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Why DRM Cannot Open Up New Business Models
An anonymous reader writes "Techdirt has a cool post up that doesn't just explain why DRM is bad, but gives a really interesting economic explanation for why DRM cannot create successful new business models. Since the RIAA and MPAA keep insisting that DRM will create new business models, it's useful to see an argument for why that's basically impossible." As the article says, anyone can create a "new" business model. Creating a successful "new" business model is what is so elusive here.
Or the terrorists will listen to our music for free!
Do you want your children to listen to the same music as terrorists?
I thought so...
So the idea of selling digital downloads of on-the-radio songs for 99 cents doesn't count?
iTunes Music Store isn't a successful new business model?
The legitimate download industry has a problem. Their products can't compete with the freely available infringing versions of the same content.
Their products cost more and they are less useful. The only selling point they have is that the copy they give you is legitimate.
However, rightly or wrongly the vast majority of people are willing to ignore this if the unlawful version is materially better than the legal version.
The music industry has to react logically to the situation rather than emotionally. Until they do that, decline is all they can look forward to.
Simon
Just tell Joost that (www.joost.com), they managed to get Viacom's portfolio signed up, now Viacom is issuing takedown notices to their content hosted on YouTube and clones but Joost has their content because they have a DRM delivery method.
http://www.rense.com/general79/wdx1.htm
So the idea of selling digital downloads of on-the-radio songs for 99 cents doesn't count?
You could do that without digital restrictions and should. If you try to restrict your customers, you will be dependent of M$ and or the RIAA majors to deliver your product. Those people are not known for fair competition and are both kings of repositories of stale, second rate junk pushed at monopoly rates. If you think you can make a "new" business in that kind of market, more power to you. I think you will be just another RIAA vassal station.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
markets always favor efficiency. pre-internet, the cd makers, tape makers, lp makers, etc., they could successfully stand between the artist and the consumer and collect tolls for a valuable service they performed: distribution of media
however, the internet renders such a model inefficient in comparison. now, the artist and consumer can interact directly. the internet has replaced the distribution model the riaa's constituent companies are attempting to defend. there defenses are unsuccessful so far, and will continue to be
the consumer is served, the artist is served. the only person left out in the new internet distribution model is the old guard distribution model. i could say "adapt or die" but that doesn't even apply here. there is only one valid economic choice for the riaa's backers: die
obviously they aren't dying gracefully, but no one ever did. forgive the dinosaur its death throes i suppose. but the riaa is history. it's simply a matter of time and the inevitable march of progress
the artist becomes the distributor. seems like a better world to me. the distributor's money in the old distribution model warped true artistic expression i think. so it's progress all around: we get better artists. the unfettered democratic interaction of artist and consumer on the internet will let the cream rise to the top, instead of whomever is backed with the most cash and radio plugs, a la the old model
go ahead riaa, try to stop progress. good luck to you
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
People who like music, who are passionate about producing their product, do not need DRM. If your song/movie is good and you stand proudly behind it, then people will be happy to pay to come to your concert/film showing.
The only reason to use DRM is as a con trick, it is basically admitting that you think your own product is crap, so we will keep selling you the Beatles over and over again because we hate all modern music and we will keep selling you the one blockbuster because we think 90% of our films are dog poo.
People want to buy good music, to think people want to buy into the control mechanism itself is ridiculous, completely back to front:
In Soviet Russia the Business Models You.
My little Linux and tech blog
Its success will be predicated on how much pain/reward the model brings to the customers when accepted versus the collective pain/reward of civil disobedience when it meets force.
.. that is what we are getting now.. Zecco.com - Free stock trading Joost - Free video content YouTube - Free video content etc etc We cried for things to be free, well now it is happening things are becoming FREE, due to a new business model, ADVERTISEMENT SUPPORTED business model. Now that is not enough we want our cake and eat it, we dont want ads now. So can you suggest a new business model that we wont cry about?
http://www.rense.com/general79/wdx1.htm
The fallacy of this argument is that the author equates rearranging scarce physical resources (ideas about things) to create added value (economic growth) with ephemeral nonphysical ideas like music, writing, film, etc. If one follows the logic of this, extracting "added value" of media content would be in controlling its creation and then distribution. Which is exactly what DRM attempts to do.
