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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?"
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.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
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.
Push Button, Receive Bacon
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.
Any fool can criticise, condemn, and complain, and most fools do. - Benjamin Franklin
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?
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.
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.
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.
Friends don't help friends install M$ junk.
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.
I8-D
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
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?