then make it so on-demand is the only way you can watch the movie in your home. Once it is, sell each viewing for sub current rental prices, a few dollars maybe. Music is a tough one, because sound is a small amount of data per minute of content. Maybe online live streaming of big concerts, as well as the traditional live tours. This won't work for studio created no-talent pop stars, but thats a good thing ;)

Lack of DRM != lack of copyright

[rusty]

> Without a DRM in place, we are capable of making as many copies of a piece of content as we want and
> seeding it onto the net. How do you create a market for a product, and make money of a product that
> has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

You're making a gross assumption that noone will obey the law without draconian enforcement in place. There's little effective DRM in place today, and yet copyright-holding companies are making significant amounts of money, and have been for years. Broad casual copying != no profits.

It is possible that your assumption will become true in future. Copyright law gives significant legal protection in return for making your work available to the public. DRM attempts to override this bargain, by unilaterally adding restrictions on use. Perhaps the bargain will break down, as more and more people will feel they are not bound by it. The more copyright holders attempt to confiscate your property (movies, books and music you paid for), the less you are likely to respect their claims of property.

Companies continue to refuse to supply what customers want (convenient open format online purchases), instead relying on DRM to "solve" the problem of unlicenced competition. Yet this makes the unlicenced competition even more useful. It is not clear that increasing the legal barriers can cancel out the market effects of giving your customers what they don't want, but when you've had protectionism for long enough, you become addicted and convinced of entitlement.

What is clear is that there is significant erosion in respect for the law, and governments which are complicit in this cycle. This could well have effects far worse than kids swapping CDs.

Rusty.

RIAA and MPAA Be Damned

[rijit]

I dislike both the AA's. No other industry except music and movies can treat their customers like criminals and still make a profit. The software industry has more to fear from piracy and you do not see them crippling things to not work on different platforms, it would kill their business. Time to find other outlets for movies and music, good thing such services and YouTube and Divx now exist as well as all the garage band music sites, plenty of music and video entertainment without all the hassles. Here is an easy fix, just tag the files as they are purchased and downloaded, then when they show up on a pirate site, you have a tag with a record of where it came from and they can hunt down the source and prosecute. This has it's own problems of course but it is better than pissing off your customers enough that they download the pirated files instead of buying the companies. I think of it this way, I buy the CD and if I find I can't use it on my equipment for DRM reason's, I download the DRM free version. After all I am allowed a backup copy, so I go find a copy that has no DRM. I have not bothered in a couple of years now, been nothing worth owning from mainstream in movies or music, though Dodge Ball is an exception to that statement...

Maybe rephrase that a little

[dtfinch]

There is always plain old copyright law though. Without DRM, it's still illegal to distribute copies without permission.

As for finding a a great to make money off of creating information that is far better than using copyright to artificially make it behave like a physical product, if you answer that you'll go down in history. If I download 1 song, it might make sense to pay $1. If I download 10000 songs, it does not make sense to pay $10,000. The cost of information should never exceed the consumer's willingness to pay. If it does, the producer has failed to sell their zero cost product.

Subscription models lead to laziness. Donation and ransom models create a free-rider problem. The open source model requires that something be personally worthwhile for someone to create it, so many things aren't created, even if they're worthwhile to the whole, just not any single individual. The copyright model works so long as the price is right, which it never is if the price is the same for everyone. Companies try to solve this by creating several editions of their products, or giving volume discounts. The DRM model is a form of snake-oil security, abused to create vendor lockin, and misunderstood by content producers who are used to selling physical media. DRM sucks because the implementation sucks, and the motivations are all wrong, but in theory it can be rather useful in creating a more efficient information market.

If DRM worked, and was not abused, it could be used in such a way that does a good job at judging what information is worth to the consumer and charging a fair price appropriately for it. If the consumer decides "Oh, I won't be using it for much, and so I won't buy it without a significant discount", DRM will keep them honest to enable the vendor to give them a price they're willing to pay. I won't pay $10000 for 10000 songs, but I'm unlikely to listen to those songs more than 10 times each, so I might (given my dislike of DRM, probably not) buy 10000 songs that could be listened to 10 times each at a significantly reduced price. If you know how someone is going to use something, you can guess what they'd be willing to pay, and tailor a limited product where they'd pay only that much, and they'd be happy if the limitations were an honest representation of how they planned to use it. Microsoft is really working hard at this using DRM and simple EULA restrictions. People are willing to pay $1000 or more for Windows Server, but they wouldn't buy it if XP Home wasn't capped/throttled in many ways, nor would a home user spend $1000 on a desktop OS. So companies have several versions of their products, with the cheaper editions artificially limited in ways that users that can't afford the better editions are unlikely to miss. Visual Studio is too expensive for pre-college students, who have roughly $0 to their name, so Microsoft makes free editions for non-commercial use. Microsoft sells MSDN subscriptions to professional developers, giving them every piece of software Microsoft makes for a fixed yearly rate (or free to anyone they wish to convert via MVP invites), but for development and testing use only, and each product key can be used 10 times. DRM today is poorly applied, creating overpriced inferior products with no variation, and being misused to create lockin rather than to solve the "information price" vs "value to the consumer" problem.

Whether or not to actually use DRM is up to the vendors, and consumers don't have to buy it. I want something I can do anything with, and I don't see that changing anytime soon.

How to sell without DRM

[Sloppy]

The way to sell un-DRMed works is identical to how you sell DRMed works, except with more profit. You don't spend money on the DRM (thus reducing expenses), and you get more customers (thus increasing revenue).

So the real question is: how do you sell anything? Beats the fuck out of me. I'm not a salesman. I think it has something to do with offering something that someone else wants, and somehow communicating that fact.

Biased answer

[Anonymous Coward]

You position yourself as if you know what you are talkign about...

You do not, actually it reads like you are just working towards yoru point of view ("DRM is baaaaad" sheep....).

I especially like the part where you state, "Music is cheap to make.". OMG, Music is NOT cheap to make. At least not distributable quality music (of course some geek will come up with annecdotal examples of the opposite...).

Producing Music is expensive, and takes extaordinary talents (which cost money too, and yes really successfull musicians will be really wealthy, just like reallys uccessfull sportsmen and businessmen). It also takes a lot of productions to find the ones that really catch on.

DRM and slashdot, bring out the sheep, and let them mod each otehr "insightfull"....

bah

InterWeb, as well

[kripkenstein]

Given the presented variables, there are serveral ways to still make money.

1. Distribute the product yourself for free, request donations.
2. Merchandise goods that do not meet the same criteria.
3. Recreate the initial (creative creation) stage in live venues.
4. Control physical access to content.

Let me add

5. Monetize the website

- which seems forgotten in the other responses to this thread, as well. How would this be done? In many ways:

a) Ads.
b) Paid subscriptions for early access to material (works on Slashdot), bigger avatar on messageboards, etc. etc.
c) Leverage the other things mentioned in the parent post - advertise and sell your merchandise.

If the official website is slick, it can make a lot of money for an artist. Release a live tour video once a week or so and you will have massive traffic (assuming the band has fans). Put the license for the video as 'free to download, but illegal to redistribute', and you get tons of downloads but no fansites that just mirror you.

This is the 21st century. It is time artists and labels got with the new program.

Re:InterWeb, as well

[TiggsPanther]

The important thing to encourage paid subscriptions can often be making sure that ad-free browsing is not the only advantage to subscribing. It's a great bonus, but hardly the main selling feature that some sites would make out.

The sites I subscribe to have useful features, like the ones you mention. Extra/larger avatars. Bonus material. One site has better browsing options when searching content. The fact that I then get to skip the adverts is merely an added bonus.
The ones I don't subscribe to are where ad-free is the only advantage, where the other advantages aren't worthwhile or (like in the case of Slashdot) the adverts are generally innofensive, relevant and even potentially useful.

The whole adverts/subscription thing where it's one or the other and no other advantages is something I've never understood. If you're on limited funds, or simply averse to paying, then paying to get rid of the adverts (or having to watch/hear - damned Flash - adverts to avoid paying) isn't a viable option.

Now in the case of musician/band websites, getting the balance right should be easy enough - in theory. Where adverts are used, keep them sane. Advertise stuff from other bands that are likely to have either similar or compatible fanbases. Advertise for a movie that the band (or a label-mate) is on the soundtrack for.
Subscriber bonuses could include cheap-but-limited merchandise. Early access to newsletters. Access to additional promotional deals and competitions. Stuff like that.

This is the 21st century. It is time artists and labels got with the new program.

Exactly. You understand what the companies seem to miss. There's nothing wrong with bands/companies/etc making money from content, just as long as they're doing it consistantly with the age we're in - not the age they're stuck in. Work with the technology, rather than against it, and many will be willing to pay for things. (And those that aren't wouldn't have anyway, so there's no real loss there). But try and restrict technology with artificial limitations for no tangible benefit and there are those who would pay who will instead rebel against it just because. (That, or downloading the non-restricted version is often seen as easier than working around the DRM)

Slashdotters are just not that sublte

[Russellkhan]

Even if they don't say it explicitly, it's just written between the lines of most posts. Just look at this thread: the idiocy that "money should NOT come from simple copies" (and that this would surely not harm culture) has already popped up. And what is that if not an assumption and hidden opinion/request that copyright be abolished??

You are reading into things. While I think that Slashdot's readership does include some very clever folks, I just don't think they are nearly so subtle as you give them credit. Generally if there's a strong opinion and it's shared by even a few Slashdotters, you'll see it spelled out clearly, over and over again like a Soviet Russia or insensitive clod joke.

Now, since we haven't seen examples of this anti-copyright sentiment you describe, I'd say you're imagining it.

Why DRM is counter-productive

[pen]

Let's say I just heard a song I really liked. I liked it so much that I want a copy of it to listen to again. Maybe even the whole album. Ok, what are my options?

I can buy a CD from a store or order it from Amazon. This means I have to either put on some pants or wait for days. And my computer doesn't have a CD-ROM drive. And this is really inconvenient.

I can sign on to iTunes or similar and buy the song. Except it's DRMed so I can't get an MP3. And that album was released by a label that doesn't participate in iTunes.

I can buy the MP3s from a grey market place online such as allofmp3.com. This is pretty much illegal, I have to pay for it, and the artist still doesn't get jack. Oh, and their selection is better than most stores but still sucks.

Finally, I can log on to my P2P network of choice and more than likely download whatever I want, in decent quality, pretty much instantly.

Now, should I support a corrupt, backwards, outdated industry that is working overtime to make my life a pain in the ass by lobbying for all kinds of crazy laws and filing lawsuits left and right, even if this is less convenient to me?

Re:Why DRM is counter-productive

[BadAnalogyGuy]

Please accept my sincerest apologies for the inconvenience of not breaking the law. Is it inconvenient for you to wear pants? I apologize profusely and wave my magic wand (no, mine not yours, you sicko) and you can now walk around pantsless all you like outside.

Do you find it inconvenient that you don't have a CD-ROM drive? I don't know what kind of cheap-ass system you have there, but by all means go ahead amble into your local Best Buy with your dick swinging free and grab whichever stereo system grabs your eye. Hell, take two. My apologies that it was illegal and inconvenient to do that until now.

I bet paying the phone company is pretty inconvenient as well. Stop paying! Hey, sorry it was set up that you had to pay each month. Now it's all yours, no charge. We'll still need a credit card number, so steal one from an old lady at the Best Buy parking lot.

Yeah, things were pretty inconvenient. Sorry, man.

Re:Why DRM is counter-productive

[SerpentMage]

Let's say that there is this car I really liked. And well, I want this car?

What are my options?

I can buy the car from a dealer which would I have to put on a pair of pants, but get the car immediately.

Or I can order the car online and have to wait for the car to arrive?

Or I can get the tech specs to an electronic throbber letting me start the choice of my car immediately.

"Now, should I support a corrupt, backwards, outdated industry that is working overtime to make my life a pain in the ass by lobbying for all kinds of crazy laws and filing lawsuits left and right, even if this is less convenient to me?"

EG Ford, Chrysler, and GM lobbied to have a new car marker in the 50's off the market because they offered "gasp" seatbelts and safety.

Re:Why DRM is counter-productive

[Mr. Slippery]

Please accept my sincerest apologies for the inconvenience of not breaking the law.

Over the course of any given week, the average American breaks many laws. We all violate traffic laws. Anyone with an interesting sex life breaks outdated sodomy laws (laws against oral sex are still on the books in many states, though not enforced). No one can fully comply with tax laws, they're too complex for humans to understand. Everyone has at least one beer before they turn 21. And how many of these people who argue "follow the law!" about copyright, violated drug laws and puffed a joint during their college days?

"It's the law" is a poor argument to guide a person's behavior.

Is it inconvenient for you to wear pants?

Sometimes, yes, it is, and it's ridiculous that people will point guns at you and herd you into a cage for walking down the street in your natural state. Or for skinny-dipping, for crying out loud.

by all means go ahead amble into your local Best Buy with your dick swinging free and grab whichever stereo system grabs your eye.

Copying is not related to stealing. When I steal something of yours, I take it away from you. When I copy something, you still have it.

Re:Why DRM is counter-productive

[pen]

(My computer is not cheap-ass, it's just a small laptop that doesn't have room for a CD-ROM drive.)

There are two differences between your examples and this situation with the music. A) When one stealsan object, the original owner loses this object. B) There is no reason other than short-sightedness that the music industry cannot provide me with the level of service -- much better service, even -- than I get from the P2P program. Technology has advanced, and it is now possible to deliver music electronically to my house, yet the big record labels insist on living in the past.

You can't DRM my stuuf if I don't want you to.

[jotaeleemeese]

You are speaking from the perspective of somebody that would seem to have a vested interest in the succcess of DRM.

For millenia "content creators", as you call artists and thinkers, in a very RIAA-MPAA-ish kind of way, had zilch protection against the unaauthorized copy and dissemination of their output, and yet many of them have always found ways to make a living, very handsome at times.

Galileo's works for example were copied all around Europe and translated, more often than not without his consent. He was not a happy bunny, but the popularity of his works earned him a reputation that allowed him to teach in the nascent universities of his time and to be the scientist to the reach and famous. Heck, they even attracted the ire of the Inquisition.

My point is that the only thing that is not reproduceable is the individual himself, ideas (which is what works of art and science essentially are) have this pesky habit to be propagated if they are interesting or useful. For bunnies sakes, that is what makes us human, our capacity to learn and propagate useful knowledge.

Copyright is a completely artificial construct, has no base in how ideas are distributed, and is based in concepts first born around the Industrial Revolution, era in which everything, even ideas, became trinkets that could be traded. If there was no copyright wathsoever artists and scientists would still find ways to earn a living, their reputation would preceed them (notice that in a world without copyright you still keep the right to be recognized as the author of the ideas produced by you).

Lets grant for a moment, for the sake of argument, that copyrights are a necessary construct. Organizations of intermediaries like the Record and Movie industries, authors guilds and unions, have pushed copyright to obscene lengths. What is the rationale to keep compensating a dead person's relatives (or legal entities that somehow manage to get hold of the copyrights) well after their deaths? What is the justification for keep extending creators rights ad nauseam to make them for all practical purposes, indefinite? (and there are some goverments that are even considering charging for using works in the public domain, because if it is public, then it must surely belong to the state, right?).

Enters DRM.

You paint DRM like if was giveth in the 10 commandements by god burning in a bush itself (do not correct me dear /.ers, this is poetic license).

You are wrong. DRM is the construct of the companies that want to keep a monopoly in the distributions channels. If they were interested in the artists and creators at all, they would long time ago have demanded standarization of the DRM methods. If Apple could dump DRM, they would do it in a heartbit, the proof is that it is so simply to get non DMRed music from iTunes stuff that it is not even funny.

What DRM provides is also a means of control of the artists, in a world were everything is DRMed, trying to provide content that isn't may become a competitive disadvantage due to the hassle that may probe to play such content.

As things stand sites like emusic (2nd most popular after iTunes), magnatunes and the individual efforts of artists (musicians, writers, film makers) that distribute their content free of DRM bullshit, proof beyond doubt that DRM is not indispensable for artists and anybody producing ideas.

It may be indispensable for the monopolists, but that does not mean we should assume is a given, specially if it inconvenience us, the consumer.

Re:You can't DRM my stuuf if I don't want you to.

[Anonymous Coward]

If Apple could dump DRM, they would do it in a heartbit

Yeah right. Apple uses DRM to lock itms music into the ipod (And the other way around). Don't know why you think they want to lose that advantage. They seem to be using the same tactics with intel OS X, locking it down to only work on a few selected types of hardware using DRM.

Apple sees money in DRM, not the non-copying part as the media studios do but in the lock-in part which is a far greater threat as it totaly skews free trade.

Two words

[Anonymous Coward]

Value add.

Convenience

[chill]

One way would be to market convenience, speed and quality. Thinking of music and movies, while it would be possible to find anything thru newsgroups, torrents or various illegal sites, they all have major drawbacks.

1. Finding the correct material -- decent indexes are almost non-existant, naming schemes are inconsistant, there is no central location to find everything. One place (NOT ONE PER DAMN STUDIO/LABEL) to find everything, with correct meta information, decent indexes and search.

2. Quality of downloaded material is frequently suspect. You have no guarantees that you're actually getting what you think you are. Is it all there? How is the encoding? What format is it in? Guaranteed, consistant quality in a variety of formats is a major selling point.

3. Speed, being able to download the file or stream it in realtime, along with guaranteed access are another point. And online "media locker" that maintains original copies of the items I've purchased so I can access them later or from somewhere else would be great.

While the RIAA seems to think the Russian site allofmp3.com is so successful because of the price, the main reason they are excellent is because the meet all of those items above -- they have almost everything, they're fast, it is easy to find stuff, and it is available in a variety of common formats.

Finally, you're going to have a hard time convincing the RIAA because they have their heads so far up their asses regarding the perceived value of their product. How come a hit movie that cost $100 million to make which I can find the DVD in Walmart for $17-20 costs the same as a new music CD? There is no way in hell the music CD cost $100 million to produce, yet the end cost is the same as a movie DVD.

Easy!

[Moflamby-2042]

A tax is collected. Committees are elected in various categories (in technological, scientific, entertainment, ...). They can influence how the taxes are distributed. They can ensure that better ideas, better software, better music, etc. receive more funding than mediocre or dreadful ones.

This funnels a certain percentage of funds to the information producers. Perhaps another percentage comes from individual taxpayers that can select which things they like (books, bands, journals, movies, magazines) better than others. Perhaps this rate is alterable at any time through the year completely at the whim of the taxpayers.

Everybody pays yearly, the writers, artists, etc. get paid. In exchange for this, absolutely no information can be controlled whatsoever in terms of distribution. Laws like the DMCA are tossed.

This tax is analogous to taxes that pay for roads, or schools that nearly everybody uses. The alternative is to put toll booths on every road you travel and allow the price and entry / exit criteria to be set by its creator. The alternative in information is to limit what can be written, spoken and shared.

Now groups can use this system, or opt for a system where they receive no tax compensation but charge for their services. They can try to DRM or obfuscate or limit access or whatever they wish in this group. The difference is that it is still not illegal to attempt to distribute the services if it ever 'gets out'. There are no EULAs preventing unintended uses and so on. The companies are responsible for protecting their own information. Good luck with that in the face of hopefully the better quality of information using the newer scheme!

I think people make a mistake in the very beginning when they assume information must be paid for. They wrongly accuse people of immorality when they copy and distribute information on their own. It is a mistake to ever think that it should be something that they have a right to control. Controlling information in this way is at odds with a free society.

Oh wait I know!

[suv4x4]

Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net.

We'll make all movies with huge resolution, then make Internet tiered and filter video packets, so downloading a 30GB movie takes ages!

And we'll call it... HD DVD and Blue Ray...

DRM

[lonewolf28]

To me the idea of digital rights management is a joke. The idea that in a 21st century global marketplace, publishers of any digital media can exclusively control there content. AND make enough of a profit to establish a reliable business model, is about as likely as starting a site-seeing business around the Lock Ness Monster. Haven't the last few years taught us anything? Technology seems to me, to be moving so fast hardly anyone has a good bearing on anything. Dinosaur industry standards such as copyright and trademarks have little bearing in a online universe where any delusional entrepreneur with a steno bad/legal agreement, a public domain website and the unpaid help of any college intern; can put out indie release OF ANY MEDIA PRODUCT. Large marketing divisions or focus groups, established long ago, the maximum projected buying power of your different consumer age groups. (I would think suburban white girls age 15-17, would be the golden consumer standard.) Focus on supplying THAT demand, first, before anything else. Irregardless of what your lawyers say about the loss of revenue from pirating or changes in DRM legislation. I worked in the distribution area of the music business for a while and I can tell you that the motto there is: "cover your ###" Content is almost an afterthought. For most worldwide entertainment divisions, I am sure it is too. If the DRM debate allows the entertainment powers-that-be to push their agendas regarding illegal DVD pirating and manufactering, I am sure this debate will remain open. But as far the cost of supply and demand go, I doubt that is the most important issue facing the general economy at large.

What about the free rider problem?

[Logic and Reason]

You're forgetting the free rider problem: when you can't exclude non-payers from consuming the end product, what incentive is there for them to pay in the first place? That's especially true when there are a lot of small "investors," so that the work will be produced (or fail to do so) regardless of any individual contribution. That's very much like the problem with voting, which is partly why we see such low voter turnouts in large elections.

I'm not saying the system won't work at all, just that basic game theory implies it won't be nearly as effective as you seem to believe it will.

Re:What about the free rider problem?

[Anonymous Coward]

There are a fair number of people who will still pay. There are plenty who won't, but enough who will. It worked before and can work again.

Re:What about the free rider problem?

[Hurricane78]

See my other post: http://ask.slashdot.org/comments.pl?sid=195347&cid =16006357

Re:What about the free rider problem?

[Mr2001]

You're forgetting the free rider problem: when you can't exclude non-payers from consuming the end product, what incentive is there for them to pay in the first place? That's especially true when there are a lot of small "investors," so that the work will be produced (or fail to do so) regardless of any individual contribution.

The incentive is that they know if they don't pay, they (slightly) lower the probability that the work will get created at all. The amount they'll be willing to pay depends on both their perception of how likely it is to get created without their contribution, and the value they personally place on the work's creation.

That first factor, however, may cancel out, because each person's belief that an artist will be able to record their next album without his contribution is related to that artist's popularity. If a popular band has a hundred thousand fans, then even if 90% of those fans figure "I don't need to pay, they'll surely get enough contributions", that still leaves 10,000 paying customers. A less popular band with only 1000 fans needs each one a lot more, but those fans will presumably be more willing to pay, since each person knows it's a lot less likely that others will pick up the slack.

That's very much like the problem with voting, which is partly why we see such low voter turnouts in large elections.

Interesting that you brought that up.. look at the success candidates have had in raising contributions online. They bring in millions of dollars from individuals who each know their $50 or $100 is just a small drop in the bucket.

As far as music goes

[niceone]

One way for the artist is to create music for people that actually put a value on it and don't want the artist to starve. Physical barriers are not the only things that stop people taking things without paying.

There are plenty of examples of this right now, for instance in the UK Warp Records (one of the bigger UK indie lables with an anual turn over around the $10million mark) have nearly their whole catalog in their online store as DRM free MP3 files (high quality VBR using LAME alt-preset standard). There are also other examples in this list.

Personally, I'm going to have my album downloadable as DRM-free MP3s - it will also be on iTunes for people that find that more convenient (?!) but it'll be more expensive (to make up for apple's cut) and obvious will have iTune's DRM there.

gheh... easy

[Oersoep]

a) Start wars to limit the production *cough-iraqwar-cough*

No, seriously:

b) Make performance the product (concerts) instead of the brochure (CD)
c) Increase the value of the product (like linux distro's do) by selling life-time licenses in music stores, give a life-time guarantee on the hardware (CD), include extra "off line" art, etcetera. Just compare it to OSS. The first record company that only does special editions and doesn't whine about downloading might just sign up a few thousand of bands willing to take the risk to try to make money in a modern way.

Re:Copyright was invented to protect cost of print

[mark-t]

More likely, if all copyright on music is removed, the vast majority of music would only be available on the 'Net, and will similarly be of approximately the same caliber as most web content... that is, having heinous quality to noise ratio. While some people might argue that we are already at such abysmal levels with music today, I'm pretty sure it could still get a whole lot worse... and even the occasional gem that might otherwise pop up every once in a while would likely get utterly lost in an untamed cyber-sea of wannabes.

Music, not books

[remmelt]

I can see that the model fails with authors. Although, producing a book is not as expensive (I would think) as producing an album, because basically you would only need a typewriter, paper, a proofreader, an editor, and a printing press. For the album, you need studio time, equipment for a band, a producer, mastering, cd press, packaging, etc. I think it is more costly to produce an album than it is to produce a book.

The point is that bands have a really good way to get known before they produce an album. They play live. This is how all albums have been made so far. Bands play live, play live some more, play live a LOT more, then maybe they get discovered and have the chance to record an album. Lots of bands that aren't discovered record albums too, just not as professionally.

I'd say it's easier for musicians to come up with a bunch of people to finance their new record because they're known beforehand. It would be harder for a writer, but then again, he can sit down and write the book, it's not like they don't all have jobs anyway. Only really successful writers/musicians/etc don't have jobs.

What's more, I don't think you need to give up on the dream either. So your album doesn't sell? The financial backers get it for free, ofcourse, and no-one else wants it? Too bad. What if it is a huge hit and gets bought by millions? How would that make the artist NOT successful? Why wouldn't the artist not get a share of that income? Must successfulness be counted in US $?

There is a website (damn, I cannot find the address anymore, I'll look it up) that does just this: you find the backers/investors, you get to record the album, the music is free online but can also be bought as a CD, the free online stuff is advertised, band and investors get a piece of the advertising revenue, a share goes to the site. The music remains the property of the artist. That is the new model.

Re:Music, not books

[Hurricane78]

> For the album, you need studio time, equipment for a band, a producer, mastering, cd press, packaging, etc. I think it is more costly to produce an album than it is to produce a book.