Music is not a red pepper. Argument by analogy often leads to ridiculous conclusions, as has happened here. The problem with DRM is not in mechanistic enforcement of copyright law, but that copyright law is broken. It has ceased to function as an economic promoter of new ideas and technology, and is instead now a mechanism of monopoly for a corporate cartel. Ending DRM won't fix that problem.
Surely there's a successful business model hiding in logic like that?
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
TROLLS!
History is a collection of people not learning from history. Maybe this is more pervasive in the business world. Consumers don't like crippled versions of products. We bought it - it's our stuff. (kiss the rings biatch!!)
Remember DIVX format movies? Companies sometimes have brutally painful lessons that the customer is, in fact, still the customer.
Why is it that I can buy TVs, computers, audio equipment at substantially lower prices than 5 years ago with better features? Funny how that hasn't changed the music industry. It's like I'm getting ripped off......
Not a business model, though.
Let creative people do what they do, share it with each other (and the world at large) under whatever terms they can get other people to agree to. There is no State-backed copyright.
You may say "egad! under such circumstances you'll just get 'amateur' 'independent' movies, etc. No one would make something expensive like *Titanic*! Or rather, they probably wouldn't. Or rather, maybe they wouldn't."
I answer that the State doesn't really have that much interest in *Titanic* being created.
My turnips listen for the soft cry of your love
While Mr. Jobs has made some money with it, and it does seem to lead the pack of legal downloading systems, it is not successful in the way that McDonalds is. It is not successful in the way that Kleenex is. It is not successful in a ubiquitous way. There are four music fans in my house. One of them has an iPod (teenager - coolness is status for her), and there are zero iTMS accounts.
There is a simply reason why; DRM and cost. When I buy music, I don't want to pay for it again, ever. Yes, I converted all my old vinyl to CD. No matter how nice or good iTMS is, I will not lock myself or my family into a single choice of music players, no matter how cool they might be.
We continue to have the choice of sources for music downloads, and always will. We jointly spend quite a bit on music, but iTMS isn't getting any of that revenue. So while it is successful in the eyes of Mr Jobs and Mr Gates, its not successful in everyone's eyes, especially those of the RIAA as they aren't getting much money at all.
To be successful like McDonalds, everyone in the world needs to know firsthand how your burgers taste. This is not true of iTMS.
Support NYCountryLawyer RIAA vs People
but yes, even government eventually comes around to common sense. i didn't say how long it would take, but it will happen. simple common sense is an acid which dissolves all barriers
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Sometimes the world changes in such a way that you just have to give up and move on. We have technology in place
and available that allows nearly anyone anywhere anytime to freely copy music and videos and people not going to let
DRM or any moral objections or law stop them from doing it.
And maybe that's justice in a way. The industry doesn't seem to have any objection to making money from music and movies that praise some of the very behaviors responsible for their own decline. They produce songs like "Smack My Bitch Up" and "Been Caught Stealing" and "Murder Rap" then wonder why they can't get people to "do the right thing" and pay them for their product. They're fucking hypocrites. They're getting what they deserve.
Successful new business models are about creating those non-scarce goods and helping them increase value. Any new business model must be based around increasing the overall pie
But the music industry is making a product - the music! And anybody who think modern popular music as represented by the RIAA is anything but the product of an industry is kidding themselves. The Britney Spears of the world didn't get big due to their solitary musical genius, it was marketers and promoters and sound guys and hundreds of other people working behind the scenes.
The music industry is just working it's darnedest to inhibit unlimited copying. A number of industries do this. Publishing companies have sued Google to not put their books online. I can't buy Gucci knock-offs, attach a knock-off Gucci label, and then re-sell them from my expensive boutique store, unless I want to hear from Gucci lawyers. I can't create a site which scrapes msnbc.com content but replaces all the ads with my own. I can't publish a photography book, using images I ripped off from flickr.
And even if DRM is a flawed business model, is Slashdot the place where we review the sustainability of various business models? This cheerleading got tiresome a long time ago. Review how poorly-implemented DRM is a security hole, or DRM lowers the real value of buying a CD, but this BS doesn't deserve to be here.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
So, we have some article here purporting to claim that it is impossible to build a business based on DRM.
