You don't have to say "however that's going to be determined". It is in the FAQ I gave linked to. Yes, but the soundness of their determination is questionable. The prebate appears to be based on average costs of living across the entire US (except AK and HI). A family in New York City, however, will not have the same actual cost of living as a family in rural Montana.
(You could make the same argument about the income tax's standard deduction, but the income tax doesn't rely on a standard deduction for all of its progressiveness.)
Here is another FAQ that addresses your millionaire question... No, it doesn't. My concern is about the overall progressiveness of the tax system.
The prebate makes the system fairly progressive at the lower end, and very slightly progressive at the upper end -- but it's progressive with regard to consumption, not income. If the billionaire couple choose to live in a modest house, drive a modest car, and drink MGD instead of champagne, their consumption might be no more than the middle-income couple's, and thus they'll pay the same amount in tax... while they save or invest the extra $9,950,000 every year.
How is that fair? They won't miss a few thousand of that huge wad of cash they're putting in the bank. That's what a progressive tax system is all about: the tax burden should be heavier on the people who have more money to pay taxes with, not the ones who buy more stuff. You may disagree with that, but most voters don't.
The income tax is progressive with regard to income. Replacing it with a tax that isn't will have the effect of raising taxes for those with lower incomes while lowering taxes for those with higher incomes. That's not a good thing.
Uhm, most countries work like that - in the UK its called VAT (Value Added Tax) and its the businesses responsibility to collect it and pass it on. He said sales tax, not VAT. Sales taxes in the US work differently.
No, it doesn't cripple the economy to have a governmental body around to enforce it (Inland Revenue), and yes, it works very well. You could say the same thing about income tax. The poster wasn't just suggesting that we have a sales tax -- we already do have sales taxes in most states -- but that we use sales tax to completely replace the income tax. The UK hasn't done that.
Furthermore, he thought that getting rid of the income tax would eliminate the need for a governmental body. I see we're in agreement that it would not.
This prebate makes the Fair Tax progressive, not regressive. A person buying only the necessities for a month is effectively paying no tax that month. The prebate only makes it progressive at the very lowest end. Once you get past "the amount of tax a person would spend on the necessities of life", however that's going to be determined, it's regressive again. The guy making $10 million a year is still paying a smaller proportion of his income in taxes than the guy making $1 million. FairTax would move tax burden from the wealthiest individuals to the middle class, which is a step backward.
Are you actually arguing that two wrongs make a right? I'm just arguing against hypocrisy. If we don't want to be bound by WTO rulings, then we should back out of those treaties and stop using the WTO against other countries. In or out, none of this wavering where we pick and choose the WTO rulings that we want to acknowledge.
Is your problem really that the US doesn't give in to the absurd demands from other nations or is it that other nations do? Some of both. I mean, not all the demands are absurd. Antigua has a point with the online gambling thing.
That goes away, and the price of everything we build goes down - a lot. And then I said that the stuff would be (sales) taxed back up to what it was. Raising the sales tax would end up raising prices by more than the amount of tax. That's because labor costs would go up along with the sales tax: if one month's expenses end up costing 30% more, you need to demand 30% higher wages to keep paying those expenses, and those higher wages are going to be reflected in a higher pre-tax price of the goods you make.
In fact, if the tax change is revenue-neutral, the labor costs would go up by exactly the same amount overall as they went down when you repealed the income tax. It's still a tax that workers have to pay somehow, and that means their employers need to pay them enough to afford it, whether the tax is being taken out of their paycheck or taken out at the store.
Cheating? How do you hide the disappearance from the inventory of $30,000 worth of SUV? What happened - did the dealer give it away??? C'mon... What do you mean, hide it? Who's going to come down to a car dealership and ask the owner, "You had 12 SUVs here yesterday, now there are only 11, what happened?" Who's going to pay his salary, and what authority is he going to have to do anything about that missing car?
If you want to set up an IRS-style agency to keep tabs on everyone who sells anything to make sure they're not cheating, (1) it's going to be a lot more invasive than the IRS is today, and (2) it's going to cost just as much to enforce as the income tax, if not more.