Not fully true.
You only need a decent computer, good music-maker sound card, logic, cubase or protuuls in a medium version and then depending of the type
- some mikes, instruments, some acoustic stuff for the walls of the room where you record maybe. stuff like that (maybe even only one mike and a guitar with inner mike if you're jack jones ;) or
- some "software studio" like reason, some vst-plugins, stuff like that, and depending on your usage one, two good midi-controllers (keyb, knobs, faders...)

Most of it (in terms of cash) you already own(pc), could be bought for cheap (midi-controllers, plugins, mikes, elen instruments) or is a one-time investition (bigger software and instruments).

If you you use a "free" copy (you know what i mean) untilyour first money comes in, and own most of the stuff, you can get away pretty cheap.
this is exactly my setup, and if i get "rich" from my work, i'll thank everyone who helped me (mostly native instruments [the company] and some friends :) with the money and respect they deserve.

Not that hard isn't it?

Wrong, that's a myth

[Dion]

The rational consumer is a defective myth, people regularly pay for things they can have for free, just ask Evian.

FSF still sell copies of emacs, although it exists on just about every ftp server in the world.

The rational consumer argument breaks down quite quickly when you aren't dealing with super-huge commodities markets where the consumers and producers take great care to be dispassionate about the commodities they trade.

If history has shown anything then it's that:
1) You don't start a landwar against russia in the winter.
2) Consumers aren't rational.

And I'm not sure about #1.

Re:Wrong, that's a myth

[Jah-Wren Ryel]

The rational consumer is a defective myth, people regularly pay for things they can have for free, just ask Evian.

Indeed, the rational consumer is one of those things that only exists in the laboratory of the mind. Not because people are irrational - individuals may be irrational, but as a group they are rational - but because the environment is never so "clean" as in the economics text books. There are always real-world costs (and perceived costs due to bad information, like advertising, brand-loyalty, and bad risk evaluation (c.f. the lucrative market for extended warranties)) that the text books don't usually dwell on.

But, for the most part, if you could measure all of these additional costs and factor them in, then the model of the rational consumer should still hold. It is just that it is almost impossible to measure ALL of those costs, that measurement itself being a cost that may dwarf some of the actual costs, which means that a rational consumer will often just "wing-it" as a cost-savings approach.

The rational consumer argument breaks down quite quickly when you aren't dealing with super-huge commodities markets where the consumers and producers take great care to be dispassionate about the commodities they trade.

That is essentially the same point I made when I mentioned feasible scale.

However, I would argue that even niche markets are subject to the rational consumer model, its just that smaller markets allow for other cost factors - one of them being that if the niche is small enough, then people can feel comfortable that the risk of the "tragedy of the commons" kicking in and screwing up an "honesty" based approach is minimized, and so too the costs of "honesty" are reduced below the potential value of "honesty" - which really ought to be called cooperation at this level.

Re:Wrong, that's a myth

[Schraegstrichpunkt]

The rational consumer is a defective myth . . . just ask Evian.

. . . or any advertiser.

Re:Wrong, that's a myth

[Anonymous Coward]

The rational consumer is a defective myth

No, it's a statistically valid theory (i.e. is a better predictor of consumer behaviour than random selection of outcomes), but it doesn't fully explain consumer behaviour by any means. I very much doubt you could find a single economist anywhere in the world who would claim that consumers are perfectly rational, and thus that a rational behaviour model perfectly explains consumer behaviour.

If history has shown anything then it's that ... consumers aren't rational.

Not at all. You have three basic relationships that are possible w.r.t. the rationality of consumer behaviour:

1. Consumers are perfectly rational: the rational consumer model correctly explains/predicts consumer behaviour 100% of the time

2. Consumers are neither rational nor irrational: the rational consumer model explains/predicts no better than random selection of outcomes

3. Consumers are perfectly irrational: the rational consumer model incorrectly explains/predicts consumer behaviour 100% of the time

As with most theories, the reality is likely to be either 2 (the default assumption), or some point between either 1 and 2, or between 2 and 3. If the explanatory/predictive power of the theory is anywhere other than 2, based on statistical tests, then it is a valid theory, and should be used for explaining/predicting consumer behaviour until such time as a more valid theory (i.e. one with a higher level of statistical significance, or alternatively, with greater explanatory/predictive power whilst remaining statistically significant) is found.

As an aside, the use of game theory in economic models has helped to explain how the expected reactions of other market participants can lead rational consumers to make sub-optimal choices. This doesn't mean they're not rational, only that expectations of the way in which other participants will behave are important variables in any model attempting to explain or predict rational behaviour.

Re:Wrong, that's a myth

[louisadkins]

Where do you fit people like me into the breakdown? If I find a movie or a track or CD that I like enough to keep I generally will pay for it to support the artist or the product. (Most of my CD purchases are from sources where I know the money goes to the artist - If I buy a song from a label, it's by the track) It's not even a question of honesty, so much, as fairness. If I want this, then I have to give something. If I feel what they ask for is acceptable, then I do so. Now, I dislike DRM, don't get me wrong. I do feel that the **AA go too far, already, in what they can do to 'protect their rights.' When it tramples my rights, it is no longer just a question of your rights. I don't want to see the artists loose out on support, if I appreciate their work, either. (One of the reasons I pay as little as possible to the big labels is that I like to actually think some of the money makes it to the artist.) That, I feel, is the true fine line; protect the rights of the consumer, and the rights of the artist. Honestly, I think the label should have the least say in things - they should return to what they were meant to be: a middle man. The middle man gets a cut, yes, but not the lion's share! Sorry if I'm preaching to the church...

Re:Wrong, that's a myth

[radtea]

individuals may be irrational, but as a group they are rational.

This is not correct on two accounts.

The first is theoretical, where individual rational choices result in global irrational behaviour, as observed in the Prisoner's Dilemma and similar situations (the group optimum requires different behaviour than the individual optimum, and the group optimum is what everyone would value the most if they could be assured of achieving it.)

The second is practical: there is a well-known class of historical situations where people in large groups strongly support and even willingly participate in actions that are extremely high risk and economically a dead loss. These are called "wars", and the "war puzzle" is a topic of ongoing discussion in economics because wars so grossly violate the economist's placid assumption of equilibrium rationality.

Economic rationality will get you a long way in understanding the world. But never forget that we are all monkeys under the skin, and be periodically overcome with "the maddness of crowds".

Reinvent your product

[coralsaw]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"

The heart of the problem that the music (and to some extent every) entertainment industry is facing nowadays with the advent of quality digital content and independent mainstream distribution mechanisms (like p2p) is not about theft, DRM, copyright issues, etc. It is simply that their traditional product has become largely obsolete. Let me elaborate on this a tiny bit.

The music industry's product has traditionally been twofold:

• the physical product (tape/vinyl/CD)
• the "star" product (for luck of a better word)

Meaning, they sold you the vinyl, but they also sold you the artist as a star idol, so you'll not only buy the vinyl because of the quality of the music, but also buy the t-shirt in order to identify with the star artist, extracting a star premium as well in the process.

Nowadays technology has blurred the situation. Music can be had for free with very low marginal cost, and the star system faces tough times because of the (chosen) speed at which most stars are promoted and subsequently dropped especially in the pop scene (presumably so that the labels come on top of the power game). In product marketing lingo, the utilityof the augmented product has greatly diminished with a risk of becoming completely obsolete.

Labels can learn lessons from other industries that historically faced the same situation, eg. the railroad industry when better means of long-term transportation came along (car, airplane). They can reinvent their product, diversify their operations, or die.

For instance, they can diversify into online-music distribution businesses that would offer a quality download service, powerful search, collaborative filtering and guaranteed music audio and file quality, while charging a modest price (not the ungodly $1 they need to charge for each song so that their obsolete profit models show the same margins). Or they can completely redefine their physical product, offering eg. a waranty for physical CDs in case of damage, limited edition with rich extras, incentives for people to start building "collectable" CD collections, etc etc. The sky is the limit for creative product marketing.

Your quoted question can be answered by a simple You don't. The profit lies elsewhere, it will just take time for these slow-moving monsters to "get it".

/coralsaw

Network economics are different

[valentyn]

In some situations, more supply means higher prices, as more supply means more recognition (brands), more fame (music), more compatibility (technical formats, classical example being the fax). This is not to say that classical economics don't work here (they do!), but that you might want to see how things work out for you. For example, your market (i.e. where you make the money) could be concerts, but your "product" (the deliverable) could be music. Your market could be training and support, while your product is a word processor.
Naturally, if the "market" you're going to start is your own and the product is your own as well, you'd think twice before giving any of the two away. I doubt if DRM is the only way to do that, however.

Examples of such?

[erroneus]

Well, there are no perfect examples, but here's some that I find are similar:

Bottled water - People buy bottled water that is often times bottled forms of their own city's water! Read the label!
Cable TV - asside from "premium channels" regular cable isn't any better than regular TV once was. (For some reason, signal strength isn't what it once was though...)
Satelite Radio - Yeah... less advertising, more focused genre... see cable TV 10 to 15 years ago

I'm sure some people can think of better examples. People are often willing to spend money because they see value in the "authenticity," reliability of delivery, the correctness/officiality of the source, etc, etc. Musical CD sales are as high as ever... musical cassette sales were unaffected back in the day. People go to see concerts even if they already own the CD or have "stolen" the MP3s from the net somewhere.

There is some truth to the fears of the Copyright-profit people. I don't feel the need to buy porn... it's VERY free on the net... and yet SOMEHOW, internet and other pornographers make as much money as they ever have. As always, porn shows the truth and the future of marketting.

Uhm, why?

[Dion]

Why do you feel that this wouldn't work?

The only problem I can see is that most people aren't interested enough in entertainment that they have the attention span to pledge money for something that will get made 6 months down the road.

I certainly doubt that "days of our lives" could survive like that, but then again drek would get made anyway to deliver the eyeballs of the passive consumers to the advertisers.

You wouldn't need to work on a stop-and-go basis, an artist who consistently makes good work might be able to get larger investors to put up the bulk of the capital up front, so production can start before enough real customers have signed up.

That's almost 100% like current situation, the only difference is that the investors/labels move on to the next project as soon as the product is released.

Who's to say that such a model wouldn't work if it hasn't been tried?

Who cares?

[Dion]

Who cares what the big manufacturers do?

Small companies who want your money will always be making non-drm playing devices.

Just look at Ogg Vorbis, none of the big manufacturers support it but all the small no-name players do.

If the big companies stop playing non-drmed content then we would just buy the non-broken ones.

More factors than supply/demand

[ben there...]

You're right in a sense that there's no problem creating demand. There is a problem limiting supply.

But another important aspect of the equation is that "something that can be infinitely and freely copied" costs nothing to the artist to (re-)distribute. Whether 1,000 people or 1,000,000 people hear it, that costs the same. It is no more work for the artist.

Like any business you can make more money by selling your products for less (on average--only some people actually buy it) but selling many more of them. So if you can sell 1,000 or freely redistribute 1,000,000 and convince 2,000 of those to pay for it, congratulations: you just made more money by letting people redistribute it.

Does anyone find it odd that those that redistribute music are actually doing the record label's job, for free no less?

Re:More factors than supply/demand

[jb.hl.com]

Does anyone find it odd that those that redistribute music are actually doing the record label's job, for free no less?

The record label does that job because it expects a return on investment. The ROI it won't get if people don't buy it.

What's The Question?

[Bob9113]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

What is the product you are attempting to sell? What question are you asking?

Consider how most software engineers make money. We are performance artists. We are paid to perform a creative act. Most of the world's software (in terms of lines) is never sold on a per-copy basis. Most lines of code are written on a performance basis; custom enterprise code.

Historically, this is also how musicians were paid. It is how most musicians are paid even today (far more musicians play in bar bands than have record deals). It is an extremely efficient economic model, because it is a free market model. Most musicians exchange their time performing music for compensation; playing out in bars across the country. A musician's time is a naturally limited commodity, and there is demand for it. Hence, there is a natural price. That price is reached almost perfectly in our currency-based free-market economy.

One interesting recent development in this model is the ability to distribute music inexpensively. This grants the performing musician the ability to advertise for a very low price, recently approaching zero with the advent of the Internet. Musicians can now audition for gigs in distant cities at the drop of an email. They can build their local audience by giving away CDs at their shows - CDs that can be produced for far less than the total cost of producing and broadcasting a television, or even radio, commercial. (for additional material here, consider the potential for performance musicians to advertise by having their music played on the radio, and consider how the relationship between the record labels and the radio stations may affect that channel)

In the past 100 years, another model of trade in the music industry has evolved; the sale of copies of performances. It is backed by a government enforced fiat monopoly. That is, it is not a free market model. The model remained fairly practical for the first 60 or 70 years, while the cost of duplication for the home consumer was high. As long as the cost of duplication was high for the majority of customers, the inefficiency of the monopoly was hidden. The monopoly price did not dramatically diverge from the consumer's perceived value, because the cost of small-scale reproduction was dramatically higher than the cost of large-scale reproduction. The monopoly market has always been enormously inefficient, but that inefficiency was hidden by the fact that the vast majority of consumers percieved themselves as paying for the duplication. The efficiencies of scale overwhelmed the inefficiency of the fiat monopoly.

Now this is all changing. (for more material here, consider the lobbying and legislation that accompanied the invention of radio, and the subsequent symbiotic trust that has developed between radio and the record labels)

After radio, the next big exposure of the fiat monopoly's inherent inefficiency came with audio and video cassettes. Another round of legal wrangling occured, but it was slightly different - Washington came out more on the side of the fiat monopolists this time. They instituted stricter copyright infringement legislation.

In this, the latest round, cost of duplication has effectively hit zero. The inherent inefficiency of the fiat monopoly is now completely exposed to most of the target market of the music industry. Once again, there has been a great deal of wrangling in Washington. And it has shifted further in favor of the fiat monopolists. It has shifted so far, in fact, that many more consumers than during any previous shift are engaging in civil disobedience.

All of which is to say, are you sure you are asking the right question? Should the question be, "How do we make this inherently anti-free-market model work?" Or should it be, "Why are we using police force to artificially support an economically inefficient model,

Re:What's The Question?

[jdub_dub]

I wish I had some mod points to mod you up. Very very well said!

Re: I'll run Linux!

[Anonymous Coward]

There will be someone, in some factory somewhere who will see a nice market for UNtrusted computing and will be turning out black market embedded-DRM-free hardware by the container load.

Look at China as an example: they make counterfiet _cars_ in the same factory as the real ones which retail for 40% less. Do you honestly think that it will be impossible to get DRM free software AND harware at any point in the future?

It may not be the big companies making this gear, but _someone_ will be making it.

It's possible, but

[jandersen]

- not with the existing model, where huge entertainment factories produce muzak and movies on an assembly line. But that is the beauty of the internet and modern technology: as time progresses, we need them less and less. It is already possible for anybody who is moderately skilled with computers to record and distribute CDs - you can get the basic setup for less than what most musicians would be willing to pay for a good electrical guitar. A few more years, and people will be able to acquire what is needed for making good quality movies too; after that it is more a question of developing your talents, honing your skills and putting together a good team, all of which can be done for considerably less than the several 100s of million USD that are spent on ovepriced (but mostly mediocre) actors, instructors, etc etc.

Just go for it!

Nonsense.

[jotaeleemeese]

You can have capable instruments for less than a top notch laptop or gaming computer.

For 1000 GBP you can get an electronic piano with proper weighing, perfectly fine to produce music that is selleable.

Nonsense

[jotaeleemeese]

In the worst cases classical musicians train between 10 and 15 years, not decades.

The naturaly gifted ones, most likely study only 7 or 8 years.

Work experience is never counted as training, you can say the same of any profession.

Exactly.

[jotaeleemeese]

I have never found a copy protected classical music CD, and buy many of them, so if somebody was trying, I would have found out.

The "Salami" Technique (TM)

[Anonymous Coward]

Snopes is, in this case, not 100% convinced that that has ever happened, but cites a few potential examples from geek chronicle. It classifies it with the colour white, which means "a legend of indeterminate origin or unclassifiable veracity".

http://www.snopes.com/business/bank/salami.asp

By the way, I was intrigued by your examples, 0.002 and 0.004 (of?) cents. :)

And yes, I guess someone would be losing money -- the bank itself. Is that not one of the ways they make money?

tmegapscm

The product becomes a service...

[Colin Smith]

Take movies for instance. Movie theatres provide a service, they provide a huge screen, surround sound, big comfy seats and "food" with an insanely high sugar content.

Music... Well same thing, big speakers, light show, band on stage, a spectacle. Music as data files are really nothing more than a form of radio.

Both provide an event.

Information such as books are a different case, they are comparatively rare, the demand is relatively low compared to movies and music. This means that they are rather difficult to get hold of, your friend is unlikely to have a copy and they are unlikely to be available on the peer to peer networks which means the supply is relatively limited and the value comparatively higher. Pay for download services for these types of products should be successful.

Software is a service, customisation, support, consultancy etc.

Re:Copyright was invented to protect cost of print

[Schraegstrichpunkt]

More likely, if all copyright on music is removed, the vast majority of music would only be available on the 'Net,

Uh huh. Because according to you there is no incentive for businesses to provide tangible forms of works that can be downloaded for free on the Internet.

</sarcasm>

It presumes that what you DRM is a necessity

[mrcpu]

Perhaps it is an unsolvable problem. So what? bands that want their music out there will get it out there, movies may change to smaller budget, or better yet, theater-only releases, in finely crafted theaters with tuned sound systems and something to make the theater experience truly enjoyable.

In short, people will figure out a way, even if it has to go through some dying and evolving from the current system.

Me, I'll be able to take it or leave it

Presicely

[cyclomedia]

As someone who's into seeking out new music I happily pay a few quid to see bands down the local pub/club, and then stump over a fiver for one of their CDRs at the end of the gig if I was suitably entertained, then tell a bunch of mates to go see them if they get the chance. If the sum of all the generates enough cash for them to feed their families then the "music business" is working perfectly fine.

Anecdotaly: possibly the best band i saw at glastonbury 2004 was four young 'uns (three lads and a lass i think) playing in the middle of the saturday afternoon to a deserted beer tent in the backstage area set aside for the circus performers. They were really fucking good but i completely forgot what they were called. Hope they've been keeping it up these past couple of years"

Half truth.

[jotaeleemeese]

Not all calssical music is orchestral classical music.

There are oozes of chamber music orchestras, quartets, duos and soloists that receive no money whatsoever from the state and still make a living from performing.

Re:Half truth.

[Eivind]

If so, they'll be able to continue doing so. Existence of DRM on CDs doesn't in any serious way affect the desirability of going to concerts. I doubt there are "oozes" of chamber music orchestras, quartets, duos and soloists that make a living trough selling CDs. (I suppose they'll exist, but I don't believe them to be very numerous)

let people pay in advance...

[2fuf]

..and wait till the combined contributions add up to the amount you want to receive. Then release the product and allow free distribution and copying.

Yeah sure.

[jotaeleemeese]

For centuries Music was made on comission.

Bach, Mozart, Beethoven, Wagner. You name it, composed at one time or another by comission.

They got paid first, they produced later.

Even today, there are writers that are perceived as so good, or that have such a novel idea under development, that get paid juicy advances by publishers (midle men after all). I see no reason why somebody like lets say, Salman Rushdie, could not get paid by 50000 people at 1GBP a head in advance in order to write a new novel. Shit writers would fall of favour and eran less if anything, would writers would be always in demand.

Re:Yeah sure.

[kamapuaa]

I wouldn't suggest music would entirely disappear, but honestly would you give money to artists as a promise of future results? A lot of people bootleg music from their favorite bands, both major-label and indie, fully knowing that doing so doesn't benefit the artist.

And where would be the infrastructure to support new artists? Even creating music requires an initial investment, not to mention TV or advertising. I quite enjoy the American "The Office" (to be fair, I download the episodes off bittorrent). I *might* be convinced to pay 50 cents an episode, but I certainly wouldn't have done than before I saw a single episode, or even after I had seen all of season 1. Some smarty-pants at NBC saw it was a good idea for a show, and worth investment.

The whole idea reeks of creating charities to support artists, an unworkable idea. DRM is not inherently wrong. Nobody's denying it's annoying, but if the alternative is a n artistic world entirely consisting of what you might find on youtube.com, or as comissioned by Bill Gates, I am all in favor of it.

Re:Yeah sure.

[Kadin2048]

I don't think there's any charity involved at all, necessarily.

And I do think that people would pay an artist for future results; this isn't some stunningly new way or doing business, you pay people in advance of performance all the time. In fact, that's why contracts and contract law exists; it gives people a way of setting out the conditions for payment in advance, so that you can either pay and be relatively secure that the work will get done, or the worker can do the work and be secure that they'll be paid afterwards. Both would work with art; sometimes you might pay in advance, sometimes you might pay on or after delivery according to a contract that you had signed in advance. Either way, you'd want to agree on the terms beforehand, just like you'd do in any other business transaction.

What I'm really trying to get to here, is that there's nothing special about art. Really, there isn't. A painter is a photographer is a machinist is a doctor; they're all skilled laborers. If you want one to do something for you, you pay them. There's nothing revolutionary here. None of them require the amortized business model that's so common today in entertainment in order to exist.

And while you might not particularly like what's on YouTube, that's a personal value judgement. If that's all that was available, perhaps you'd feel it necessary to spend a few dollars in advance -- take a small risk, in other words -- and fund someone who would create the sort of entertainment that you'd want to watch. It's all about what people are interested in paying for.

There is obviously a demand for entertainment, and there is a clear supply; the only thing we need to do is place as few barriers as possible in between those two groups, and let the problem work itself out.

As to your comment about DRM not being funadmentally wrong, I disagree. I disagree not on moral terms, but because of the negative effects they have on our society in general, because they make it harder for people to interact normally and use the rights which they ought to have, and because such restrictions distort the market from what it ought to be naturally.

Re:Yeah sure.

[Anonymous Coward]

Curiously, it's already been done at least once. I haven't tracked it carefully (in fact, it was this story which caused me to go re-visit), but one of my favorite authors serialized a new novel (donations supported the writing, as publishers weren't interested in picking it up on terms he found acceptable). Lawrence Watt-Evans did write The Spriggan Mirror, with the "royalty" covered by donations. His post-mortem on the process is at http://www.ethshar.com/thesprigganexperiment0.html

It sounds like the book will also get published in print form next month (yay), and it has inspired additional serial projects from other authors. Diane Duane has one running at http://www.the-big-meow.com/ for instance.

Re:Yeah sure.

[dwandy]

DRM is not inherently wrong.

DRM is inherently wrong. Both from a business stance as well as a freedom stance.

DRM on music has only hurt paying customers.
DRM on music has never stopped a single determined pirate.
DRM makes the pirate download not only cheaper but in fact a better product.
Consumers typically don't spend more to get less for a long time.

Having an adverserial relationship with paying customers is never a good strategy. Businesses spend millions trying to convince you to like them, and treating your customers like criminals eliminates any goodwill you can generate. If this business was selling cars, bookshelves or screwdrivers the public would have abandoned them a long time ago. It is only because they hold our culture hostage that they can continue to behave the way that they are.

e-music is now the second largest e-tailer of music and is DRM-free... figure that into the equation.

Re:Yeah sure.

[LuYu]

I wouldn't suggest music would entirely disappear, but honestly would you give money to artists as a promise of future results? A lot of people bootleg music from their favorite bands, both major-label and indie, fully knowing that doing so doesn't benefit the artist.

And where would be the infrastructure to support new artists? Even creating music requires an initial investment, not to mention TV or advertising. I quite enjoy the American "The Office" (to be fair, I download the episodes off bittorrent). I *might* be convinced to pay 50 cents an episode, but I certainly wouldn't have done than before I saw a single episode, or even after I had seen all of season 1.

You have switched the subject from music to television which, admittedly, is a more difficult fit for this idea.

Having said that, it is important to point out that in music, this model could work quite well. Let us say that the fans of a particular band want to pay the studio costs and living expenses of the band while the band makes an album. They have heard all the songs. They know what they are getting. Now, the only expense is the studio time to produce something that fans do not go to the concert hall to listen to.

This group of fans then decides on the cost, sets a finantial goal for production funding, sets up a donation system (on the Internet or wherever -- they could even collect at concerts), and starts collecting money. When the goal is met, the artists start putting their songs on record. More importantly, they start putting their songs on record with the aid of professional sound engineers and equipment.

This is good for everyone except the old producers, the **AAs of the world. The fans get to have a quality production of their favorite music whenever they want, the band gets money, and no one has to worry about whether or not they can share it with their SO or best friend or monkey.

TV and movies make this more complicated because the recording is the performance, but I am sure someone on Slashdot or somewhere else could come up with a solution to this problem.

Oh give me a brake.

[jotaeleemeese]

You need a guitar, a guy and a good song.

Nowadays the quality you can achieve with home recording equipment is more than enough.

There are several UK artists that during the last year have used the Internet exclusively to gain notoriety. If it was good enough for them it is good enough for anybody else.

Re:Oh give me a brake.

[Anonymous Coward]

" If it was good enough for them it is good enough for anybody else."
And it is for you to decide this for anybody else? Creators of music have a choice.

How many people have failed trying to do this? (You would not know, sice they failed...)

This is typically the anecdotal evidence used on /. It does not prove anythign apart from the fact that it may work for certain people...

Once again, DRM, business, making money is something 99.9% of the people here (you included) have absolutely no clue about. But yet an opinion, and that opinion is driven by justifying having large amounts of pirated works....

What was life like before?

[Jeppe Salvesen]

You paid to go to concerts and theaters and circuses etc. That's how the artists and the composers and screenwriters etc made their money.

That model is still around. Maybe we should use it more?

You don't

[briancnorton]

At risk of being labeled a heretic, I'm (in concept) pro-DRM. The #1 export of the United States is Intellectual Property. A primary tenet of capitalist dogma is that if we don't have a way to protect and profit off of it, there will be less of an incentive to create it, thus less will be created and it will be of a lower quality. It's not just theory, it actually happens. Look at any large scale industry privatization over the last 30 years.