It only takes one thing to counter an impossibility. I know of somebody who makes about 4 million dollars a year on what is effectivley shareware, a type of DRM. His software is hackable and crackable, but basically at the end of the day DRM, that is, the set of restrictions he puts on his items so that he can sell them digitally, is what makes it work. Furthermore, his business has obsoleted several brick-and-mortar type businesses who were doing about the same thing.
It's time slashdot stops linking to these highly ideological opinion pieces attempting to pass themsleves off as "analysis." It's particularly easy to debunk them when they claim that something is impossible, however.
Restrictions kill business and it's a lack of those restrictions which make iPod what it is. Restrictions, other than those imposed by M$, had nothing to do with the success of iTunes. Good hardware design, compatibility with existing CD collections and a lot of bad decisions from M$ are what made iPod and iPod made iTunes. Restrictions can and will kill iTunes and iPod if Apple is not careful.
Without iPod, no one would ever have bought anything from iTunes and restrictions have hurt it. People load their iPods with CDs, not restricted tracks from the iTunes music store. iPod is responsible for the success of iTunes, but that is tiny trickle of what it could be without restrictions. People took more time and trouble to purchase the same thing on CDs. If they really could have exactly the same thing from iTunes as they get from CDs, they would have bought much more.
Both iPod and iTunes would have been a flop like WMP and "Plays for Sure" if Apple had put restrictions on music that originally had none. People got angry when they learned that WMP made it impossible for them to transfer their CD based music collections, had to rip everything again if Windoze flaked out, and when WMP itself was not stable due to all the paranoid checks and M$ using it as a conduit for advertising. All of the M$ imposed restrictions made media on M$ decidedly second rate. M$'s suppression of the ogg format probably spared both M$ and Apple of early Linux competition, but that did not make WMP any better. Apple won because they had the easiest to use and least restrictive package.
Competition will continue to threaten non free music. iTunes sales will collapse as people continue to discover legal and restrictionless music online. If Apple makes it difficult for people to buy and load restrictionless music though iTunes, iPod will die. iPod also faces a significant threat as makers of music players embrace ogg and free software. M$ let those makers down by not delivering on sales, stabbed them in the back by eliminating the whole "Plays for Sure" DRM and all of them are now under the mp3 patent litigation cloud. Music player makers who deliver a quality product that works with all file formats and does what the user wants can and will supplant iPod.
Friends don't help friends install M$ junk.
The legitimate download industry has a problem. Their products can't compete with the freely available infringing versions of the same content.
They can't compete with CDs either. Study after study shows that portable music player owners buy more CDs than other people do, but avoid restricted music. It's not the price, it's the overall convenience and lack of trust that people have for restrictions that keep restricted music sales down in the dirt.
Friends don't help friends install M$ junk.
the consumer is served, the artist is served. the only person left out in the new internet distribution model is the old guard distribution model. i could say "adapt or die" but that doesn't even apply here. there is only one valid economic choice for the riaa's backers: die
Cool. I want to buy some Jazz music. Let me just type that into Google. Oh goodie, only 97,100,000 pages to browse through.
Yes, fans can put their own pages together, but that's amounting to the same thing, and corporations will usually have a bit more credibility to the masses. I mean, it's their job to aggregate music, right? It can't be crap.
Seriously, they can serve a purpose in the new world order, but they need to resize and adapt.
Sorry, but economic theory says that a succesful business model depends on both the consumer and producer benefiting from the model. Producers in the business of content production (music, movies, software, pharmacueticals etc.) will eventually stop if they don't get some sort of benefit from this. DRM provides new ways of assuring getting this benefit and thus enables new business models.
I'm not saying the content production will stop if producers don't get rewarded - people will still write, take pictures and make music for fun. But the business of producing it will stop.
"DRM will create new business models"
yeah, just like "weapons create new business models"
both business models are preferred by the mafia!
The basics of Performance & Availability & Desirability of artistic expression have changed over time, and are changing again.
Performances in times past were always done live. 20th Century became more and more recorded and then finally more digitized and transportable. Major Market Content in the late 20th Century became more centralized in handfuls of mega distributor/publishers. 21st Century with the Internet is putting mega-distribution at a breaking point, partially because of the breadth & depth of content, most of which is not served by the mega-distributors:
1. Not every consumer wants "new" content: Casablanca is as viewable to day as the 1940s, and Gershwin's Rhapsody in Blue is still as beautiful today.
