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The Almighty Buck

Sony: Case of Right vs Left Hand 282

Masem writes "Wired has an interesting article that explains the problem facing several of the megacorporations that have both content and technology divisions, as specifically in the case of Sony. The tech divisons want to offer the consumer all the possible options, while the media divisions are very concerned on DRM. While the two groups are trying to meet somewhere in the middle, they are still at odds about it, and also finding that that middle is becoming rapidly populated by other competitors (including Microsoft) in just how to empower consumers without sacrificing their copyrighted materials. Both divisions are trying to adopt to just changes in the landscape and hoping to find something that will work."
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Sony: Case of Right vs Left Hand

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  • Split up (Score:3, Insightful)

    by bsharitt ( 580506 ) < minus language> on Friday January 24, 2003 @01:56PM (#5152014) Homepage Journal
    In the current enviornment, Sony may be better off spinning off their music division.

    • Re:Split up (Score:5, Insightful)

      by JudgeFurious ( 455868 ) on Friday January 24, 2003 @02:03PM (#5152094)
      I know if I were Sony I would certainly consider it. A slice of a 20 billion dollar industry in conflict with your own 40+ billion dollar electronics business would make a pretty clear decision for me.
      • Re:Split up (Score:2, Interesting)

        by zhevek ( 147623 )

        The idea of splitting a company just isn't part of the current corporate thinking. Article after article in business magizines are devoted to merging companies, but nary a one devoted to intelligently unmerging.

        Though we may see that very soon when Time Warner decides it has had enough of AOL losing money ;)

      • Re:Split up (Score:2, Insightful)

        by KGIS ( 307368 )
        I disagree, if I was in their position I would be looking at changing the business model so that one side of the company could leverage the other. If it would work they would be the only company in their market. Once their compatitors would figure out how to compete again they would already be learning from their mistakes and ready for round two.
  • How about... (Score:5, Insightful)

    by Anonvmous Coward ( 589068 ) on Friday January 24, 2003 @01:56PM (#5152026)
    ...trusting your customers?

    If something's fairly priced, nobody's going to take the time to copy off something to somebody who doesn't wanna pay. "Go buy your own."

    • But what about... (Score:4, Interesting)

      by Khakionion ( 544166 ) on Friday January 24, 2003 @02:04PM (#5152100)
      ...releasing quality products? If the new music rack is populated by the likes of Eminem, Missy Elliot, Dixie Chicks, etcetera, I think I'll try the good ol 'net for my music infusion.
    • The problem with your theory is that it has to be true for every single person for it to work, and I'm willing to bet that that's not the case. If it only holds for 999 out of 1000 people, then everything will get shared.
      • Re:How about... (Score:5, Insightful)

        by rgmoore ( 133276 ) <> on Friday January 24, 2003 @02:58PM (#5152512) Homepage

        Wrong. As the software industry shows, it's quite possible for a company to make money selling originals even when there's a whole industry devoted to making illicit copies. So long as a reasonable percentage of people prefer to buy legitimate versions, the creator can continue to do fine. There just has to be some incentive for people to pay for legitimate versions of whatever- software, music, or movies- rather than illegitimate copies. In the software business that comes in the form of tech support and legal threats against businesses that use illegal copies. In the movie and music business it's likely to be in the form of guaranteed quality of the copy. People who use file sharing networks constantly complain about the large percentage of poor quality files. Legitimate providers could very easily make money by charging a decent amount for the promise that the technical quality of the recording will be high.

        • Re:How about... (Score:4, Insightful)

          by axlrosen ( 88070 ) on Friday January 24, 2003 @03:09PM (#5152576) Homepage
          Actually I was talking about the poster's theory that nobody would upload songs if they could be bought inexpensively, not whether a company could make money in the face of song swapping.

          People who use file sharing networks constantly complain about the large percentage of poor quality files. Legitimate providers could very easily make money by charging a decent amount for the promise that the technical quality of the recording will be high.

          If they did start to sell high-quality, unrestricted song files, then I imagine the quality of the files on the file-sharing networks would go up too, right? (They'd be the same files.)
    • Re:How about... (Score:5, Insightful)

      by salesgeek ( 263995 ) on Friday January 24, 2003 @02:17PM (#5152214) Homepage
      If something's fairly priced, nobody's going to take the time to copy

      Amen to that. 99.9% of the problem with the movie and the music business is that their stuff just isn't worth what they charge. They've overproduced (there's more music and movies at the average wal-mart than I could listen to or watch in a lifetime), overhyped and finally overpriced their product. Result? People would rather go out of their way to copy than to buy JUST TO SPITE THEM!

      How about ink jet cartridges? Ever wonder why a store like Staples has to put them behind the counter? Because their customers will take them because they aren't worth paying for (I personally refill, the penalty for refilling is an occasional ink-stain)!

      I'm sick of the fscking razor blade business model. I'm tired of 80% marketing expense product cost. Now I will go wander back out in the desert from whence I came...

      • Absolutely not. I would NEVER steal an ink refill, because it cost someone something (time and money) to manufacture it. Stealing this incurs extra costs. When someone downloads an MP3, the only cost incurred is bandwidth - specifically, that of the server and the client. The artist isn't actually hurt directly.
        • Re:How about... (Score:3, Insightful)

          by salesgeek ( 263995 )
          I agree that stealing is wrong. I think the problem with the record business (or the ink cartridge business) is that we have the victim and thief backwards. BTW - stealing ink cartridges isn't a good idea. We don't need shoplifters making the $40 cartridge for my $35 printer more expensive!
      • by TFloore ( 27278 ) on Friday January 24, 2003 @05:04PM (#5153357)
        And when you are comparing the price of anything to a nearly-equivalent version of the product that is offered for free, almost any amount of money, no matter how small, will not be considered "fair" by most people.

        Most people don't copy music to spite the record companies. (Oh, a sizable percentage of /. readers might, but not most normal kazaa users.) Most people copy music, and let other people copy it, because it doesn't cost them anything, except a little bit of time. And most people don't properly value their time.

        This is one of the problems that unlimited internet access causes. (Don't get me wrong, I love unlimited internet access and would be very upset if I were charged per-megabyte fees.) I don't mind giving a friend a lift across town in my car. It doesn't cost me much at all, maybe $0.25 in gas or so, and 10 minutes of my time. I will think seriously about driving a friend from one coast of the U.S. to the other, because that is a non-trivial expense, just in terms of gas and vehicle maintenance. Time expense also becomes unreasonable.