While I appreciate DRM on a macroeconomic level, I have serious problems with it as a consumer, and as such I totally recognize the appeal of DRM-free music as a consumer. What we need is a new social contract with music producers. It used to be that when I bought a CD, I (for all intents and purposes) owned the music. I could transport that music with me and play it anywhere I wanted. In the age of DRM they try to convince me that I own a license to play that music, but only on the one player. That's bullcrap. If I am buying a license, then I need to be able to get to that licensed material anywhere. The industry needs to create a common standard so that my digital music can go in my home theater, my iPod, my car, my friend's house or wherever else I might want it. At the moment, there is no consumer benefit to DRM protected media. That's wrong.

Re:You don't

[AtomicJake]

At risk of being labeled a heretic, I'm (in concept) pro-DRM. The #1 export of the United States is Intellectual Property. A primary tenet of capitalist dogma is that if we don't have a way to protect and profit off of it, there will be less of an incentive to create it, thus less will be created and it will be of a lower quality. It's not just theory, it actually happens. Look at any large scale industry privatization over the last 30 years.

Could you come up with some examples? This might be very interesting, but I can't see them (over the last 30 years).

Biased, but interesting, question

[Anonymous Coward]

But if we take this strawman situation as given, we actually end up in a situation that has been fairly extensively studied by economists. The orthodox answer to the question posed is, as you suggets, "Well, you don't" and the the typical economist will go on to make the case for e.g. intellectual property, or some other typ of limited right of monopoly being granted to the inventor. (Yes, from an economist's perspective a piece of music is an invention.)

Anyway, what is interesting in this debate is a view that challengenges the received one. This dissenting opinion was presented by researchers Michele Boldrin och David K. Levine in a paper suggestively titled "Perfectly Competetive Innovation" (I believe a version of this paper is available at the website of one of the authors: http://www.dklevine.com./ If I remember their argument correctly, they argue that the very first copy of an invention is essentially it's blueprint. So at this point, the inventor has a monopoly over her invention, and is thus able to charge a price greater than the cost of producing an additional copy. If the number of copies sold is limited, then the buyers will also be able to charge a surplus in selling copies of the product. By reasoning like this, the authors show that there is, in fact, an incentive to innovate in the absence of intellectual property.

Now, in the case of digital music the cost for distributing an additional copy is essentially nil. If it is actually exactly equal to zero, the argument may break down. I am to sufficiently familiar with the details to say this with certainty, even though I would assume that this be the case. Never the less, I find this a stimulating idea, since it poses the following question: is distributing an additional copy absolutely without cost, and if so, should we impose some cost on doing so? Obviously, absence of DRM excludes many ways of imposing such a cost. But there may be other ways, such as ISP:s charging a small per-megabyte cost. This suggestion will probably cause an aoutcry among a lot of you. But if it is a price we would have to pay for a DRM-less music and movie industry, would it be worth it?

What about selling the music on your website, for

[mrvan]

What about selling the music on your website, for $0.10 a track? There is so much music I am not buying because I think it's too expensive, but if I listen to internet radio and there is a 'buy this track now!' button that would give me a mp3 version of the track for 10 cents, no way would I be stealing it from people. You need DRM to keep prices ridiculously high and the limit your fanbase. You need cheap music to generate a huge paying fanbase. Which do you think an artist would rather have?

Wrong question.

[jthill]

The answer to the right question is "Because they are breaking the deal. The times are quite plainly not limited, and any objection to that is simply, blatantly and utterly dishonest, a flat lie. Turnabout is fair play, and they're stealing every item with a copyright older than twenty years. The people receiving money for those copyrights are thieves. Pretending that because it's legal, and because these are nice about, just trying to support their children, and oh-so-polite-except-for-the-stealing, makes them not thieves, is dishonest. It's Orwellian. We have two words: illegal and criminal. They're legal, but criminal.

A civil society that legalizes theft and enforces that law will soon discover that victims tend to become uncivil. Blaming the victim is despicable, but one can't expect anything better of thieves.

Product Integration

[jacobw]

Actually, the entertainment industry has several decades of experience in making a profit from two products that can be infinitely reproduced with no marginal cost. Those products are called "TV" and "radio."

Think about it. The cost to broadcast The Jack Benny Show were the same whether one person had his radio turned on or a million--and once those listeners had bought their radios, they could listen to radio all day long without paying any additional costs.

So how did Jack Benny make a living? Advertising.

So the real difference between the pre-digital age and the post-digital age isn't the ability to make copies. It's the ability to fast forward. Seriously. If you couldn't skip the ads, then an additional million people watching Survivor over P2P would be just as profitable for CBS as an additional million people watching it on TV. (Obviously, CBS would need a way to measure the P2P viewership in order to charge advertisers, but they'd just pay Nielson to develop a way of doing it.)

And that's why product placement is the way of the future. I chose Survivor as a deliberate example because there's already a lot of built-in placement there. Reward challenges don't just involve food or money; they involve Fritos and Visa credit cards.

Now, there is still money to be made by interstitial ads, as evidenced by the fact that the broadcast networks still have them. But as more and more people get PVRs, or download shows via P2P with the ads already edited out, product placement is going to become a bigger and bigger percentage of media companies' profits. And at some point, we'll be back to the old days, when shows had titles like The Maxwell House Concert. (Yes, that really was the name of a show!)

People in the entertainment industry know this already, which is why (for example) the union representing TV and film writers made a major push to be included in conversations about product placement. The Writers Guild didn't pick this issue at random--it's the way of of the future.

An interesting question, though, is whether the networks and studios will own that future. I would argue that the most profitable entertainment product of the past several years didn't appear on TV or in the movie theaters. It appeared on Revver.com. I'm referring, of course, to the Eepybird Mentos Fountain video, which cost $300 to make and had already generated $15,000 in advertising revenue for its creators by June (as well as an additional $15,000 for Revver.) By my estimate, it has since earned an additional $15,000 for the Eepybird guys, bringing their total profit to $29,700. That's 99 times their initial investment. By way of comparison, Pirates of the Caribbean 2 cost about $225 million to make. To be as profitable as the Eepybird video, it will need to make more than $22 BILLION.

I don't think the major entertainment companies will vanish. Hollywood, as an institution, has proven remarkably resilient. But I do think that, 20 years from now, the entertainment industry is going to be a lot more decentralized, and a lot more driven by small groups of creators doing relatively low-budget stuff.

Follow up with URL

[remmelt]

The site in question is Sell A Band.

an analogy may help

[apol]

An analogy may help:

Suppose that engineers invent a tool the prevents people from seeing the buildings of a city. In order to see the same landscape we are used to we would have to pay a fee. People would protest saying that this restriction is too annoying to be accepted, and for us it seems to be an absurd idea, but once this system is in place one could argue that without it architects would lose most of their revenue and incentive to create. But of course architects can get paid otherwise like they are paid today: by the constructor of the building for instance.

The situation of music artists is the same: without DRM people would perhaps buy less frequently cds on the shops, but musicians could still earn money from concerts, classes, radio broadcasting and other comercial uses of their work. Besides, in spite of the facility of copying cds from a friend, many would still be ready to pay for the cd in a store because of the book that comes with it.

apol

It works for TE LE VI SION

[Virtual_Raider]

Please mod me away into oblivion if I'm mistaken but, isn't this exactly the way commercial open TV works? Someone known as the producer pays in advance for the goods: script, performances, etc. Then they give it away "for free" in the open signal and they get their money back from the advertisers. If the show fails to catch up and therefore generate the expected revenue stream, it gets cancelled.

Now with the net and the new digital media it might be possible to do something similar to audience tracking. Right now they meassure how many coach potatoEs watch X show, and the advertisement price is set based on that. Even radio works that way. The problem is, like the CEO of Nettwerk said (I think it was him) so-called the music industry is not in the business of entertainment but in the business of selling plastic objects. If they were in the business of music, they would be readily and proactively looking for new business models to market their content instead of trying to force consumers to buy their only approved medium of distribution.

"I'm permanently having a bad-spelling day"

Re:It works for TE LE VI SION

[Anonymous Coward]

Networks do not "give it away for free" and then get money from Advertisers.

They get their money first. If they can't sell advertising blocks around the show, the show never sees the light of day. If the Advertisers won't renew their advertising (because the ratings are tanking), the show gets cancelled.

It's a service, not a product

[volkris]

The key is recognizing that information is not so much a product but the result of a service. If people want music they'll pay to have it produced. Once it's produced they'll have it, and they want to have it.

So let's throw out all of these crappy analogies. There's no "stealing" of music since doing so doesn't remove it from the hands of anyone else. Information is fundamentally different from real property; let's not try to force the rules of the latter onto the former.

Pay the producers for making music that people want, and then don't worry about what happens to the music.

It's really the responsibilities of entrepreneurs to figure out the details of the business model. The government shouldn't be stepping in to make up for their lack of creativity.

Old Dog, New Tricks

[Anonymous Coward]

In economics, we learn that the price of a product is determined essentially by supply and demand. Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net. How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

Now, imagine that there wasn't possibility of DRM at all in first place, or that it was shown (as it will be) that cost of protection, in both initial investment (DRM development is NEVER done, it is ongoing process, costing ever more) and maintaining the system thru physical enforcing, for which we use euphemisms such as "rule of the law" but it boils down to hunting out in the wild (you KNOW there always are some or plenty of THEM file sharers out there) and taking away material posessions or locking up people who won't comply (and it costs too, in wages of highly qualified professional investigators', detectives' and police officers who do arrests, jail space and maintanence, attorneys' fee additional technical equipment and software needed to track and find "lawbreakers") was too encumbering for any DRMed product?

Obviously, then there wouldn't be any product that NEEDS DRM. However, customers have needs that they would pay to satisfy and there are lucrative opportunities for those who can charm money out of their pockets. As I see it, there are several ways to do it:

- Subscription (advance payment, ransom) model: If you don't get your money, nobody gets nothing from you! For every product there are early adopters, premierre audience, those who care for their prestige and on the other side of the scale, there are those who are half-harted, freeloaders, scavengers or simply enjoing when they take away anything from a "sucker" ("OMFG, I am sooo smarter then YOU, I fooled you, hahahahahaha, I payed nothing"). Those others are not paying customers, nor they would ever be consumers if they had to pay anything, or at most next to nothing. For REAL customers, you would have to book sale BEFORE you get into final production. For films, just shoot trailers, for software, just create demo, ... etc, and NEVER EVER do anything more until you cached in enaugh money. If your tresury never reach the 'GO' level, after certain time you return money to each customer (today's technology allows that operation).

In this model, and presuming there was no DRM, each of your paying customers is potential reseller (which is illegal at present, but that could change once the industry finds a piece of mind and lawmakers follow) and you could gradually increase product prices counting on them to find out it will still be profitable to them to buy early and sell copies to lower end of the market. However, some money will continue to pour even after initial launch, because people sometimes buy something not for their own consumation, but for show-off (presents). You won't impress anyone with ugly hand-marked DVD media in case with pale, moot printout remotely resembling the original.

- Customisation: in digital world copying is cheap but so is (automated) modification! Today we leave customers freedom of choices, options, "skins", etc. but they usually make their choice to suit them and then hardly ever change it. You give them everything so that they don't need you and then expect them to respect you? Although this is clear case for software products, todays' (or recent tomorrows') tech could allow customer to fuse neatly into films, or music too, so that anyone getting a copy of that particular product... feels a little deprived of self esteem... and cuting out one to paste in another would result in ever growing deterioration of quality and enjoyment.

- Bribe: remember Kinder Surprise(R) chocolate "eggs"? A little chocolate on the outside and a small series (collector's items!) of thematic figures, or toys to assemble is a great success. Well,

TCP does not work.

[hummassa]

Repeat with me, once again: TCP/DRM does NOT work.
Why? Simple.
Cryptographically, DRM means you have the cyphertext AND the key... so, YOU have the plaintext also.
But one'll say: "but the thing is protected, inside an IC, etc. .etc.". So I say: The analog/digital loophole. How? Simple. Even if your audio output is digital and encrypted, you pry open your digital loudspeaker, reverse-engineer the digital datapaths till you find the DAC and plug some wires there. Even if it is completely integrated in the same IC, you rip off the coil from the speaker, and wire your ADC there so you have a reasonably-high-quality analog input.
Even if all plasma/LCD tv sets are all-encrypted, they'll have to put _some_ color in _each_ pixel in the end, so you just yank the screen off and see how is color represented for each pixel. End of story.
Now, I know that the USofA (and Australia? and where else?) they have that insane DMCA thing, but this depends on each one to combat idiot legislation. I am doing my part down here (I keep an eye for legislative insanity, and scream as loud as I can when I see one)

Re:TCP does not work.

[gutnor]

Humm, what you describe is certainly non obvious. That's not far to say that Windows is opensource since you have the unencrypted binary and a computer running it.

A high-quality copy of a movies or music would require motivated people with the right ( read professional ) equipement. Compare that with today when all you need is a small freeware app and less than 10 minutes to make a 1:1 copy of any DVD movie.

This system is not perfect, since only 1 determined pirate is needed to seed BitTorrent. However it would cut straight all semi-legal copying ( eg: copy a movie for a friend or do a temp copy of a DVD you received from NetFlix, ... generally morally accepted by everybody )

Re:TCP does not work.

[LordRobin]

Repeat with me, once again: TCP/DRM does NOT work. [...]

Simple. Even if your audio output is digital and encrypted, you pry open your digital loudspeaker, reverse-engineer the digital datapaths till you find the DAC and plug some wires there. Even if it is completely integrated in the same IC, you rip off the coil from the speaker, and wire your ADC there so you have a reasonably-high-quality analog input.

If there's a better argument for why DRM does work, I've yet to hear it.

Remember: Security is not about making stuff impossible to steal, it's about making it so difficult to steal that it's not worth it. The fight against piracy is being waged in two ways: first, make it so hard to make copies that only the elitist of techo-geeks will bother, and second, drive file-sharing sites far underground to avoid the law. You can't eliminate piracy, but you can push it so far out of the mainstream that 90% of your market doesn't know how to do it.

Re:TCP does not work.

[Anonymous Coward]

all you really have to do is remove the ability to program machines that can either display drm content, or connect to the internet. This would easily solve the problem of copyright violations. Once you properly license web browsers and remove programmability from consumer machines, the ability to pirate would be greatly impacted. For instance, I have no real reason to need to program my home computer, and its only the existance of these "hobbyist programmers" that keeps me from enjoying a cheap quality consumer level broadcast style internet. If we restrict web servers to those licensed and supervised server operators with oversight guaranteed to prevent them from hosting illicit files like music not registered with government copyright offices and the RIAA, we can preserve intellectual property creation as a valid way to make a living.

Re:TCP does not work.

[Shaper_pmp]

You could do the same thing a lot easier by setting up a video camera pointing at the TV screen, but it wouldn't be a 1:1 digital quality copy. And you couldn't back up the movie in less time than it took to play all the way through.

And if you're good enough at hardware to rip open consumer electronics and start re-wiring them then there's nothing practical that anyone could do to stop you.. oh, except embedding the whole motherboard in inches-thick epoxy, or something equally devious. Or just putting a tag on the case that permanently damages the apparatus if it's opened - remember: no user-servicable parts inside.

However, none of this matters, because you simply aren't considering the hassle it involves. If I break a DVD and have a choice of spanding £20 on a new copy or wasting a weeks' worth of evenings ripping open my home electronics, isolating the vulnerable point in the circuit, building some kind of signal-tap, streaming off the signal, taking it into the computer and encoding it to Xvid... well, I'll suck it up and buy another copy of the DVD - my time is worth more than that.

This is the problem - even if piracy is always theoretically possible (and if the gizmo is set to, for example, melt a large hole in the motherboard whenever an unauthorised person breaks the security seal on the case then it isn't), if it's too much hassle then people simply won't bother. Sure, they can technically still exercise their fair-use rights (except where the DMCA already makes it illegal), but if it's too much hassle or too technically difficult then they might as well not have them.

If you're a hard- and software-wizard, and are only interested in pirating mainstream movies on an huge scale then yes, DRM (and arguably even TCA) may ultimately be pointless. However, all this does is (once again!) prevent legit users from exercising their rights while only making piracy even more profitable.

Re:TCP does not work.

[slashbob22]

Now, I know that the USofA (and Australia? and where else?)

Canada is on its way http://www.michaelgeist.ca/daysofdrm to having its own DMCA.

Proud Canadians, we need to fight this.

Re:TCP does not work.

[gutnor]

You summarized the wet dream of xxAA, Sony, Microsoft, Apple, ...
with a minor correction

"we can preserve intellectual property creation as a valid way to make a living"

should be

"we can preserve intellectual property creation diffusion as a valid way to make a living"

Intellectual property creation has been a valid way to make a living since thousands of years. That's diffusion that is a relatively new problem. Intellectual property laws are usefull to prevent diffusion companies to use your Intellectual property to make money instead of you. Idea is not bad in theory, but has been perverted too much in the recent year and nowadays seems to serve only the opposite objectives.

Re:TCP does not work.

[RockModeNick]

There is simple matra to this "If it can be played, it can be copied. A really high quality analog copy redigitized will be nearly indistinguishable to anyone. If you can play it, it can be duplicated, period.

Re:TCP does not work.

[Kamots]

Ah... but all you've done is made it impossibly difficult for the average person to exercise thier fair-use rights. Format-shift? Time-shift? Space-shift? Nope! Make a clip for a school presentation? Nope! Make a backup? Nope!

Also DRM isn't about making something difficult to copy (not steal... but that's a different arguement). DRM is about making it difficult to crack the DRM. Once the DRM is cracked, it's easy to copy. That's the inherent flaw of DRM schemes.

But... the hardcore hacker community will see this as a challenge and set out to rip and release as much as they can. We see that today with rips of movies being released before they're even released to the public, with CSS being cracked, etc, etc. There's a lot of people who are willing to spend thier time on these pursuits without financial compensation. They're not going to magically go away if/when DRM gets tougher to crack.

Finally, as others have pointed out, once you've got a copy with no DRM, then we're right back to the filesharing we've got today.

All DRM will do is keep paying customers from executing thier fair-use rights and not do much to stem the flow of illegal copies.

If you want to reduce piracy then stop giving people new reasons to pirate stuff!

Re:TCP does not work.

[Dare nMc]

>reverse-engineer the digital datapaths till you find the DAC
If there's a better argument for why DRM does work, I've yet to hear it.

well if (s)he had stoped at "reverse-engineer the digital datapaths"
The problem with trusted computing, DRM, etc as I see it.
Is that they are generaly relying on shipping the same content to everyone, and everyone having the same key, but that key to decrypt is well enough hidden that no one will find it.

After any one person publishes a key (that everyone must have in their devices) then a tool that decrypts all released content using that DRM is easily produced.

Now HD-DVD/BlueRay seams to be trying is to make the keys revokable. So once a tool is produced that breaks all existing content, they switch keys on new content, then any device with all keys revoked, would have to have updated firmware to still play anything new. All new content would again be protected, until the new key was broken...

Similar method worked (eventually) for satalite TV, however their advantage is obvious, all their devices were constantly downloading from a satalite, so the time to revoke all keys, and issue new ones was days, not months or years like a DVD player (DirecTV required Hardware updates that took a year, but that was likely a early design mistake.)

Re:TCP does not work.

[tbannist]

You fail to understand reality, young padawan. It only takes one Jedi to unleash the power of the force.

Or simply put, one person can crack the DRM and then release infinite DRM-free copies. You can't make it difficult enough to prevent people from doing it, all you can do is make it extremely profitable for those who can crack it. Mark my words, the stricter the DRM, the more money the professional pirating outfits will make. Essentially, DRM is creating one of the new growth sectors that funds organized crime.

Re:TCP does not work.

[Dark_MadMax666]

You miss the point again -average user will simply use bittorent -same way as before. You only need one dedicated person with right equipment to get undrmed copy ,and its naive to think nobody will do it (well for start there is actual financia interest in 3d world countries to rip the movies and sell them in their home markets for $1 per DVD).

  And is it was mentioned before DRM can not be effective in principle - you can always just rip off the screen (and with high res equipment it will be good quality) .

But I doubt it will ever comes to this ,if anything they will have to catch unencrypted sctream from the point where it goes to screen matrix (you cant put encryption on each pixel - too expensive) .If ever it comes too that even - all current DRM systems are far from ebing unhackable even by conventional means and I do not see situation change in next 5 years .And in 5 years world can be totally different place.

Re:TCP does not work.

[tom2275]

...or wasting a weeks' worth of evenings ripping open my home electronics, isolating the vulnerable point in the circuit, building some kind of signal-tap, streaming off the signal, taking it into the computer and encoding it to Xvid....

Or just download a copy that someone else spend the time ripping open the case, isolating the vulnerable point.....

Re:TCP does not work.

[soft_guy]

If you can play it, it can be duplicated, period.

This is true. However, there are digital watermarks that will survive being copied in this manner. It would be possible for the movie companies to watermark the film with a unique identifier that could identify specific copy. They could sell movies to you in a manner that requires you to identify yourself and take responsibility for any copies that turn up with your GUID in the watermark.

Personally, I would not buy any digital media under such a license, but it could be done.

Re:TCP does not work.

[Shaper_pmp]

Except that when you're sat at home wanting to back up your entire DVD collection, who goes on bittorrent and waits to download them all? And who just suddenly guaranteed that every movie I own is available on bittorrent?

There are only so many hacking groups, and you can only rip and transcode so many movies per day, y'know. And with DRM+TCP both of those numbers are effectively set to decrease dramatically.

You're missing the point - even if piracy is always possible, and even if making the ability to hack hardware a requirement doesn't stem the flow too much, and even if the more specialised requirements and necessity of having a physical (no doubt quickly-made-illegal) device doesn't make catching and prosecuting pirates easier, it's the normal users who are effectively stuffed.

If I want to pirate the latest Stargate SG-1 or Desperate Housewives, I'm fine on bittorrent. If all I want to do is back up my $obscure_movie DVD that I already bought and paid-for, I'm boned unless I can rip it myself.

Maybe you weren't aware of this, but many people like watching movies that there isn't a huge mainstream audience for, or that unaccountably aren't popular with the early-adopter geek set.

And maybe you've missed this, but not everyone is interested in the pirate's viewpoint. If you just want to serially rip off movies, great. Ethically indefensible, but great. I've even done it myself before now. But there are those of us who value quaint concepts like personal freedom and fair-use copyright exemptions, and we're the ones who're getting fucked in the arse by DRM/TCP.

Re:TCP does not work.

[Rei]

Remember: Security is not about making stuff impossible to steal, it's about making it so difficult to steal that it's not worth it.

Yeah. I mean, it's not like once somebody, somewhere cracks it once, it's unleashed in unprotected form on the net and effectively impossible to stop.

I should add that even in the most "ideal" DRM scheme -- content encrypted straight up to a decoder that is physically part of the display components -- you can crack it. Worst case, you monitor the RF coming from the chips in the decoding process; after all, RF even reveals what CPUs are doing. Do they think that they can shield in a way that people can't remove the shielding?

Re:TCP does not work.

[Shaper_pmp]

If it can be played (by me), it can be copied (by me)? No.

I don't care if professional pirating gangs on bittorrent can still pirate movies (although you'd have to be pretty out of it to think this extra layer of complication isn't going to slow the flow at all) - if I can't exercise my fair-use rights with media I paid for, that's fucking wrong.

Come with me on a journey... I own $obscure_dvd. I want to back up $obscure_dvd. At the moment I can rip it to another DVD, or (even better) transcode it into Xvid and stick it on my machine for playing whenever I want. So far so legal.

With DRM+TCP I can't do this. Even if $obscure_dvd does somehow gets ripped by TV-flavour-of-the-month obsessed pirates, and even if it has enough mass-market appeal that the torrents don't just die through unpopularity, by downloading it I'm comitting a criminal act - why the fuck should I have to become a criminal in order to exercise my legal rights?

You're right - DRM+TCP is entirely "survivable" for people who only like mainstream media and just want fr33 sH1t 0ff t3h 1nTern3t5, but for those of us who give a fuck about our rights or prefer something a little more obscure than the latest Paris Hilton album, we're boned.

Re:TCP does not work.

[Shaper_pmp]

Jesus Christ, did nobody bother to read the post to which they responded?

Please explain how anybody's supposed to pirate a movie if devices are coated in inch-thick epoxy resin, or burn out chips when the case is opened. If you're thinking "current DRM systems don't do that", do remember chess matches last longer than one move ahead.

Or since it's just a digital file anyway, how about embedding a watermark in the movie that uniquely identifies you, your computer and your credit-card to anyone who downloads the file. How long do you think mass-distribution piracy is going to last when the police get a handy list of the names of key players in every major pirating ring delivered to their door?

Please also highlight how the fact that I can make myself a criminal and expose myself to prosecution makes up for the fact that my fair use rights are being violated.

Also, even if a few people manage to produce workaround devices and aren't caught and charged under the DMCA, please explain how massively upping the skill-set barrier to entry for piracy and restricting the activity to a tiny fraction of its current number of practitioners is going to help maintain the vast flow of pirated media we enjoy now?

Re:TCP does not work.

[Shaper_pmp]

Bugger - forgot to add:

all current DRM systems are far from ebing unhackable even by conventional means

Because they're all software based, so they're amenable to software hacking. Software hacks are easy, cheap and simple to create and distribute. Hardware hacks are none of these things.

And if "all DRM systems are far from being unhackable", please point be towards a WM9 stripper. No, not WM10 or WM11 (they were announced recently), WM9.

and I do not see situation change in next 5 years.

Have you ever heard of the Trusted Computing Platform? It's based around a dinky little chip that will sit inside your machine well within five years' time.

Said dinky little chip provides a unique key that identifies you and allows you to unlock DRMed media. The entire TC platform is designed with one aim in mind - to absolutely prevent you from extracting this key. The entire OS, and hardware from the motherboard up has been designed to prevent you getting the unique personalised key out of the chip for unauthorised purposes. Safeguards are built into the very hardware of the machine such that unless you can get into the physical chip package and somehow read off the (encrypted) key, you aren't getting it.