1) Completely eliminate the income tax, and, just to be clear, that means the corporate income tax, too. 2) Institute a National sales tax to run the country with. We have enough regressive taxes already, thank you. We don't need to make the system any more regressive, but that's exactly what replacing income tax with sales tax would do: people with lower incomes spend more of their income on taxable goods, while people with higher incomes spend proportionally less (saving or investing the rest).
Furthermore, cheating on sales tax is a lot easier than cheating on income tax. Imagine buying a $10,000 car - if you have to pay 30% sales tax, that's $13,000 total. Now suppose you offer to pay $11,500 cash if the dealer doesn't report the sale: you both gain $1500 and no one will notice, unless you want to keep the IRS around and let them audit every business's inventory.
In addition to the cessation of wasting all that money to collect the income tax, all American goods reduce in price dramatically from not having to pay income tax. Er... no they don't. Think about that a little harder. The workers who make those goods still need to buy stuff, but now everything they buy costs more because of higher sales taxes. Labor costs won't drop, because all the money that's been going to income tax now has to go directly to employees who'll use it to pay sales tax.
How is Europe so completely backwards on this issue? I agree about the radio royalties. It's absurd that I can listen to my radio for free, and you can listen to your radio for free, and all of our friends can listen to their radios for free, but then if we all meet up together and listen to the same radio, suddenly someone has to get paid for it.
However, let's not lose sight of the point here, which is the double standard. We have some pretty absurd requests of other countries too, and if we expect them to go along with our absurd requests, we're going to have to go along with theirs.
Except that unlike the switch from Horse & Carriage to Automobile, many (not necessarily the parent) are advocating the continued presence of the content without the continued presence of the revenue. No, I don't think they are. They might think they are, but they aren't.
If someone says "I don't want to pay for books anymore", then they might think they're advocating a world where the only books that get written are the ones that are written for free, out of pure love of writing. And if you read their posts, you might think that's the world they're advocating too.
However, even if we abolished copyright tomorrow, we wouldn't end up in that world.
There would be some authors who just loved writing enough that they kept doing it for free, sure. But there would also be some authors who said, "Look, I know I can write a better story than these hippies who do it for nothing, but I need to pay rent. Give me a few bucks and I'll show you what I can do." Some of them would suck, but some of them would be able to command more and more money for their work as they prove themselves.
Even without copyright, the act of writing is still worth something. That's where the value in a book comes from, after all -- the author puts it there before the first copy is ever sold.
If people could get past the notion that this argument is about the container and start realizing that it's the content that the creator is trying to sell, and it's the content that the consumer is trying to buy, then maybe we could stop having these ridiculous arguments. I'll raise you one more: it's not the content that the author is trying to sell, it's his own labor. The "content" is a sequence of words, which is essentially just a big number, and it has no more inherent value than the speed of light or the first million digits of pi. Figuring out what that number is in the first place -- which sequence of words makes a good story -- is the hard part.
So how does an author "directly" apply his talent? Personally, I don't think Don Knuth would be too willing to hit the road and read "The Art of Computer Programming" to an audience... A writer directly applies his talent by getting people to pay him for writing new works - just like an architect directly applies his talent by getting people to pay him for designing buildings, or a teacher directly applies his talent by getting people to pay him for teaching.
That may sound glib, but it's really that simple. There are details to work out, of course, but that's what the market is good at: connecting the people who have money and want to spend it on a service to the people who want money and have a service to provide. As long as people care about having new works to read (or watch, or listen to, etc.), there will be demand for the services of those who can create them.
Here's one example of how it might work: suppose Don Knuth announces that he has an idea for a new book, and he needs $50,000 within six months to write it. You go to his web site and see a graph with a little red line counting up to $50,000, and you can click to contribute as little or as much as you want. If you contribute $50, it's held in escrow, and the book is that much closer to being written.
If he reaches his goal, then he begins writing; the money is frozen, to be released according to some predetermined schedule (half now and half when it's complete, maybe). Maybe contributors get something special (their names listed in an appendix, a 10-minute phone chat with Don, etc.), or maybe the release of the book is enough of a reward.