        There should be a similar thought process with sharing music. Giving a friend a copy of a cd you bought, so they can listen to it and see if they want to get more stuff by that group, is a reasonable thing to do. Giving 2000 copies of it to people all over the world isn't.

        But with unlimited internet access... Giving 2000 copies away to total strangers costs you the same as giving one copy to a good friend. The only "cost" to you is your time to set up the client and music files on your system.

        It's hard to compete with free.

        Competing with quality or convenience? Quality won't work. It will be too easy for P2P networks to add the equivalent of karma. Add a crc value to the information transmitted in a file search. After a verified good transfer, compare the crc value. That lets you verify the other client isn't lying about contents. Then you can listen to the music, and "moderate" on quality of the rip. Not if you like the song, but if the rip is good quality. Enough "nothing but skips and cracks" votes and that client drops to the bottom of the search results. You just solved the quality problem on p2p networks. Convenience can be handled also.

        It's hard to compete with free.

        We love this when talking about Microsoft, and any other propreitary vendor competing with an open source product. But the recording industry (and the artists that want to distribute their own stuff without dealing with the Major 5 Labels) has this problem also.

        I admire the problem... and I wish I could offer a good solution. I really think it will just end up being a version of Apple's solution. An advertising campaign "Don't steal music" and almost no real limitations enforced. Because nothing else will let the industry keep the honest customers, which I like to think are the majority.
        • by salesgeek ( 263995 ) on Friday January 24, 2003 @05:17PM (#5153434) Homepage
          It's hard to compete with free.

          That's what happens when you make so much music, then basically give it away to consumers over FM radio (or on TV) for 30 years... The entire broadcast business is based on this model:

          Consumer: Mooches for free. Changes channels to avoid commercials.
          Customer (advertiser): Pays broadcaster for commercials that consumers change channels to avoid.
          Broadcaster: Pays for playing movies or music.
          Labels & Studios: Churn out more crap that is simmilar to the crap that sold the most commercials for the broadcasters.

          Exception: Theaters and live performances - customer pays outrageous price for tickets...

          The problem with the internet is that it's the ultimate commercial skip.
    • by samael ( 12612 )
      If something's fairly priced, nobody's going to take the time to copy

      And who decides what's "fair". Because I sure as hell know that the customer's idea of fair is a lot less than what the company's idea is.

      My fair price for the latest Britney album? Free, or even negative.

      My fair price for the next U2 album - proably up to $30.

      Your milage will almost certainly be varying like a motherfucker.
      • Re:Fair? (Score:2, Interesting)

        by PyromanFO ( 319002 )
        " And who decides what's "fair". Because I sure as hell know that the customer's idea of fair is a lot less than what the company's idea is."

        The market decides. Hes not saying go tell Sony, "youre going to charge this, and no more!" Hes saying that Sony should give thier customers what they want, while still getting what Sony wants. Theres a balance and its called market price. The problem here is only Sony is getting what they want, the customers are getting screwed.
      • I'd say your U2||Britney comparison is fair. However, you're forgetting the fact that millions of pre-teenage children convince their dumb parents that ~$30 is also fair price for Britney garbagge.

        Companies know this and they make $30 a CD of you on U2 + $30 a CD of people who fall for marketing bullshit.

        Now guess, do companies lose more money on copying U2 or Britney stuff?

        • As I'm reading these Britney vs. U2 comparisons, I can't help but think how much I disagree with them.

          U2 is the product of marketing hype, even moreso than Britney. How many Grammys does U2 have? Realize that U2 is marketed towards thirtysomethings, Britney to teeny-boppers.

          Look, it's a matter of personal preference. Personally I'm not going to be downloading any U2 or Britney anytime soon, I'd rather listen to Skinny Puppy or Muslim Gauze. YMMV.

          But comments like $30 a CD of people who fall for marketing bullshit remind me of why we need to all boycott the MP....OMG the new LOTR movie is out I'm gonna be first in line!!!

          Okay, back to the topic:

          Sony's biggest problem is that, on both sides of the house, their (consumer-oriented) products are disposable. Or maybe that's their strength. I don't understand a civilization whose raison d-etre is the quick-flip, the economy of which has relegated works of lasting value (be it CDs that you'll want to listen to in ten years, or CD players that will still work in ten years) to a cultish minority that remembers when things were made of metal and lasted forever. Sony used to "get it", my Betamax built in 1981 outlasted four latter-day VHS machies. Not anymore.

          Perhaps, if we're lucky, Capitalism will eat itself. Certainly, the sea change brought on by lossless copying vs. crappy content has Sony et. al. burning the candle at both ends.
    • Re:How about... (Score:3, Interesting)

      by Anonymous Coward
      > If something's fairly priced,

      It would be an improvement if the music industry gave better value. Lower prices may reflect that for current products, but the basic music CD has not changed for quite some time.

      The production end needs to stop complaining that consumer technology has cought up and needs to move on to better products. Either put out smaller disks, or use much higher densities to give added values.

      For example a multilayer CD that could be played on most current CD players but also contained video clips, session video or film of the concert. Perhaps just bundle a CD and a DVD for current CD prices and offer the CD only at a lower price.

      Sure, they could copy the music for playing in the car or on a walkman, but you would need to buy the product to get the full value.

      This would help both industries: new players required for multi-layer CDs or new markets for DVD players.

      Cassette tape added value over vinyl by being portable and less destructable. Records were dubbed to tape but this lost quality compared to buying new tapes.

      When CDs first came out they could be dubbed to cassette tape for walkmans and car players (and probably still are), but the CD added value by being better quality so people bought CDs rather than just copying borrowed ones to tape.

      Now there is no difference between bought product and copied product the music industry needs to introduce that difference.

      Of course DVD or mini-CD copiers will eventually catch up and the electronics industry will make much money selling these, so the next step by the music indutry should then be to some other way of adding even more value.

    • Better idea (Score:3, Insightful)

      How about offering a complete end-to-end production setup that is streamlined to be able to produce small quantities of merchandise, records, etc for artists who aren't signed? How about investing in companies like PropellerHead so that they can guide the development of production tools so that they can reduce studio costs and eventually build "micro studios" that can be fit inside a garage. Imagine say..... TimeWarner buying PowerMacs, installing a lot of great production software and building quality, low-cost "studios" for artists they sign. That'd be a hell of a lot less expensive than plunking down $250K-$1M for studio time. All they'd have to do is get the band's best cut, send it to the techs to clean it up and press it. They could probably save as much as $800K per record or maybe even more doing that.