Windows Vista (and other TCP-supporting OSes) have protected audio and video streams which prevent third-party apps from "listening in" to the decoding processes. These systems run as core OS-level code, and even other parts of the OS don't have permissions to monitor them. Your monitor, sound card and even speakers also need to have a TCP chip in them to decode the stream, so you can't even use old hardware or exploit the analogue hole any more.

You can't get the TCP key out, because it's locked away in hardware. You can't listen into the decoding process in the OS, because it's at a lower level than your apps are allowed to reach. You can't directly exploit the analogue hole, because the media is ecrypted right until it gets to your speakers and monitor.

You're reduced to either hacking speakers and monitors, or literally pointing a video camera and microphone at the screen.

Yay for the day when all rips are dodgy cams, at a fraction of the "acceptable" resolution of the day! Hoorah!

And in 5 years world can be totally different place.

Indeed. It could well be a place where the current flow of pirated content is reduced to a comparative trickle of low-quality cams, said trickle of pirated content is much easier for law enforcement to monitor and use to catch infringers, media companies can dictate to you what devices you browse their content on after sale, "fair use rights" are a quaint memory and trying to exercise your fair use rights makes you a criminal. We're already half-way there now.

Re:TCP does not work.

[MS-06FZ]

And if "all DRM systems are far from being unhackable", please point be towards a WM9 stripper.

I found one online but when I tried to download it, the site asked me for a password. When I said I didn't have one, it offered me a "free tour" with pictures of the stripper in action and at the end it asked me for my credit card info. Might be worth checking out if you have a credit card.

Re:TCP does not work.

[Dark_MadMax666]

I know about TCP and its application to DRM. But -thats what I said not in 5 years, Vista is not even here yet ,not to mention most of the hardware for it , DVI/VGA are still standard video interfaces and none of DRM ridden interfaces are in main stream use (despite them being present on the market for last 5 years) .
  A lof of infrastructure has to happen before RIAA wet dream has even possibility to become reality. And then guess what? - non DRM ridden platform will still be here ,as there is still consumer demand for them .DRM ridden boxes will be just another appliance of limited use.

You're reduced to either hacking speakers and monitors, or literally pointing a video camera and microphone at the screen


  And you know hacking speakers and monitors is not that hard really ,even DRM ridden ones. You still have to unencrypt data somewhere ,and as I said before putting TPM chip for every pixel is too expensive .Remember you only need one hacked monitor and one hacked sound card in the whole world to get the content on the loose. -All regular users get it same no hassle way (bittorent,p2p).

Re:TCP does not work.

[VernonNemitz]

The DRM issue you point out is actually the tip of the iceberg of future technology.
In that future, automated systems will repair themselves and produce goods, including energy. See "The Two Faces of Tomorrow" by James P. Hogan
Today our efforts are going into the technical infrastructure to bring about that future, but when/IF it arrives, then in theory, everyone should equally benefit from that equivalently "unlimited" supply of ordinary physical goods, that cost no human effort to make.
(NOTE: "Overpopulation" would be a word that depends on the ratio of goods to people. It is quite possible for us to breed faster than even that future technology can cope. Isaac Asimov once used the exponential-population-grown figures of the 1960s to show that, assuming instant teleportation and nuclear alchemy and other technology existed, the entire mass of the Observable Universe could be converted into human bodies in less than 6000 years, leaving zero mass for oxygen, food, water, shelter, etc., to sustain that population. {"The Power of Progression", Magazine of Fantasy and Science Fiction, May 1969})
What do people do in a not-overpopulated automated-supply future world? Exercise creativity! So, consider forming a team to produce a movie that in today's economy costs $200million -- what are the costs in that future economy? The physical set-materials and equipment and post-production tech are free for the asking of the automated infrastructure. The labor is donated for the Love of Art (or maybe for allocades/awards), or they wouldn't have joined your team. Net result, the movie can indeed be released for free.

Re:TCP does not work.

[arminw]

.....how about embedding a watermark in the movie that uniquely identifies you......

Do you REALLY think Walmart will go to the trouble of registering every buyer of the $5.95 DVD's from their bargain bins?

Any digital data boils down to a stream of bits transmitted over time. Take a stream of bits from the receiver to the transmitter or recorder and you get a perfect copy, DRM included, EVERY time. Marketing such a device should not even be against the law, since it is not CIRCUMVENTING any coding or encryption. A simple box with a player and recorder, where the stream of bits goes directly from the playback head to the record head would allow copying *any* recorded data stream, no matter how much DRM it has. It could be marketed as a universal media backup device.

Re:TCP does not work.

[dgatwood]

Precisely. The fundamental reason that DRM cannot work is that you are protecting the same content millions of times. The law of averages says that if one in every hundred thousand is able to do it, there are ten people with a copy of a given work who can do it. It only takes one. More to the point, as soon as that scheme has been broken for one piece of media, it has been broken for -every- piece of DRMed media. It only has to be broken once before -every- piece of content encoded with that crypto scheme is available to people who haven't purchased it. The only way to avoid that problem would be to make the media do the first stage of decryption itself, which might happen someday, but not any time soon....

You can make it harder for transient content (e.g. cable signals) to be cracked because it is of lower value after the data is stale since it cannot be readily stored until you're ready to decrypt it. In that way, all you have to do is provide a separate encrypted stream for every customer and it becomes a lot harder to decrypt. But that is literally what is required for DRM to have any real effectiveness: a separate copy for each person with a separate key for each person, coupled with never letting them store the data, even temporarily. For most content, this makes no sense, and until we have ubiquitous gigabit wireless networking everywhere in the world, it will never make sense. Even then, the cost of the computing overhead needed to encrypt millions of copies of a stream simultaneously with sufficiently strong crypto will likely exceed the benefits of doing so for the foreseeable future.

Creating perfect DRM is a fundamentally unsolvable problem, and creating "good enough" DRM is never truly good enough. All you can really do is protect it for the short term to prevent initial sales from being cannibalized (and even then, only if your DRM scheme has never been used before). After that, all bets are off.

Re:TCP does not work.

[dgatwood]

Listen closely, because I'll only say this once. The day I have to show identification to buy a movie is the day I never buy a movie again. Period. As an individual, my right to privacy trumps any rights the studios might naively think they have to protect their intellectual property rights.

And no, I don't upload pirated content on Bittorrent. The studios simply have no right to know who I am. The next step is that they say, "Oh, you watched movie A and movie B, so you now fit the profile of [insert criminal group here]," and you see the problem. Or "Oh, you got that movie at this location at this time when your [wife, girlfriend] thought you were [at work, at your parents' house]," and suddenly you're being sued for child support. And on and on and on. There are a nearly unlimited number of ways that this information could be used that would violate the privacy of the viewers.

Moreover, if I buy a book, I have certain rights. I can read that book, burn the book, resell the book, etc. With DRMed content that is tied to me, I lose all of those rights. I therefore will not spend any money on DRMed content unless I already possess a circumvention tool to allow me to make full use of that content in the same way that I could make use of it otherwise. That alone is sufficient reason for me to reject content with such draconian protections.

Finally, I'll add this thought: when you treat people as criminals, they are far more likely to act in a criminal fashion. "You want me to show my ID before buying this DVD because you are cracking down on people pirating movies? If I'm losing my rights anyway, I have nothing to lose." Yes, that's a bit of a stretch, but remember that a sufficient number of uniquely watermarked copies of the same movie precisely superimposed (averaged) will almost certainly result in an unreadable watermark, no matter what methodology is used, but will not affect the actual reproduction in any negative way. Just a word to the wise.

Re:TCP does not work.

[emilper]

It could well be a place where the current flow of pirated content is reduced to a comparative trickle of low-quality cams, said trickle of pirated content is much easier for law enforcement to monitor and use to catch infringers, media companies can dictate to you what devices you browse their content on after sale, "fair use rights" are a quaint memory and trying to exercise your fair use rights makes you a criminal. We're already half-way there now.

Or it could be a world where cheap computing power, good enough and not very expensive recording devices and lotsa free online documentation on using them will let lots of people put their good enough content online asking for "two cents if you enjoyed it" from the "consumers" ... ... I just looked at my booksmarks list and my expenses list, and I see this world already came into being: you already can legally buy music, that's at least good enough and it's not DRM loaded, from lots of places, and even watch for free movies that are funnyier/better done/more spectacular special effects/etc. than what you can buy on copy protected DVDs.

Re:TCP does not work.

[Shaper_pmp]

But -thats what I said not in 5 years, Vista is not even here yet, not to mention most of the hardware for it , DVI/VGA are still standard video interfaces and none of DRM ridden interfaces are in main stream use (despite them being present on the market for last 5 years).

Vista is slated to be released in January next year. As with all Windows releases, it'll prompt a new generation of "designed for Windows Vista" hardware, and will prompt a new round of hardware upgrades/purchases across the PC world.

According to this there are already in excess of 25 million PCs out there with the trusted computing chip in them (link was written a year ago), and by 2010 most devices will have some form of hardware TCP support.

Now, while I'm not arguing there might be a few machines knocking around in five years time without a complete end-to-end hardware TCP implementation, it's clearly going to be the de-facto standard, and that's only going to get worse with time.

You're right, in principle speaker or monitor hacking isn't impossible. However it's not easy, the skills required are much less common that software programming, and once one person does it they can't package the solution up like an application and simply copy it to anyone who wants to use it. Hardware is hard.

Also see what I posted earlier about the hassle of it. If I've got to rip apart my monitor (or even download schematics, buy components and build my own device) just to rip a movie I own, chances are I'll just suck it up and buy the damn thing.

And then guess what? - non DRM ridden platform will still be here ,as there is still consumer demand for them .DRM ridden boxes will be just another appliance of limited use.

Sorry? Did you miss something? The whole point of hardware DRM is that machines which don't support it won't play the media. They won't have the hardware, and they won't have a licence to decrypt the file.

DVDs/DeCSS is a relatively pathetic encryption attempt, and look at the legal trouble it caused, and how long it took for legit, reliable DVD players to be made available on Linux.

If an OS wants to play TCP DRMed media it'll have to have support right down to the hardware and buy a licence to join the club. OSes which don't follow the rules will get sued, and the next generation of DRMed content will simply ignore them.

Remember you only need one hacked monitor and one hacked sound card in the whole world to get the content on the loose. -All regular users get it same no hassle way (bittorent,p2p).

Oh jesus, I thought we covered this. Downloading off bittorrent is fine for teenage pirates to leech the latest episodes of Stargate SG-i or Desperate Housewives. It's no solution at all for those who like obscure media, who have a large collection of movies they'd like to back up, or who don't want to be exposed to prosecution and bankruptcy simply for exercising their Fair Use rights.

Where did this "OMFG! Teh intarwebs wi1l s4ve uS from DRM witH biTtorr3ntz!" meme come from anyway? It's not a solution - it's just a workaround for one small (ethically indefensible) section of the ripping community. Normal users are still fucked, and it's only really the normal users who have a right to complain in the first place.

Re:TCP does not work.

[Shaper_pmp]

That's a great hope for the future. Nevertheless, it doesn't mean we shouldn't be fighting against DRM as well.

Re:TCP does not work.

[Shaper_pmp]

I'm not sure what argument you're responding to, but it's not the one we were discussing.

We were talking about downloading TCP DRMed files, or ripping TCP DRMed media. We weren't talking about buying DVDs from Wal-mart - we can rip those already.

Your universal backup device is lovely, but it doesn't do squat about circumventing the DRM, which is what we were talking about. Sure, I could back up my DVD movies to other bits of obsolete plastic, and in the coming years I could also pull out my antique DVD player to watch them on. Assuming the player is still working, I can get spares for it, and the DVDs don't degrade after... oh... 10-15 years?

Alternatively, I could back them up to my machine, stick the lot in a database and view them whenever I want, however I want.

I mean, I could back up DRMed files now, but as soon as I change my machine or lose the DRM licence all those backed up files are useless.

Re:TCP does not work.

[Shaper_pmp]

Amen to that.

The trouble is, with hardware TCP support you may well be "uniquely identified" in order to complete the DRM licence acquisition, and you might well never even know it.

And TBH, I don't think your last paragraph is a stretch at all. People become what they're treated like. Treat people like idiots and they'll take great pleasure in acting dumb. Treat people like criminals and the implicit insult will make them more likely to break the law.

"I'm being treated like this anyway, so I might as well reap the benefits" is a powerful and common impulse.

Re:TCP does not work.

[emilper]

that future is already here

We can fight against DRM by not buying DRM loaded products. It might not be very convenient, but it will encourage "content distributors" that are not enough brain-damaged to regard DRM as their only hope.

Re:TCP does not work.

[Anonymous Coward]

Sorry? Did you miss something? The whole point of hardware DRM is that machines which don't support it won't play the media. They won't have the hardware, and they won't have a licence to decrypt the file.


Invalid Assumption.

You're assuming a TCP PC with a DRM media drive, the latter refusing to read the media unless everything is TCP compliant. You're also assuming no part can be subborned and concluding from this that the whole unit cannot be subborned, and therefore functions atomicly.

While such a contraption is possible, it is unlikely to occur in any reasonable time frame, as in a PC, it requires changes to industry standards which will take a very long time, due to inertia in the marketplace.

- the media drive plugs into a bus. SCSI/ATA/etc have no reason to include a function for one device to "verify" (cryptographically) another device (specifically, the HBA). This is outside the scope of the standard. Therefore the media drive cannot trust the bus.

- the HBA plugs into a host bus (eg PCI). Ditto, the host bus has no reason to include a function for one device to verify another. This is outside the scope of the standard. Therefore, the hba cannot trust the host bus.

- and so on

What a true TCP PC requires is not just a TCP chip which stops a non-TCP OS from reading certain bits of memory, but a whole hierarchy of TCP components (TCP chip -> PCI chipset -> HBA -> drive). This is not going to happen. Adding this drives up complexity and therefore cost, and because every component must do this (or the chain is broken) that means multiple increases in a market noted for its constant decrease in cost.

My conclusion:

There is going to be nothing (in anything but the long run) preventing someone plugging a DRM media drive into an old PC, at which point we're back at convincing the media drive that we're running a TCP OS (yes, more difficult that DeCSS, but possible, and something at which many people have a lot of practice).

On a different topic, you've also fundamentally misunderstood the flaw in TCP/DRM. They are a lock. However, the function of a lock is not only to keep people out, but also to allow the right people in - they are designed to be unlocked. Conventionally, locks keep out people to whom the contents does not belong, burglars and houses, etc. However with TCP/DRM, the physical property (PC, media) belongs to the person trying to circumvent the lock, who has both time (privacy) and resources (computers excel at trying things over and over again) to do so at leisure.

Re:TCP does not work.

[arminw]

......but it doesn't do squat about circumventing the DRM, which is what we were talking about.......

The problem I pointed out is that DRM doesn't stop commercial "pirates", who are the only ones that actually do REAL damage to the bottom line of the **AA people. All DRM does make it hard or impossible for a legal user to use the contents they have bought in any other previously undreamed of ways. Ten years ago nobody even DREAMED of iPods and multi-gigabyte key-ring data storage. In another 10-20 years we may carry 100TB of storage in a thing of that size. Using a mechanism that stores data as dense as the DNA molecule would allow storage of orders of magnitude more than we can today. Every bit of content that was ever expressed by all humans on the planet since history began can then be carried in a device much smaller than any iPod today. DRM for any particular microscopic fragment of data would no longer make sense.

DRM will exist until the content distributors are completely unimportant to the existence of human creativity. As bandwidth increases any creative person can make their talent available directly to anyone, without any middle distributors. Humans have always mirrored their Creator by being driven to creativity themselves, long before it was possible to widely share their works. This will continue to be, but the business of sharing creativity will no longer be a source of income for middlemen. It is these middlemen that are pushing for DRM.

Google at this moment is making available to everyone with an Internet connection, some of the greatest literary works ever written in the English language. DRM will be a distant memory in 10-20 years. Copyright itself, an artificial monopoly, will die before the presently granted copyrights expire.

Re:TCP does not work.

[Shaper_pmp]

You're right, apart from the fact that (as I understand it) TCP relies on the audio/video being encrypted with the DRM key right up until it hits the display device.

And yes, every link in the chain has to be TCP-compliant, or the system isn't "Trusted". For example, have you seen the recent news stories announcing Vista will downsample all HD content played on the computer if you don't have a TCP monitor? Ditto for sound cards and other output devices.

The whole point of TCP is that the entire architecture of the computer is locked down by it. Otherwise the entirety of TCP is a white elephant, not much scarier than the current crop of (crackable) DRM offerings.

Not to be rude, but I think you need to read up a bit on the specifics of the TC platform.

Re:TCP does not work.

[Shaper_pmp]

Nice plan, and one whihc I generally try to help along.

However, at the moment the movie industry's tanking, and instead of re-examining their approach they're just blaming the whole thing on piracy and clamping down harder.

I really hope it works, but I fear a future of having to avoid all mainstream media is coming...

Re:TCP does not work.

[Shaper_pmp]

"The problem I pointed out is that DRM doesn't stop commercial "pirates"... All DRM does make it hard or impossible for a legal user to use the contents they have bought in any other previously undreamed of ways."

Exactly. The talented hardware-hackers and organised criminals will be able to crack media, but normal users home are stuffed. Ripping gangs are very good on new releases, but the overwhelming majority of pirate content on bittorent isn't the latest stuff - it's largely hosted by amateurs.

"Every bit of content that was ever expressed by all humans on the planet since history began can then be carried in a device much smaller than any iPod today. DRM for any particular microscopic fragment of data would no longer make sense."

Sorrry, what?. We've already got entire libraries in the palms of our hands, and all that's happened is that content producers have got more uptight about copyright.

We're moving to an information economy rather than an industrial one. That means information (and access to it) becomes more valuable, not less.

What was your reasoning otherwise?

"DRM will be a distant memory in 10-20 years. Copyright itself, an artificial monopoly, will die before the presently granted copyrights expire."

Hopefully so - the world would be a much better place. Unfortunately, I don't trust large corporations and the governments i ntheir pockets to act in the best interests of a society 20 years later. I trust them to clamp down and screw the normal user for every penny they've got, and fuck the future.

That's why I'm fighting against them.

Re:TCP does not work.

[arminw]

..... that's happened is that content producers have got more uptight.....

My point is that it's the content DISTRIBUTORS that will go the way of the dinosaurs. Right now they are trying to prevent the tide from coming in. Technology is enabling the the content PRODUCERS also to easily distribute their art. That is how it was before technology came along. Artists performed before live audiences, in effect distributing their work. We will eventually come full circle, when once again artists will distribute their own work, cutting out all the greedy middle men, now getting the lions share of the money due the performer. People who appreciate skilled work, will generally pay for it. I use or have used a number of shareware programs and have always paid for them, even though there are many who don't. I might download some music I like, to check it out, but then if I do, I'll go and buy the CD if it's available. The same with DVD, I'll go rent it or watch it in the cinema and if I like it, I'll buy the DVD.

Re:TCP does not work.

[Fordiman]

"all you really have to do is remove the ability to program machines that can either display drm content, or connect to the internet."

Yes, and the spherical cow just trampled over your deus ex machina.

Re:TCP does not work.

[Fordiman]

"first, make it so hard to make copies that only the elitist of techo-geeks will bother"

They've already done this (read: Fair Play 6). Fortunately, it only takes one 'techno-geek' to crack it in order for it to become easy for the remainder of humanity (read: QTFairUse6).

"second, drive file-sharing sites far underground to avoid the law"

This, too is already being done. Take a look at Kazaa. The cool thing about that is that there's now a consumer demand for file-sharing. As such, there will always be another one willing to spring up its head for the masses.

Once again, it only takes one 'techno-geek' to bring an idea back.

Re: I'll run Linux!

[Anonymous Coward]

China does this because they're still not fully integrated into the new, globalized economy. Once this happen, they won't need counterfeiting anymore and they will stomp it out. Judging by their success in effectively stomping out internal political opposition, there is no doubt whatsoever that counterfeiters will be doomed once they're not useful anymore to Chinese economy.

It may not be the big companies making this gear, but _someone_ will be making it.

Oh really? You can maybe build a PC in your home, you can maybe assemble a working motherboard in a home lab, but how do you make TC-free chips? Have you any idea of the cost involved? And how hard will they be hunted down by the market-friendly law enforcement? You can't relocate a chip factory that easily, you know, and they're easily found out.

The world is shrinking. There is no way out. Nothing you can do. Say goodbye to your "rights", they've been already bought and paid for.

Get used to it.

DRM will fail in the end!

[Euseb]

There will be always a way to break the DRM. We should learn from history, for us humans it tends to repeat (remember all the attempts to protect movie DVD's, in the end, it's easy to copy them). The Movie and Music Industries will be forced to become efficient operations that can't afford to waste money in extravagant productions. Something similar to what has happened to the Banking industry where they would spend obnoxious amounts of money on their operations (luxury buildings, expensive art, excess of staff and overpaid managers, etc.), and were used to make huge profit margins. Now they run a more efficient business that has reduced its costs and its margins. It is ridiculous the amount of money that the people involved in these industries make, i.e. a Movie Director's Assistant makes a minimum of $200,000 a year. They are not to blame though, we are because we buy their overpriced product (we don't know any better because the industry behaves like a Monopoly). However, technology is going to make that industry efficient whether they like it or not. Same goes for Real Estate Agents, they are going to start making money proportional to the service they provide. In most of the cases, their service is not worth the standard 3% commission. God bless Technology!

Re:"I'll run Linux!"

[JockTroll]

What did you expect? Did you really believe all that crap about the "digital revolution", "information taking the place of money" and so on? It took some years but the economy has reacted, so harshly that all your dreamy-eyed fantasies will be crushed totally. Your beloved computers will be, forever, your prisons. Those of us who haven't turned stupid machines into a reason to live will carry on as always, and nothing will change for us, while you computer geeks will have to resign yourself into having been utterly defeated. No more ridiculous revenge plans for your failed lives, no more parasocialist ideals, nothing more of that forever. The corporate geeks have caught the computer geeks, they have beaten them up and left them defeated and humiliated, as always. To paraphrase your beloved Orwell, the future is a jock, shitting on a nerd's face forever. Suck it up.

It's all about the extras

[Ironsides]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

I'm assuming you're asking about CDs and DVDs for one thing. For those two, it's all about the extras. Little things that don't cost much but are bonuses like the prize in a ceral box. For example, including full lyrics in the CD booklet. Or a collectors card/photo with either a picture of the singer/band or something on it. Basically, you release something that isn't as easy to distribute digitally.

There's probably other things you can do as well. Those are what I've seen done before. It's a nice treat for the fans.

In answer...

[sm62704]

You sell it on a physical medium, as art was always sold before computers came around. Nobody ever bought "music", they either bought sheet music, a recording of music, or hired musicians. In 1944 you didn't buy a song; you bought a 45 or a 78 that had a song recorded on it. You didn't buy a novel, you bought a book with the novel printed on its pages.

DRM for audio DOES NOT WORK. There has never been true DRM for music, yet folks still buy CDs. I could always copy records and tapes, and did so. The only difference now is I don't have to be in the same room; nothing has really changed.

The record industry blames copying for its sales decline, but the true reasons are that there is a boycott against them, and they aren't producing much that people want to buy. My dad doesn't listen to the radio any more, he says the country music sounds like rock, and I listen to indie music because the "rock" they play on the radio isn't rock; it's wimpy whiney minor key pablum obviously produced by formula. It has no soul. Plus, even if the music didn't suck people percieve that the price of a CD is way too high considering (as you said) manufacturing costs. Drop the price of a CD to five bucks, there is still profit there.

Give the songs away as incentive to buy the physical medium. The song itself is worthless.

theft? guilt?

[tomstdenis]

I'd say most people who have "duplicated" [it's not piracy, yarr AVAST ye matey!] movies wouldn't physically shoplift from a store or otherwise.

Why is that?

Could it be they'd feel guilty?

Ok, so why don't they feel guilty about duplicating movies? Could it be the actors [representatives of the movie in all honesty] are overpaid liberal pussies? Nobody really thinks about the catering, camera, rig, grip, etc other people that go into a movie. The mindset is, the actors are rich they can afford me not to pay for this copy.

And in all honesty, fuck them. I'm so tired of hearing about a movie that rakes in 300M dollars and then to hear about how "the studio stole all the profits" or "the stunt men only get 50K/yr". If every product I made got me 300M a year I'd pay myself fairly. Maybe if the studios and "A-list" actors stopped stealing all the profits we'd be set.

I just don't get why we live in a world where an actor can make 20M on some movie, but a doctor who reconstructs your heart makes only 100-200K/yr?

hmm...

Tom

I have one...

[Hurricane78]

... a very workable indeed. I guess you even used it already.

But i won't tell you, stupid amerrican. Find it out for yourself!

GWAHAHA AHA HAHA!!

Biased answer

[Anonymous Coward]

Ah yes, the "they're locking up my culture" argument. Right up there with the "they're stealing my job", in the common sense department. Besides you all aren't purchasing* the content so you have no say so as far as what happens to "your culture".

*Some of you gave up that right in exchange for free content. The rest because they couldn't be bothered to carry the situation to its proper conclusion.

drm is snake oil

[orabidoo]

For all the noise about it, for and against, and all the moral high, low and middle grounds that the slashdot crowd so loves to argue about, the obvious fact is that RIGHT NOW we have a working economy without DRM. So obviously one is possible.

Just look at it. The music industry's entire catalog is pretty much available on a digital, easily rippable, non-DRM'd medium: the good old CD. For all their noise and complaints, I don't see the labels shutting down CD stores to prevent "piracy"... and you can be sure that 99% of illegal music copying originates in CDs.