2. Not every consumer, or even young consumer thinks Britney Spears is actually a listenable likable singer.
3. Listening is useful while concentrating on other tasks, and "MTV" type performances may not mean much as audio.
4. Consumers of specific market segments other than current "pop" are not likely to be served well by the mega distributors, as in percussion, brass bands, folk songs, & dozens of others, but the Internet makes those sources readily searchable and AVAILABLE.
DRM is destined to be of minimal use or "success", because consumers do not see value in it for typical performances and a lot of non-mega performers do not see it giving their distribution method and success of their careers a boost.
I have too much complexity in my life as it is, to have to bother with whether my "music DRM" is now not going to let me put my music on my 4th mac or my 5th iPod.
I simply will not allow any more distractions and complexity to interfere with enjoying life.
How Time/Warner, Paramount, EFI, BMG, Sony or any other mega handles DRM will not affect me, as I simply will not buy their content. They have lost me forever with DRM. Could they get me back? If I buy a copy of a performance that I can use and keep 'forever', and I accept the price, then yes.
Consumers will ultimately determine which performance supplier/distributors win, and which will not. Lets see, there was Sony RootKits, MS PlayForUnsure, & Apple iTunes. Looks like at the moment, the consumer has voted for minimal hassle. But then even those suppliers pale by comparison to CD/DVD sales which have no DRM, so the super majority of consumers have elected to buy and continue to buy with no DRM at all.
Foo'-Mo'-D says,"Wutup foo?"
A rude AC asks:
"Restrictions, other than those imposed by M$, had nothing to do with the success of iTunes. "
You care to clarify this fanboi? If DRM is MS it's bad but for Apple it's A-OK? What a fucking fagboi.
and a more direct answer would not hurt.
M$'s greed and incompetence were key factors in the success of iPod. M$ restrictions were and still are much worse so all of their services have failed. Between that and their attack on ogg format, iPod was the path of least resistance.
Friends don't help friends install M$ junk.
DRM is DRM(boo!) not because we are "afraid" that companies that use DRM would outcompete the companies that don't. DRM is DRM(evil as evil gets) because it is done by monopolistic organization that would exclude anyone employing some people other than grandpa and grandma from non-using DRM.
Whether it is the situation or not, is another question, but nobody seriously thinks that DRM is survivable.
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
I hate to burst people's bubbles...except when the bubble is as patently stupid as thinking that someone can get something for nothing. Nothing, not even love, is totally free. Love, real love, requires effort on the part of the people in love to make it work. Real love is one of the best bargains on the planet, but it still requires effort, so it isn't free. It may not costs money, at least not in a direct sense, but it costs effort.
The basic argument in the TechDirt article is that, since other, "free", non-DRM music exists, then no business model involving DRM can add value to society ("economic value"), which, in the long term, is necessary for a successful business model. While adding some kind of value is necessary for the long term success of a business model, to say that such a model cannot utilize DRM is patently false. Aside from some currently existing successful business models that ARE using DRM (iTunes, etc.), the argument rests on a basic misunderstanding of what economic value means in the context of DRM.
The cost of distributing digital content, including music, has dropped to truly tiny amounts. The actual cost of delivering a digital version of a song is very small, probably in the vicinity of a few cents per song (don't quote me on that figure). At this point, most of the cost is not the delivery of the song itself, but the time cost to the listeners to find music that matches their tastes. Ironically, this has always been the case.
There has always been "free" music. In the distant past, most music that people listened to was "free", in the sense that they weren't charged for it. People sang and played instruments in their homes for friends and family and no one paid a dime for these performances. The quality was highly variable, depending on who the musicians and singers were, but that's "free" for you.
The music labels aren't using DRM very well, in my opinion, and, given their track record of clubbing people to death for stealing something that has a marginal cost of a few cents, they aren't likely to be the ones to figure out how to include DRM in a successful business model.
The primary problems with reasoning of the author of the TechDirt article and the people that bought into its logic, are.