      The first big label to say, "no no, technology is ou--my--friend" is the going to be the one that owns the industry. I'm surprised that one of these labels hasn't already contact Steve Jobs and asked him to help them "get with it" technologically. You'd think that at least one of the bean counters in accounting would realize that personal computers could greatly cut down on their cost. DRM isn't good for labels, versatile PCs which can hold lots of cheap digital music are. They should be offering free 64-96k oggs as samples and downloads for say.... $.75 a song for a 350K VBR Ogg or MP3. I give my friends music occassionally to sample, but if the labels did that, I'd just tell them to stop being a cheap mofo and buy the damn downloads.
      • Re:Better idea (Score:2, Informative)

        by joshsisk ( 161347 )
        Imagine say..... TimeWarner buying PowerMacs, installing a lot of great production software and building quality, low-cost "studios" for artists they sign. That'd be a hell of a lot less expensive than plunking down $250K-$1M for studio time. All they'd have to do is get the band's best cut, send it to the techs to clean it up and press it. They could probably save as much as $800K per record or maybe even more doing that.

        The problem with this idea is that, under the current system, the recording costs come out of the band's share of income from the record. In fact, all expenses do, including marketing. Thus, the label has no incentive to save money, since their cut is unchanged.
      • I give my friends music occassionally to sample, but if the labels did that, I'd just tell them to stop being a cheap mofo and buy the damn downloads.

        The problem remains that you need to trust all participants to play by the rules. One person violates that trust and your content becomes valueless.

    • I can back that up. If CDs were $8 and had a couple more songs on them I'd buy a lot more. If DVDs were $12 and were consistant with their features (alternat languages, sub-caps, etc ...) I'd buy a lot more.

      In addition to purchasing more media we'd be buying high end (Sony) electronics to play them on.

      As it is, we use old junky hardware and steal the media.
    • Re:How about... (Score:4, Insightful)

      by seaan ( 184422 ) <> on Friday January 24, 2003 @04:52PM (#5153277)
      ...trusting your customers?

      But that is not really what DRM is about. Protecting against illegal copies is just an excuse, what they really want shows up in this quote from page 4 of the Wired article:

      A digital rights management system isn't just a traffic cop; it's a powerful tool that gathers all kinds of information about consumers, from credit card numbers to listening habits, and dictates which devices can talk to the PC and how.

      What Sony entertainment, and the other publishers are really afraid of is "money left on the table". A lot of that money comes from things consumers used to do for free, but they are in business of making money, not running a charity. If they have to buy a few laws to get extra control, they don't care if it hurts society in the long run. Let's close this post with another quote from page 4:

      "If you're looking for logic in this situation - hey, it's the music business," says Launch founder Dave Goldberg. "There's not a lot of logic in what they do." But to Ehrlich, the logic is in not letting another company play music gratis when it could be paying. Precedents matter: If broadcast radio hadn't been exempted from royalty payments decades ago, for reasons hardly anyone can remember, the music industry could be collecting an extra $2 billion or so a year. "It's hard to change the old world," Ehrlich declares.
  • While it's interesting that these companies have internal conflict over which way they want to swing, I'd like to remind everyone that we really don't care what they eventually decide. Corporations do not run the country (yet). We need to decide what's right first and then companies have to adapt to that. Crossing our fingers and hoping that "they make the right decision" is worse than useless, as it puts the decision into the hands of the capitalists.
    • Corporations do run the country, bud. Hate to break it to you. How often does your representative "represent" you over a large corporation? Never. They have lobbyists and lots of money to contribute. We have a voice and the innate ability to vote for whichever candidate has the most money. Either way corps. win.
    • We need to decide what's right first and then companies have to adapt to that.


      Umm, if you don't like what a particular company is doing, then simply don't support them (i.e.- don't buy their products). Unless they're doing something illegal, which in the case of Sony is no, then why do we need to set policy for them? I mean really, who died and made you God? How about I decide what I think is right for your personal life first and then you have to adopt to that.

      Regulation has a place. Law is important. But you can't regulate and legistate things to suite your case, especially if there is no crime being committed. We're talking about music here, and not that great of music at that. The only crime Sony and related companies have committed is providing really horrible service and treating customers like criminals. So forget about them, or compete and offer better music and better service. But until you've run a multinational corporation and figured out how to do it "right," I think you should not be so quick to regulate their business according to your values.
  • by BlameFate ( 564908 ) on Friday January 24, 2003 @02:00PM (#5152058)
    This is why Microsoft will, IMO, be destined to be constantly playing catch up in the DRM arena.

    As the article says, Sony is trying to iron out the imbalances between it's content creation and electronics business. With the co-operation with Phillips to buy Interplay and a proven track record in widespread licensing of a technology to the electronics industry (think CD) then I think Sony has the ability to overcome the aparrant "civil war" (hype alert!) internally and become a dominant force in the new wave of entertainment.

    The article portrays them as more balanced and willing to work it out for widespread consumer benefit than the sensationalist tagline of "civil war within Sony" implies.

  • Wasn't this just recently discussed in another article posted here on Slashdot? Not a duplicate story I'm talking about but the conflict between the five major labels and the companies that own them was mentioned in the article "Record Industry Extinction Predicted RSN" yesterday. If you skipped that one but liked this one you might want to go back and give it a look.
  • by NanoGator ( 522640 ) on Friday January 24, 2003 @02:01PM (#5152070) Homepage Journal
    Too many can't do's == too many won't buys.
    • Too many can do's == too many won't buy's as well. I can download a song for free, therefore I won't buy the cd.
  • by SoCalChris ( 573049 ) on Friday January 24, 2003 @02:01PM (#5152076) Journal
    Sony: Case of Right vs Left Hand

    Maybe they should work on becoming ambidextrous?
  • by joelwest ( 38708 ) <joel AT joelwest DOT com> on Friday January 24, 2003 @02:05PM (#5152112) Homepage
    Just a few random thoughts....

    The entertainment industry is relatively old. Unfortunately the entertainment industry, while professing to be 'hip' and 'new' is actually very conservative, and new things frighten them.
    As well most members of the music industry don't actually produce anything -- hence they call the musicians "talent".
    The non "talent" members of the industry are actually looking at working for a living, and this frightens them. Hence being conservative. And wouldn't any pimp fight if his bitch was giving it away for free?
    Like I said ... just some random thoughts.

    • The concept of a media entertainment industry started with the advent of the Gutenberg printing press. With this, people were able to acquire entertainment (ie: books) and enjoy them at home.

      It wasn't until the 1970's that Gutenberg had any competition with the personal Xerox, so there was an effective monoloply with the publishing industry that prohibited copylefting. Now, within the span of around 20 years, the end-consumer is completely enabled to produce near-perfect copies of virtually every media imaginable (print, audio, video and digital).

      This may require a radical shift in thinking, perhaps returning to the wealthy "landowners" supporting artists rather than the relatively recent model of consumers supporting pop-culture phenomena.
  • Quote... (Score:5, Interesting)

    by dietlein ( 191439 ) <(dietlein) (at) (> on Friday January 24, 2003 @02:05PM (#5152114)
    The job of making a business out of entertainment and hardware combined falls to Sony's chief strategist, Yuki Nozoe.

    This is one guy I do not envy.

    This is also the guy who determines where Sony's future money will come from, e.g. consumers buying expensive hardware, or media giants paying Sony (more than they do now) to secure their content.

    He, of course, wants to please both hands.

    He shouldn't forget: you can please some of the people all the time, and all of the people some of the time, but not all of the people all the time.

    Therein lies his decision.
    • This is also the guy who determines where Sony's future money will come from, e.g. consumers buying expensive hardware, or media giants paying Sony (more than they do now) to secure their content.
      Cringely alluded to this briefly [] a few months ago when he noted that in 2001 the PC business was more than 8x the size of the movie business and music business combined. Those media giants aren't so giant... why are they even in the game at all?

      Seems obvious to me that the money will either come to Sony from consumers or will go to other companies (e.g. Apple, for making me an iPod and letting me mostly do what I want with it) who are willing to sell us what we want.

  • No kidding! (Score:5, Interesting)

    by Abalamahalamatandra ( 639919 ) on Friday January 24, 2003 @02:08PM (#5152131)
    I bought the first of the "cool" MP3 players they came out with about three years ago - it was awesome, took like a single AA battery, was the size of a pen, had 64M of flash (a lot at the time) and use ATRAC compression.

    Unfortunately, it also came with OpenMG, which was the only way to talk to it. Loading MP3 files on it required that they be "checked in" to OpenMG, which involved importing them into its encrypted store, and took well over a minute per MP3 file. Once they were in there, you could load them into the unit, but - here's the kicker - only three times unless you checked them back in from the unit to delete them.

    Worse, while investigating all this madness, I found out that the standards this was supposedly complying with had NO SPECS for interoperability! Get a new player from another company, tough luck, your "secure store" is worthless. So unless you want to wait for the importing function to complete every time, you had to keep two copies of each MP3 - one cleartext and one imported.

    It was a classic case of the software/media side taking a very cool device and totally ruining it. I returned it less than a week later.

  • Summary (Score:5, Informative)

    by SuperHighImpact ( 463360 ) on Friday January 24, 2003 @02:10PM (#5152141)
    Yeah, I'm karma whoring, but...

    For those of you who don't want to read all five pages, this quote humorously sums up the entire thing.

    Instead, it's tried to play both sides. As a member of the Consumer Electronics Association, Sony joined the chorus of support for Napster against the legal onslaught from Sony and the other music giants seeking to shut it down. As a member of the RIAA, Sony railed against companies like Sony that manufacture CD burners. And it isn't just through trade associations that Sony is acting out its schizophrenia. Sony shipped a Celine Dion CD with a copy-protection mechanism that kept it from being played on Sony PCs. Sony even joined the music industry's suit against Launch Media, an Internet radio service that was part-owned by - you guessed it - Sony. Two other labels have since resolved their differences with Launch, but Sony Music continues the fight, even though Sony Electronics has been one of Launch's biggest advertisers and Launch is now part of Yahoo!, with which Sony has formed a major online partnership. It's as if hardware and entertainment have lashed two legs together and set off on a three-legged race, stumbling headlong into the future.

    • by WIAKywbfatw ( 307557 ) on Friday January 24, 2003 @02:16PM (#5152199) Journal
      Sony shipped a Celine Dion CD with a copy-protection mechanism that kept it from being played on Sony PCs.

      You say that as if it were a bad thing. Sounds like the humane thing to do to me. Hell, I wish they'd add this "feature" to their Celine Dion back catalogue too, if only to protect future generations from her screaching.
    • Re:Summary (Score:5, Funny)

      by nucal ( 561664 ) on Friday January 24, 2003 @02:16PM (#5152205)
      Sony even joined the music industry's suit against Launch Media, an Internet radio service that was part-owned by - you guessed it - Sony

      For some reason, this reminds me of the scene from Space Balls where "Pizza the Hut" dies by eating himself ...

      • I was reminded of the light and dark sides of the Schwartz, and Lone Starr and Dark Helmet getting their schwartzes wrapped around each others.
      • Re:Summary (Score:2, Insightful)

        For some reason, this reminds me of the scene from Space Balls where "Pizza the Hut" dies by eating himself ...

        Businesses routinely "sit" on new technologies out of fear that they will cannibalize the sales of existing products. But that's short-sighted, because in the long-run, technology's advance can't be stopped.

        Smart businesses aren't afraid to cannibalize their own sales, because they know that if they don't eat their own lunch, someone else will.

        Unfortunately, the entertainment industry has a long history of not understanding technology [] and they don't understand the risks of opposing its growth

  • The good thing... (Score:4, Insightful)

    by Whatsthiswhatsthis ( 466781 ) on Friday January 24, 2003 @02:11PM (#5152146)
    The good thing that is happening here is competition. If these companies collude to undermine the rights of citizens, at least they have themselvs to contend with. An inner struggle might just be what we need.
  • by GuyMannDude ( 574364 ) on Friday January 24, 2003 @02:11PM (#5152152) Journal

    Kina reminds me of all those Godzilla vs. MechaGodzilla movies where the Big G has to fight an evil robotic double of himself. Mankind (in this case: Japan) always ended up being the loser as these two Goliaths fought. Let's home mankind doesn't suffer quite so badly this time around...


  • Break them up! (Score:4, Insightful)

    by ebcdic ( 39948 ) on Friday January 24, 2003 @02:14PM (#5152184)
    This is a fine example of where concentration of ownership across sectors is just as damaging as a monopoly within a sector. If the technology arm of Sony was an independent company, it would have no interest in restricting consumer choice.
    • Re:Break them up! (Score:2, Interesting)

      They break up quite nicely in a free market. This is a great example of why large companies are inefficient. They work at cross purposes, and it is hard for them to tell how much things cost.

      Ludwig von Mises wrote a book called Socialism [] (free and online) in 1922. Short version: when governments set prices, they are inefficient, since they don't know how much things should cost. Big companies run into the same problem -- is it better for Sony to do choice A or choice B?

    • Yeah, and they'd both be less profitable. Two competing businesses, spending lots of money lobbying against each other, are not as profitable as one unified company. It's in the shareholders' best interest to have a unified front; sony just has to figure out which front is more profitable.
    • Re:Break them up! (Score:3, Insightful)

      by thefirelane ( 586885 )
      Either that, or it is an example of the beauty of the free market. Sony is not giving consumers what they want in either direction, so competitors who focus on making, say, a really well designed white pod-like mp3 player with no restrictions.

      I don't get how you see "a company that is too big is failing" and think "we should break them up". Isn't it an example of the market breaking it up, or killing them if they don't deliver?

  • by jmkaza ( 173878 ) on Friday January 24, 2003 @02:15PM (#5152188)
    This "problem" is actually an opportunity for these groups. Bertlesmann had heavy investment in Napster. Sony's media and harware departments are working against each other, and AOL Time Warner can't figure out how to maximize profits in their media sections without suing their own ISP. More effective management and departmental integration is the key. Imagine if AOL bought out Kazaa, made it a service of AOL, provided all of Time Warner's content, licensed the other 4 recording industies', and allocated profits from increased subscrition based on percentage of each record companie's downloads. They could even license the service out to other ISPs. All of their subscribers would have access to all the music they want for nothing more than their monthly ISP fee, the RIAA would get their cut, and hardware companies wouldn't have to worry about DRM. All of the goals of the CBDTPA would be accomplished without any of the restrictive legislation. It all comes back to better business models. How long do Slashdotters have to scream this before the corps start to listem?
    • How much more would AOL have to charge to appease the record companies? How many of their customers would leave if they increased their monthly fees to accomodate something the users can already do for the current price? How many would leave if they changed the pricing structure so that you were automatically charged a few cents for every song you downloaded? Bear in mind that they can already do it for *free*. That's pretty much all the average AOLuser needs to know. Actually, they need to know more, I should have said that it's all they know.

      These businessmen are pretty good at what they do, and doubtless they are thinking hard of a way to do this. AOL really isn't in a position to do it because they stand to lose so many customers. Unfortunately, they are the only existing company that is in any kind of a position to do it, considering their market presence and assets. The only service that could come up and work would be a brand new one set up by the record companies themselves, and they would need to figure out a way to be able to sell the songs for download but make it so that those downloaded files cannot be transferred to another computer. They've tried a few times, but they have all been too restrictive, so we dislike those options with a passion.

      They are trying. They just can't see eye to eye with us. Nor we with them. That's the problem.
  • Well, except us maybe. New technology means change, and people hate change. The entertainment industry has set up a history of payment for product that used to require professional equipment to produce. Now, anybody with a CD burner can distribute their product. Their reaction is not surprising. [] I think it's important that we look at the big picture rather than just say "RIAA evil, MP3 good." We need to draw on history's lessons on how we dealt with change in the past.
  • by K8Fan ( 37875 ) on Friday January 24, 2003 @02:30PM (#5152322) Journal

    The only reason we are able to own VCRs is because Sony went to the Supreme Court to fight a suit against Universal Studios and Disney for our right to time-shift television programs. When Sony bought Columbia, I knew it would be the worst thing they could possibly do.

    I attend trade shows like the Consumer Electronics Show and even Sony's small regional dealer-only shows and have talked with many Sony employees about this. I can assure everyone that any Sony employee with any tech savvy is pained by this - their digital music player guys hate all the DRM crap - their Tivo guys worry about Hollywood trying to break the product - their HD guys wish they had an HD recorder they could sell, etc.

    Most of the Sony Electronics employees I've spoken with wish that Sony would sell off the movie studio business and get back to what they are good at. But on the other hand, it's possible that with Sony's ownership of Columbia and their membership in the MPAA and RIAA, they are providing the only balance in those organizations? One shudders to think what they would be like otherwise.

  • by Snork Asaurus ( 595692 ) on Friday January 24, 2003 @02:31PM (#5152325) Journal
    Last night, while doing something else, I flipped on the box for background noise - the channel was CNBC. I heard "muffle, entertainment mumble, corporate, CEO, the street, dividends, blah, blah" - the usual business garble.

    The I heard something along the lines of "What are your plans in light of the undeniable success after Napster of peer to peer file trading software such as WinMX?" The person being queried was Howard Stringer, CEO of Sony Corp. of America.

    His reply was mostly the usual babble about legal means, being proactive in providing what customers want through services such as Pressplay, etc., but the he caught my attention when he qualified the foregoing with the statement: "even though we can chase people with viruses" (and that is a verbatim quote - I wrote it down).

    I asked myself:

    1) Does he just not have a clue what he's talking about?

    2) Have recent legislative and minor legal successes given the recording industry a greater sense of omnipotence?

    3) Is he aware of some gifts that US government about to bestow on his industry

    4) Did he tip his hand?

    5) Is he on crack?

    My guess is mostly #1, a little #2 and some #3.

    • It looks like he was toying with the virus idea back in early 2001. While I hate to give Ziff Davis a bit of traffic, Google came up with only one hit on this referencing an MS NBC article;
      1. Industry leaders perform autopsy on dot-com bustola ( March 11, 2001) []

        "... "Sony CEO Howard Stringer, who kept the audience laughing throughout the night with a battery of quips, said, "Right now it would be possible for us, and I've often thought it would cheer me up to do it, you could dispatch a virus to anybody whose files contain us or Columbia records, and make them listen to four hours of Yanni ... but in the end we're going to have to get serious about encryption and digital-rights management and watermarking." ..."

      • make them listen to four hours of Yanni

        That would be cruel - isn't that how they got Noriega to surrender?

        So his ideas are possibly as little as 2 years old, rather than the more typical 10-20 for that industry - a very forward thinking man. But Stringer did not appear to be joking last night. It's difficult to convey in writing the ambiguity of his use of word "could", but it almost sounded as if he was implying that they thought they had the right to do it, with impunity, but won't. Anyway, it was probably just a little FUDding on his part.

  • Uh... Lessee...

    Agressive mega-corp finds that it has conflicting interests in its 300 year plan to become the most powerful single hive-mind on Earth.

    It's interesting in a sever-the-corpus-callosum kinda way, but really. Am I being so slack to say I don't give a @#%$ what 'problems' huge corporations have?

  • Sony has those mini-disc. They used to have computer drives for them, but supposedly the music division balked for fear of pirating. When they came out the 120 or so meg per MD at 2$ was very good price/size.

    They also released a 1.? Gig version of MD for those MD video camera, which again would have made a good floppy replacement.

    Music MDs have a very primitive digital to digital copy protection scheme.
  • by Cire ( 96846 )
    Sony's technology divisions (PSX, DVD players, etc.) account for a much larger portion of their earnings than their content (mainly sony music).

    It would seem to me that the only solution Sony would be interested in would be one that does not impact on their profits. If they were to install some kind of DRM into (for example) TV's that wouldnt let you skip commercials, they would be (rightly so) worried that people would start buying other brands.

  • by jdclucidly ( 520630 ) on Friday January 24, 2003 @02:45PM (#5152424) Homepage

    One casualty of this is battle is the Sony NetMD line of MiniDisc recorders. In fact, the entire MiniDisc media has been crippled by Sony just to satisfy their DRM needs.

    The NetMD line of players/recorders allows you to record at 44kHz quality on the road. This is great for radio jounalists because you can buy a nice battery powered mic and record interviews wherever you go. The packing for the recorders fails to mention that while you can transfer 'songs' to and from your computer over the digital link, it explictly denies you the ability to import audio that you recorded from a microphone -- presumably to prevent digital bootlegging. So, to protect against the %1 of people that might use the NetMD illegally, the other 99% of us lose out.

    There are allot of people pissed about this and there's a petition to Sony to get this featured turned on via a software update here []. Over 2,600 people have already signed it. Go sign it too!

    As for the MiniDisc media, if Sony would stop charging ludicrous licensing fees for players, we'd finally have a nice, caddy protected, alternative to CD-Rs.

    • I use minidiscs to record audio for low budget films. The initial reason as to why I went MD was that I thought I'd be able to transfer the audio over to my computer digitally.

      I still have to record via analog thanks to these fuckwit decisions. I'm a content creator, you bastards! And no, I'm not going to plunk down the cash for the absurdly expensive MD recorders that have a digital out. I can't afford it. Less money for Sony, more frustration for me.

      After working for a few big companies I discovered that they are all run by monkies on crack. Depressing, really...
  • by ReidMaynard ( 161608 ) on Friday January 24, 2003 @02:47PM (#5152432) Homepage
    Sony sues Sony; Sony couter-sues (AP) ....
  • by visionsofmcskill ( 556169 ) <> on Friday January 24, 2003 @03:01PM (#5152529) Homepage Journal
    While this issue is certainly a bone of contention in the midst of mega-conglomerations, it is only a temprary issue that will be reolved quickly. The main point on the agenda is profitability.

    If the Sony corporate heads can't find a resolution to deal with DRM within the company in such a manner as to remain profitable, it will remove the un-profitable segment.

    While the music industry (RIAA, MPAA, etc..) is attempting to bring the cross to bear against IP infringments onto tech comapnies, evryone knows that DRM is ultimatly impossible. Not in that you cant make it hard for copiers to copy and distribute them, but in that if someone can hear/see what you have to show them, they can ultimatly record it, or re-create it.

    Given that fact, most mega-conglomerates with .02 cents of knowledge will tell their music arm to re-adjust it's buisness model and become profitable, mainly because the fault does not lie with the technological arm.

    It's highly unlikely any major company is going to tell it's profitable tech arm "stop making computers consumers like and buy" because they dont support their less profitable media arm.

    something has got to go, the inherent un-balence between arming consumers with weapons that will hurt your own sales of other items has placed the mega-corps into a situation in which whey WILL have to choose what to drop.

    DRM is not gonna cut it, file-sharering software will just incorporate DRM crackers or other such means to turn Copy Protected media files into standard media files (that seem to be non-commercialy owned).

    Consumers will rebel against measures that are any more intrusive than behind the scenes protection, so you can forget about selling completely crippled systems..

    As such, you can choose between forcing your tech arm to stop making computers that ultimatly can hurt sales in your media arm. Or you can tell your media arm to shape up or ship out.

    Lastly, when you look at the nature of music and video, in that the average home user is now able to make their own easily distributed movies and music with relative high quality, you can see that the RIAA and MPAA are under attack from more than just piraters, but by home users making music themselves. The average joe (like me) can record his band for under a grand. If im not a "aucoustic" band, or musician, then my expenses vs. quality improve ten fold.

    producing high quality music (without Microphones and other analog/acoustic gear) is CHEAP, and even live sounding music isnt too much more

    As such i think we may be going full circle back into an era that resembles the times when local acts were the biggest shabangs, And THIS is what is ultimatly the killer of the music industry.

    the film industry may not be too far behind. Although the average Joe is NOT gonna leatn maya or other film and 3d software at the drop of a hat, nor have those fields improved Enough to make their use quick and easy, they are on the road to becoming quick and easy. I dont see holo-deck style easy of creation in our near futures... but it isnt THAT far off (im talking about the ability to make chracters and render them interactivly with chracteristics almost on the fly, not about creating a full 3d environment around you)

    once people can start making their own stories &or imaginations take shape with ease... the film industry will be having some serious problems.

    ultimatly the buisness aspect to selling OTHER peoples content creations will suffer... and it should... the only reason these industries are so enormous and powerfull is due to the in-accesibility of the equipment they use to the average joe. I've been in several LOW-budget films and the expense for high-quality is greatly reduced from what it was due to tech. and this is only going to continue. As smaller firms (even individuals) become increasingly capable of creating competing quality products, the big guns will find themselves being shredded by hosts of little pirhanna's.

    It's gonna take a while before these changes sweep through, and the old fuckers will fight it to the end, but ultimatly tech HAS been bringing increasing power to the end user. Go pick up ProTools Free from , or iMovie from apple to see the beginings.

    now if you were a mega-corp... what would you choose?

    --Enter the sig--

    • Given that fact, most mega-conglomerates with .02 cents of knowledge will tell their music arm to re-adjust it's buisness model and become profitable, mainly because the fault does not lie with the technological arm.

      It's highly unlikely any major company is going to tell it's profitable tech arm "stop making computers consumers like and buy" because they dont support their less profitable media arm.

      According to the article, the hardware division is barely profitable at all (like Matsushita, Hitachi, etc. not able to make things as cheaply as other Asian compititors). It said that the media arm brought in a fraction of the revenue, but virutually ALL of the profit!

      Plus, we don't know how DRM will (if ever) become reality. In a free, competitive market I would hazard a guess that it would eventually fizzle and die. But I would think that Sony would want to keep this together as long as the issue of *forcing* DRM (through legislation) is still a distinct possibility. Even if Sony splits off the media from the hardware arm, the RIAA/MPAA will still be there, still pushing for legislated DRM. If it becomes reality, then there is no more conundrum on Sony's part: their hardware and media will be perfectly suited to one another!
    • While the music industry (RIAA, MPAA, etc..) is attempting to bring the cross to bear against IP infringments onto tech comapnies, everyone knows that DRM is ultimatly impossible. Not in that you cant make it hard for copiers to copy and distribute them, but in that if someone can hear/see what you have to show them, they can ultimatly record it, or re-create it.
      I'm afraid that's wishful thinking. RMS explained in his Slashdot interview [] almost 2 years ago, discussing the then-ongoing suit against Napster:
      If they do not win using present-day law, we can expect to see the record companies purchase new laws they can use to suppress these programs in the future--and trot out famous musicians like Metallica (only famous musicians get much of their income from copyright) who will say that copying music is like killing their baby.

      We can also expect to see fierce attempts to catch individuals who use Napster and imprison them. The War on Copying will become more vicious.

      The War on Drugs has continued for some 20 years, and we see little prospect of peace, despite the fact that it has totally failed and given the US an imprisonment rate almost equal to Russia. I fear that the War on Copying could go on for decades as well. To end it, we will need to rethink the copyright system, based on the Constitution's view that it is meant to benefit the public, not the copyright owners. Today, one of the benefits the public wants is the use of computers to share copies.

      I'm afraid the MPAA is not going to give up as easily as we'd wish, and we're in for a long period of increasing suckage.
  • So pressplay subscribers haven't even topped the 50,000 mark, while Kazaa, the leading file-sharing service, has 60 million users.

    That seems to imply that Pressplay subscriber numbers is at least in the tens of thousands. Quite frankly, I'm shocked that it's even that high given the restrictions they put on the use of the content.


  • by loteck ( 533317 ) on Friday January 24, 2003 @03:10PM (#5152583) Homepage

    Once again, as seems to be the case with so many of these kind of problems that involve the digital world, i believe the real problem is summed up on the last line of his (excellent) article:

    If only it didn't depend on a bunch of music men who've yet to wean themselves from shiny plastic discs.

    I think the real underlying issue that confronts us is simply a lack of understanding of the technology that is becoming available. These men have grown up in a "shiny disk" world, and judging by their actions i cannot help but think that they are fundamentally (and by no fault of their own) incapable of understanding the kind of societal and logical changes that are taking place as technology allows us to manage content more freely.

    In short, i would predict that these problems wont really find resolution until the next generation that has grown up with this technology takes over the big businesses and is able and willing to do what they known needs to be done.

    I just hope we can survive until then.

  • Anyone else? (Score:4, Interesting)

    by rzbx ( 236929 ) <slashdot@rzbx.COBOLorg minus language> on Friday January 24, 2003 @03:11PM (#5152596) Homepage
    Has anyone else thought about the fact that maybe we would be better off without copyright? Seriously, one moment please, don't mod me down so fast. Sure, we've lived with copyright laws for a while now, but what would it be like without them? Have you ever REALLY thought about it? I've done a lot of thinking and a lot of reading (I do mean a lot). I know most people don't even question it, they just question one thing, the work put into it. Yet ask yourselves this, do the construction workers, road builders, etc. get payed royalties everytime you drive down the road or use your house? How come we treat information like this?
    • Re:Anyone else? (Score:2, Interesting)

      Yes, we've thought about it, and anyone who's somewhat rational has realized that everyone loses without copyrights.

      Consider, first, the Marxist system of communism. Therein, no one profits: they are all given the same [insert thing of value here, i.e. food, money, etc.] no matter how they perform. As a [proven] result, the culture stagnates economically, socially, artistically and scientifically.

      The elimination of copyrights is tantamount to instituting a Marxist model of economics of intellectual property. If I'm a producer of intellectual property, all my money comes from one of the following, Wages, Royalties and Contractual fees.

      Wages refers to the idea that I may be simply receiving an hourly fee for my work. This is like a company code-writer. They're already shown to feel less motivated than when they have a stake in their creations.
      Contractual Fees are akin to wages, and are a lump-sum payment for a peice of intellectual property.
      Royalties are repeating payments each time a peice of intellectual property is employed. This is the best way to attach value to intellectual property, as you receive payment directly in correspondance to value of a product. Thus, the incentive to create new intellectual property is the greatest in a royalty system.
      The ability to negotiate these fees is key for producers of intellectual property, as they can only negotiate the value of that property based on their ability to control the use/reproduction of it. If you cannot contorl that use/reproduction, then why should anyone pay for what you created? They can just use it for free.
      • Re:Anyone else? (Score:4, Insightful)

        by Paul Fernhout ( 109597 ) on Friday January 24, 2003 @07:03PM (#5154006) Homepage
        On the issue you raise of motivation, two points.

        First, the law of large numbers over the internet (like with GNU/Linux) shows people will create without direct financial incentive.

        Second, this article: tml [] discusses how scientific studies find that for creative intellectual work, reward is often no motivator, and can in fact have negative effects on performance.

        From the article: "The recognition that rewards can have counter-productive effects is based on a variety of studies, which have come up with such findings as these: Young children who are rewarded for drawing are less likely to draw on their own that are children who draw just for the fun of it. Teenagers offered rewards for playing word games enjoy the games less and do not do as well as those who play with no rewards. Employees who are praised for meeting a manager's expectations suffer a drop in motivation."

        So, while what you say is essentially the "conventional wisdom" of our age, it may well not be correct as regards creative works.

        Also, note that in order to enforce copyright in the internet age, we will need something equivalent to scope in the "War on Drugs" as a "War on Sharing". The War on Drugs effort keeps about a million U.S. citizens behind bars at a direct cost of 20-40 billion dollars a year. And before you laugh and say it is not possible for a million people to be locked up for using Napster and Kaaza, consider that people in the 1960s would have laughed at the notion of a million americans behind bars for non-violent drug offenses in the 1990s -- but it happened.

        For the same amount of money, the U.S. could provide grants of $100K a year to around 400,000 artist, musicians, and writers who make their work freely available.

        So, you choose which society you want to live in, however you label some part of it. And by the way, copyrights are monopolies, and monopolies are generally considered anti-capitalist.

    • [Accidentally posted this as A.C. -- reposting as me...]

      For support for elimitating copyrights or greatly reducing their terms, see Richard Stallman, especially here: e&NodeID=650 []

      and also Brian Martin's essay "Against intellectual property" (part of a large book -- _Information Liberation_) l03.html []

      You can also see lots of ongoing discussion on Lawrence Lessig's blog [] which I have been posting at specifically in this Doc's diagnosis [] topic comments section here: try_id=889 []

  • by SnakeStu ( 60546 ) on Friday January 24, 2003 @03:12PM (#5152597) Homepage
    It's important to realize that the balance between the benefits to the public and the benefits to the copyright owner will not be achieved by allowing the copyright owner to decide what balance is best for their bottom line. We cannot sit idly by and hope that Sony et al decide on a balance that will be acceptable to us; instead, we must focus on convincing the government to abandon their imbalanced support of such corporations and start doing what is right to achieve a balance for all concerned. (I didn't say this would be easy, so don't bother with the "too late" comments.)

    It's sad to see that some replies in this topic have shown obvious confusion regarding the role of corporations versus the role of government. In the US, the Constitution was not written by corporations, nor should amendments (codified or de facto) be done so. That corporations have more sway than Joe Public is a given at this time, but times change and so do governments, for good or ill. The more apathetic the public, the more "oh, it's too late, they're already in power anyway" responses, the more things will decay in favor of the corporations. The more motivated the public, the more politicians will put the input of corporations in a subordinate (or at least equal) position compared to the input of their voters. Corporate money can only buy an election when the public is apathetic and detached from the political process, and thus open to glitzy ads. If there is a strong sentiment in the public to reduce or eliminate the effect of those ads, then the role of corporate money is also reduced or eliminated. In the end, the vote counts, not the advertising.

  • Problem??? (Score:2, Funny)

    by Ty ( 15982 )
    I only see profit!!

    1. Sell customers CD-Burners to copy copyrighted material.
    2. Upgrade DRM technology on media to prevent media copying.
    3. Sell customers NEW CD-Burners to bypass DRM technology (try harder than markers...)
    4. Go to step 2....

  • The left hand washes the right hand, but only because it doesn't know what the right hand has been doing...
  • IBM All Over Again (Score:5, Insightful)

    by Royster ( 16042 ) on Friday January 24, 2003 @03:20PM (#5152679) Homepage
    IBM used to be Microsoft.

    They had an effective monopoly in computer equpiment. Sure there were competitors, but they ate the crumbs that IBM couldn't be bothered to bend over to reach. They had been the subject of a long standing antitrust investigation by the Justice Department which was dropped by the Reagan Administration.

    Along comes the microcomputer which IBM names the PC. But, IBM wants to protect it's mainframe business, so they try to deliberately hobble the nacent PC so that it won't take away desktops holding a 3270 terminal. They don't build PCs with Intel's new 80386 chip.

    The result, competitors fill the markets which IBM's internal politics won't let them fill. Compaq sells 386s hand over fist and IBM loses the market they made.

    Now Sony makes the same mistake.

    Those who forget the past are doomed to repeat it -- Satayana
  • Radiohead (Score:3, Informative)

    by eherot ( 107342 ) on Friday January 24, 2003 @03:47PM (#5152820)
    I was a little disturbed when this article stated that "Major acts like Radiohead have flatly refused to make their music available online." This was very much contrary to everything I knew about Radiohead. I decided to pay their web site [] a visit just to check. Sure enough, while their site does not contain MP3s of actual album songs, they have several music videos and dozens of bootleg mp3s. I've always thought of Radiohead of the kind of band that thinks it's really cool when they do a show and the audience already knows the words to their unreleased songs. Everything I've read suggests that they are one of the few bands that have fully embraced the online music trading trend.
  • Appomattox (Score:3, Funny)

    by T1girl ( 213375 ) on Friday January 24, 2003 @03:58PM (#5152914) Homepage
    I think I'll just listen to the voices in my head until they get this thing straightened out.

    There's always one other way to do something - your way. -- Waylon Jennings (1937-2002)
  • Not possible (Score:5, Insightful)

    by thorrbjorn ( 321412 ) on Friday January 24, 2003 @04:09PM (#5152981)
    To save its electronics business and make its dream of digital services a reality, Sony needs a system that doesn't punish consumers yet somehow satisfies the entertainment industry.

    This system is not possible. The only system that will satisfy the entertainment industry is one which punishes consumers. The industry doesn't just want to protect it's copyrights (a goal with which I agree), but restrict consumer rights, making legal practices technologically impossible.

    For example, the practice of burning a CD you legally own, so you can take that copy in your car with you leaving the original safely at home. To the consumer this is perfectly normal. To the courts, its perfectly legal. To the industry, its a perfect wasted, a lost opportunity for revenue. They want to make you buy two copies of the CD.

    For the entertainment industry, DRM isn't about protecting copyrights, its about opening up new revenue streams. The problem facing the technology industry is the fundamental fact that consumers don't want to pay more for less.
  • Well, at least Philips did the right thing in 1998 when they sold of their music divison Polygram. The reason they did this were exactly the kind of problems mentioned in this article, they foresaw conflicts between their CD-recorders/copiers and their record company (so now they can focus on copiers that do read copy-protected pseudo-cd's). The time that hardware builders needed their own content providers to sell their equipment has long gone. Welcome to the 21st century, Kimura San.

"The one charm of marriage is that it makes a life of deception a neccessity." - Oscar Wilde