And if you look at video, you have the same thing. The DVD was originally DRM'd, but that was broken a long time ago and DVD ripping programs abound these days, from reputable sources even. Do you see the industry putting a stop to DVD sales, or somehow trying to prevent computers from having DVD drives with ripping ability in them? Actually just the opposite is happening - until recently people didn't have much of a (legally bought) movie collection at home, because original VHS tapes of movies were way expensive, so people resorted to renting them. The industry has actually figured out that by pricing movie DVDs quite cheap, people will buy lots of them, and the industry makes a BIGGER PROFIT!

So what's all this DRM noise then? Well, Yahoo themselves summed it up pretty well, and considering their position in the industry, you'd think they know what they're talking about:

DRM doesn't add any value for the artist, label (who are selling DRM-free music every day -- the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform.

As far as I can tell, that's good news for all of us. DRM is now like cryptography export regulations were a decade ago: a big threat that we all get so worked up about, but is ultimately irrelevant on its own grounds.

Just like there comes a point where crypto knowledge is "not that hard anymore" and cannot be kept in a box, in the long term, the greed of DRM vendors combined with the fear of audio-visual producers is just not enough to make something as techically broken *and* useless as DRM fly.

The same way the stock market does it...

[vacorama]

stocks are just pieces of paper, they have value based on their popularity, digital media could work the same way... http://newerthannow.com/blog/

Not a "Product"

[John Hasler]

> How do you create a market for a product, and make money of a product that
> has a huge initial creative investment, but then no manufacturing cost, and
> is in infinite supply?

Quit thinking of it as a product. The business of selling copies is obsolete.

archiving is a moot issue

[poptones]

None of those people in grandparent (penny arcade, etc) would be making ANY money without the banking institutions - that is, unles they could ifnd a way to convince people to shove their money in envelopes, stamp it and mail it. Oh, but then they'd still be at the mercy of the post office, so if they were offering something the ever increasingly fundamentalist world governments dislike they could be cut off in an instant and hauled in front of some kangaroo court on "mail fraud" charges - or something much worse.

Archiving is moot - the notion that a world of indiviiduals will be able to provide a more comprehensive archive is a fallacy; here's an example: I've bought at least two copies of grace jones' slave to teh rhythm, yet don't at present have one because the cassette and the cd both wore out. For months I have been jonesing for some of this out of print material and even amazon didn't have any used copies every time I looked. I checked p2p, torrents and usenet, and all that's there is her greatest hits and such. Finally it dawned on me I had installed real player for linux some time ago, so I hit up rhapsody... guess what? Not only is the CD I want there, but a halff dozen others as well. And Rhapsody gives me 25 "free full downloads" essentially every time I visit (I only allow session cookies) so... here's an example of DRM inciting the legit publishers to provide for me what no "commons archivist" have thus far been willing or able to do - high quality downloads (the sound actually is better than the last mp3 version I tried of the title track) that I can access from my desktop anytime, free.

There is room for both - this notion that drm is inherently evil is as moronic as any other bigotry. And when all those bad and nasty things happen and linux DOES get locked out of the mainstream media industry, you'll need only go as far as your nearest mirror to see who to blame.

Balance is what is needed, not zealotry.

Re:archiving is a moot issue

[Ender Ryan]

Way to look so far out into the future...

Dude, you didn't even look beyond your particular taste. That does not constitute a serious sampling of works being... well, "kept alive" for the future. Indeed, there IS no way to get an accurate sampling, as DRM hasn't existed long enough.

Re:archiving is a moot issue

[NeutronCowboy]

Let's keep the discussion on-topic and the insults out of it, shall we? My post wasn't about DRM, it wasn't about who makes money or how (which what the first paragraph is about, I think), it was about current copyright law. You provided a fine example of finding a specific album that you were interested in. Good for you. But that's not the scenario that I was referring to.

In your example, the album is fairly recent (1985). The company who produced it is still around, and the original rights holder is still available. To boot, you happened to have a media player that ran on the OS of your choice, which allowed you to play the music you bought. Great. Hooray. Now let's consider some other scenarios. Movies from the 20s are still copyrighted, yet a good number of the rights holders are dead, which makes finding the current rights holder a pain in the ass. Was it bought by someone? Inherited? Given away? Who do I talk to about archiving if I find a celluloid of some old movie that I would dearly love to present to the rest of the public? How do I do that legally? Keep in mind that time is running out - a lot of those old movies are pretty much falling apart by now. You might argue that what's worth preserving is already being preserved, but I think there's plenty of reasons not to let a small and highly specific subset of people decide what's worth preserving.

Then there's another example - what happens if your OS of choice is deemed to not be the proper avenue for releasing music players? The drive towards trusted computing is exactly that - the drive to remove the ability of individuals to control their hardware and software. What good to you are all the Grace Jones files then? They'll be worth exactly the same as the random noise in your /null partition.

The problem with copyright law - and by extension, DRM - is not that it makes things impossible to live with *right now*. It's the consequences of the current trend towards using copyright as some king of license to print money that are truly horrifying - if you are interested in anything that is not currently being flogged by the people in charge of the copyrights. If you are only interested in 20 year old stuff that's still more or less current, good for you. Before insulting dissenting opinions though, remember that there is far more to media and culture than what's being produced in that time frame. And that's what's at risk of being lost forever.

Re:archiving is a moot issue

[nmos]

I think your example supports the parent's position more than your own. If we lived in a world with sane copyright laws such as a term of maybe 5 - 10 years then anyone on the planet who had that album could legally and openly give you a copy. P2P networks would be 1000X bigger and more comprehensive than they are today. Libraries could put most of their collections up on line. There would be hundereds of music sites with huge collections competing for your $ based on their ability to help you find what you want effeciently. If you had to you could just ask on pretty much any music fan site/newsgroup/forum and someone would just send you a copy. In short, your odds of success would be much greater than they are today, not worse.

Re:archiving is a moot issue

[Lodragandraoidh]

I've bought at least two copies of grace jones' slave to teh rhythm, yet don't at present have one because the cassette and the cd both wore out.

A) If you take care of a CD - it will last as long as you can effectively use it. I have CDs from the '80s that are still playing strong.

B) Why didn't you burn your CD to MP3 before it became too damaged to play? Once you have it in an electronic medium, you can back it up off line, and access it through different devices. Then you can keep your CDs in a clean dry environment where they can be your ultimate backup - for as long as you live.

C) By buying 2 copies of the album - you just gave the music industry middle men twice what they deserve (and maybe more than that). The artist usually doesn't take home a large percentage of record sales.

Re:archiving is a moot issue

[Ender Ryan]

He's probably a luddite, or a subservient little prick of an authoritarian supporter.

Either way, he's a goddamn fool to think his pathetic little example proves anything. Thinking ahead more 20 years is probably beyond his capacity.

As always, porn leads the way

[BenEnglishAtHome]

Rather than trying to make money up off of the marginal copies, which have little to no inherent value, charge for the first copy. Charge interested parties, in advance, for creation of the work.

I know it's only a small example, but lots of camgirls make their biggest money from "custom" work. They exchange emails with you about what you want to see, agree to a scenario and a price, and then make a little vignette for you to enjoy. Generally, they'll make $300 and up (way up!) for as little as 10 minutes of work and a little time for post-production tweaking. More typically, you can get a 30-45 minute performance for about $500. Add in an hour of post-production work and we're talking an hourly wage in the $200/hour and up range. That's not a bad wage. "Model" web sites do the same thing with still pictures. It's a viable way to make a living churning out performance art.

Re:As always, porn leads the way

[dwandy]

I think one of the biggest mistakes people make when talking about this sort of thing is the required returns for artists to become interested, or to achieve an economic incentive.
Todays rock-stars were serving beer for eight-bucks an hour before they scored it large. They can easily make $20-$30k touring and playing or selling their own CDs (on-line and at shows).
If the artist puts on even 200 shows in a year and needs to earn (5 guys * $30k = $150k / 200) only $750 per show. Total.
A decent bar-band can put 1000 people at $30+ each, so the bar can (and does) pay much more than $750...
Discussing with people in the bar business, a band such as this might get paid in the order of $15,000 ... so 200 shows is an income of $3-million... even divied up amongst 5 guys this is $600,000 each per year. I don't know what you make, but I could be incented to tour and create for $600k.

Do they start at this income? hell no. They just might play for $500 a night at the beginning and only get 50 gigs in a year (or less) ... that's why they have other jobs at the start. If people like what they hear then they get to play more, and get paid more.
Also, it's typically sub-20yr olds who start out ... making $5000 a year playing music is not far off what they can make flipping burgers .. and it's a lot more fun.

...And the arena bands ... some 18,000 people at maybe $60 each is over a million dollar gross PER NIGHT. ...and the Madonna's and such who can charge in the hundreds of dollers per seat ...well, the income just multiplied.

No, wait: Assume a spherical CUBE!

[abb3w]

...neglect information costs...

It occurs to me (with the benefit of some sleep) that that's an even bigger problem than the massive mess of assumptions before. One of the fundamental assumptions for an ideal market is "perfect information". However, we're not only talking about a public good, but an information good. The existence of DRM inherently precludes one assumption required for an ideal market.

Oopsy.

There's probably a Nobel awaiting for anyone who works out a mathematical model for information markets. Hmmm, I don't have anything more important to work on today....

Re:No, wait: Assume a spherical CUBE!

[Anonymous Coward]

Shit, I'd hate to see what you could do if you slept at a "Holiday Inn express".

This is exactly why I love slashdot discussions. There is something strangely satisfying about seeing amatuers slapped down by... better informed amatuers. It's like an intellectual bum fight.

Re:No, wait: Assume a spherical CUBE!

[abb3w]

It's like an intellectual bum fight.

A battle of wits between a horde of unarmed opponents....

Re:No, wait: Assume a spherical CUBE!

[Anonymous Coward]

A battle of wits between a horde of unarmed opponents...

or perhaps an air assault by a circular firing squad of flying attack monkeys...
since we don't mind plagarizing

DRM is a myth.

[Jartan]

The problem with DRM isn't what they are trying to accomplish with it.

The problem is quite simply that no matter what scheme they come up with at some point they have to actually let you watch/listen. People talk about encrypted media paths and what not. Wherever you put an encrypted media path in it has to end somewhere.

Wherever that path ends someone has the capability to take it's output and turn it into a very pristine digital copy. Once that one person makes a copy and uploads it to the net everyone can get it easily with very little effort.

This is fact. An unchangeable reality. The only possible outcome is going to be an eventual massive shift in how we view the mere concept of compensation for copyrighted material.

The problem and the solution

[li'l opie]

I heard someone say their problem was obscurity, not piracy. So if music and movies are in infite supply then they become advertising. The money must be made selling something else. T-shirts and lemonade. Or, ironically, advertising. Universal has just come to this realization. They are giving away the music to sell advertising. And surely t-shirts and lemonade are soon to follow.

maybe that's a good thing...

[gravyface]

It's entirely possible that the Internet will mean the end of $200M productions...

Maybe this is a good thing? I've always wondered how much of that $200M big budget blockbuster was actually spent on essential film components (equipment, filming, effects, etc.) or lavish dressing rooms, pre-parties, post-parties, limos, etc. Perhaps having a tighter budget will mean more creativity in the industry.

Pay for original, not for copies.

[Anonymous Coward]

"The answers are the same. You take out loans to pay for marketing, promotions (giving stuff away free), and then pay them off when you're established and making a profit. You might even have to work two jobs to support yourself while you follow your dream and get established. Not everybody makes it. Either they have a product that not enough people want, or people didn't find out about it, and they go under. That's the free market."

Illegally downloading content isn't the "free market". Although it is the market demanding free things.

"It's very little different to how artists work today. Unknown artists struggle to get exposure, so do bread-and-butter work and 2nd jobs to get by.
Giving away some of your work for free, especially digitally where it costs you virtually nothing, is great marketing. The 'tip-jar' method does work sometimes, as does getting people to pay for higher quality versions of your material. Give away the low-res one, maybe with adverts embedded (hellooooo, radio) and use that to get people to pay for the high-res version. After a few cycles of that, people will pay in advance for the new one to get it made, or released if already made."

There's a word for that. It's called "shareware". According to slashdot, it's apparently not as good as freeware like F/OSS.

"The old method of charging many times what something cost to produce is dying. The whole point of the free market is for new businesses and new business methods to be tried out, and live or die in the attempt. DRM is the complete antithesis of the free market as it uses government law to prop up an artificial and failing business model, and removes the freedom of the customer to choose alternative providers. DRM on physical products warps the meaning of physical property itself for the purposes of the big media cartels."

Well several things. One this forum has repeatedly demonstrated it's ignorance on various subjects. I rather doubt anyone here can give a factual account of what content really costs to create. Second of course a business is going to charge more than break-even. It's called profit. Are you all certain you know how commerce works? Third illegally downloading content is likewise the "antithesis" of a free (speech not beer) market. Forth give the "failed business model" argument a rest. No one's being fooled by it. And last, you have ALWAYS had the choices of "not buying","buying from someone else". DRM doesn't change that. It just means that one can't abuse THAT particular content.

"My singlle player version of Half-life 2 DVD is a great example of the evils of DRM on physical media. It's encrypted, so I can't use it without Valve unlocking it for me online. I can't resell it, as my key is now used. I can't even give it away, as the key is tied to my steam account which has other older versions of my games in, and I can't delete the key or move it. The physical DVD in my hand might as well be a blank piece of plastic with a number printed on it, and to add insult to injury, when the game was first released I had to put my DVD in the drive for the DRM check, while people who'd bought it online didn't. It's over a year later, and I'm still pissed at Valve."

Uh, huh. Did I tell you how much security costs me in time and money? Damn security cartel. Good thing those nice "burglars and identity thieves" are out there protecting me from their "failed business model".

As an addendum to the other comments

[Anonymous Coward]

If you produce a track that you think you can sell 10,000 times for cash and make enough profit to pay for it, then it doesn't matter if 1,000,000 people download it, as long as 10,000 people paid.

By making freely available and asking that the place to buy is shown with the track (as text in the ID3 tag) you can proetially reach a market of a billion people. Will 1/100 % of these pay? Likely (the online ad business think they can manage it).

That you could have made 100x that if you added DRM and reached the same market, but then you are limiting your market by ADDING DRM. And the extra sales are not necessary to make this project a going concern. All you needed were 10,000 sales. Any more than that is pure gravy, so why reduce it by paying for restrictions on who you can market to?

The Problem is The Product as defined

[jcdick1]

As I see it, the problem is that the CD or the MP3 is what is being defined as the product. I have said it before, and I will say it again, the music is the product, and not the media used to distribute it. If the artists want to be musicians, then they need to be making music, not CDs. The goal should not be a platinum-selling album, but a 250,000 attendee concert series. I should be able to go out on any night of the week, with ten dollars in my hand, and have my choice of any style of live music by bands that aren't local, regardless of where I live. So I say to the musician, "Don't be a recording artist, just be an artist." Will there be tons of money to be made? In the case of the Grateful Dead, you betcha. But you better have the staying power. Is there decent money to be made? Absolutely. You won't be buying a Ferrari any time soon, but then, if you are in it for the money, most people probably don't want to hear you anyway.

Make DRM work by taking the payments out...

[Anonymous Coward]

Wrote this back at school.... it takes a while to get into but the idea is interesting... I since have learned that a law professor at Harvard is working on a similar idea.

A New Approach To Copyrights

During the fall of my freshman year at Yale University, I had the pleasure of attending a round-table discussion about the impending Napster case. Earlier that year, the university had acknowledged student use of the "peer to peer" system by limiting the bandwidth Napster clients could use. As a result, when the heavy metal band, Metallica, filed suit against Napster, Yale was named among the contributory infringers. Speakers at the round-table discussion, argued over whether or not the university constituted an Internet service provider, over whether or not enabling peer-to-peer sharing was contributory infringement, and even over what else the music industry should be doing, besides threatening higher education, to address the problem of piracy. But no one questioned that problem was real. Nor did they doubt that the problem was growing rapidly, and that regardless of the outcome of the Napster case, a serious challenge to copyright law was under way.
History
Copyright law is far from new. It's source dates back to the writing of the Constitution - or further if you consider that the Constitution draws from a long tradition of English law that began with the Licensing Act of 1662. In the three hundred and forty one years since its creation, copyright law has gone through many transformations. Before suggesting a new approach to copyright law, we should certainly understand how the law functions today, and why it breaks down. So what is copyright law, and how does it work? Allow me to review a few key points, salient to the discussion ahead.
Every time you fix in tangible form some original creative work or expression you automatically gain a copyright on that material. You draw a finger painting and presto, instant copyright. The definition of what exactly is copyrightable has also changed over time, but currently the standard of an "original creative thought" seems to hold. This of course includes songs, books, and movies, but it also includes things like computer source code. While computer code's functional aspects fall into the domain of patents, the actual expression of that function in a programming language is covered by copyright. Once you have a copyright, it allows you to attribute the work to yourself, to create derivative works, to publicly display or distribute the work, to demand your name not be applied to other's derivatives, to sell the rights to the work to another, and of course to copy or reproduce the work. These last two rights will be the most important in our discussion. You can also register your copyright with the government. If you register, your work is protected by customs, and someone infringes on it, you may seek greater damages as well as legal fees from the infringer. You must register your work prior to filing an infringement lawsuit.
Now you have a registered copyright, but how are you going to enforce it? You are afforded full protection under the law, but unfortunately, the structure of the legal system and of copyright law itself makes actual enforcement difficult. A century ago, if you wanted a copy of a work or a copy of a derivative work, someone had to make it for you. Most likely, it would come from a printing house. Thus, historically it made more sense to bring a suit against the company or person producing the offending works, rather than trying to find and litigate every person who purchased a copy. Today, this is simply impractical. One of the first examples of this new era in copyright law came with Sony vs. Universal in the early 1980's. The case centered on the misuse of VCRs to infringe on broadcasters copyrights. There was no central producer or distributor to challenge in court, since it was the end users who where making the copies. The case was brought agai

Re:Make DRM work by taking the payments out...

[Anonymous Coward]

The capitalist system is extremely efficient at distributing scarce resources. Supply and demand creates price and penalty equilibriums, and people who want things enough to pay for them tend to get them. However, this system is very poor at distributing infinite resources. Since there is unlimited supply, no one is willing to pay anything for the resource. Once a work is created in digital form, it becomes an infinite resource. Anyone can copy it as many times as they like with no degradation. Because of this infinite nature, digital media really represents a hitherto unseen kind of challenge for our legal and economic system.

You know, I think you hit the nail on the head with this passage: Authors should actually flood the environment with crippled, wrong, digital copies of their work, so that buyers can never know if they have the real, quality thing on their hands or a nasty surprise. Then, everybody would go to the source for "clear water". In the abundance of something there is a scarcity of its un-presence. Viva economy of garbage!

Who cares about the publishers?

[Anonymous Coward]

Here's a question, why are we all so concerned about the publisher's profits? Publishers were a necessary evil for so long, because artists could not afford the means of production on their own. Now, we finally have a chance to DO AWAY with that necessary evil which has been plaguing us since the invention of the printing press.

Right now, publishing houses have all the power in the music industry. Artists have very little. Digital distribution can change all of that. In the short term, yeah, some companies are gonna go out of business. So what? I personally don't buy music so that Sony can make a profit, I buy it so that the artists will keep making more of it.

Artists won't stop making music just becuase Sony stops turning a profit on their insane cash-cow (how sweet would it be to do none of the work and reap all of the benefit in any situation?) Do you think Nine Inch Nails would stop releasing albums if their publishing house went under? Hell no, they can always release digitally!

Eventually we will see a re-balancing of the power relationships. Right now publishers have the advantage over artists, because they control the means of production. The means of production have been FINALLY invalidated by digital media! This is a great thing for music, because it means that the artists will finally start to get their fair share. The power relationsihp between the artists and the production side will be shifted. Artists will make more money off of each CD that is sold, because they will be commissioning the publishing houses to distribute the hard copies with digital distribution being their primary avenue.

We've been trapped into believing that the production side has a right to make money off the artists blood sweat and tears, and then we've somehow been convinced by those companies that this is the true capitalist way. Its not, I know I sound communist, but if you are a real capitalist you will see that these production companies never had a right to the insane profits they make off another man's labour in the first place.

Re:Who cares about the publishers?

[Guaranteed]

Agreed. The current way of doing things won't work without locking up the supply side of things, but the current way is not the right way, and deserves to crash and burn.

Financing the "Star Trek" society

[Paul Fernhout]

An essay I wrote in 2004:
    http://www.kurtz-fernhout.com/oscomak/AchievingASt arTrekSociety.html
An excerpt:
"Now, let us move on to the question of where could more money for
education and creativity come from -- such as to fund more creation of
free copyrights and free patents? And where could budget cuts be made so
US parents (and everyone else) could work less hours and devote more
time to their families and charitable hobbies -- including informally
educating their children? As we shall see, a hundred billion dollars
here, a hundred billion dollars there, and soon we are talking real
money. :-)

Let us consider ways to free up money for the non-profit sector (or
reducing working hours) by cutting wasteful government and consumer
spending in these areas with (annual estimate of easy savings):
    * Healthcare ($800 billion),
    * Military ($200 billion),
    * Prisons ($125 billion),
    * Agriculture ($40 billion),
    * Transportation ($250+ billion),
    * Housing ($350+ billion),
    * Manufacturing (very variable),
    * Media (very variable),
    * Banking ($14000 billion up front, $320 billion annually), and
    * Education (very variable).
This is a total of $14000 billion up front and at least another $2085
billion per year. And this is even without considering any lifestyle
changes such as from widespread adoption of Voluntary Simplicity:
    http://world.std.com/~habib/thegarden/simplicity/
which will ultimately result in the largest savings in the US and
worldwide (but I discuss no further here). "

Re:Financing the "Star Trek" society

[khallow]

This analysis is deeply flawed in some places particularly the discussion of banking. There isn't $14 trillion to be obtained from banks by ending fractional reserve banking (ie, keeping on hand only a fraction of the money that is deposited in the bank not holding "IOU's to other banks"). It would just reduce economic activity not clean out some vast hidden store of public funds. I found a lot of the other points of analysis to be rather shallow or incorrect, but nothing else to this degree.

For example, life expectancy isn't in itself a good measure of the value of health care. A lot of that can be explained by lifestyle differences between the US and the EU. So it could be argued that health care is providing er, great value for the price but this value is masked by diet, smoking, etc. I wouldn't buy that, but how do you deal with that argument?

Military spending is another example. The US runs a global hegemony. You may doubt the value of this hegemony, but it explains why the US spends far more than anyone else. Also, the US has substantially reduced its inventory from its Cold War high. The US currently has somewhere around 6,000 active warheads, according to the Federation of American Scientists. Still very high for the purported missions that these warheads are meant for.

Still I think this is an interesting article. There are some deep flaws in many parts of the US economy, and this is a good start at looking at the overall picture.

Re:Financing the "Star Trek" society

[Paul Fernhout]

I appreciate the reply.

We can quibble over specifics, especially the issue of who pays the costs versus who gets the benefits, e.g.:
      Banking: The gold standard (gold dinar and islamic banking vs. fiat dollars and usury):
          http://www.moneyfiles.org/goldwar.html
          http://en.wikipedia.org/wiki/Islamic_gold_dinar
          http://www.prosperityuk.com/prosperity/articles/wi zzoz.html
    Health: "Has Canada Got The Cure?"
        http://www.alternet.org/story/40951/
    Empire: "War is a Racket"
          http://lexrex.com/enlightened/articles/warisaracke t.htm
but thanks for the comment about being a good start -- we sure need to start somewhere. :-)

Another excerpt from the essay:
    http://www.kurtz-fernhout.com/oscomak/AchievingASt arTrekSociety.html
"A common denominator in just about each of these areas is the domination
by out-of-date ideologies based on scarcity perspectives and/or the
capture of the government regulatory and funding bodies by narrow
interests who are afraid of losing out by progressive post-scarcity
change (which they fear will leave them impoverished). There is also the
issue of some people desiring to continue to have lots of raw power over
other people's lives (like that of a master over slaves); frankly I
can't address that character flaw other than to point at religious and
humanistic traditions of enlarging one's sense of self to include
community and world responsibilities (including finding joy in helping
the growth of others to be independent decision makers), so I restrict
what follows to monetary aspects of the problem. Ultimately though, raw
power lust has to be dealt with -- and dealing with that I freely admit
will be tougher than the economic aspects of making the case for a
post-scarcity worldview."

That is really where the core of the problem is. We can always argue about specifics in any one area -- but that is the big picture as we transition to a world where kids realize the schools they are forced to be in have little relation to an emerging post-scarcity reality made possible by automation and the internet:
    http://www.whywork.org/

This has already been answered 100 years ago

[Corrupter]

Newspaper, radio, and television solved this problem 100, 80, and 60 years ago respectively. Let's not keep pretending we don't know the answer. Don't listen to the recording and motion picture industry. The are just fools. "When the winds of change blow, some people build shelters, others build windmills."

Re:You charge for the time you spend working on it

[DaveV1.0]

Oh, really? Making a song is the same as painting a house or fixing a car?

How long would a mechanic stay in business if one customer could take the repair done to his car and give it to anyone else with the same car problem with little more than a couple of clicks?

How long would a painter be in business if the work done on a single customers house could be spread to any or all houses with a few mouse clicks?

The different is that completed tax forms, a painted houses, car repairs are all one off custom work on physical items. They can not be shared. Creative works such as songs and movies are not physical items, they are experiences, coded information, distributed on physical items. The money is made by selling the same experience to many different people. Your tax forms are not the same as my tax forms, but the Star Wars you watch is the same as the Star Wars I watch.

You speak of pooling money to make music or movies. How will that work? Remember, people contribute to political campaigns because they feel the will get something in return. Will the contributors be given free copies? Who will be the contributors? If it costs $50,000 to make an album, that is $5 from 10,000 people, but what if a band only has a fan base of 1,000 people willing to donate for an album. That makes it $50.00 per person. Are you willing to pay $50.00 for an album?

Will muscians campaign for funds? "Hi, we are Giant Pudding. We are a band are looking to make an album. Will you contribute?" If they are going to campaign, how will they do it? Begging on street corners? Commercials on TV? Where will the money for the campaign come from? The money from the live gigs go to supporting the groups members.