1) They assume that, since the *marginal* cost of delivering a song to a listener over the Internet is very small, the value of that product is very small. I think someone took a microeconomics course and didn't quite "get it" as it applies to the real world. Some microeconomic theory suggests that, in a truly competitive market, with "perfect information" (an economic term that means everyone knows all pertinent information about a product and its viable alternatives), marginal price will approach the marginal cost. The author and his fans seem to interpret this as meaning that the value of that song is therefore so close to zero (free) that the difference is negligible.
Actually, value is what someone would be willing to pay for something. Usually, a consumer pays less than the absolute maximum they would be willing to pay for something, so that, when they do buy something they come out "ahead", in the sense that their overall welfare (what economists call "utility") is increased, since they traded something (some amount of money) for something they valued more than that money and the other things they might buy with that money. If they weren't getting something better, they probably wouldn't make the trade, unless they were an addict or somesuch. Similarly, companies cannot for long sell something for less than what it costs them to produce it, unless selling it enables them to make money some other way, such as what Google does with its advertising.
2) The second basic problem with the logic of the TechDirt article is that it assumes that the alternative to any business model that uses DRM is "free". It's not. Nothing is free (see above). If a business model can use DRM to capture enough revenue to create
DRM provides new ways of assuring getting this benefit and thus enables new business models.
DRM doesn't do any such thing. It doesn't assure anything.
1. It makes it more expensive to distribute product, reduces the profits per sale at a given price, and ensures that the products that don't take heroic measures to prevent copying will be cheaper and higher quality.
2. It doesn't prevent online distribution of unauthorised copies.
That's why online music distribution hasn't taken off. NOT because people are ripping music off rather than buying it, but because the online version is worth so much less to the consumer than the DRM-free CD version... even if the CD version is more of a hassle to buy... and putting DRM restrictions on the online version hasn't kept people from ripping it anyway.
3. Not having DRM doesn't prevent producers from being rewarded.
Since DRM doesn't actually do much to prevent unauthorised copies, and providers are still getting rewarded, it seems like DRM isn't what's making it possible for producers to get rewarded after all. In fact, lots of producers are putting their music online in DRM-free formats... if I recall correctly eMusic has been in business longer than iTunes, and lots of people... including some big names... are still publishing music through them. For eBooks, Fictionwise and Baen Books don't seem to be in any trouble.
The new business models are viable without DRM, as proven by the fact that they exist without DRM, therefore DRM isn't what's needed to enable them.
Although I don't disagree with a lot of specific claims in the piece, I disagree that those claims can be applied as sweepingly as they seem to be. Generalizations are useful as a way of gathering insights, but are often not predictive unless also exhaustive and rigorous. I gained some useful insights from the article, and yet no confidence that it would predict behavior because it appeared implicitly to give permission to overlook other things of importance in its rush for what seemed to me a too-facile analysis. Overlooking detail can give you good explanatory power, but there's no proof that the same details wouldn't matter in another circumstance, and so an explanation that a certain bridge failed because of bad placement of its struts (without regard to what kind of metal was used) might precisely explain that issue, and yet not usefully predict that the detail of metal choice is the relevant thing to expect in another case where the struts are placed right. I don't doubt that the factors he cites matter in some cases, but I do doubt they are the only things that could matter.
I'll give two specific examples of concerns I had about the reasoning he did:
First, DRM as practiced relies on additional assumptions not made apparent not discussed in the otherwise good essay; those need to be accounted for, and I don't think the accounting is trivial. In particular, there's an implicit assumption in industry that the "good" music and the "good" TV is what is under DRM and the "other" music and the other "TV" is not. People might quibble over whether I should substitute "polished" or "slick" for "good" and "unpolished" or "raw" for "bad", but I think any fair analysis would say that the aggregate level of quality available in TV, at least, from Cable TV or a commercial movie studio is different and of higher quality (along at least some axes) than the average level of quality produced on a home camcorder and posted to YouTube. Over time, that will change, of course, there is a notion of "scarcity" which relates to quality, and one argument that DRM clings to and that is somewhat defensible is that what is needed to maintain this distinction is money, and that DRM enables the money, allowing a small number of larger and better funded efforts. If what it takes to make the good stuff is money in large quantities, and money in large quantity is doomed to remain scarce, then DRM might succeed for a long time. If making good quality music or movie houses becomes dirt cheap, then it might be gone overnight. But neither scenario seems to me a refutation of the usefulness of DRM in aggregating money. But the scarce thing might be "production money" not "music" and it might be that DRM is converting a market with no "aggregated money" into one with "just some" aggregated money, in which case it is adding value, and under the restrictions of the author's own reasoning, it is adding value.