On the other hand, if he fails to reach the goal, then everyone's money is refunded; he can either try again with a lower price or a better idea, or conclude that his writing isn't marketable and go into another line of work.
What exactly are you saying? That *writers* need to find another way to earn a living? Yes, exactly.
The analogy isn't between buggy whips and writing, it's between buggy whips and selling copies. Fewer people want to pay for copies in a world where they can make their own copies for free, just like fewer people want to pay for buggy whips in a world where they can get around without a horse and buggy.
Writers, musicians, and everyone else who makes a living by selling copies needs to wrap their head around that. Their talent -- the act of coming up with a story and putting it into words -- is still valuable, and if they charge directly for using it, they can keep making money, because people will always want to read new stories.
The idea that a writer's job is to sell books is a relic of a time when copying books was difficult and copyright was easy to enforce. Now, copying is trivial and copyright is virtually unenforceable. That doesn't mean writing won't be viable anymore, only that selling books won't be a viable way to make money as a writer.
To all you "I don't believe in imaginary property" people, go to hell. You ain't going to get your way (which is every thing every one else does should be free). If such people actually exist, I'm not one of them. I'm happy to pay someone for doing a job I can't do, like writing a book or recording a song.
But they don't want me to pay them for doing what I can't do. That's the problem. They want me to pay them for copies of books and songs, when I can already make all the copies I'll ever need for almost nothing, once the original has been written.
Figure out what it costs to write the original, ask for that much money, and the people who want it to be written will pay. If there are enough of them, then you get paid, you release the work, and everyone gets to enjoy it freely (since you've already been paid a price you decided was fair, it doesn't matter how many people eventually a copy). If there aren't, then your work isn't worth as much as you thought, so either lower your price, come up with a better idea to write about, or go into another line of work.
Why should people spend their own time and money to create content and not be compensated adequately for it. If I know I'm not going to make more than a couple thousand dollars for that novel I've been working on for the last 5 years, I might as well let it just die and use my time more efficiently. I agree completely. If you can't convince people to pay you a price you feel is fair for your writing, then that probably means your writing isn't good enough (or at least marketable enough) to make a living off of, and you should go into another line of work rather than wasting 5 years of your life on something that won't turn a profit.
Copyright encourages people to do just the opposite: to spend their time producing things that, ultimately, won't sell enough copies to justify the cost of producing them. For every best-seller, there are thousands of books that end up losing money. If authors would insist on being compensated for their work, like everyone else is, instead of taking royalties from the sale of copies, they'd know ahead of time whether it was worth doing.
Flawed analogy: People didn't buy whips anymore because they had no more meed for them. On the contrary, people nowadays still want to get writers' works, they just don't want to pay for it anymore. You're overlooking the point of the analogy: people don't want to buy copies anymore because they have no more need for anyone else to make copies. People can now make their own copies for virtually nothing.
The act of writing new works, however, is something people will still be willing to pay for, because most people aren't writers. That's what I meant when I said authors' talent is still valuable, but only when applied directly.
So how would that work? Why should I spend months or years researching and writing a book, if there's absolutely nothing to stop people from freely distributing it once its out there? You should do it if you can get someone, or a few hundred someones, to pay you for it - if you can convince them that the benefit they'll receive from the book's existence is worth paying you to write it.
(You should also do it if the benefit you'll receive from writing it is worth the time it'll take you, but let's ignore the volunteer side of things for now.)
See, the key here is to realize that the work of an author is not to sell books, print books, or distribute books. The work of an author is to write books. And once you've been paid for writing the book, it doesn't matter how many people "freely distribute" it, because you've already been compensated for the time and effort you put into writing it.
I would miss the PDF royalties *very* much if they evaporated [...] Authors are real people with families and mortgages The folks who made a living selling buggy whips were real people too, with their own families and mortgages to worry about. Some of them, the ones who wouldn't or couldn't adapt to a changing world, lost their ability to provide for their families.
That's sad.
But you know what? Our society is better off now, because we were willing to bite the bullet and tell those people, "You're going to have to find another way to earn a living." If we had used the force of law to protect their incomes, those few people would've been better off -- at everyone else's expense.
We're in the same situation now. Some people won't or can't adapt to a world where they can't make a living selling copies of information: a world where their talent as artists and authors is still valuable, but only when it's applied directly, not indirectly via copyright.
Some of those people will be left behind, and that'll be sad too, but it's necessary. And just like the era of the automobile brought in a whole new set of jobs to replace the ones that were lost, so will this era.
But again, that was the case of the music companies requiring restrictions that made competition impossible. You can't fault Apple for that in 2003. Why not? The labels may have created the DRM problem in the first place, but Apple had an opportunity to solve it, and they deliberately chose not to. In fact, they went out of their way to interfere when someone else tried to solve it (that is, when Real reverse-engineered FairPlay to sell their own tracks to iPod owners).
Apple deserves as much blame as the labels here. They fought hard for it!
And nobody else can play them unless they also pay $495 over the 5-year life of a console For less than the price of two name-brand games a year, they can play every XNA game (plus develop their own, using free tools). That's not such a bad deal. And...
or unless you get a Big Company to publish your game. ... later this year, you'll be able to self-publish them on Xbox Live for anyone to download.
A lot of microstudios develop for PC because they are too small to qualify for console development licenses. What do you suggest for them? You can develop Xbox 360 games with XNA for $99/year.
So you say it is an issue where the iTunes service/subscription would prevent competing products from working, except that there are already online competing services that work, today. The existence of competition in the present doesn't change the past, and if you recall, this started with someone saying Apple has done nothing anticompetitive.
I don't know how well eMusic stacks up today, but in the era before DRM-free sales were widely condoned by record labels, eMusic's selection was a joke (and you couldn't even hear the punchline until after you signed up and saw that they didn't have anything you wanted to download).
In four years, when Apple has attained dominant control, they can push for DRM free video and get it because the content owners are sick of being yoked to Apple. If Apple licensed FairPlay, it would only increase, not decrease, Apple's stranglehold on the market, so Apple's refusal to license FairPlay still smacks of "benign despot". We don't know they'll be successful... movie studios have shown even more stubbornness than record labels. In any case, anyone who's been accused of abusing their monopoly position can usually come up with some argument for how we're all really better off that way, but that doesn't excuse their anticompetitive actions. They don't get a free pass just for saying that stifling competition today will put them in a better position to increase competition tomorrow, because in the meantime, they're still raking in profits with no competition.
Then you tell me, why did Apple push for DRM free music? My cynical theory is that they saw how unpopular DRM was with their customers, but didn't want to give it up, so they took a stance they didn't think the labels would follow. They claimed in public to be opposed to DRM, betting that the labels would never agree to sell DRM-free music. Then the labels called their bluff.
I don't think we'll see similar behavior from movie studios anytime soon. Studios have been in love with copy protection for decades, from Macrovision to CSS to AACS. Apple can continue to oppose video DRM in public, confident that the studios will keep insisting on DRM. That way, they get the best of both worlds: positive mindshare from customers who think Apple's on their side, and increased sales from preventing customers from buying video content anywhere else.
As I said earlier, it was features and not FairPlay that encouraged people to use Apple's store: The ability to synch to unlimited iPods, 5 computers, easy backup, and burn to CD. Since they were the only store to offer that, for nearly a year, don't you think that would give them a huge boost in users? It was probably a factor, but not the only one. You can't overlook the fact that iTMS was the only store that worked with what was by far the most popular player.
If you owned a portable music player, chances are it was an iPod, and that meant every competing store had a huge barrier to overcome before they could court you: any songs you bought from them would've had to be burned to a CD and re-ripped in an iPod-compatible format, costing you time and audio quality. It simply wasn't feasible for any other store to compete with iTMS for iPod owners' business, and iPod owners were (and still are) the biggest part of the market.
Does it help that iTunes isn't bundled with the iPod? That you have to download iTunes to use it? No, because bundling is beside the point here. This isn't like Microsoft shipping IE with Windows, where competing browsers still work but they're less convenient. It's a case of leveraging the monopoly position of one product (the iPod) into pushing another product (tracks from the iTunes Music Store) by preventing competing products from working. If you chose not to download iTunes, that didn't negate iTunes's advantage, it just meant you couldn't buy name-brand tracks from any online store.
Simply because format shifting for music was declared legal under the Audio Home Recording Act which does not apply to movies and has nothing to do with fair use. No, that's incorrect. You're probably thinking of section 1008 of the AHRA:
No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings. That may look like it applies to all personal format shifting, but in fact "digital audio recording device" and "digital audio recording medium" are terms specifically defined in the AHRA. They basically refer to devices which implement serial copying management and media for which a royalty is added to the price, like the standalone CD burners that only work with the more expensive "music CD" media, and in fact the court in RIAA v. Diamond found that the Rio did not meet the AHRA's definition of a "digital audio recording device".
Currently, making copies of entire movies in teh US is illegal whether you like it or not. I'm sure you wouldn't mind posting a link to a court decision where format shifting of movies was found to be illegal, then, right? The DMCA makes it illegal to break the encryption, but other than that, I see no legal point on which to distinguish movies from music (format shifting of music has already been found legal).
Neither of these are valid examples of fair use as defined under US law. Go look it up. Er... maybe you're the one who needs to look it up. Fair use isn't codified in the law. It's only vaguely defined there, and all we really know about which concrete actions count as fair use has come from court decisions.
Format shifting has been found legal for music (in RIAA v. Diamond, IIRC). What makes you think it wouldn't also be found legal for movies?
To be able to make bit-for-bit copies, you need access to a manufacturing plant. You can't make them at home with a consumer-level burner and media: that's how it's been since DVD-R was introduced.
So, the encryption system does prevent piracy on some level - or at least it did until it was cracked. It prevents you from selling exact copies on the street corner unless you have connections to someone who can go into the disc factory at night and stamp out his own copies, or steal them while they're being loaded onto a truck, or whatever.
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(You could make the same argument about the income tax's standard deduction, but the income tax doesn't rely on a standard deduction for all of its progressiveness.) Here is another FAQ that addresses your millionaire question... No, it doesn't. My concern is about the overall progressiveness of the tax system.
The prebate makes the system fairly progressive at the lower end, and very slightly progressive at the upper end -- but it's progressive with regard to consumption, not income. If the billionaire couple choose to live in a modest house, drive a modest car, and drink MGD instead of champagne, their consumption might be no more than the middle-income couple's, and thus they'll pay the same amount in tax... while they save or invest the extra $9,950,000 every year.
How is that fair? They won't miss a few thousand of that huge wad of cash they're putting in the bank. That's what a progressive tax system is all about: the tax burden should be heavier on the people who have more money to pay taxes with, not the ones who buy more stuff. You may disagree with that, but most voters don't.
The income tax is progressive with regard to income. Replacing it with a tax that isn't will have the effect of raising taxes for those with lower incomes while lowering taxes for those with higher incomes. That's not a good thing.
Furthermore, he thought that getting rid of the income tax would eliminate the need for a governmental body. I see we're in agreement that it would not.
In fact, if the tax change is revenue-neutral, the labor costs would go up by exactly the same amount overall as they went down when you repealed the income tax. It's still a tax that workers have to pay somehow, and that means their employers need to pay them enough to afford it, whether the tax is being taken out of their paycheck or taken out at the store. Cheating? How do you hide the disappearance from the inventory of $30,000 worth of SUV? What happened - did the dealer give it away??? C'mon... What do you mean, hide it? Who's going to come down to a car dealership and ask the owner, "You had 12 SUVs here yesterday, now there are only 11, what happened?" Who's going to pay his salary, and what authority is he going to have to do anything about that missing car?
If you want to set up an IRS-style agency to keep tabs on everyone who sells anything to make sure they're not cheating, (1) it's going to be a lot more invasive than the IRS is today, and (2) it's going to cost just as much to enforce as the income tax, if not more.
Furthermore, cheating on sales tax is a lot easier than cheating on income tax. Imagine buying a $10,000 car - if you have to pay 30% sales tax, that's $13,000 total. Now suppose you offer to pay $11,500 cash if the dealer doesn't report the sale: you both gain $1500 and no one will notice, unless you want to keep the IRS around and let them audit every business's inventory. In addition to the cessation of wasting all that money to collect the income tax, all American goods reduce in price dramatically from not having to pay income tax. Er... no they don't. Think about that a little harder. The workers who make those goods still need to buy stuff, but now everything they buy costs more because of higher sales taxes. Labor costs won't drop, because all the money that's been going to income tax now has to go directly to employees who'll use it to pay sales tax.
However, let's not lose sight of the point here, which is the double standard. We have some pretty absurd requests of other countries too, and if we expect them to go along with our absurd requests, we're going to have to go along with theirs.
If someone says "I don't want to pay for books anymore", then they might think they're advocating a world where the only books that get written are the ones that are written for free, out of pure love of writing. And if you read their posts, you might think that's the world they're advocating too.
However, even if we abolished copyright tomorrow, we wouldn't end up in that world.
There would be some authors who just loved writing enough that they kept doing it for free, sure. But there would also be some authors who said, "Look, I know I can write a better story than these hippies who do it for nothing, but I need to pay rent. Give me a few bucks and I'll show you what I can do." Some of them would suck, but some of them would be able to command more and more money for their work as they prove themselves.
Even without copyright, the act of writing is still worth something. That's where the value in a book comes from, after all -- the author puts it there before the first copy is ever sold. If people could get past the notion that this argument is about the container and start realizing that it's the content that the creator is trying to sell, and it's the content that the consumer is trying to buy, then maybe we could stop having these ridiculous arguments. I'll raise you one more: it's not the content that the author is trying to sell, it's his own labor. The "content" is a sequence of words, which is essentially just a big number, and it has no more inherent value than the speed of light or the first million digits of pi. Figuring out what that number is in the first place -- which sequence of words makes a good story -- is the hard part.
That may sound glib, but it's really that simple. There are details to work out, of course, but that's what the market is good at: connecting the people who have money and want to spend it on a service to the people who want money and have a service to provide. As long as people care about having new works to read (or watch, or listen to, etc.), there will be demand for the services of those who can create them.
Here's one example of how it might work: suppose Don Knuth announces that he has an idea for a new book, and he needs $50,000 within six months to write it. You go to his web site and see a graph with a little red line counting up to $50,000, and you can click to contribute as little or as much as you want. If you contribute $50, it's held in escrow, and the book is that much closer to being written.
If he reaches his goal, then he begins writing; the money is frozen, to be released according to some predetermined schedule (half now and half when it's complete, maybe). Maybe contributors get something special (their names listed in an appendix, a 10-minute phone chat with Don, etc.), or maybe the release of the book is enough of a reward.
On the other hand, if he fails to reach the goal, then everyone's money is refunded; he can either try again with a lower price or a better idea, or conclude that his writing isn't marketable and go into another line of work.
The analogy isn't between buggy whips and writing, it's between buggy whips and selling copies. Fewer people want to pay for copies in a world where they can make their own copies for free, just like fewer people want to pay for buggy whips in a world where they can get around without a horse and buggy.
Writers, musicians, and everyone else who makes a living by selling copies needs to wrap their head around that. Their talent -- the act of coming up with a story and putting it into words -- is still valuable, and if they charge directly for using it, they can keep making money, because people will always want to read new stories.
The idea that a writer's job is to sell books is a relic of a time when copying books was difficult and copyright was easy to enforce. Now, copying is trivial and copyright is virtually unenforceable. That doesn't mean writing won't be viable anymore, only that selling books won't be a viable way to make money as a writer.
But they don't want me to pay them for doing what I can't do. That's the problem. They want me to pay them for copies of books and songs, when I can already make all the copies I'll ever need for almost nothing, once the original has been written.
Figure out what it costs to write the original, ask for that much money, and the people who want it to be written will pay. If there are enough of them, then you get paid, you release the work, and everyone gets to enjoy it freely (since you've already been paid a price you decided was fair, it doesn't matter how many people eventually a copy). If there aren't, then your work isn't worth as much as you thought, so either lower your price, come up with a better idea to write about, or go into another line of work.
Copyright encourages people to do just the opposite: to spend their time producing things that, ultimately, won't sell enough copies to justify the cost of producing them. For every best-seller, there are thousands of books that end up losing money. If authors would insist on being compensated for their work, like everyone else is, instead of taking royalties from the sale of copies, they'd know ahead of time whether it was worth doing.
The act of writing new works, however, is something people will still be willing to pay for, because most people aren't writers. That's what I meant when I said authors' talent is still valuable, but only when applied directly. So how would that work? Why should I spend months or years researching and writing a book, if there's absolutely nothing to stop people from freely distributing it once its out there? You should do it if you can get someone, or a few hundred someones, to pay you for it - if you can convince them that the benefit they'll receive from the book's existence is worth paying you to write it.
(You should also do it if the benefit you'll receive from writing it is worth the time it'll take you, but let's ignore the volunteer side of things for now.)
See, the key here is to realize that the work of an author is not to sell books, print books, or distribute books. The work of an author is to write books. And once you've been paid for writing the book, it doesn't matter how many people "freely distribute" it, because you've already been compensated for the time and effort you put into writing it.
That's sad.
But you know what? Our society is better off now, because we were willing to bite the bullet and tell those people, "You're going to have to find another way to earn a living." If we had used the force of law to protect their incomes, those few people would've been better off -- at everyone else's expense.
We're in the same situation now. Some people won't or can't adapt to a world where they can't make a living selling copies of information: a world where their talent as artists and authors is still valuable, but only when it's applied directly, not indirectly via copyright.
Some of those people will be left behind, and that'll be sad too, but it's necessary. And just like the era of the automobile brought in a whole new set of jobs to replace the ones that were lost, so will this era.
Apple deserves as much blame as the labels here. They fought hard for it!
I don't know how well eMusic stacks up today, but in the era before DRM-free sales were widely condoned by record labels, eMusic's selection was a joke (and you couldn't even hear the punchline until after you signed up and saw that they didn't have anything you wanted to download).
I don't think we'll see similar behavior from movie studios anytime soon. Studios have been in love with copy protection for decades, from Macrovision to CSS to AACS. Apple can continue to oppose video DRM in public, confident that the studios will keep insisting on DRM. That way, they get the best of both worlds: positive mindshare from customers who think Apple's on their side, and increased sales from preventing customers from buying video content anywhere else. As I said earlier, it was features and not FairPlay that encouraged people to use Apple's store: The ability to synch to unlimited iPods, 5 computers, easy backup, and burn to CD. Since they were the only store to offer that, for nearly a year, don't you think that would give them a huge boost in users? It was probably a factor, but not the only one. You can't overlook the fact that iTMS was the only store that worked with what was by far the most popular player.
If you owned a portable music player, chances are it was an iPod, and that meant every competing store had a huge barrier to overcome before they could court you: any songs you bought from them would've had to be burned to a CD and re-ripped in an iPod-compatible format, costing you time and audio quality. It simply wasn't feasible for any other store to compete with iTMS for iPod owners' business, and iPod owners were (and still are) the biggest part of the market.
Format shifting has been found legal for music (in RIAA v. Diamond, IIRC). What makes you think it wouldn't also be found legal for movies?
To be able to make bit-for-bit copies, you need access to a manufacturing plant. You can't make them at home with a consumer-level burner and media: that's how it's been since DVD-R was introduced.
So, the encryption system does prevent piracy on some level - or at least it did until it was cracked. It prevents you from selling exact copies on the street corner unless you have connections to someone who can go into the disc factory at night and stamp out his own copies, or steal them while they're being loaded onto a truck, or whatever.