If you contribute to the album fund what do you get in return? Will the contributors get a free copy of the album, or will they have to buy the album as well as pay to produce it? Will they get a share of the profits from the albums? If so, how much?

typo

[j00r0m4nc3r]

in the summary. nice.

Re:Copyright was invented to protect cost of print

[nasor]

"Nowadays, the cost of typesetting and printing (or composition, arrangement, recording etc.) is borne by the artists, and the publishers do nothing of value that a kid in a garage can't do. So there is no further need of copyright to protect the printing investment. Anyone can record, print and distribute for essentially nothing."

This is only true of creative works that can be made by a small number of people for a very low cost. True, it costs almost nothing for an author to write a book or a musician to record a song, but what about things like movies, videogames, or television shows?

It's not pure economics

[Anonymous Brave Guy]

It isn't a matter of being "honest" [...] it is a simple matter of economics - rationale consumers will not pay for something they can get for free.

If everyone behaved like an economically-optimal robot, as in your model, then no charity would be able to do its work, investment funds that specialise in "ethical investments" would have no subscribers, and no-one technically competent would buy Linux distributions off the shelf. Since these results are demonstrably not happening, we can reasonably conclude that humans do not base their decisions on where to put their money purely on selfish economic principles. There is a personal, ethical aspect as well, and a part of that is recognising when something you value has required others to work to make it, and feeling that a reasonable reward to those others is justified. There is also the economic issue that things like convenience have a perceived value: even if you could have something for free, sometimes it's easier to pay a little to get the product via a more convenient mechanism.

As we saw in another recent Slashdot discussion, a lot of people don't pay (or aren't allowed by their purely-economically-driven employers to pay) for things when there really is nothing in it for them, but the introduction of an "honour system" through the idea of copyright provides a sufficient motivation for many. Indeed, my answer to the original question in TFA would be:

1. observe that most people are basically honest, and willing to pay a perceived fair price for something they value;
2. introduce a law that creates a market artificially where copying for the benefit of others is not allowed;
3. accept that a certain number of people will rip you off, and attempt to enforce the law to the point where it makes economic sense to do so.

In other words, the market the original question asked about already exists, in part because of the existence of copyright, and many people in diverse fields are already making plenty of money in it.

Re:It's not pure economics

[Jah-Wren Ryel]

If everyone behaved like an economically-optimal robot, as in your model, then no charity would be able to do its work

Your whole post is predicated on this false belief. The people who give to charity, et al, believe they are receiving value from doing so. Tangible or not it doesn't matter, it is their belief based on all the information available to them. Perfectly rational behaviour.

Hell, I just paid $100 to an author of a GPL'd tool that I use regularly. I had no onus to do so, but I believe that in sending him the dough I am encouraging further and continued development. But, as his paypal transaction count showed - despite 10,000+ downloads over the years, I was only the 6th person to make a payment.

Re:It's not pure economics

[Anonymous Brave Guy]

I truly feel sorry for you. If no-one helps anyone else in your world just because it seems like the right thing to do, then it must be a very sad place to live.

Re:It's not pure economics

[Jah-Wren Ryel]

I truly feel sorry for you. If no-one helps anyone else in your world just because it seems like the right thing to do, then it must be a very sad place to live.

Actually, you should be feeling sorry for yourself. Poor reading comprehension is a terrible disability.

Free riding

[Kadin2048]

Free riding isn't a "problem" per se, it's really just indicative of a lack of demand.

If people want new content, then they'll have to help pay for it to be created; if they don't want to do that, then the content doesn't get created, and the artist does something else with his time. As people become more bored with existing content, the demand for new content increases. Is it possible that a lot of people will sit around and just wait for someone else to pay for the new content? Sure; but really that's just saying that they're not really that interested in it, or interested enough. It's a value proposition, and they don't value it enough.

That's the simplest possible scenario; you just wait until someone with enough resources becomes bored enough with what's out there, to pay for new content just to have it created. It will happen eventually, you just have to wait for it.

Of course, there are lots of other ways that you can encourage people to pay for content-creation themselves, rather than try to game the system and hope that somebody else will; you can reward the people who actually pay for the creation (e.g., by giving them a credit so they can show off to all their friends that they were a supporter, by inviting them to the initial performance/showing/release, publicly thanking them, etc.) so that there's a social pressure not to freeload.

At any rate, I think it's a key mistake to look at the market as being one of "art" or "entertainment," as if art is a tradable commodity. That's exactly the problem that's gotten us to this point. Rather than looking at the market as one where 'art' is bought and sold, it's better to look at it as a labor market, where the labor of artists is bought and sold. If you are an artist, your job becomes not marketing your artwork so much as marketing your labor (which if you are an artist, by definition involves creating some form of art, persistent or ephemeral). So if you wanted to be a successful artist, rather than selling copies of your work, you would need to look at yourself in the same way that any other skilled tradesman does, and develop a market for your time.

Essentially that's what I'd like to see us return to; rather than "art" being something that's stamped out in a factory like aspirin tablets (a very industrial-age idea), and the focus being on creating a market for the copies, put the focus back on the labor, where being an artist is an avocation like any other.

Re:Free riding

[Anonymous Coward]

Free riding isn't a "problem" per se, it's really just indicative of a lack of demand.

I could literally download all music and all movies at this time. For free.
And not being in the USA have little to fear in the way of lawsuits.
So what stops me from downloading everything? time.

At the end of the day I have a limited amount of time, and most movies are 90-minutes of my life I'll never get back.

Even 'free' costs me time, and so if I have 90-minutes to be entertained I have no use for 10 movies...

Actually, the author is wrong.

[The Dodger]

In this context, the price of a product is not determined by supply and demand.

First of all, let's take supply out of the equation for the time being and we're also going to ignore the effects of marketing and advertising.

Price and demand have an inverse relationship - drop the price, demand increases; raise the price, demand will drop. How much the demand will increase/decrease per unit change in price is determined by the price elasticity of the product in question.

If you're manufacturing widgets, supply is an issue because in a competitive market, prices will generally (I know people are going to point out all the exceptions to this statement) adjust to a level where demand broadly matches supply.

For digital content, supply isn't a factor in determining price. Costs and customers' willingness to pay are the factors you should be thinking about.

Let's say I spend $10m creating a piece of software that is designed for the corporate market. I do a bit of market research and I discover that, if I price it at $20k (let's assume that the incremental costs of production/distribution are negligible for the purposes of this example), approx. 1,000 companies will buy it - i.e. those companies willingness to pay for my product is $20k or higher .

On the other hand, if I price it at $5k, approx. 10,000 companies will buy it - i.e. their WTP is $5k or higher .

What do I do? Well, if you do the math, you'll find that pricing it at $5k brings in the most revenue. However, the problem with that is, 1,000 of the 10,000 companies I'm selling it to for $5k are actually willing to pay $20k, so I'm leaving $15m worth of potential revenue on the table.

How can I capture that extra $15m of revenue? I'll leave that one as an exercise for the reader but while you're thinking about it, have a think about how much you're willing to pay for a given product, whether it be a digital camera or a piece of software like an email client or even an operating system, and (more importantly) why.

D.

Re:Actually, the author is wrong.

[Anonymous Coward]

This sort of stratification of the market is what has driven many software companies to offer modular versions of their software in order to maximize revenue. Adobe Elements vs. Photoshop, for example.

Regardless, 'willingness to pay' is demand. In the case of your examples the supply is not really unlimited. These companies are only willing to pay the amounts you specify because there are presumably controls in place to discourage them from donwloading a free copy of your software from Kazaa, controls that are the subject at hand.

Insane business models need not apply

[Distan]

I've got a great idea for a business. I want to start a factory that makes air, bottle it, ship it to people's houses, and let them breathe it. The problem is, there is already too much air around, and it is all free.

Shouldn't I be able to lobby Congress to ban all this free air, so that my business model can succeed? Think of all the tax dollars my air sales will bring in?

The example you set up is quite similar. You have proposed a stupid business model, and then ask us how to make it work. The fact that this model appeared to work for part of the twentieth century was a quirk of technology. There just happened to be a slim window in the development of technology where the tools of reproduction were too expensive for the common man, and multiple businesses sprang up to distort and manipulate this flaw in technology. Now that technology has improved, those businesses want to hold onto their out-of-date business model.

Buggy whips went away, slide rules went away, and those businesses are next.

I imagine that if we ever invent a food replicator like on Star Trek, all the farmers, grocery stores, and restaurant owners will want their obsolete business models protected as well. But too bad, technology marches forward.

DRM is different than rights

[bokmann]

I didn't see anyone else say wuite this argument, so I figured I'd add my 2 cents to this already crowded conversation.

The question over whether we need DRM is fundamentally different than the question of whether authors have rights that need protection in general.

If you don't agree author's have rights, then this whole thing is a mute point - it means that you believe that a creative work, once created, is the property of all to do whatever they want to with.

If you believe that authors have rights, the you believe that the author has some sort of interest in protecting how his/her work is used, and the right to profit from it.

DRM is about whether you think the authors have a further right to inconvenience/not trust/violate the fsir use righte/etc of your customers.

Authors CAN have rights to their work, AND use the law to protect them, WITHOUT using DRM.

Re:DRM is different than rights

[cdrguru]

Authors CAN have rights to their work, AND use the law to protect them, WITHOUT using DRM.

How? Today, when we have people spending every bit of free time they have to destroy the economic viability of so-called "intellectual property"? When we have people cheered on by the media for "cracking" DRM systems and pirating software, movies and music?

There is no law on the Internet and most of the people using it have figured that part out. There is no way to enforce copyright when 99% of the broadband user community says there is not such a right.

a working economy with drm?

[__aalwyc6372]

O_o

DRM and the Reasonable Man

[Anonymous Coward]

Here are links to an excellent three-part MP3 Newswire commentary that offers some insight into your question.

Copy Protection and the Reasonable Man
http://www.mp3newswire.net/stories/2003/crime.html

CDs and the Scarcity Principle
http://www.mp3newswire.net/stories/2003/scarce.htm l

Efficiency of the Market
http://www.mp3newswire.net/stories/2003/efficiency .html

a way out?

[cyberbian]

The VHS debate is behind us, as is the cassette recorder, and the floppy disk, and other 'copy protection' mechanisms are on the forefront of this battle versus our own machinations.
To be fair, we have made this problem for ourselves, and only we can allow ourselves to fix it. I'm not suggesting that this will be an 'overnight' event. It is evident through the study of history that this is not the first time that we have been faced with such struggles. Where civilization fails its members is when it becomes static and foolishly believes that it is at the 'pinnacle' of progress. It's measurable that in these moments of self-delusion, that 'the barbarians at the gate' become a real and tangible threat to progress of civilization. Any student of history can verify the cyclical nature of empire and civilization, it seems that we are on the cusp of another such cycle.
If civilization is to finally progress beyond the previous incarnations, we must first allow ourselves the recognition of our common heritage. Consistently civilizations in history have allowed the creation of an 'elite' ruling class, which in turn has controlled through knowledge and coordination the bulk of society to what its knowledge base and comfort level deemed best effect.
This incarnation of 'civilization' has gone beyond previous incarnations in that it has developed a knowledge base (the internet) that makes the Library of Alexandria seem like a quaint idea. The danger to civilization as the 'elite' ruling class has come to know it is in the spread of this knowledge base. There truly is an opportunity for egalitarian rule using the internet. I think the 'elite's' know it and are working to lock down all knowledge to ensure their comfortable position at the rest of humanity's expense. This is 'Digital Rights Management' and the 'Digital Millenium Copyright Act' and other such nonsense.
This is direct evidence that the 'elite' aren't exactly comfortable with having the 'cat out of the bag' The flaw in their reasoning however is that they feel that they can control the flood of anger and retribution that they rightly deserve. They can no more control this than they could mitigate the effects of Katrina. DRM and DMCA et al are just 'band-aid' approaches to 'stem the tide' of the knowledge that they find is freely floating all around them.
To suggest that artists are hurt by mp3 and other digital media types fails to account for the real economic facts of the case. In fact, artists and creators actually benefit from the distribution of their content, people outside of their 'region' are now being exposed to the work and the dissemination of ideas is bringing real positive effects to society. Who is directly hurt by this distribution are the people who have controlled the work 'to their exclusive benefit' through previous distribution and marketing mechanisms. While it is arguable that the distribution and marketing people need to make a living too, perhaps they might need to address the inequity of the current model. Sales have not decreased dramatically as suggested by the BSA, the RIAA, and the MPAA, it's smoke and mirrors. The real benefit for DRM is the control mechanisms that were previously in place (i.e. the dissemination of knowledge and culture) are returned to the 'elite' class.
Recently on Slashdot (and elsewhere) there has been much discussion on how little artists actually derive per song with legitimate downloads v. CD prices. I believe that the artists are speaking out against cruel tyranny of their creative work and minds. This tyranny is not through the downloader, but rather the 'big muscle' corporations that 'lock-in' content and claim creativity as their own. The irony is that although they might be guilty of creative views of the truth, they probably haven't created anything original in their whole lives.
It's also important to remember that security (aka DRM,DMCA) is a state of mind. The fact that a lock exists already implies insecurity. It implies this doubly, first in that a lock 'needs' to exist (aka.

Many others repeated this:

[hummassa]

Once one person breaks the encryption, said person can release an infinite number of DRM-free copies. So, for DRM to work, it's not sufficient that it makes "difficult" or ("a hassle") to copy the work. It should make impossible to copy it. But, as I said, that's not gonna happen.

Re:Many others repeated this:

[Shaper_pmp]

Great. So you're promising there'll always be someone out there who'll be ripping every piece of media I want, no matter how obscure, right?

And he'll always freshly seed a torrent exactly when I'm looking for it so it's always available even though it's not hugely popular, and the movie or album rip'll always be good-quality, right?

And it'll take exactly as long (and no longer) than ripping my own DVDs, right?

And I'll never, ever get caught for copyright infringement (backing up is legal, up/downloading isn't), and never get taken to court and sued, right?

Oh well, that's fine then.

In that case I don't care that I have to become a criminal in order to exercise my legal fair-use rights. And I don't care that the hardware hacking requirements are going to hugely limit the proportion of people with the required skills to rip media in the first place. After all, when you're showering a drip-drip-drip's just as good as a proper full-on power-shower, isn't it?

See where I'm coming from now?

Re:Many others repeated this:

[hummassa]

Great. So you're promising <1, 2, 3 & 4 >, right?

Essencially, yes. This is already the case today. Actually, as another poster stated, that or the creation of a really serious, organized-crime type copying ring will ensue. And then, the War on Terror and the War on Drugs will meet their younger sibling, the War on Reading.

Re:Many others repeated this:

[Shaper_pmp]

Sigh. Would you like to explain why all the points I raised are wrong, then? I'm seriously interested in why you think that, given:

1. I can't find every piece of media I want now, certainly not within any sensible timeframe.

2. Are you telling me you've never had a torrent die on you half-way through a download? Or that less-popular/rarer torrents aren't more prone to this? And you've never downloaded a torrent to find it's a crappy cam that's been mislabelled?

3. Ripping a DVD already takes less time than a torrent. What makes you so sure bandwidth will increase faster than processing power?

4. Thousands of people are being sued at this very moment. Please explain how this will stop when TCP comes in and it only gets easier to track people.

I love your chirpy optimism, but the fact is these four points are already a problem today, and no matter how hard you wave your hands and claim they aren't, you're not actually giving any evidence at all.

Don't get me wrong, the problems aren't crippling ATM, but this is the case today with software-only DRM, no hardware support and widespread and common (software) skills required to crack it. Because it's software not only the media but also the tools required to crack DRM are distributable anonymously, with an infinite supply and for free.

We're actually currently discussing the change that will negate every single point above[1], and your best counterargument is the (incorrect) assertion that everything's fine right now, so it'll continue to be fine in the future, even after everything changes?

I'm genuinely interested in your opinion, but it isn't making an ounce of sense at the moment...

[1] Hardware hacks necessary, DRM immune to software attacks, obscure hardware skills necessary to crack DRM, and the tools necessary are limited-supply physical goods which would be hard to distribute anonymously.

(And sure, the plans for such tools would be simple to distribute, but we've just got through saying that most people won't have the tehcnical skills to put them together.)

Re:Many others repeated this:

[Shaper_pmp]

Balls, forgot to add:

Actually, as another poster stated, that or the creation of a really serious, organized-crime type copying ring will ensue.

Organised crime in involved in prostitution, drugs, gambling and physical DVD/video piracy. Notice the common thread? Money.

Organised crime isn't going to be remotely interested in pirating media and giving it away for free, or else we'd be knee-deep in free poker chips, hookers and coke.

On what basis (other than wishful thinking) do you assert they'll maintain the status-quo, with free downloadable media commonly available?

And then, the War on Terror and the War on Drugs will meet their younger sibling, the War on Reading.

Nice idea. But ever notice a few things:

Drugs cost money, downloads don't.

Drugs generate money for the organised criminals who provide them. Free downloads don't.

Downloads are freely available in a variety of formats, qualities and from a variety of sources. Drugs are much, much harder to get, the supply is uncertain and the quality is wildly variable.

amortization, stealing.

[PhYrE2k]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

Amortizing the cost of producing and distributing the product, including of course the payment to the artist, over the useful life of the product (read: total cost / estimated sales per year, with the sales per year brought back into present dollars versus future dollars).

How do all companies factor in R&D? How do drug companies who spend billions developing a drug and then pennies making the actual drug come to prices? Same thing.

The other side of the music scene though is that people are stealing it. So your options are:
  a. turn those folks into buyers [DRM is an idea for that, but causes trouble for the current buyers]
  b. they're not sales unless you make money, so just reduce the number of sales and hence raise prices [read: downward spiral]
  c. let the market forces work themselves out [accepting that some people will not buy at any price]

I'd argue that 'stealing' the music is not what the market INTENDS to do, but the end effect. The key is to ask why. un-DRMd music is no worse than folks copying tapes using high-speed dubbing. What the music industry ignores is that (a) music WANTS to be shared. If you hear a song from your buddy's car- you want it for your car... right away, (b) people want a song and not an artist's collection of songs, (c) the price needs to be reasonable. People will do what is convinient. If you can get a song in 2 minutes from the comfort of your home for free or cheap versus pay too much, going to a mall, being restricted on how you use it, and so on, you'll do it. Renting/sharing songs between friends is a good first start and a good sign from the industry.

-M

Re:Copyright was invented to protect cost of print

[NewWorldDan]

and the publishers do nothing of value that a kid in a garage can't do.

Publishers provide 3 things of value: capital, marketing and distribution. In the digital age, distribution isn't as important (though a lot of people still buy their music at Wal-Mart). Most online music stores will stock damn near anything because there is no overhead to deal with. However, without marketing (and the capital to pay for that, to take your act on the road, etc.) no one will find your song and listen to it.

Copyright currently exists to give the content creators a limited exclusive on their created works. That's a good thing. Copyrights also last (effectively) forever. That's a bad thing. Somewhere along the line we got this crazy notion that creating something somehow gave you a "moral right" to the work. That you and your heirs will own that work for eternity. That's a bad thing.

But back to the original question, is DRM necessary? The answer, is no. There will always be ways to circumvent DRM. The analog hole can not be closed. If someone is infringing your copyright, the burden is (or at least should be) on the copyright holder to take action against the infringer. I suppose if someone only wants to sell their content DRMed, that's their right, but I won't buy it. The only purpose I could see for DRM is for subscription type services.

Bruce Schneier agrees

[Anonymous Coward]

Schneier described the same thing in his Street Performer Protocol paper. There are variations proposed by others, and wikipedia mentions some current implementations.

So?

[twitter]

That's the problem. It's not, and as such most people still need to buy it... including authors, musicians, actors, and developers. Yes, in a utopian world everything would be free. But I don't live in that world, and neither do you.

So, you would take the one utopian part of our world and make it as nasty as the rest?

Three words...

[Anonymous Coward]

National Public Radio.

They have been 'giving away' their content for more than 30 years. They have had no trouble making enough moola to run their business and even expand it. No DRM nessesary thank you.

Even now, most of their audio archive (with some notable exceptions) is available online, for free (in both senses). Yet they are still able to make a go of it.

You may never become uber weathy using their business methods, but their methods work.

Re:Yes, Fictionwise uses DRM

[lamona]

The Fictionwise e-books use a variety of secure formats, including the Microsoft secure reader, secure PDF, MobiPocket, etc. Each of these uses the "trick" of tying itself to your particular hardware. So part of the purchase negotiation on Fictionwise is that you have registered your reading device (or the individual software copy) with Fictionwise. If you copy the file to any other device, it will not open. Interestingly, I purchased an audio book recently from an Italian company and it arrived as a simple MP3, presumably with no technical protection. It's quite unusual to find unprotected files being sold commercially, however.

forget supply and demand

[plopez]

Economics is essentially a social science, it is about human relationships. People always find a way. Create DRM, and it *will* either get cracked or people will find another avenue (web hosting in N. Korea or Madagascar anyone? How do you control live performances?).

Trying to restrict the supply of art and entertainment is as non-sensical as trying to restrict the supply of oxygen. And just as intolerable.

Art and entertainment just happens. It is just that people are begining to figure out you don't have to pay a 'pimp' to get their music or other art and entertainment to the world. Monolitic and centralized control is breaking down, eating into profits and scaring the hell out of the suits.

A good example is prison economies. The supply of cash is restricted in prisons. So instead prisoners substitute tobacco, services (including sex) and crafts. They find clever ways around economic restrictions.

The more they try to clamp down, the more peple will find a way to squirm out of it (to sort of paraphrase that qoute from 'Star Wars' which I cannot recall verbatim at the moment, when Leia is talking to Vader).

Economic fallacy of the importance of IP

[Catbeller]

I was reading the http://www.mises.org/story/1568 ten economic fallacies article the other day, and an eleventh fallacy occured to me:

Intellectual property is indispensible to a free market economy.

The question actually is: what does intellectual property cost our economy, and does the balance accrue in our favor?

First up is the cost of the absolutely overwhelming, inescapable and expensive, Cold War insanity expensive, police state that we are building here and around the world to create a regulated economy for non-existent property. We actually have to monitor what people say, what they watch, what they hear, what they write, where they go, where they point recording devices. Then we have to build the prisons to house all those miscreants, and fund the courts and the lawyers to lock 'em all up. And this criminalization industry adds nothing to the economy (Broken Window fallacy) -- it merely costs.

The next and killer cost is the cost of lost opportunity. Let's take what used to fuel the growth of science: free and open dissemination of information for all to share. This freedom fired the intellectual explosion that gave us calculus and steam engines, an explosion that sadly is being contained by IP firewalls around corporations and universities as they become profit engines. The shrouding of research is slowing science and technology growth by a significant amount. The question is: what could have been learned by now had these new IP lords not restricted the flow of knowledge? This is not covered by cost accounting, which picks and chooses a narrow field of debits and credits that merely cover what profit IP gives the cost accountants, not the civilization as a whole. The advance of science since the Renaissance has been derailed in the last fifty years.

Extending that idea, what could be the profit to the civilization as a whole if every single book, all movies, all magazines, all sound recordings, all designs, were released in a timely fashion, as the Constititution's writers ordained, and inventors and artists could access everything that mankind has ever created, anytime they liked? What new Renaissance is being throttled by the greedy little men who have sold the idea that ideas and visions are not only their private property, subject to packaging and resale like stock, but theirs for all time to come?

What is this new paradigm of eternal ownership of mankind's knowledge in ever more concentrated (read wealthy) hands giving us, as a people, in comparison to what it is denying us?

Are we losing knowledge that could counter global warming?
Breakthroughs in chemistry that could neutralize waste?
Genetic breakthroughs that could cure cancer, diabetes, AIDS?
Breakthroughs in propulsion that could give us space for pennies?
Organic printers that could create infinite amounts of food from garbage?
What books could be written?

Most importantly, what young minds could be sparked if children could sit down at a screen and feed the Elephant's Child, reading and watching and listening to anything and everything that interests them?

As a child, in my city school, there were only a few science fiction books on the shelves. I read "Have Spacesuit, Will Travel" and "Time for the Stars" twenty times each or more. When I arrived at high school, I found rows of SF, and "wasted" time reading each and every one. What could I have done, what could I have imagined my life to be, had I access to all that had been written, for free, since the time I could read at the age of eight?

Multiply me by a billion. What have we lost?

Re:Copyright was invented to protect cost of print

[poot_rootbeer]

Nowadays, the cost of typesetting and printing (or composition, arrangement, recording etc.) is borne by the artists, and the publishers do nothing of value that a kid in a garage can't do.

I'd like to see that kid in a garage manage to get a band's new single into heavy rotation on Viacom's cable channels and ClearChannel's radio stations.

Promotion is a valuable service to a musical artist, and the record companies are still really the only way for an artist to successfully get promoted. The internet has not yet changed this.

If you can't charge for it,

[PMuse]

then sell something else.

With no controls (no marginal cost, no effective copyright enforcement against the masses, no social mores against copying, no DRM), supply approaches infinity. The price for recorded works of all kinds falls to zero. Ya just can't charge for it.

So, the business model has to be to charge for something that is in limited supply. One thing that's in limited supply is live performances. Happily, free electronic distribution of recorded entertainment generates demand for live performances. The type of entertainment this seems to work best for is music.

However, there is a limited demand for viewing movies in theatres if the same movie is readily available the same day at home. Worse, novels aren't performed at all, so the only thing electronic novels can promote is hardcopy novels. If/when ebook readers reach acceptable performance, price, and compatibility, they may replace hardcopy novels.

Free electronic distribution of recorded entertainment will quickly create a world where the enormous sums now spent promoting a work cannot be recouped. It is possible that it will also make it impossible for creators to make a return on the time spent creating.

Suggestions

[AlecTavi]

The biggest difficulty with intellectual property (IP) in the Internet age is using a product model where it does not apply. IP is essentially different from regular property for all the reasons that people have mentioned: ease of duplication and ease of distribution being the core issues. Without DRM, it would seem that IP cannot produce a profit, because a distributor can no longer compete against pirates.

I suggest that this is not a problem, however. Distributors no longer perform a valuable service, and that is why they cannot compete. Why buy a CD or legal download when it is more convenient, cheaper, and of equivalent quality to download it from pirates? DRM legislation is an attempt to maintain the current business model (product-oriented) by restricting consumers' freedom.

A better solution is to view intellectual property from a service model. Musicians, artists, movie producers, authors, and software developers perform a service: the creation of new intellectual property. People will still pay for this service. Artists used to work primarily on commision, why can't other IP creators? I will still pay to go to a concert, even when I could listen to the same music at home, because the musicians provide a unique service that is not duplicated through digital distribution. Hearing good, free music on the internet could be considered advertisement.

Similarly, the role of distributors could be modified as well. I would pay for a DRM-free iTunes service because it would organize music, centralize it, and maintain a certain level of quality. These are service-oriented benefits, rather than product ones, that can survive without DRM. (Consider the services of Slashdot, except with music downloads.)

In summary, IP producers and distributors could still make money without DRM because of the services they provide. DRM only protects income from valueless services (distribution/replication).

Without DRM

[JerryLs]

My two cents - you don't "create a market." You create a product, anticipating a market need. An infinite supply is no good without demand. Moreover, in time the most prolific product falls into oblivian. That said, we need to protect the creator of a product from theft - hence digital rights, but the management should not make it impossible for honest citizens to copy/use the product for their own personal use at home either. We are getting closer to taking away the rights of the individual who has made an honest purchase. Said individual used to be able to do pretty much anything with content or equipment he paid for, and in general, the courts had ruled in favor of the private user. No longer is that the case.

Mod parent down as (mostly) uninformed

[Anonymous Coward]

Right: "CDs are usually not concerts"

Wrong: "Classical music is one of the most heavily post-prodded genres" Never done overdubbed/multitracked pop, have you? The typical classical recording is done by first getting one good take of the whole work (or major section, like a movement of a symphony), then rerecording problem sections, then patching things together. "Note-by-note" correction can be done, but most producers won't put up with it-- it's viewed as cheating. (There's a well-known story about Glenn Gould putting together a Beethoven sonata recording by splicing together alternate phrases from two different takes, but he was wierd!)

Wrong: "A classical orchestra has dozens of players, hundreds of mics." For doing orchestra, you start out with two or three mics, and then add just enough more to capture the natural balance of the orchestra (usually one or two for solo instruments). "Enough" varies amoung engineers, but it's usually less than 10, and never "hundreds." The musicians do the balancing, not the engineer. (That's why minimal-microphone recording is often called the "classical method," duh!)

In a word: Service

[localman]

I am willing to pay for good service. In fact, I do. I know how to download music and TV for free, but I choose to use iTunes because they've got far more dependable service. The search is better, the download speeds are better, the quality of the product is better and more consistent. That's worth a lot to me. About .99 per track. If a company provides a better experience than can be had for free, they can charge for it.

The only thing about iTunes that reduces its value (and prevents me from buying more) is the DRM. That reduces the value considerably since my entire move from CD's to digital music files was in the interest of convenience. I used to use JHymn to unprotect the songs, but it hasn't worked for a while. So the DRM always makes me think twice, and in fact I'm buying less and less because

Cheers.

Easy!

[Joce640k]

It's easy! You have to give the customer something extra, something that can't be downloaded.

Badges, pens, t-shirts, all that sort of thing.

It's called "creating value", rather than "trying to achieve 100% profit margins by selling a $0.02 piece of plastic for $20".

Patronage

[scottme]

What we need is a return to the days of patronage. Relatively rich people funding the endeavours of artists, sponsoring them to create music, pictures, movies, whatever. They might do this because they feel it is worthwhile to them, to society, or that it is their duty, or for that matter, whatever damn reason they choose - they are the ones with the money after all.

The middlemen of the obsolescent content business model had a role as the custodians of the manufacturing and distribution processes, but digital technology has rendered them unnecessary. Perhaps they can find a role as some kind of patronage broker.

I like to think that through patronage we could get back to the true purposes of art - to give pleasure - as opposed to what it has become, a means for someone to get rich (not necessarily the artist).

A Working Economy Without DRM?

[wittend]

In a healthy economy, markets come and markets go. The market in recorded music is gone, and I believe that in due course the same will be true for video & movies. At about the time that these markets were establishing themselves, the automobile was destroying the market for buggys and buggy whips.

The 'Entertainment' business has no inherent *right* to exist. If it does, it does. If it goes away, a lot of 'middle men' providing ever more dubious value adds to artist's work will have to find some other rock to live under.

You don't. Music is not a commodity. It's art.

[Anonymous Coward]

What will happen now that the age of selling packaged music is coming to a close? Musicians will go back to earning money by performing live, or by being paid to write music (rather than sell it), teach lessons, etc. Just like musicians did for thousands of years before vinyl, compact discs, and big record labels.

Just because copyright can't be enforced by DRM doesn't mean artists will stop producing great works. In fact, the ratio of great work to crap work that is based on a corporate template for what sells will probably improve.

Brown Nose 'The Man'

[Chapmeister]

Uhmmm... 1) Hop in bed with government officials. 2) Form laws requiring huge payment for an inert product. 3) Strangle innocent consumers with legal action. 4) Instill fear in the populous. 5) ??? 6) Profit!

Re:You charge for the time you spend working on it

[Mr2001]

How long would a mechanic stay in business if one customer could take the repair done to his car and give it to anyone else with the same car problem with little more than a couple of clicks?

He'd stay in business long enough to repair one car, so he'd have to charge enough for his work to make it worth going into business - just like I proposed for artists.

You speak of pooling money to make music or movies. How will that work? Remember, people contribute to political campaigns because they feel the will get something in return. Will the contributors be given free copies?

Everyone can be given free copies, because a band is in the business of writing and recording music, not the business of making copies. Once they've been paid a fair price for the time they put into recording the album, the band doesn't need to worry about how many people listen to it - it doesn't take any more work to write an album that 100,000 people will listen to than it does to make one that only 1000 people will listen to.

Who will be the contributors?

The contributors are people who want that album to be recorded, just like the contributors to a political campaign are the people who want that candidate to be elected. They're not directly getting anything in exchange for their money, they're just adding a small part to the total that will eventually pay off as a benefit for everyone.

If it costs $50,000 to make an album, that is $5 from 10,000 people, but what if a band only has a fan base of 1,000 people willing to donate for an album. That makes it $50.00 per person. Are you willing to pay $50.00 for an album?

Think about that a little harder. If the band only has 1000 fans willing to spend money on their music, how are they going to turn a profit selling copies for $15 on store shelves? They won't. Here's what'll happen: they'll sign up with a record label, they'll get an advance on royalties that will never materialize, and they'll end up owing that money back to the label and wishing they'd never recorded an album at all. If they look for funding ahead of time, at least they can realize it's unprofitable before they spend their own time and money on it.

If you contribute to the album fund what do you get in return?

The satisfaction of knowing you contributed to something worthwhile, and the ability to listen to it and share it with your friends when it's finished. If you decide not to contribute, you might still be able to listen to the album if/when it's released, but you're making it that much less likely that it ever will be, so your contribution gives you the assurance that it will be created and made available (or your money back).

Will the contributors get a free copy of the album, or will they have to buy the album as well as pay to produce it? Will they get a share of the profits from the albums? If so, how much?

The artist doesn't need to sell copies if he's already been paid for his work, so there's no profit from selling copies and no need to divide it into shares. Of course, there's nothing stopping an artist from selling CDs if he can distinguish them in some way from the freely available copies.. signing them, including free concert tickets or coupons for merchandise, etc.

Popularity and consequences.

[Anonymous Coward]

"As that hasn't happened, I'm inclined to believe that most normal people don't give a fuck whether their music's DRMed or not, so long as they can play it."

A rather unappreciated point is made here. DRM as implimented by Apple (as opposed to Sony's effort) doesn't affect the majority of consumers because most don't do anything that hits it's boundaries.* The only ones that appear to be making most of the fuss, are geeks (by their nature) and that other group that brought this whole mess about (which came first? The lock, or the thief?)

BTW Ever notice that the "reasonable competition" is small potatoes? If they get as popular as some of the mainstream? Will they still continue with their "no DRM" ways? Or more likely popularity will attract the same crowd that eventually brought DRM to the masses.

*Side note. Alll the DRM players I've seen will play user-created content just fine.

It's sort of like light ...

[Jerry]

to paraphrase a Founding Father.

To use your lighted candle to light the candle of another takes NOTHING from you or your candle, but it pushes back the darkness for both of you.

In order to make money on candle light the Capitalist has to make candles illegal to own without a "license" -- imposing ARTIFICAL scarcity. That requires buying off politicians to get the law passed. Then someone lights a toothpick and used it to light someone elses candle, circumventing the law. Being the consumate Capitalist, you lobby Congress for another law (the Darkness Moving Candle Act) making it illegal manufacture candles without including an ingrediant which extinguishes the candle after a period of time, requiring a "license upgrade", or to use the candle for any other purpose except to illuminate YOUR vacinity, and requiring that no one else be in your vicinity who could benefit from your light without paying the "license" fee.

Thus, the Capitalist, because of their greed and by virtue of corrupt politicians puts a tollbooth on Light and keeps everyone who cannot afford their license in the dark. Humanity suffers but what do they care, living the luxury life in a half-dozen mansions scattered around the globe.

The economics of attention

[Henri Poole]

Ecomonics is primarily a funcion of supply and demand. Media duplication and distribution, in the old economy of some media, limits supply. This is incompatible to an open system. It was also not effective for television and radio - nevertheless, these businesses have been successfull by monetizing the limited supply of attention of people who are focused on the media. This seems like a natural place to focus on economic models for media free from the artificial systems to restrict supply, like digital restrictions management.

Re:The economics of attention

[hendler]

I agree: "Attention is the most valuable commidity" It's up to the consumer to choose what kind of world they want. With DRM you protect mega companies. (which are not all "evil") Without DRM you protect free speech. The problem with DRM is that it's "digital restrictions management" not "digital _rights_ managment" you loose rights in ways that only benifit corporations. No DRM doesn't mean doing away with copyright law - no DRM means getting rid of products that infringe on rights. Maybe the question becomes "How do you make money and protect free speech?" Seems to me like there are more ways to make money for more people with free speech than without.

Re:The economics of attention

[cdrguru]

The problem is that almost nobody today, and absolutely nobody in the future, will "respect" copyright. Therefore, in the future no DRM = no revenue. Copyright has been proven over the last 10 years to be an obsolete concept to everyone under 30. As this group ages, I would not expect copyright to get any better treatment.

Re:The economics of attention

[hendler]

Nobody will respect copyright? I understand that you mean that if digital devices allow a crime to be committed anonmously then a crime will be committed. The bigger problem is that a lot of DRM commits crimes against fair use and free speech. Also that DRM is often a criminal violation of privacy. Not all DRM is evil. But the debate on DRM is focused on eliminating DRM that is "evil". Consumers are going to choose items that allow fair use and free speech. The whole economy doesn't collapse without DRM - it only collapses for some. As a consumer, I'd rather have the economy collapse for Sony than loose free speech through digital mediums.

Steal this Thread?

[JohnG307]

People were hoping for some intellectual discourse on DRM in Steal This Film, but it seems most were disappointed with the result. This thread seems like a much better, more logical, well thought-out response to the recording industries, explaining why DRM is bad, why people commit piracy, and why people feel justified to do so.

I'm pretty sure /. should make it's own documentary with a bunch of talking heads with impressive titles below their names on the screen, reading these comments verbatim. It would probably do a lot to bring open otherwise apathetic eyes to the failings of the current media distribution system.

Music is no longer scarce

[Marxist Hacker 42]

Sure, it's likely that in a fully DRM-free Internet age that musicians won't be mega-millionaires, but I consider that a good thing.

It will likely even lead to better music- art is always better when there is suffering involved for the artist. That's why modern RAP music has lost so much of it's edge- you can't sing about poverty if you have enough gold around your neck to feed a small third world nation.

Having said that- it's within the realm of possibility that an economic system based on scarcity (which is what the original article is really talking about) will become outdated within our lifetimes. The answer is that we need a new economic system- one that isn't based on scarcity. http://www.freecycle.org/ has the right idea- but we need to expand it.

Re:Copyright was invented to protect cost of print

[Anonymous Coward]

The whole purpose of copyright was originally to protect those people who invested in the typesetting of printed works

No, that's incorrect. It was to protect the author from the publisher, not the publisher from another publisher. In the US, there were few homegrown books because there was no copyright on foreign books, so the publishers only published British authors (and didn't pay them). We didn't pass laws to protect foreign publishers from our own publishers, we passed laws to make an even playing field between our authors and theirs.

How do you make a profit?

[DaveJay]

Well, the answer is "you cannot make a profit by producing a good at great expense, if one individual sale of that good can result in an infinite number of copies made and distributed at no cost." That's it; without DRM, you can't make a profit, if distribution of that type of good is your *only* business.

However, the most commonly considered scenario is that of music distribution, and music distribution only exists as a profitable business because the alternative (going out to a venue to see music) was more expensive (in time, money, effort and inconvenience) than buying a copy to play at home. In theory, someone might have asked, "how can you make a profit by producing live shows and charging for tickets, when people can buy and share performance recordings for less?" and the answer would be "you can't." Yet somehow, live shows still managed to make money, and that's because performance recordings don't give you the full "live" experience. That can't be replicated at little or no cost, and so it remains a profitable business. Also, the distribution of those recordings (directly to the consumer and via radio) gives consumers confidence in the product they'll be getting at a "live" performance, so they'll pay more for it.

Movies are the same way; the VCR was supposed to close movie houses, and it certainly made then LESS profitable, but it remains a profitable business because seeing a movie theater is a different experience than watching a video tape, and for many people a more valuable experience (such that the additional cost in time, money, effort and inconvenience is worth it.)

So what happens when you remove the profitability from recorded performances, either movies or music? The sale of recorded performances becomes unprofitable, but live/theatrical performance remains profitable. The end result should be that musicians stop making recordings of their music, and focus all of their efforts on live performance, while moviemakers stop allowing their movies to be released on DVD.

That's not what has happened so far, however. Remember the music example, where the live performance business was profitable both despite and because of the distribution of recordings? Well, if you get rid of the profitable recordings AND the free recordings (by not making records at all), nobody knows about you and nobody will come to see your shows -- and the live performance business goes down the drain. That's what it was like to be a musician back before performances could be recorded; only a small number of musicians were profitable (large symphonies and whatnot), and being a musician was a generally disreputable business to be in. Performance recordings brought profit, and profit brought legitimacy.

So now you have musicians that can't make money through recorded performances, but still want to make money through live performances. So they continue to record, and accept the cost of recording as a marketing expense rather than a direct source of revenue. Without recordings at all, nobody comes to your live shows; sell your recordings, and you'll make some money from recordings and some from shows; give away your recordings (which is what you do these days if you distribute just one CD) and you'll make no money from the recordings, but you'll still make money from the live shows.

Will you make as much money at the live shows as you did with the recordings plus the live shows combined? Probably not, but remember: generally, the record companies make the recording money, and the musicians make most of their money from live performances. Take away the recording profit, and you might hurt the record companies, but the musicians can go right on being profitable.

This isn't a complete answer by any means, but it's all I have time for. :)

Samsung

[dwandy]

Just look at Ogg Vorbis, none of the big manufacturers support it

I picked the Samsung YP-C1 for precisely the reason that it supports ogg...
I'll agree that ogg isn't a popular format for the Big Boys, but Samsung is pretty much one of the Big Boys now...

Create a stock market

[philipstaffordwood]

1) Find someone who can generate "recoupable income" from the distribution of the "product" or artifact.

2) Have this agency apply for a "stock" to be created based on the product.

3) The agency registers the "stock" on an existing market for creation of this artifact.

4) The agency sells "stock" on the market to investors.

5) Each share in the stock is coupled to a dividend to be paid at a future date based on the number of registered copies of the freely distributed artifact.

6) The money raised from stock sales gets paid to the artifact creators.

7) The artifact is freely copyable and distributable with users "registering" to indicate use.

8) After a fixed period the registered copies are tallied and the divident gets paid out.

a) The agency that adminsters the market makes profit on transaction costs.

b) The artifact creator receives capital to produce it.

c) The investors carry the risk of project failure, but are able to speculate for a profit.

d) The stock declarer (having calculated his "recoupable cost" before-hand) has an increased "income" due to the free spreading of the artifact with almost no risk. If the artifact does not get copied much- they don't pay much in dividends.

e) Any user has access to the artifact after registering

DRM replacing copyright?

[bigpat]

Without DRM, information goods are what economists call "public goods". Public goods are non-excludable, which means that if you supply them to one person you are effectively supplying them to everyone. And they are non-rival, meaning that if you give them away, you still have them.

I think you are equating DRM with copyright. Copyright is the legal restriction on your right to copy, DRM is a physical restraint on your ability to copy.

DRM turns information goods into private goods. Now they can be sold and owned. They become excludable. The investment needed to produce them can be recovered by charging for their sale.

No, that is what copyright does, not DRM. DRM is something new that is now only being added to the economy based on fears by media companies that now that digital content is far easier to copy than previous forms of content that mere copyright law will not provide a sufficient legal barrier.

I think the flaw in the premise is that we have been operating in a DRM dominated economy until now. Quite the opposite, effective DRM requires a substantial investment in technological infrustructure which until now has not been practical.

I think any question or claim that presuposes that our current or previous system of intelectual property was based on DRM should be looked at suspiciously. Effective DRM is a new economic model, which should not be confused with our previous system where copies could be made more difficult to make, but really it was copyright law which protected the right to copy and allowed an information economy to flourish.

I think the bigger fear at this point is will DRM undercut copyright. If people come to rely on DRM to tell them that they can or cannot make a copy, then only those providers of DRM will be able to make any money. A reliance on DRM could have a very bad effect on the economy as a whole because it would raise the barrier to entry to content originators and providers, essentially creating a DRM tax on every piece of content you wish to protect and make money on. Versus the previous usumption that the legal protections were enough amd that any serious violations of copyright could be tracked down and litigated or prosecuted.

I think DRM is yet another example of people being forced to follow laws rather than simply being expected to.

I don't think it is worth it, nevermind the fact that there is no requirement for DRM'd content to be able to revert to the public domain which is and should continue to be at the foundation of all intelectual property law.

Talk about a negative effect on the economy and society as a whole if copyrights never expired and even if they did then it had no effect beause of DRM, imagine for instance if the Bible was DRM'd in perpetuity and only the Catholic church could make copies.

Simple Answer: Monetize peoples Attention

[Henri Poole]

How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply

Simple: Just monetize peoples attention instead of trying to monetize the media.

Re:How? Ask Apple

[Blakey Rat]

Of course they do. They want to stay in business. If Apple suddenly stripped the DRM from all the purchased songs, they'd lose every RIAA record label instantly and probably more than a few indepentants. Then they'd lose all the television producers with content up there as well. They'd go from a selection of millions to only thousands, and people would move on to DRM-using services like Rhapsody in droves.

Mechanisms

[iridium_ionizer]

Yes, the fans pay in advance system could prevent new talent from being able to find exposure. Yes, it could kill the romantic idea of running down a "dream." Yes, it could encourage established talent to become stuck in a rut.

The fact is that most of those problems still exist today. New talent today has trouble finding exposure. There are plenty of old talent that keeps on churning out the same old stuff (you know who). And frankly, as long as there is any potential for reward and recognition talent will always "dream" and have their dreams shattered.

As long as we are creating a whole media financing system based on paying in advance (through escrows and the like) it really wouldn't be that hard to create mechanisms to help prevent the problems. You could give each shareholder a vote based on their financial contribution and if a certain percentage (say 70%) of shareholders were not satisfied then a chunk of the money would be transferred to an independent artists fund.

These independent artists funds would really be the key to promoting new talent and encouraging creativity. There could be funds based on media (film, music, paintings, comic book, literature) and by genre (sci-fi, comedy, techno, rap, hard-rock, emo, experimental). In a sense we already have awards funded by donations (and consumer eyeballs), but what is needed in the digital age is a common framework that blends the grass-roots participation and voting (ala American Idol) with an NPR pledge drive.

taxation is part of the answer

[jpenny]

Do you know any form of property that is not taxed?

So, if the "intellectual property" mafia wants to continue to use that analogy,
then perhaps it is time that we started to take their analogy seriously and
treat their property more like other property.

Then they would have to start making some decisions on how much the property
is really worth to them, and whether it is worth it to continue to hold a
property from the rest of humanity.

Oh, there are problems with this, particularly with valuation. I propose that
each property holder self-declare, with mandatory buyout clauses and maybe a
limited number of total exemptions (franchise players).

Compare to a musician

[sideswipe76]

The price of a violin or a Piano is comparable to the price of tools for any profession. Have you seen the licensing fees for a copy of Rationale Rose? Visual Studio .NET? Have you ever seen how much a professional car mechanic spends on tools? I gaurantee you a professional car mechanic spends as much for his tools as a baby grand piano. And yet somehow, I don't know any software developers or car mechanics (even the ones who work on formula 1 cars) that have been as rich as Metallica or Michael Jackson. I don't know about you, but having my car working well is far more important to me than if I get the latest CD from Metallica so members of the band can engage in frat-boy like debauchery.

Tax the Internet!

[SAN66]

This would be the simplest solution.

1) Tax the internet. At first very little, but as CDs, DVDs, etc sell less and downloads increase, the tax would go up

2) Split the tax into various segments, movie, tv, commercial literature (ie books that would be printed) and distribute them accordingly

3) Include voluntary exemption. If you as an individual or your business do not download media, you can be exempt from paying the tax, by your burden of proof. This would likelly be arranged by ISP records proving that there is no media traffic through your route and may include audits, much like financial accounting.

4) Distribute accured tax based upon tracking of downloads. This would be up to the company producing goods to prove, much like financial accounting. And of course there would be audits and whatnot to make sure people don't fudge the numbers.

People may freak out about the suggestion about taxing the internet, but if implemented correctly this could work. And, I don't know about you, but I don't mind paying a slight increase more per month for my internet in exchange for free access to content of all kinds.

This would also open up the market for smaller production studios and artists to produce goods.

How did Microsoft do it?

[French guy]

As far as I know, Windows never had any successful copy protection since this year. Before Windows XP, I had never paid for a copy of Windows OR Office (since Win 3.11). No one I know has. Yet, they managed to become the biggest company the world has ever seen. Now how could THAT happen? Figure this. You have a $29,95 product. Let's say that there are 1 billion computer users in the world. If you product appeals to only 0,1% of them, that's potentially 1 million customers. Out of this, only 10% are interested to acquire your product instead of the competition. In the end, if only 1% the remaining customers decide to pay for it, that's approximately 300,000$ in your pocket. Okay, that's a pretty crude example, but you get the picture.

Examples

[briancnorton]

Example: The Russian Oil sector. In soviet times it had a dilapidated, underinvested infrastructure and was manages soley by Rosneft. With privatization came Lukoil, Yukos, TNK, etc. They dumped billions into the system to make it as modern of an operation as anywhere in the world. As a result, Russia now has a stable economy based primarily on amazing growth in the oil sector. The weak link in the chain is still transneft (state owned pipeline monopoly) which has no profit motivation and as such does not invest back into the system. (and it a political weapon)

Counter Example:The US Welfare system. In 1996 the welfare reform act of 1996 made people with no economic incentive to work get jobs or lose benefits. From the Wikipedia "The consequences of welfare reform have been dramatic. Welfare rolls (the number of people receiving payments) dropped significantly (57%) in the years since passage of the bill. Child poverty rates for African Americans have dropped the sharpest since statistics began to be tallied in the 1960s."

Re:Examples

[Anonymous Coward]

In 1996 the welfare reform act of 1996 made people with no economic incentive to work get jobs or lose benefits. From the Wikipedia "The consequences of welfare reform have been dramatic. Welfare rolls (the number of people receiving payments) dropped significantly (57%) in the years since passage of the bill.

This seems a lot like "When I open the faucet, the water flows". You measure, then cut and then you suddenly admire how the material is miraculously shorter after that! You dumped them out of the crib, but it didn't change their mindset. I am certain that in most cases, the problem was thrown over the wall to the police and to middle-class citizens spending more and more on their own security.

Re:Examples

[AtomicJake]

Well, I asked actually for examples that include Intellectual Property. So, the examples given are just saying that a reward scheme increases productivity (and the US Welfare example is probably a not that good example), but they do not relate to Intellectual Property and definitely they do not show that DRM establishes such a reward system for the content producers.

Re:Examples

[briancnorton]

The claim was that of capitalist system of financial incentives-to-produce is a time-tested and irrefutable fact. I made no claims about DRM. In fact, theft of music and movies is almost irrelevant in the grand scheme of things. Economic espionage (theft of IP) is estimated to cost the USA between 250 and 300 billion dollars per year, plus peoples lives. (it's a dangerous game) The entire music industry is valued around 7 billion per year. IP must be protected. Congress understands this, but has chosen to focus their attention in the wrong places as directed by the people with the money. (a sad state of affairs)

Another reason the singularity is near:

[Anonymous Coward]

This person still believes in classical economics, the allocation of resources under conditions of scarcity. Digital information doesn't work that way.

Easy

[Anonymous Coward]

The same way Google does it and Universal Studios does it.
Free, but you get advertisements ;-)

Charge for bandwidth

[kommisar]

How do you make an online economy work without intrusive DRM? Simple, a universal tax on bandwith at $0.001 per megabyte (or ~$1 per gigabyte). Now it costs you $6 to download a CD full of audio from a pirate site and will totally change the dynamics of digital content distribution.

Re:Charge for bandwidth

[Anonymous Coward]

I think this fellow previously summed it up quite exactly.

Re:Charge for bandwidth

[kommisar]

Better to remove the tradgedy-of-the-commons problem that is the internet with flat rate pricing than to bend over for DRM and all kinds of privacy invading technologies that are going to be foisted on us. Some businesses (like spamming) will become less profitable when you have to pay for the resources that you use, and these businesses will fail. New businesses that are efficient in the new pricing scheme will arise to replace them. Linux does not depend on either model. You can order your Linux install CD from many sources and don't require flat rate pricing for success.

Unobtrusive Adverts

[MrSteveSD]

When it comes to video, I think It can be done. You just need to generate money by people looking at the video. This can most obviously be done with adverts. However, adverts are annoying so how about this. Each film has an extra track of information that describes saleable objects. So if you were watching a cop show and liked the Mafia Boss's shirt, you could click on it and it would take you to a website that sells them.

Re:advertisements

[dragonbutt]

If I could download a movie or music free within 10 seconds of it's release, but it had comercials that I have to fast-forward through,
OR
Buy the hard copy cd/dvd a week later with no comercials at all, I might do both, or either.

Could this provide a solution?

Easy!

[magictiger]

There's a real easy solution to this. If you pay for your download, the company sends you an envelope with lyrics, script, popup of the band/movie cast, stickers, whatever. Put the same stuff in the hard copy of the media.

Some people are going to argue that it will raise prices for productions. That it may, but if you keep the prices pretty close to where they are now and accept lower profits, you'll still keep your strong sales even when your "content" is available online. The solution is to add in something so that the consumer doesn't feel like they're just buying the music/movie, and it has to be something that people will actually want, so no cheesing out by just adding in an extra picture or two. Make it worth having.

Re:"I'll run Linux!"

[alfs boner]

Hear, hear!

Simple

[geekoid]

Include something with the package that can't be downloaded.

As it turns out, a lot of people will pay for music online if it is easy enough. iTunes is a greate example.
Do some people not pay? sure. But most people will pay because it is right.

False Assumptions and another hypothetical

[magisterx]

Your question starts out with false premises, or at least implied false premises. First, you are implying that the situation you describe now does not presently exist. Granted, DRM does exist now, however I am not aware of any DRM yet brought out that hasn't been cracked, and fairly quickly at that. Thus, technically, you can create that infinite number of copies and distribute them easily. Yet content industries have not yet collapsed, in fact they all seem to be doing quite well.

Second, you imply that without DRM virtually everyone would make use of these freely available copies. You have posited that DRM vanished, not that copyright vanished. While there are some hardcore filesharers out there that refuse to buy anything, a very large percentage of people consider such copying wrong and avoid it on moral grounds, and there is another group that will consider it a morally grey area and use it to sample some and then go out and buy the ones they really like. If DRM were removed(recall that DRM is relatively new, it was very recently quite easy to copy a VHS tape to another, for instance), it would have very little impact on the later two groups in terms of how much they buy. Only that first group of hardcore filesharers would download more than they already do.

Let us put those aside though and posit a world with neither copyright(in the legal or moral sense) nor DRM. In this situation everyone could and would share their media freely, easily, legally and morally. This still would require a major shift in the content creation industry, but still would not destroy it. First, presentation can be sold. In movies, this would mean theaters, which could still be required to provide a percentage to the content producers. For music, it would mean emphasizing the concerts as moneymakers with the recordings being advertising for the concerts. Second, packaging and convenience. Strange as some may find it, a lot of people like the feeling of owning something and packaging matters in retail very much. Even if they knew they could legally make a copy of a DVD, many people would still buy it if it were well packaged and presented.

Finally, do not forget the patronage system. Most of history's art, music, and many of the plays were formed with the primary financial support being a rich lord paying the creators a stipend to permit them to do their artistic work. The old system exactly as it was could be used for music still. Movies, due to their extreme cost, would need something more complicated, but a combination of soliciting funds from multiple patrons(perhaps even a donation system for the masses) and reducing the absurd cost of movies(particularly some of the salaries) would accomplish it.

Music is Important

[Anonymous Coward]

I feel like I've spent more money on music and movies because of mp3's et al, not the other way around. I don't have a lot of money since I am a student so I like to know exactly what I want to buy most. I wish there was a way to directly support the artists. Since the beginning of time, music was only heard in close proximity to someone playing a musical instrument. The only way that musicians made their money was by playing live. Have people stopped going to concerts? In addition to the above, how did it turn out that specific music/songs have become so important?

Re:Yes, Fictionwise uses DRM

[aussie_a]

Yes Fictionwise does use DRM for some of it's products. But the books I linked to are not DRMd and are miraculously still published. In my parent's world no-one would buy any of those DRM-less books from fictionwise but would instead pirate them. This is in fact not how the real world works, which is what I was trying to show.

Theft |= Infringement

[SonicSpike]

Perhaps you missed the concept that copyright infringement does NOT equate to theft (unless you physically shoplift it out of the establishment).

Re:Theft |= Infringement

[gfxguy]

IP theft = theft.

I know I'm using courtroom terminology to make my point, but I find it hard to believe that you don't inherently believe that someone who creates content doesn't have the right to decide how that content gets disseminated (if it does at all).

If he says you can have it for a dollar, and you just take it because you don't want to pay, it's theft. And I don't need a courtroom or our legal system to tell me that it's wrong.

Now if you want to create a movie or music or software and put it in the public domain, that's great and I applaud you for your generosity. But you can't decide what to do with things other people have created.

Re:Theft |= Infringement

[SonicSpike]

First off IP Theft = jacking some one's copyright. In other words, in order to steal some one's intellectual property, you would have to go to the US Copyright/Patent/Trademark Office, and change the name on the forms to your own. THAT would be theft of copyright because you have deprived the original owners right to copy (more accurately it would probably be fraud, but that isn't the issue at hand).

Distributing unauthorized copies is simply infringing on some one's exclusive right to copy. The difference might seem small, but in a court of law it is as wide as the grand canyon. I have taken 2 semesters of copyright law in college so I consider myself fairly well educated on the subject.

I do believe "that someone who creates content [has] the right to decide how that content gets disseminated" up to a certain point. Specifically for a very limited amount of time, under 25 years at most. Bug again, the length of time isn't the point.

"If he says you can have it for a dollar, and you just take it because you don't want to pay, it's theft. And I don't need a courtroom or our legal system to tell me that it's wrong."

You are confusing morals with legality. The two are absolutely not one in the same. Is it illegal to run a stoplight if no one else is around? Yeah. Is it immoral? Probably not, PENDING your belief system/personal values.

You also said "just take it because you don't want to pay". But, if we were talking about depriving the owner of something, then yes that would be theft. But making an unauthorized copy of something deprives the owner of nothing (unless you had planned on purchasing it anyway but decided just to get it for free; then the owner would be deprived of potential revenue but that is very hard to make a case for).

I am not saying that making an unauthorized copy of some one's art is ok, just that it is NOT theft.
Hopefully that clears things up for you.

Re:Theft |= Infringement

[gfxguy]

No, I don't think you understand... I was specifically saying that I don't care what the legal system says (it's not immoral because the legal system says it is), it's immoral because people have an inherent right to decide what to do with their creations (as long as it doesn't infringe on others rights).

By taking that away, you are "stealing" that ability, that content that you have no right to... it's a personal, moral, belief system. You ARE depriving the creator of that IP the right to decide what to do with it.

I do believe there ought to be limits, as well, and I think the current copyright system sucks, but there are inherent beliefs that I don't need religion or courts to tell me (I don't need God or the law to tell me it's wrong to kill someone except in self defense, for example). There's an inherent knowledge of right and wrong, for the most part, that we all have. It is wrong, and it is theft, in my opinion, when you take someone's creation without their permission.

Re:Theft |= Infringement

[SonicSpike]

Let's ask a question...

What if Congress abolished all copyrights effective immediately?

At that point, NO ONE would have ANY rights to their creative works.

I think you fail to see that the reason anyone has ANY rights to control the distribution of their own creative works is because Congress says so. It is NOT an unalienable right, it is NOT a divine right, it is NOT a natural right, it is not part of some sort of the basic foundation of society, culture, or a 'greater intellectual atmosphere'.

Copyrights are NOT a moral issue in the US ANY WAY YOU SLICE IT, it is 100% strictly a legal concept because it ONLY exists due to statues. Congress could abolish it tomorrow if they wanted to.

Ideas are like toothpaste. Once they come out, they are in the open and cannot be put back in. Congress simply says that when the toothpaste comes out of the tube, for a limited time, it belongs to the person it came out of. But after that, it belongs to society. And the ONLY reason copyright exists at all is to give people an incentive to innovate and be creative so that they have a chance of making a profit.

Re-consider you assumptions

[arkarumba]

Lots of ideas sound reasonable when presented in isolation and built on top of assumptions you don't recognise. You need to identify and question the hidden assumptions. The first thing you need to reconsider is your statement "create a market". Why is there a need to create a market? Whose interest are you serving? Many DRM arguments presented BY CORPORATIONS are in terms of "it helps the artists" However please read this enlightning article The Problem With Music by Steve Albini for a more realistic view of the music marketing machine.

It is actually not the people who PRODUCE music who need drm. They are able to make a living off it through various means including concerts, merchandise. Its only the people who MARKET music, who require drm - and the important question to be asked "What do these corporate marketing drones contribute to the CREATIVE process of making music?"

You need to reconsider the PURPOSE of Copyright, and whether it should be taken to such an extreme. This can be a turning point in how you think about the whole subject. You should consider Copyright that it is not a natural right but is an ARTIFICIAL monopoly GRANTED BY SOCIETY (ie you and me) TRADED in exchange for something WE value - which is the creative process. My natural right is to be generous, to help people, and to share the things that I have. As children this is drummed into us because it BENEFITS SOCIETY. Its "natural." What drm and extreme-copyright does is turn NORMAL PEOPLE into criminals.

I read an elightning article once (which I wish I could find again) which compares laws and ethics, and highlights the fact that law is a reflection of eithics, NOT the other way around. Laws are made by the government ON BEHALF OF "the people" to help us to exist in harmony with each other. The ultimate decision on laws "IS" made by the people in the election of governments (theoretically! which is belied by the way the spin machines works today and the suspect nature of recent US elections.) The most interesting point made is that when "the people" WIDELY disregard a law, then it is a BAD law. It is the LAW WHICH IS WRONG, NOT "THE PEOPLE", since the law is not reflecting the ethics of society. This is exactly what is happening with music today. People WIDELY AND WITHOUT COMPUNCTION feel that it is "right" to share music they like with their friends. This indicates that current Copyright laws ARE WRONG for the majority of society. Only a tiny part of society is trying to impose these laws on the rest of us, to make us criminals for doing what is natural, which is sharing.

If the laws as they stand are wrong, they should be relaxed rather than strengthened. The fact that this disadvantages a particular type of business, a tiny subset of society, is beside the point. SOCIETY IS NOT BUSINESS, SOCIETY IS PEOPLE trying to work out the best for all of us to have fulfulling lives. If "WE" were choose not to reward artists (which is not the case, but an extreme hypotethical) then WE may suffer by a reduction in creative works, but that is "OUR" choice. The artist CAN make a living BY PERFORMING. What many instead DO want is that we dont want people who don't contribute to the creative process to not make money exploiting artists. Until recently the wide disemintation of creative works has required significant resources, and so the distribution companies had a purpose. Now with the Interent, the resources required for distribution are so minimal that these corporations are less important, and THIS is the reason they are desperate to have these laws implemented. These drm laws they wish to inflict on use protect THEM, not the artists. To highlight this, please read to story The Road to Tycho (The Right To Read). While this is an extreme example, it is outside the realms of possibility in the future.

Consider that the original purpose of Copyright was to PR

The Lie that is Hollywood Budgets

[iendedi]

It is still cheap to make compared with films. That is partly because Holywood's business model has pushed up the cost of making films, but it is also because films are expensive to make.

Who believes it takes 250 million dollars to pay for some CGI and bluescreen acting? Really?

The reason such high production costs are show is to reduce the tax burden from the profit of such films. It is easy to create scores of companies and subsidiary-like corporate structures, overpay all in the production of such movies, and assuming that ownership is all within the same essential movie cartel, you can show losses on fantastically successful features and avoid taxes while in truth all you did was shuffle money around within the cartel.

It's called tax fraud. Don't confuse it with real costs.

some random thoughts

[False Data]

I promised myself I'd spend a few hours screwing around in the workshop instead of screwing around at the keyboard, but this is too juicy a topic to pass up.

As I understand it, copyright (and DRM, which is--or at least began as--a way to enforce copyright) is supposed to handle the problem that it's really expensive up front to create the work and really cheap to copy it. Economically, copyright makes the copying part more expensive for everyone who isn't the author. For simplicity, I'm going to assume DRM equals copyright. (I know, it doesn't. The places in which DRM restrictions exceed copyright I'll leave for someone else. Copyright is also enforceable without DRM, but it's harder and more expensive to do.) So, let's assume a world where copying is cheap for everyone, regardless of whether or not they're the author. That world suggests two broad classes of solutions: (1) reduce the author's sunk cost to create the work, or (2) recover the sunk cost by charging for something other than copies of the work.

For books and some other forms of media, one time-honored way to reduce sunk cost is to publish in serial form. That's basically how Dickens did a lot of his stuff and how web comics do it today. If we assume the author can recover some non-zero amount either through sales of copies, such as to early purchasers, or by selling something else like advertising, serial publication reduces the author's commitment before any money starts coming in. The other classic approach is to work on commission for a wealthy patron who, essentially, pays the entire sunk cost in exchange for the right to dictate enough of the work's content to satisfy some need like advertising, ego, or a specific piece of enterprise software.

I think there's a lot of potential for interesting new business models in the second class, charging for something other than copies. People have mentioned selling the author's time. Variations on that theme include selling admission to live performances, accepting comissions to customize an existing work (where that can be done more cheaply than creating a new one and the author's style is distinctive enough that someone else can't easily replicate it), or offering support contracts. Other possiblities include selling fame, such as autographing (for a nominal fee, the author will sign your name and a brief message on the work with the author's private key) or selling knowledge (where the work required a lot of research, or producing it involved unusual experiences, the author could go on a speaking tour.)

Two final thoughts. First, if we're talking video games, it sounds like either publishing in serial form or in-game advertising are the most likely models. And second, if you think this problem is headache-inducing now, think forward to when have desktop fabbers and people are swapping design files of household goods, fashion items, and machine parts.

Pricing Based on Effort

[YumYumClownMonkey]

Basically, I think you have to price your content based upon how much effort it would take to break it open. Let's assume I value my time and effort at $60/hour. Let's also assume I'm able to buy a song on iTunes for ~$1 or steal, err, share it on Limewire. If it takes me more than 60 seconds of extra time to locate and download the song, well, shit: Might as well just buy the thing. Obviously, it's not possible to directly calculate how much people value their time. But whatever that number is, (at least in the consumers' heads,) that's where the sweet spot for pricing unprotected content is. I would guess that Apple probably did that math themselves, which was (one of) the reasons they prices songs at $0.99 a pop. Of course, the other reason is probably that pricing it less would make it impossible for them to get the record companies in bed with them: Any less and iTunes could leech away from CD sales.

Welcome to the Roman Empire

[Anonymous Coward]

... circa 400BC to 500AD

or China, circa 2006

sale != profit

[entendre entendre]

Nobody makes significant profit selling copies of Shakespeare or Beethoven. They are commodities; anyone can make them, so profit margins are close to zero. You can sell tickets to performances at a profit, but when it comes to books or (to a lesser extent) recordings, there's no scarcity, and it is scarcity that makes profit possible.

Without profit, there is no hope of return on investment. Without that, there is no investment. Of course there will always be some hard-core enthusiasts doing this stuff until the end of time, perhaps making enough money to cover their costs (if they are lucky - it's a rare orchestra that isn't dependent on donations). But investment will flow go towards things that are scarce - that's where the business will be. An organization that doesn't make profit is usually called a charity (or sometimes, a bankruptcy).

If you want to profit from data, you have to stop thinking of your target market as customers, and start thinking of them as an audience. Sell tickets to performances, or keep your software on a server and show targeted ads to people who user your server. Those can't be pirated, but they can still be monetized.

Re:sale != profit

[Spazmania]

Of course there will always be some hard-core enthusiasts doing this stuff until the end of time

Not just some. Virtually all great artists of the last century fit this description whether in music, pictures or literature. When they can't make enough money from the art itself, they work elsewhere to make enough money to continue creating the art. Creating art is in their nature; they can't not do it.

While I wouldn't wish to see any artist short-changed, I stronly doubt that sucking the money out of the business would have a negative impact on the art's quality. And with the Internet as a distribution media, their fame wouldn't suffer either.

Record Companies are Outdated

[Anonymous Coward]

Record companies have monopolies on the artists they represent, ie, no one else can legally distribute their music. But who owns or should own the copyright/monopoly to the music? The author or performer. The artists should say, "Anyone advertise and sell my music, and I want $x for each copy you sell". Anyone that wants to sell it then gets a copy from the copyright owner and signs a contract to pay $x per unit to the artist. They are free to sell it at any price they can get. Of course there will be competition, so gouging cannot happen. Popular artists can demand more. Free market, everyone wins except the record companies.

Yours is an USofAn perspective

[hummassa]

1. I have not had this problem.

2. Nope, sorry.

3. I concede it takes more time to download than to rip a DVD. But it takes less of MY time. To rip a DVD = 20-30 minutes of my time; to click on a torrent link and let KTorrent do its thing = 20 seconds, if you count that one to two days after I'll check to see if it arrived OK.

4. This is an strictly USofAn problem. (Ok, and Aussie, and maybe Canadian). The time of use for any computer equipment in less developed countries is too long for an effective implementation of TCP+DMCA legislation. (Many people here in my work use 7 year old computers!). And people can work in Beowulf clusters of older equipment (I have news of a Beowulf of old Pentiums in an university)

Ok, so we can reach the conclusion that you certainly like more obscure titles than I do. Which is impressive in and on itself.

We have a consumer protection legislation -- and popular movements -- that make the passing of DMCA-like legislation practically impossible, which is GOOD. So, yes, I do have another perspective. TCP-less hardware abound here and will continue to abound for a long time... even after every single piece of hardware in the USofA is TCP-enabled. This is a 180-million people country, and others (China and India) will follow suit. The "War on Reading" is a war that the USofA cannot win (just like the other two, but I digress).

About hardware hacks: if you stop to remember, before the 1960's there were no software hacks ... but plenty of hardware hacks, with secret recipies being exchanged in the underground (do you know what is a 999 key?) The internet will continue to make those hardware hacks available to anyone anonymously, even in a TCP-dominated USofA. And it's just slightly more expensive to implement, but plenty of people will do so. And plenty of unDRMed media will be available, even if more obscure titles don't.

Today, people that copy DRMed media and distribute it normally have the skills necessary to make the transition from soft-hacking to hard-hacking, and that is my point. Or worse: it will all fall in the hands of the organized crime (you know, those that supply the $1-a-pop pirate DVD that the street guy sells) and we DO know those are pretty much untouchable, as a rule.

Re:Yours is an USofAn perspective

[Shaper_pmp]

1. Great, we've just established you mostly like the very media that bittorrent is good for. So it's no surprise that you don't see the problem for everyone else.

2. In this case you're definitely only looking for the most mainstream stuff out there. Again, you're fine but many other people won't be.

3. When you know what your'e doing ripping a DVD can be automated to a one- or two-click process (as it is on my machine). This makes ripping DVDs a lot more "usable" than hunting mininova or isohunt for variable-quality reliant-on-other-people torrents.

4. To my certain knowledge this is going on in the USA, Canada, Australia, the UK and several other european countries. And the USA is famous for nothing if not putting pressure on other countries to adopt its economic and legal policies.

"Ok, so we can reach the conclusion that you certainly like more obscure titles than I do. Which is impressive in and on itself."

Less the sarcasm, correct. You don't seem to spend much time on the fringes of bittorrent, but are safely ensconced in the middle of the most popular torrents. And you seem to have little care for either the future or the idea that what happens in other countries affects your life too. Where are you from, exactly (if you don't mind me asking)?

"We have a consumer protection legislation -- and popular movements -- that make the passing of DMCA-like legislation practically impossible, which is GOOD."

That is good. However, given the USA is putting serious amounts of pressure on various governments to fall into line and adopt its IP policies, how long do you think you'll stand against the world, if the USA continues unchecked?

"TCP-less hardware abound here and will continue to abound for a long time... even after every single piece of hardware in the USofA is TCP-enabled."

Who designs and manufactures most of the hardware and software in the world? What country still dominates the web (even though it didn't even invent it)? What countries' corporations determine the de-facto standards that everyone else has to be compatible with? What country consitutes the single largest market in the world for hardware, and where's the equivalent of Microsoft or Dell pushing for non-TCP hardware?

And who produces a massively disproportionate quantity of the world's mass-media?

"This is a 180-million people country, and others (China and India) will follow suit."

Says who? One small region's administration in India says it's adopting open source (important: it hasn't done it yet - there's still plenty of time for it to pull a Massachusetts), and China's making vague moves in the direction of Red Flag Linux, that's all.

"About hardware hacks: if you stop to remember, before the 1960's there were no software hacks..."

Indeed, and there was a miniscule fraction of the number of people who could use them, compared to now, when even my grandmother can rip MP3s off a CD.

"but plenty of hardware hacks, with secret recipies being exchanged in the underground (do you know what is a 999 key?) The internet will continue to make those hardware hacks available to anyone anonymously, even in a TCP-dominated USofA. And it's just slightly more expensive to implement, but plenty of people will do so. And plenty of unDRMed media will be available, even if more obscure titles don't."

All correct. But the number of people with the skills, time and patience for hardware hacking is pathetically small compared to the number of people who'll download a ripping app and use it to rip CDs/DVDs.

All DRM is theoretically possible to break. It's the difficulty of implementing the solution that matters. You can't argue that hardware hacking is more specialised and expensive than writing code. You can't reasonably argue that making a complex hardware device is as eas

Who said anything about free downloads?

[hummassa]

My point was: the organized crime will get the DRMed media, copy and unDRM it, and sell it on the streets for $1 a pop (as they already DO TODAY), and one of us (or many of us) will pick that unDRMed media and post it on the net for the delight of the rest (even if it is in an anonymized -- read "full of kiddie porn" -- encrypted/distributed channel)

IOW: extreme DRMing has as consequence the popularization of kiddie porn. No, not that. Aw, forget it :-)

Re:Who said anything about free downloads?

[Shaper_pmp]

Heh, I see what you mean now, but this is a very parochial attitude.

Most western countries are very hot on IP protection, and with the pressure from the US this is only getting worse. The US is also putting pressure on the far east (SE Asia), Russia and others right now to clamp down on it.

Relying on your government to be half-arsed on IP law doesn't strike me as a particularly good solution when the USA is on the warpath, just like relying on the government to be half-arsed on terrorism didn't work in Afghanistan.

This is kind of offensive:

[hummassa]

Relying on your government to be half-arsed on IP law

Actually, my government is strong on consumer protection law, not the other way around.

Re:This is kind of offensive:

[Shaper_pmp]

Well as we said, bully for you - you're fine. So don't get worried about TCP or DRM, because it may well never significantly affect you.

However, it's then completely incorrect to tell other people, who will be affected that "there's no problem".

You won't have a problem, but they will. Ergo, there is a problem, just not one which affects you personally. Hence posting "there's no problem" is flat-out wrong.

Sit there and be smug that you'll be fine, as is your right. However, recognise that you have nothing useful or informative to say to people from other countries in a DRM/TCP debate.

It's like if the government decided to put to death all the people who had brown hair. If I happen to be invisible I'm laughing, but I have absolutely nothing of value to say to a forum full of people who aren't. And going on said forum and posting that "it's not a problem" is simply bullshit.

Door #3 (ouch! that hurts!)

[hummassa]

There are only two explanations which are possible here - either you're an extremely talented hard- and software hacker who's so good he's forgotten quite how hard most people find things like that, or you know bugger-all about either and you're talking out of your arse.

Actually, it's option #3: I am not an ultra-talented hacker, but I really know where to get them by the dozens, both on-line and in-person. That's the question.
And a quick look on my slashdot profile would bring you some other relevant info WRT your post...

Ransom model

[WillWare]

Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net. How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

DRM is a colosally bad idea. Think of it like this: today you alone have a piece of content (which you spent lots of time/money creating), the end state is that it's in the public domain, and how did you make money going from here to there? The fairest way to do it is the Ransom model. A similar but more formal arrangement is the Street Performer Protocol.

An idea I like is an incremental ransom model. You spend $100 million making a movie, say 7200 seconds (two hours) long. You chop it into pieces a half-second long, encrypt each with a separate 128-bit key, and publish the 14,400 encrypted tarballs with bittorrent. Now your problem is to make back a few hundred million dollars by selling the 14,400 secret keys. You can ransom them, just as Stephen King did with chapters of The Plant (but without his unnecessary condition that some minimum fraction of consumers be non-defectors). You can auction off others on eBay. You can donate some keys to charity. You can sell some keys to sponsors, e.g. Hershey might want to buy the keys for the sequence where somebody is eating Reese's pieces because Mars/M&M didn't want to invest in your movie.

Of course some keys will represent more interesting parts of the movie than others, and you'll want to think about how to reflect those differences in the prices you try to get for them. A few exciting bits, released for cheap, might make good teasers.

I would be really curious to see how it would work out if a major movie were released this way. It would be really interesting to see how the economics of that would play out.

I concede, and apologize.

[hummassa]

In all cases, USofAns should be fighting DMCA+TCP with teeth and claws. It's really evil. But you are right.

Re:Copyright was invented to protect cost of print

[Anonymous Coward]

IT still takes time to format text for electronic distribution and time is money. Plus you need ISBNs to get your text into the online bookstore channels, and those cost money and time...and time is money.

There is also the matter of the author's moral right to see her work distributed and read without alteration. Given the fad od "remix", copyright is the only way to take legal action against that kind of interference.

So whether or not something is actually printed is immaterial. The cost of production may be minimized in the electronic doamins, but it is NEVER zero.