Second, though, I think DRM is villified unnecessarily here, if by DRM you mean "the management of digital rights" (in the abstract). If by DRM you mean "the specific set of rules in play today and the specific programs that implement these, notwithstanding that other rules could be chosen and other programs could be implemented that could still be correctly described under a banner named DRM", then indeed maybe something is broken. We don't condemn Democracy because we don't (depending on our party) like Clinton or Bush--we vote in smoeone else and still call it democracy. We don't condemn capitalism because we have a recession, nor herald it because of a monetary bubble.... well, we do, but we ought not. The subtext of this article seems to be to bring down DRM by proof, rather than to seriously analyze it. I see no enumeration of what it sets out to do, whether there are ways to fix it, etc. I see not even a definition of what DRM is so that I can know for sure whether it's a philoosphy or a specific set of rules being discussed.
Copyright works not only to allow big companies to se
Kent M Pitman
Philosopher, Technologist, Writer
At worst this article is completely disingenuous. A proper economic anaylsis of DRM may well be able to make a case that it cannot open up a new business model but this article is not it. At the core of the authors thesis is the statement (unproven) "DRM is fundamentally opposed to this concept. It is not increasing value for the consumer in any way, but about limiting it.". However it is easy to argue that DRM provides the incentive for some content creators to do the creating in the first place. As long as one creator is willig to enter the market "Safe in the knowledge that DRM protects their IP" then there is a new business model and the authors whole argument is shot to pieces.
So lets think about it another (better) way; "DRM cannot be a positive contributor to net social utility". A simple argument would run;
Once a content creator has been stimulated (economically or cathartically) to produce content that _particular_ content cannot have any further social capital invested in it since to do so would be formally inefficient. Every dollar returned to the original author (who has already been sufficiently rewarded for its creation otherwise they would never have done so in the first place) is a dollar that should better have been spent stimulating a different piece of contents createion.
Don't misunderstand there are a whole bunch of value added services surroundig the content that have revenue streams, shops, library services, downloads, storage, viewers, original artwork suppliers, etc etc. Even the costs associated with its distribution are capable of driving a new business model whose marginal cost is very low (if not effectively zero).
DRM comes into the picture and ensures that extra dollars are sent back to the author in excess of this "critical" amount. Therefore the overall utility of society is reduced since those extra dollars are not stimulating the creation of the extra content they could produce in the more efficient non-DRM world
QED.
This rough sketch is not designed to provide a bullet proof case. I hold firmly that there is such a proof; DRM cannot be a net positive contributor to social utility and as such it should be illegal. However the full defence of that posiiton is too long for the margin of this book.
"The first thing to do when you find yourself in a hole is stop digging."
Your argument is fallacious as well. You argue that a music track is not a physical good, therefore it has no value. Somebody must see value in entertainment, because I doubt people have been purchasing music CDs for $15 a pop all these years because they like the shiny media it comes on.
The real fallacy in his argument is that he takes a perfectly valid economic point and draws a crazy conclusion from it out of left field. The author says, in a nutshell, "the economy awards money to those that add value [a true statement], and adding DRM to what would have been unrestricted content does not add value--it subtracts value [also a true statement], therefore there exists no viable business model that involves DRM [wild and incorrect conclusion]."
Content distributors can still add value to their content, DRMed or not: quality ripping, quality distribution over high-speed pipes, centralization of content availability (because The Pirate Bay doesn't have everything), better usability (because my grandma doesn't know, and never will know, what a torrent is), authenticity, etc. All that stuff is worth something; just ask iTunes. DRM purports to allow distributors to protect their value-added distribution channel (to the extent that their DRM doesn't get cracked, which it always does).
Unfortunately, the content distributors have totally misread the threat to their business model. They can keep screaming, "Piracy! Piracy is theft!" until they're blue in the face, but that doesn't change the fact that artists do not need the distributors anymore to sell their creative works. It used to be that if you wanted to see your music at Tower Records, you had to go through a label. Now, anyone can set up a website and circumvent the distributors entirely. That is the threat to their business models, not piracy.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock