DRM and new business models
p2pnet.net news view:- There’s a TechDirt article that tries to use economics to explain why DRM protects old business models, not opens up new models.
Continuing my increasingly lengthy series of posts on the economics of non-scarce goods, I wanted to take a look at an issue that I mentioned in passing earlier this week concerning the ongoing insistence among the entertainment industry (and the DRM industry) that DRM somehow will open up new business models. I’d like to explain why, economically, that doesn’t make sense.
I don’t know if I agree with the analysis. My problem with DRM is different, which is that it’s dishonest about relationships (IE: Rental vs. ownership), and thus is both a form of theft (of what you would otherwise own) and a scam (pricing doesn’t take the “rental” situation into consideration) that should be illegal.
The same technology could be used to create new rental-based business models, where it’s made clear that the person who holds the keys to a locked down technology is the “owner”.
I wrote the following as a comment:
Whoever I see a thread talking about DRM I have to ask what definition they are using: the marketing term “Digital Rights Management”, the more correct “Digital Restrictions Management”, or something else?
I often use it as an acronym for “Dishonest Relationship Misinformation”. I use it to mean the abuse of a technical measure to lock down hardware which the person holding the keys does not own, and the encoding of content such that it is only interoperable with these locked down devices.
I have no problem with laws which protect technologies which lock down devices where the keys are held by the owner of the device, or even with the encoding of content such that it can only be decoded by these types of devices. What I am opposed to is calling a relationship a purchase that is really a “rental” (IE: the person receiving the content doesn’t own the hardware — they are “renting” it from someone else).
Once we are honest about what the relationship is, we can then expand current consumer protection laws to protect those renting from abuses of their privacy and other rights. But I am fundamentally opposed to being dishonest about the relationship we are discussing, and companies should not be allowed to claim they are “selling” something that is locked down where the owner is not given all keys.
I believe that “DRM”, as I have defined it, should not only not be legally protected – it should be outlawed. If people want to create new rental-based business models, then that and other situations where the owner of a device wants to lock down their own devices should be legally protected.
If you’re Canadian, please sign the Petition to protect Information Technology property rights.
Russell McOrmond – p2pnet contributing editor
[McOrmond is an independent author (software and non-software) who uses modern business models and licensing (Free/Libre and Open Source Software, Creative Commons). He's also the CLUE policy coordinator.]
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Tired of being treated like a criminal? They depend on you, not the other way around. Don’t buy their ‘product’. Do bug your local politicians. Use emails, snail-mail, phone calls, faxes, IM, stop them in the street, blog. And if you’re into organizing, organize petitions, organize demonstrations and then turn up on your local political rep’s doorstep, making sure you’ve contacted your local tv/radio station/newspaper in advance. Don’t just complain. Do something!
March 4th, 2007 at 2:50 pm
This is precisely one of the reasons I won’t buy content with enforced DRM. The prices don’t reflect the purchasing method. Nor do they fit in my lifestyle as it is.
I’m not going to pay for something that is a rental agreement, that locks down subpar offerings in quality, and then pay for it with the price of some product I could hold in my hands. It’s sort of like buying air. I can’t see my purchase, can’t feel it, can’t do anything with it beyond what the guard dog watching permits, legally.
However I can get the same product off p2p without the restrictions, at no price to pay for the ‘goods’, and for subpar quality I can sample it to find out if it is worth paying the price for physical cds.
What I can’t do is go to the radio and hear those new artists that might expose me to new works that might interest me. There is no longer a public exposure point that does this legally without having to buy junk along with the one that might convince to spend the money in the first place. I’ve been stung by the filler far too many times and will no longer pay full price just to find out if I might like it or not.
Add the above to the DRM and I don’t see value for the buck that might help change the mind about what is now a preconceived notion that digital sales aren’t worth fooling with. There is no bang for the buck in it. No resale value if I decide it’s just as bad as I thought before the purchase and want to recoup some of my expenses in a bad choice. On the whole it’s a buyer beware issue and it has left over time a bad impression about the cartels offers.
I’ll continue to pass on DRM and digital downloads as there is nothing there worth the money.
March 4th, 2007 at 10:40 pm
First, I have to give you real credit for your website here. It’s a great job, and you’re obviously quite passionate about it. However (don’t you always know there’s a ‘however”):
1. You’re beating a dead horse. What I mean by this is that you — and far too many other people in the p2p advocacy “scene” — appear to take the issue of “legality” as intrinsically meaningful. It’s not. The “legality” of any given activity has absolutely nothing to do either with the ethical reasoning of the individuals involved in it, or with the actual merits of the activity itself. A primary example of this was the fact that chattel-slavery was “legal” during most of human history. People who were repulsed by the idea of humans being owned as property routinely violated that law. The “consequences” of doing such were of no meaningful import whatsoever. (Admittedly, the issues in p2p are far less visceral than the slavery thing was, but it’s a very vivid and obvious example.)
Another example, less obvious perhaps, but still important is the fact that the vast majority of people routinely engage in a plethora of activities which are technically ‘illegal’ —— in violation of one or more statutes, regulations, or laws. This is more an issue of whether laws can be meaningfully enforced, than a case of individuals being “unethical” — one can make an extremely strong case that the ever more intrusive amount of ‘laws’ in our culture is not a good thing, and that most of them are not valid, legitimate activities for government to be meddling with anyway.
Add to this the long and illustrious tradition of “civil disobedience” — where individuals feel duty-bound to disobey certain laws ON PRINCIPLE, and you have pretty conclusive proof that the p2p ’scene’ cannot be stopped, whether it’s ‘legal’ or not.
2. The second issue is technological: namely, all forms of DRM are ‘breakable’, no matter what the claims to the contrary. Additionally, given enough people working on a given technical approach, DRM WILL be broken rather quickly — especially if said hackers working on the project are motivated to do so ON PRINCIPLE vis a vis statement 1.
(Notice, for example, the vast upsurge in DCSS encryption info since such things are tecnically ‘prohibited’ by law — yet another instance of “civll dissobedience” in action.
3. Then, you have the “Grey Album” effect — any attempt to curtail the distribution of something WILL instead lead to it’s being distributed FARTHER, and FASTER. (War on drugs, for example.) “Grey Tuesday” would never have happened if Sony hadn’t attempted to suppress the “Grey Album” — like most remixes/mashups, Dangermouse’s product would probably have vanished into the sea of similar products. Instead, it sparked a huge phenomenon, was hosted on vast numbers of websites, and has politicized the debate even more. “Law” — in the last analysis — is superfluous, and little more than a nuisance. Not that it cannot be used to damage individuals — but the fact is that any such damage always remains relatively small-scale, and never stands a chance of stamping out whatever a given ‘law’ ostensibly targets.
(Another visible instance of ‘civil disobedience’ in action is the rise in tee smoking. Ever since the governments of various nations began force-feeding teens propaganda — oops, I mean “public service announcements” — smoking has become just another subtle form of rebellion — a way to spit in “The System’s” face.
So, given the fact that quite a few people now see p2p and related technologies as a civil-disobedience issue, any and all ‘laws’ related to same are, in the end, nothing but more of the same inane beurocratic hoops that people have become used to jumping through for decades, and like all other such “nuissance laws”, will continue to be flouted more of less openly. It’s understandable that the “Cartels” (as you call them) would attempt to use the — inherently ineffectual — mechanism of “legal coercion’ — but in the long run, it cannot work.
So, the p2p advocates are, in the end, beating a dead horse.
March 4th, 2007 at 10:45 pm
First, I have to give you real credit for your website here. It’s a great job, and you’re obviously quite passionate about it. However (don’t you always know there’s a ‘however”):
1. You’re beating a dead horse. What I mean by this is that you — and far too many other people in the p2p advocacy “scene” — appear to take the issue of “legality” as intrinsically meaningful. It’s not. The “legality” of any given activity has absolutely nothing to do either with the ethical reasoning of the individuals involved in it, or with the actual merits of the activity itself. A primary example of this was the fact that chattel-slavery was “legal” during most of human history. People who were repulsed by the idea of humans being owned as property routinely violated that law. The “consequences” of doing such were of no meaningful import whatsoever. (Admittedly, the issues in p2p are far less visceral than the slavery thing was, but it’s a very vivid and obvious example.)
Another example, less obvious perhaps, but still important is the fact that the vast majority of people routinely engage in a plethora of activities which are technically ‘illegal’ —— in violation of one or more statutes, regulations, or laws. This is more an issue of whether laws can be meaningfully enforced, than a case of individuals being “unethical” — one can make an extremely strong case that the ever more intrusive amount of ‘laws’ in our culture is not a good thing, and that most of them are not valid, legitimate activities for government to be meddling with anyway.
Add to this the long and illustrious tradition of “civil disobedience” — where individuals feel duty-bound to disobey certain laws ON PRINCIPLE, and you have pretty conclusive proof that the p2p ’scene’ cannot be stopped, whether it’s ‘legal’ or not.
2. The second issue is technological: namely, all forms of DRM are ‘breakable’, no matter what the claims to the contrary. Additionally, given enough people working on a given technical approach, DRM WILL be broken rather quickly — especially if said hackers working on the project are motivated to do so ON PRINCIPLE vis a vis statement 1.
(Notice, for example, the vast upsurge in DCSS encryption info since such things are tecnically ‘prohibited’ by law — yet another instance of “civll dissobedience” in action.
3. Then, you have the “Grey Album” effect — any attempt to curtail the distribution of something WILL instead lead to it’s being distributed FARTHER, and FASTER. (War on drugs, for example.) “Grey Tuesday” would never have happened if Sony hadn’t attempted to suppress the “Grey Album” — like most remixes/mashups, Dangermouse’s product would probably have vanished into the sea of similar products. Instead, it sparked a huge phenomenon, was hosted on vast numbers of websites, and has politicized the debate even more. “Law” — in the last analysis — is superfluous, and little more than a nuisance. Not that it cannot be used to damage individuals — but the fact is that any such damage always remains relatively small-scale, and never stands a chance of stamping out whatever a given ‘law’ ostensibly targets.
(Another visible instance of ‘civil disobedience’ in action is the rise in tee smoking. Ever since the governments of various nations began force-feeding teens propaganda — oops, I mean “public service announcements” — smoking has become just another subtle form of rebellion — a way to spit in “The System’s” face.
So, given the fact that quite a few people now see p2p and related technologies as a civil-disobedience issue, any and all ‘laws’ related to same are, in the end, nothing but more of the same inane beurocratic hoops that people have become used to jumping through for decades, and like all other such “nuissance laws”, will continue to be flouted more of less openly. It’s understandable that the “Cartels” (as you call them) would attempt to use the — inherently ineffectual — mechanism of “legal coercion’ — but in the long run, it cannot work.
So, the p2p advocates are, in the end, beating a dead horse.
March 5th, 2007 at 12:03 am
I don’t think it is beatnig a dead horse at all. If people do not demand change, then change will NEVER happen.
I agree with you that p2p cannot and will not be stopped, but to say that people should not try to have laws changed in the consumers favor for curbing things such as DRM, when they have been in the CORPORATIONS favor for so long is kind of short sighted.
Before things can change, someone HAS to stand up and say “enough”! That is why sites like this exsist all over the net. People are tired of corporations trying to take control away from people and put it in the hands of corporations ONLY.
Fair use is exactly what it says…it puts corporations on the same footing with consumers when it comes to making a backup copy of something they own. Now the corporations are wanting to take away control from consumers even having a single backup copy of something they ALREADY OWN!
I think THAT is WORTH legally fighting them for!
March 5th, 2007 at 7:39 am
You will guess that I disagree. While what you say is true for some people, you are wrong to think that it is true for most people. Most people obey the law, and don’t have the technical knowledge to restore the security of their own computers if a vendor has circumvented it with a DRM.
While the law and technology can be circumvented, it is a real limit on the rights and freedoms of most people. I’m not concerned with my own rights, given I will always have the ability to use my technical knowledge to protect the security of my own computers. What I’m worried about is my mothers friends who are currently constantly infected by Microsoft Windows viruses and who need software vendors to be able to legally offer them technologies to protect their computers. Currently the law protects those who are circumventing security, privacy and other aspects of their computers.
I don’t want to sound harsh, but I believe it is our responsibility as technically literate people to protect the majority who are not. To just worry about those few of us with the ability to protect our own rights regardless of the law is very selfish.
March 5th, 2007 at 10:43 am
“You’re beating a dead horse. ”
Sorry, but this horse is not dead. If it were, the RIAA would quit using words like “illegal” and “theft”.
Innocent minds read this rhetoric and believe it to be true, especially since it comes from an international organization who owns a lot of the content they have grown to enjoy. Then these young people, many of them students, go on this p2plawsuits website and write the RIAA a cheque for close to 4 grand. – People who have been targeted in their lawsuits are also pressured to pay.
Also there are many who are unsure of how to proceed with developing products and business models that will benefit us all. they don’t want tp go up against that scary RIAA until the law makes itclear to all of us exactly what is legal and what isn’t – there are too many mixed messages now.
Once the law has been made clear and it is properly communicated, this horse will be dead.
It appears to be in the interest of the RIAA to continue with this veil of uncertainty.
March 5th, 2007 at 6:58 pm
Are you intentionally misunderstanding what I tried to say, or are you stupid? I ask that in all sincerity, because quite frankly, it has to be one of the two.
1. P2P cannot be stopped. This has been demonstrated time and time and time again. We’ve both admitted that.
2. “Laws” are ultimately meaningless, in that, while they CAN be used to harrass individuals, or even a relatively small subset of the given “lawbreaker” population, they are ultimately “unenforceable” beyond a VERY limited extent. There’s already something like, what, 1 billion P2P users? Ultimately, whatever ‘law’ happens to end up on the books can do NOTHING, unless the majority of the population VOLUNTARILY plays along with it. (Or do you deny the proposition that “unenforceable laws cannot be enforced?”
Yes, harassment by the RIAA is disgusting, but sadly, the RIAA is a government lobbying-group, and like all such organizations, exists for ONE purpose only: sucking government cock in an attempt to use the — otherwise completely useless — mechanism of “government” to get their way.
Government is, ultimately, little more than a useless annoyance which can only appear to “rule” over its subjects so long as THEY THEMSELVES play along in large enough numbers. That’s why “revolutions” work out so well.
Or do you seriously expect me to believe that the RIAA (or any other agency) could “sue” millions of p2p users? The whole debate over what lobbyists, lawyers and other assorted leeches do is, ultimately, meaningless, once a large enough element of the populace stops obeying. The point is NOT what any given group of “lobbyists” happen to get those useless ‘governmental’ leeches to scribble down in their books — the point is: what is ACTUALLY happening? What are people REALLY DOING? Can what people are REALLY doing be stopped?
In the case of p2p:
What’s actually happening? Vast amounts of stuff being downloaded all the time, and climbing, showing NO signs of stopping, or even levelling off.
What are people REALLY doing? Well, “Grey tuesday” should have been an indicator of THAT. Large numbers of people simply don’t given a shit whether it’s “legal” or not, irrespective of WHAT the RIAA, or various governments, say. Government is ULTIMATELY ineffective. In the short-term, they may be able to intimidate folks into playing along and letting them think they “rule”, but ultimately — nope.
And the most important: CAN what people are doing be “stopped?” Again, Grey teusday, and the people who are developing — and continuing to develop — p2p technologies and new ways to distribute content, etc, are FAR more interesting, and important, ultimately, than any sort of “lobbying” could ever be.
The fact is, the pro-p2p side has ‘won’, and the horse IS dead — it’s just twitching a bit.
Sorry if my statements made any ‘activists’ reading this realize their own unimportance.