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A Working Economy Without DRM? 686

Tilted Equilibrium asks: "In a few weeks, our school will be hosting a panel on DRM with several respected individuals. In advance of the panel, I have been doing some research on the topic and thinking about it in my free time. In economics, we learn that the price of a product is determined essentially by supply and demand. Without a DRM in place, we are capable of making as many copies of a piece of content as we want and seeding it onto the net. How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?"
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A Working Economy Without DRM?

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  • Biased question (Score:5, Insightful)

    by swillden ( 191260 ) * <> on Tuesday August 29, 2006 @11:47PM (#16004799) Homepage Journal
    How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

    Most likely, you don't. But in large part you're creating a strawman, by specifying exactly the situation in which it is most difficult to make a profit.

    It's entirely possible that the Internet will mean the end of $200M productions, because unless you can get your money back in the theater (I'm focusing on movies because they're the only things that fit your specifications), you can't make it back.

    Maybe. I'm not absolutely convinced of that. I think DVD releases with lots of extras, including some that aren't digital, are a good model. Obviously, movie theaters have a workable model. There may be other approaches that can work. Any approach that offers the consumer real value for their money will work. People *want* to spend money on entertainment.

    And, honestly, outside of movies, what other media meets your requirements? Not music. Music is cheap to make. Sure, it's likely that in a fully DRM-free Internet age that musicians won't be mega-millionaires, but I consider that a good thing. I think it would be great if we could support more musicians with decent incomes, instead of the smaller number with insane incomes. Heck, even if there aren't more of them, maybe they'll live longer and make more great music if we don't give them heroin and Ferraris.

    I agree with Eric Flint's essay, found in the Free Library on Until there's some way to make music/movies/books that doesn't require musicians/actors/directors/authors, and until people stop wanting those materials, there *will* be ways to make money off of them. It's just a matter of finding them. And, perhaps, accepting that people don't really need millions for doing what they love.

  • you don't... (Score:5, Insightful)

    by twiggy ( 104320 ) on Tuesday August 29, 2006 @11:49PM (#16004808) Homepage
    You don't.. you sell something other than the tracks.

    You create a completely different model now that people expect the tracks in digital form for free (or will risk an RIAA lawsuit to get them).

    you make your money on tours, tshirts, or making amazingly badass CD packaging (see: Tool - 10,000 Days) that makes it worth picking up a hard copy.

    Or, you make your money by giving people valuable merchandise or preferred seating at concerts for joining your fan club.

    You can't create demand for something that can be infinitely and freely copied.
  • by nbehary ( 140745 ) on Tuesday August 29, 2006 @11:54PM (#16004829)
    The thing is, if you market the shiny case, people will buy it. At least, the market thus far proves that to be true. Me, myself, I tend to be a huge "pirate", but I'll pay for something I think is worth it, even after getting it for free. That can't be said for most. But, irregardless, the masses will pay for it. At least so far. I guess my point is, make quality, make people think it's worth paying for, and I'd hope most would. Maybe I'm an idealist though......
  • Re:you don't... (Score:5, Insightful)

    by QuantumG ( 50515 ) <> on Tuesday August 29, 2006 @11:54PM (#16004831) Homepage Journal
    You can't create demand for something that can be infinitely and freely copied.

    Wow. How can you say all that and still miss the point. There's no problem "creating demand", there's only the problem of "limiting supply" and you can actually do that, but to do so requires you to be so fuckin' evil that you're willing to get in everyone's face and prevent them from helping others.
  • extra's (Score:2, Insightful)

    by bm_luethke ( 253362 ) <luethkeb@com c a s t . n et> on Wednesday August 30, 2006 @12:00AM (#16004857)
    To a large extent I think there is some truth to having an issue with making money by selling the virtual parts. It becomes even truer the more that is what you are selling.

    However there is something to be said for convenience. I'm willing to pay some premium for always high quality recordings, no viruses, good selection, and other things that file swapping has a great deal of difficulty with. This depends on what you time is worth and how much is charged. Itunes has made pretty good with this even though many still do not use it (I don't - I don't like enough music to bother).

    The other is many people (especially myself) like physical copies and the extra's that go with them. Nice jacket insets, quality backup (though this is much less the case now - most are skimping on quality control), hard copy manuals, all sorts of things. Just stuff I can not get by downloading.

    And, lastly, support. For consumer items this may not be such a big deal - what support on downloaded MP3's? But for software with a business that can mean a whole lot. Really, what most businesses are paying Microsoft is thier support. This comes in several forms - large list of supported hardware, listening to important demands, and other types of things (little to none is getting phone support, you have your IT staff or another company to deal with that). For most businesses that switch to linux this also tends to be the case - Microsoft didn't listen to the demands, found some peice of hardware didn't really work well (for instance you need real time data encoding and you can not set the Kernel to the modes you need), or maybe need to dink with the code.

    In short, there are lots of things to sell. In some markets it may not be that great, in others it may be where all the money is. It also depends on what you are viewing as your product - if it is only the string of bits being copied then you are screwed - DRM or not (it *will* be broken and once it is then back to unlimited supply, and probably broken quickly and much cheaper than the DRM that you produced). In the end, that is reality and you can not fight it succesfully. You can debate if it will end up good or not, but it will not stop it from occuring.
  • stupid question (Score:5, Insightful)

    by RelliK ( 4466 ) on Wednesday August 30, 2006 @12:03AM (#16004871)
    How do you create a market for a product, and make money of a product that has a huge initial creative investment, but then no manufacturing cost, and is in infinite supply?

    The same way it worked before DRM. You are making a ridiculous assumption that DRM is the only thing that prevents someone from distriduting copies of copyrighted works. That is utterly false. There is this thing called copyright law that works just fine without DRM. Photocopiers didn't kill the book publishers. Tape recorders didn't kill music industry. VCRs *multiplied* the profits of the movie industry, despite the fact that certain studios nearly had them outlawed.

    For this reason your question is either biased or stupid or both. Turns out it is entirely possible to have a viable economy without infringing on the consumers' fair use rights or first sale doctrine. Who would have thunk!

  • by CrazyJim1 ( 809850 ) on Wednesday August 30, 2006 @12:04AM (#16004881) Journal
    Only thing I saw DRM do is stop a Backstreet Boys CD from working on my exgf's portable CD/DVD player.

    DRM doesn't stop online piracy anymore than a speedbump in your driveway slows interstate traffic.
  • by Anonymous Coward on Wednesday August 30, 2006 @12:14AM (#16004922)
    But those theories are all based around ideals of perfect or near-perfect competition. We are, obviously, nowhere near that in most markets. This is especially true of the entertainment field. The music industry is best described as an oligopoly, with there being a small number of major labels who hold a vast portion of the market. Sure, there are minor labels, but they push nowhere near the volume of the major labels.

    It's questionable how well such elementary theories hold up when you consider the often convoluted legal and tax systems of many western nations. Those can have a significant impact on the ability of people to freely enter and leave markets, which in turn impacts directly on the validity of many of the Economics 101 theories.

  • Re:Biased question (Score:3, Insightful)

    by BadAnalogyGuy ( 945258 ) <> on Wednesday August 30, 2006 @12:14AM (#16004926)
    I disagree with the whole idea that it's unnecessary to protect the works of content creators. DRM is a necessary evil and assuming a world without it is simply pissing in the wind. What we need to work towards is a DRM model that preserves as much of our rights as possible while still effectively preventing the widespread copying of content.

    DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards. If the data stream is protected, the media appliance will acknowledge and honor the DRM lock and you will be unable to do more with the content than is allowed by the DRM lock. This is reality and it is already here. What we want to do is make sure that things like machine-local data can be transmitted from one machine to another (deleting the original data as it moves to the next device) are preserved while things like forward-lock (which prevents copying at all) are eliminated. Working against the system when you are completely outside the system is futile.
  • Re:Biased question (Score:4, Insightful)

    by westlake ( 615356 ) on Wednesday August 30, 2006 @12:18AM (#16004937)
    Music is cheap to make.

    Talk to a classical musician: ask her the price of a fine solo instrument, a piano, a violin. The basic tools of her profession.

  • by ThomasBHardy ( 827616 ) on Wednesday August 30, 2006 @12:19AM (#16004941)
    The core problem is the base assumption that record companies and via them, that music and movie stars deserve to make tens of million of dollars for doing what they do.

    Sure you can talk about limited talent that drives up demand... and I can point you at any technical or challanging industries where that is true also but where the salaries for pop stars are not dished out to the coroprate IT guys.

    Sure you can talk about how hard it is to train up for and performn in an action movie... and I can point you at any number of physically challanging and dangerous jobs. Just stop by the local fire station.

    Somewhere in the past 60 years we developed the notion that stars deserve to be ridiculiously rich. Sure I wish them well, as much as any other person who does their jobs well. But they are not demigods. They are not superior human beings. They are just highly overpaid for their jobs.

    The solution will be when a few things come together...

    1) Digital distribution arrives fully, so that crowded theaters with annoying people and cell phones are a thing of the past unless you want to go to them, and can enjoy first run movies at home.

    2) Prices of all media drop as the cost of perpetual CGI improvemnets removes the need for such extravagent movie costs

    3) Stars of all types begin making more sane profits from their works than the current model.

    Then we'll have the chance to listen to and watch what we want, in our own homes and it can be priced affordably enough that we won't mind paying for it versus downloading it illegally.

    Like many, I do not mind paying for the content that I consume. But I do object to paying too much for it and for being forced to watch it in theaters (which I have come to detest) if I want to see it the same year it's released. And I am truly angered byu hamfisted DRM implementations that deny me the ability to enjoy what I paid for by telling me how I'm allowed to watch it.

    The recording industries are sufering from clinging to the old model. They milked that model until it generated so much money that they are fat and deluded. They fight, and will continue to fight, the necessary revamping of the industry until their final breath. But in the end, progress happens, no matter how much you fight.
  • Re:Biased question (Score:4, Insightful)

    by intrico ( 100334 ) on Wednesday August 30, 2006 @12:22AM (#16004955) Homepage
    "I think it would be great if we could support more musicians with decent incomes, instead of the smaller number with insane incomes. Heck, even if there aren't more of them, maybe they'll live longer and make more great music if we don't give them heroin and Ferraris."

    This is an excellent point about the music industry. The traditional business model is very inequitable to the average artist. The major record labels say that people are "hurting" these artists by downloading their music. But one can make a very strong, valid argument that by forcefully marketing a select few musicians to the massess, and creating huge barriers to entry to these marketing channels for thousands of other artists who may can be just as good or better, that they have have caused the general population to miss out on all of these other artists out there. This hurts all of these other artists by effectively denying them mindshare.
    Getting marketed by a major record label is simple a matter of being in the right place at the right time, and really is not correlated at all to the quality of the artist's work. The same of course, goes for the movie industry where quality does not necessarily equal production costs and or marketing clout. And again, the traditional setup of the movie industry ends up denying access to marketing channels for many smaller independent film producers, making it harder to get the word about their works out to the masses. In short, the RIAA-associated and MPAA-associated marketing powerhouses have fostered an anti-competitive environment at the artist level. DRM-Free media will not ruin the "working economy", but it will create a level playing field for the actual artists who produce content.
  • by abb3w ( 696381 ) on Wednesday August 30, 2006 @12:29AM (#16004982) Journal

    Further, it is a theorem of economics that in the long run, competition will force prices to the level of manufacturing costs. As goods become popular, the investment needed to produce them will dwindle in proportion to the number of goods produced, and their prices will fall. In a DRM system, popular information goods will be inexpensive, and well supplied. There will be no shortages. DRM is an optimal way to manage information goods.

    ...provided that you have no externalities, neglect information costs, have no economics of scale and scope, have goods that are homogeneous, all market utility is pecuniary-metric, time-value utility effects are neglected, and there are no barriers to market entry. Any takers?

    Also note that one fundamental assumption of the original question (zero marginal manufacturing cost) is incorrect. Costs are de minimus, not zero; there are marked differences in economic effect.

  • by Kadin2048 ( 468275 ) <> on Wednesday August 30, 2006 @12:31AM (#16004994) Homepage Journal
    I've discussed this in other threads before, but I think the way that you make money without DRM is by not trying to make entertainment on speculation.

    Basically the entertainment companies go out right now, and make a movie/song/whatever, and spend a whole lot of money doing it, in hopes that they can then go and sell the end product over and over and over to make up the investment. There is really not any way to do this, without DRM. As I think DRM is fundamentally flawed, so is this business model. That doesn't mean it might not stick around for a few centuries, but it's eventually doomed.

    The problem is that DRM tries to artifically limit the supply of something that requires very little labor in order to reproduce. The n-th copy of a digitally delivered Brittany Spears album costs virtually nothing; it's only the first copy that really costs a lot to make. (Okay, so this sets aside that the net value of any given Brittany Spears album may in fact be negative.)

    In the past, since the recording companies basically controlled the means of producing more copies (vinyl/CD stamping factories), they could artificially inflate the cost of the marginal (that is, n-th) copy, in order to pay for a bit of that first one. The only reason this works is because they have a monopoly on the means of producing more copies. That's it.

    What digital delivery, and computers/the Internet in general, do is make widely available the means of production. (Apologies if I'm sounding a little Marxist here, but it's tough to avoid the terminology.) When anyone can make that 'one last' copy, you can't fix the price of it anymore. You just can't. DRM is an attempt to put a finger in the dike, to make it artificially hard again to make an additional copy, but they have a whole lot of information theory working against them. There is no practical way, that I can envision, to allow people access to digital media which does not inherently give them an opportunity to copy it, particularly since copying is inherent to the digital distribution process. And this is only going to get more difficult in the future.

    So given this, what to do? The answer is to make people pay in advance. There will always be a demand for new content; even with the entire past produce of human civilization on tap, it is the nature of people to want things that are fresh, that have been created specifically for them (whether individually or as a group). Rather than trying to make money up off of the marginal copies, which have little to no inherent value, charge for the first copy. Charge interested parties, in advance, for creation of the work. If people aren't interested in funding its creation, it doesn't get made. If fans want an artist to continue to produce, then they can pay to commission more albums. Rather than paying an inflated cost for each copy, which has some portion of the original labor's cost built into it, they will pay for the cost of that labor up front. It is the labor which is valuable, not the copies.

    This of course would force a re-evaluation of both how we think of the relationship between artists and their public, and also of how much art we as a society produce (right now I think it's clear that we produce a surplus; we produce more new art than the public really demands, and one must understand that in a pay-in-advance system, this would no longer be supportable), but I don't think there's anything fundamentally wrong with it. As people demand new content, they will pay for it to be created. Either they will pay what it costs to create it, or it will not be made.

    This is the way the market should work: as people desire novelty, the business models would be formed around the demand. Instead of a top-down approach, it's bottom-up; allowing consumer choice and demand to drive how people will make money. There are lots of ways that they could do it, from straight work-on-commission to more subtle crediting schemes, or donationware/threatware (e.g. "I'll write the next installment of the
  • by Anonymous Coward on Wednesday August 30, 2006 @12:35AM (#16005004)
    Probably something about the 'long tail economy' kicking in.

    Capitalism isn't the last stop on this train ride we call human history...

    It's the end of the world as we know it and I feel fine...
  • Re:Biased question (Score:5, Insightful)

    by aussie_a ( 778472 ) on Wednesday August 30, 2006 @12:44AM (#16005041) Journal
    You assume DRM is necessary, but in actuality, it isn't. These people [] somehow make a profit without DRM (otherwise they wouldn't bother releasing the e-books). As does these people [] as well as these people. []

    Perhaps multi-million dollar movies aren't capable without DRM or Britney Spears being profitable without DRM, but the truth is that the big media cartels aren't the only people in town no matter how much they want you to think they are. And DRM isn't necessary for artists to not only make a profit, but to make a living. Not all artists will be able to make a profit or a living, but then again not all artists deserve a profit or a living. DRM isn't a necessary evil, it's just an evil.
  • Re:Biased question (Score:5, Insightful)

    by BadAnalogyGuy ( 945258 ) <> on Wednesday August 30, 2006 @12:53AM (#16005064)
    We're not really talking about Trusted Computing here, though it may be interesting to see how TC impacts the availability of DRM-stripping software on mainstream operating systems.

    Once the upcoming crop of DRM-enabled operating systems (Mac and Windows) only support media playback through OS API-level function calls, your "control of your computer" will have reached its conclusion. As system APIs become more plentiful, more useful, and easier to use, control is slowly creeping away from the now-productive developer and towards the central programming model/operating system.

    You have every reason to be worried about losing control.

    "I'll run Linux!"

    With DRM implemented as an encrypted datastream and licensed to hardware/software makers, who is going to be able to bring DRM playback capabilities to Linux without also being tied to strict licensing restrictions that prohibit DRM-stripping as a feature or side-effect? These DRM systems are of course already running on Linux, just look at your favorite DVR which already implements such a system. Does this translate to your PC being able disable DRM content? Unfortunately, no. Not unless a DRM-licensee decides to break their license and provide the tools to do so. It's not out of the realm of possibility that a rogue employee may do such a thing, but the financial hardship he would face would typically be a sufficient deterrent.
  • by Anonymous Coward on Wednesday August 30, 2006 @12:54AM (#16005069)
    All the "Screw drm, let's abolish copyright,

    Odd. I have never seen anybody say that copyright should be abolished. In fact, just the opposite. There are many who wish to do away with method patents (esp as it relates to software), but not copyrights. Now, there are a NUMBER of ppl who want to see the copyright laws as laid out originally adhered to. That is, a limited lifetime, as well as they want their rights to fairuse be re-enforced. I would bet that 99% of everybody has no issue with copyrights.

  • by Shivani1141 ( 996696 ) on Wednesday August 30, 2006 @12:55AM (#16005074)
    But you forget, the Major venue that a classical musician in these days will make his or living is in Performances. A mentionable chunk of those same musicians will also supplement thier income with Musical tutoring. a Cellist(for example) primarily makes his living working for an opera, an orchestra, or some other like institution. If they don't, they arent considered professionals. To a Classical Musician music is not something they own a copyright to. they perform the works of others, they provide music as a SERVICE. And as for the extremely expensive, rare instruments? Afaik, and I am not an expert on such matters, those rare instruments are provided to classical musicians by patrons of the arts.
  • by okoskimi ( 878708 ) on Wednesday August 30, 2006 @01:09AM (#16005121)

    Like someone already said, you don't need DRM to protect copyright. It is just one method (albeit an efficient one) of enforcing it. You can also sell digital content without DRM and still sue people who try to sell it in an organized fashion. This is in fact how a lot of digital content is handled today. Effectively, the people supplying pirated copies are your competitors who have a huge advantage in price but suffer a similarly huge disadvantage in marketing, convenience and legal status. And the pirates actually also suffer a disadvantage in price, because they cannot get any money for the content itself (who would pay for pirated music?), although they can get some money from advertisements.

    Hey, Apple sells lots of music, even though they same music is also available for free as pirated MP3's.

    So, your basic formula for success is something like:

    1. Marketing. This is the only way to reach the great masses, and pirates can't do it efficiently (well, they can send spam...). Also, since the content is free to reproduce, you can keep you customers happy by frequent bonus offers, discount clubs, monthly freebies, and the like. A nice example of taking advantage of free reproduction is the DaZ3D [] website which sells Poser content. You have got to admire their marketing savvy. And the success - I mean come on, their business case is so good they have created a free version of Poser (DaZ|Studio) just to sell more content! And none of the content is copy protected mind you.
    2. Convenience. Giving the users convenience means you have to put effort into organizing the content, into web site design and management, making sure content installation is painless, etc. Effort requires money. If you are a pirate, you are likely not making enough money to do this.
    3. Traceability. Discourage people from copying your content to each other. If all content contains a hidden watermark which identifies the original buyer, people are a lot more reluctant to copy content even to their friends (how many of your friends do you trust not to copy the content any further?).
    4. Create as much FUD about pirated content as possible. Only legal content is virus-free. Pirate web sites install trojans which will steal your money. Etc. There is enough basis in fact to make it work. And it works in politics well enough...
  • Re:Biased question (Score:3, Insightful)

    by vmcto ( 833771 ) * on Wednesday August 30, 2006 @01:11AM (#16005127) Homepage Journal
    There are no players that refuse to play non-DRM content.

    Yes, but realistically how long will that last?

    Do you think the big manufacturers are going to continue to produce devices that play non-DRM content? What's in it for them?
  • Re:Biased question (Score:5, Insightful)

    by gfxguy ( 98788 ) on Wednesday August 30, 2006 @01:12AM (#16005132)
    I tend to agree and more.

    I honestly believe people should be more honest with themselves and their wallets. If something is worth buying, it's worth buying. If it's not worth buying, don't buy it. Just because you don't like the arbitrary amount someone has set for the product doesn't mean you should be able to just take it. I mean, come on! We're not exactly talking about stealing bread to feed starving children! We're talking about movies!

    However, I don't agree with DRM at all, either, because if you do shell out the cash, you should be rewarded with a lot of freedoms with that content. You should be allowed to make backups, you should be allowed to listen/watch on different devices and so forth.

    Now the reality - the more these idiots apply DRM, the more worthwhile it is to STEAL the content because the stolen content gives you the freedoms you should have had to begin with. I make the analogy with software copy protection, specificly from the 80s and early 90s. The copy protection became so bad, I'd buy a game and the first thing I'd do is look up on the internet (through ftp sites, at the time) how to break it. Damned code wheels and all that crap. Forget it! It's the guys that stole the game that didn't have to put up with that crap, and it's the people illegally copying the movies that can do whatever they want with it.

    I'll make these analogies as well: when cassette tapes hit the markets as a cheap, convenient means to copy recordings, the RIAA complained it would put them out of business. Instead, sale of prerecorded cassettes opened up a whole new revenue stream for them. When consumer grade video recording hit the market, the MPAA cried it would put them out of business. Instead, the video sales and rental market opened up a whole new revenue stream for them; movies that wouldn't ever even have seen the light of day began returning at least some money, and movies that made hundreds of millions were making another hundred million in rentals when, if the MPAA had it's way, they'd be making nothing.

    Then the RIAA complained about CDs. CDs sound so good, that cassette recordings made from them sound better than vinyl. Yeah. CD sales skyrocketed and the RIAA increased it's revenue again. Then there was DVDs and how people would record this high quality content on VHS, and they were wrong there, too - the sale of DVD quickly overtook VHS sales; the discs cost less to produce, but people payed more for them.

    The bottom line is that if you give the people what they want, they will pay for it. I can download mp3s illegally, or I can pay for them. I choose to pay for them when I think it's worth it. Otherwise I simply don't download them at all.

    I realize few people out there are as honest (my wife calls it brain dead honest) as I am; even people who are generally honest might not mind downloading a few things here and there. So yes, copyright violations will continue to happen, but there has to be an "acceptable" rate, which you would calculate by figuring out how much the cost of enforcement is versus how much is lost.

    Frankly, the worst part about DRM is that we pay for it. We pay extra for licensing fees so that our DVD player will be crippled, and we pay extra for content itself so that it can be crippled. WE are the ones who pay for lost functionality and freedoms, and the more they squeeze us, the more ONLY HONEST consumers are hurt.

    If that's not ass-backwards, I don't know what is.

    So my question to these idiots is: honest consumers are paying extra for products with reduced functionality, while people with illegal copies of the content seem to have the most freedoms. How does that make any sense at all?
  • Re:Love, not fear (Score:3, Insightful)

    by gfxguy ( 98788 ) on Wednesday August 30, 2006 @01:22AM (#16005166)
    Yeah, that's great, I feel so good that the artist makes $0.001 for each song downloaded, while the RIAA gets the lion's share so that they can hire more lawyers pay more royalties to companies coming up with new and better DRM.

    No, I don't illegally copy music, I do use itms (and other legal services), I mostly have just stopped buying music because I realized that full CDs are almost always a rip off (yes, I've bought CDs where I like every song on them, but they are few and far between), and downloads are crippled enough that it's not even worth the $1 they want. In order to use my itms purchases on my mp3 player, I need to burn and rip a CD. The quality just isn't there.

    I like these guys who are producing their own stuff. I like the idea of completely bypassing the riaa. That's the model we should strive for. I even go way back before mp3s were popular and I've bought CDs from artists on the web. $5 could buy you a very interesting CD at the time.

  • by homebrandcola ( 983781 ) on Wednesday August 30, 2006 @02:14AM (#16005332)
    The question implies that DRM stops people releasing unprotected tracks to the Internet for illegal download. But it doesn't. It is a trivial matter to bypass any DRM and extract the content. No ammount of DRM has even slowed illegal downloads, if anything it has added to it. People would rather have a non-DRM copy. If you want to know about an economy without DRM talk to emusic [], or Audio Lunch Box []. It might not be all the music you are interested in personally, but they have a business model based on non-DRM music downloads.
  • by shmlco ( 594907 ) on Wednesday August 30, 2006 @02:28AM (#16005367) Homepage
    The basic problem with your premise is that now an author (let's say) need only convince a small, select number of people that they should finance his work for a year. Further, once that work is completed there are many mechanisms the market can be use to judge that work (reviews, word-of-mouth, ratings, picking it up in a store and flipping through it) and find out if it has value to them, and is worth the twenty bucks.

    Now, let's compare that with an assurance contract, where I have to convince a LOT of people that I can produce something of value, doesn't generate an advance so I can actually get on with creating it, and really provides no guarantee to the end user that it will be a quality product, or one suitable to you (you were expecting killer hard-code SciFi, not a time-travel romance novel). Once I produce it according to the contract, you have to pay for it, with no recourse.

    I don't see paying in advance as the answer either, as it limits the available selection to "known" authors who've already made a name for themselves. Stephen King might be able to get a 100,000 people to pay in advance for the next chapter of his new book. A new and unknown author certainly can not.

    Further, I tend to see it generating "more-of-the-same" content. Weber may be getting ready to branch out, but what happens when his fans only want to pay up front for more HH? How much of the storyline of The Matrix do I have to reveal before I can convince several million people to kick in $20 up front?

    Finally, the up-front "salary" kills the dream as far as I'm concerned. Every author, singer, actor, and director dreams of the "great american novel" or hit song or blockbuster movie. Those dreams convince them to take risks and experiment with new ideas. I don't want those dreams dampened with a "just a job" mentality, working for minimum wage...
  • Re:Biased question (Score:4, Insightful)

    by SanityInAnarchy ( 655584 ) <> on Wednesday August 30, 2006 @02:29AM (#16005370) Journal

    You are repeating the same misconceptions in the same ways. Look at your language:

    I disagree with the whole idea that it's unnecessary to protect the works of content creators.

    No one is arguing "that it's unnecessary to protect the works of content creators." We're arguing that DRM, specifically, in any form, is not worth the harm it causes, and that content creators can make a profit without it. After all, they did before DRM existed.

    DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards. If the data stream is protected, the media appliance will acknowledge and honor the DRM lock and you will be unable to do more with the content than is allowed by the DRM lock. This is reality and it is already here.

    If you are astroturf, you need to listen here: If that is really and truly the reality, I will wean myself off modern media. I simply refuse to spend any money on anything that has unreasonable "protection" on it. If there are enough of us, you will lose money on DRM.

    That is why I refuse to buy anything Blu-Ray until I am convinced that it's permanently cracked.

    If not, I simply don't care enough. There is enough entertainment in the world that comes without strings attached.

    What we want to do is make sure that things like machine-local data can be transmitted from one machine to another (deleting the original data as it moves to the next device) are preserved while things like forward-lock (which prevents copying at all) are eliminated.

    Current DRM models have two problems: In order to enforce any kind of protection, they require specific software/hardware stacks, which reduces user choice -- for instance, it becomes essentially impossible to have a proper open-source media center, or even to run a closed media center on an open OS.

    The second problem is, much of it is online. For instance, the music subscription services -- pay $x/mo and get as much music as you can download, but if you stop paying, they stop playing. Another example is Steam: You only pay once, but it insists on connecting to the Internet periodically to get updates and to be able to shut you down if they find two copies from the same purchase online at once. The problem with this is, I'm essentially trusting the content provider not to unfairly revoke my right to use my content -- Valve could one day decide not to let me play at all, or their servers could go down, and I'd be stuck without a game.

    This puts things entirely too much out of control of the consumer, who, in a very real sense, no longer owns their stuff. Think of it this way -- the rights to a book are owned by the author, and only licensed to a publisher for a finite amount of time. If you buy a book, you own that copy, and may do whatever you want with it, other than distribute copies of significant portions of the book. Yet I never hear authors screaming about how they're being completely ripped off by those damned libraries with their damned copy machines, not to mention kids with OCR who just throw the stuff up on the Internet.

    Now, look at the Music industry. No real, provable signs that Internet piracy does a thing to their sales, yet publishers own artists' song rights forever, and now they want consumers to give up any concept of owning a song, the way we have for software. Oh no, now you own a license to play this song, which they can invalidate any damn time they please.

    Working against the system when you are completely outside the system is futile.

    Wrong. Almost all attempts at DRM are futile. No DRM will make it completely impossible to pirate something. If it does, it will be so oppressive that consumers won't take it anymore.

    Here is the system that really works for everyone: For media, make it more con

  • Re:Biased question (Score:5, Insightful)

    by NeutronCowboy ( 896098 ) on Wednesday August 30, 2006 @02:35AM (#16005387)
    Not only are we paying in terms of money, we are paying in terms of culture that is being locked up and lost forever because there is no legal way of archiving it. That, in my opinion, is the biggest cost of all and the prime reason DRM is Evil.
  • InterWeb, as well (Score:3, Insightful)

    by kripkenstein ( 913150 ) on Wednesday August 30, 2006 @02:58AM (#16005441) Homepage
    Given the presented variables, there are serveral ways to still make money.

    1. Distribute the product yourself for free, request donations.
    2. Merchandise goods that do not meet the same criteria.
    3. Recreate the initial (creative creation) stage in live venues.
    4. Control physical access to content.

    Let me add

    5. Monetize the website

    - which seems forgotten in the other responses to this thread, as well. How would this be done? In many ways:

    a) Ads.
    b) Paid subscriptions for early access to material (works on Slashdot), bigger avatar on messageboards, etc. etc.
    c) Leverage the other things mentioned in the parent post - advertise and sell your merchandise.

    If the official website is slick, it can make a lot of money for an artist. Release a live tour video once a week or so and you will have massive traffic (assuming the band has fans). Put the license for the video as 'free to download, but illegal to redistribute', and you get tons of downloads but no fansites that just mirror you.

    This is the 21st century. It is time artists and labels got with the new program.
  • by BadAnalogyGuy ( 945258 ) <> on Wednesday August 30, 2006 @03:17AM (#16005484)
    Please accept my sincerest apologies for the inconvenience of not breaking the law. Is it inconvenient for you to wear pants? I apologize profusely and wave my magic wand (no, mine not yours, you sicko) and you can now walk around pantsless all you like outside.

    Do you find it inconvenient that you don't have a CD-ROM drive? I don't know what kind of cheap-ass system you have there, but by all means go ahead amble into your local Best Buy with your dick swinging free and grab whichever stereo system grabs your eye. Hell, take two. My apologies that it was illegal and inconvenient to do that until now.

    I bet paying the phone company is pretty inconvenient as well. Stop paying! Hey, sorry it was set up that you had to pay each month. Now it's all yours, no charge. We'll still need a credit card number, so steal one from an old lady at the Best Buy parking lot.

    Yeah, things were pretty inconvenient. Sorry, man.
  • Re:Biased question (Score:2, Insightful)

    by Logic and Reason ( 952833 ) on Wednesday August 30, 2006 @03:17AM (#16005485)
    It might not be very nice to listen to a street musician without giving him any money, but I certainly wouldn't call it dishonest. I don't think the musician has any right to demand that everyone who listens to him pay up, since he is performing in a public area and therefore does not have the right to decide who may stay and who must go.

    Now suppose there were a law mandating that if you listen to a street musician for a certain length of time, you must pay him. Would that change the morality of the situation? Only if you believe that violating laws is in and of itself immoral. In your "brain-dead honesty" I see only a slavish devotion to nonsensical laws; you should decide for yourself what is right and wrong, not let the majority do it for you. I would be able to respect your opinion on "honesty" more (though I'd still disagree) if it didn't seem like you were using the law as part of the justification for your position-- believe me, I understand how seductive that thinking can be, but conflating legality with morality has led to much evil in our history.

    Please don't accuse me of using convenient reasoning to justify my own actions, because I'm not. My own actions are irrelevant to this discussion, and my argument will stand or fall on its own regardless of how you perceive me.
  • Re:Biased question (Score:4, Insightful)

    by Jah-Wren Ryel ( 80510 ) on Wednesday August 30, 2006 @03:34AM (#16005522)
    It seems you are not taking everything into account.

    Actually, it's you who aren't taking everything into account. All of your examples involve additional cost factors - people who buy movies, music and games instead of downloading them are making a judgement that the cost of downloading is not only not free, but higher than the cost paying in the approved manner. That's in part because of the perception of the legal costs, in part because of the cost involved for getting plugged into the P2P networks (learning curve, perceived risk of virii, etc) and in part because of the cost of actually finding the desired product online.

    None of these issues have a thing to do with honesty. Nada, zero, zip. It just basic economics.

    If you would like to actually demonstrate a scalable example where a market works on "honesty" instead of basic economic principles, please be my guest.
  • Re:Biased question (Score:3, Insightful)

    by intrico ( 100334 ) on Wednesday August 30, 2006 @03:37AM (#16005538) Homepage
    You've read into that sentence too way deeply. I was referencing the question posed in the title of the original Slashdot posting, "A Working Economy Without DRM? []". DRM was created by these major companies with the intent of controlling distribution of their media - part of an overall agenda to control distribution *as well as* the traditional marketing channels, two things which these very few huge media companies have obviously enjoyed a nice grip on for decades. Without these control-tactics exhibited by the media companies, "getting discovered" (e.g. scoring a contract - a lot like winning the lottery, not highly correlated to talent) would be irrelevant, as it should be, in turn creating a more level playing field for the artists.
  • by arkhan_jg ( 618674 ) on Wednesday August 30, 2006 @03:40AM (#16005553)
    These problems are the same as any small business has getting off the ground. How do I get new customers when they could just go to the big chains they already know?

    The answers are the same. You take out loans to pay for marketing, promotions (giving stuff away free), and then pay them off when you're established and making a profit. You might even have to work two jobs to support yourself while you follow your dream and get established.
    Not everybody makes it. Either they have a product that not enough people want, or people didn't find out about it, and they go under. That's the free market.

    It's very little different to how artists work today. Unknown artists struggle to get exposure, so do bread-and-butter work and 2nd jobs to get by.
    Giving away some of your work for free, especially digitally where it costs you virtually nothing, is great marketing. The 'tip-jar' method does work sometimes, as does getting people to pay for higher quality versions of your material. Give away the low-res one, maybe with adverts embedded (hellooooo, radio) and use that to get people to pay for the high-res version. After a few cycles of that, people will pay in advance for the new one to get it made, or released if already made.

    The old method of charging many times what something cost to produce is dying. The whole point of the free market is for new businesses and new business methods to be tried out, and live or die in the attempt. DRM is the complete antithesis of the free market as it uses government law to prop up an artificial and failing business model, and removes the freedom of the customer to choose alternative providers. DRM on physical products warps the meaning of physical property itself for the purposes of the big media cartels.

    My singlle player version of Half-life 2 DVD is a great example of the evils of DRM on physical media. It's encrypted, so I can't use it without Valve unlocking it for me online. I can't resell it, as my key is now used. I can't even give it away, as the key is tied to my steam account which has other older versions of my games in, and I can't delete the key or move it. The physical DVD in my hand might as well be a blank piece of plastic with a number printed on it, and to add insult to injury, when the game was first released I had to put my DVD in the drive for the DRM check, while people who'd bought it online didn't. It's over a year later, and I'm still pissed at Valve.
  • Re:Biased question (Score:3, Insightful)

    by Schraegstrichpunkt ( 931443 ) on Wednesday August 30, 2006 @04:28AM (#16005738) Homepage
    No one is arguing "that [DRM is] unnecessary to protect the works of content creators."

    I am. We still have copyright law, after all. Ultimately, that's why the content creators are still making money, even though every DRM system in widespread use has been broken (or fixed, depending on your point of view) to date.

    I have yet to see an argument that DRM is necessary that is grounded firmly on evidence, rather than speculation. From what I've seen, the evidence suggests that DRM is unnecessary.

  • Re:Biased question (Score:3, Insightful)

    by visualight ( 468005 ) on Wednesday August 30, 2006 @04:52AM (#16005815) Homepage

    DRM is a reality and to deny this is to be simply ignorant of current trends in media playback software/hardware stacks. All new hardware from major manufacturers will support DRM standards

    Why do people keep saying that? Is that supposed to be some kind of self fulfulling prophecy? Like, if you say it enough it'll be true? The truth of your statement is entirely dependent on what people accept. I, and everyone I know, will never accept a computer or purchase media that is restricted/crippled/trusted. And, I think the percentage of the population that also believe that will continue to grow, not shrink. So,

    DRM is a temporary social problem and to deny this is to be simply ignorant of current trends in society/politics. All new hardware will still allow people to defeat DRM standards.
  • by SolitaryMan ( 538416 ) on Wednesday August 30, 2006 @04:53AM (#16005818) Homepage Journal
    As I think DRM is fundamentally flawed, so is this business model. That doesn't mean it might not stick around for a few centuries, but it's eventually doomed. The problem is that DRM tries to artifically limit the supply of something that requires very little labor in order to reproduce.
    In other words, DRM tries to enforce conservation law on the matter that does not obey conservation law -- information. The problem is that for many years social laws were based on two fundamental principles: property(things) and service(energy). Both obey conservation law. Now, information does not. What surprises me is that instead of trying to adopt social laws, we are constantly trying to adopt mother nature and enforce conservation law on information. DRM goes even further: it tries to deny the fundamental "share with your neighbour" principle. This approach is never going to work, but what frightens me is that playing gods like this can lead to major disasters.
  • Re:Biased question (Score:1, Insightful)

    by Anonymous Coward on Wednesday August 30, 2006 @04:54AM (#16005824)
    Do you think the big manufacturers are going to continue to produce devices that play non-DRM content? What's in it for them?

    Manufacturers of devices make their money off consumers of content, not producers of content. There is no financial incentive to produce players that refuse to play non-DRM content.
  • TCP does not work. (Score:3, Insightful)

    by hummassa ( 157160 ) on Wednesday August 30, 2006 @06:25AM (#16006081) Homepage Journal
    Repeat with me, once again: TCP/DRM does NOT work.
    Why? Simple.
    Cryptographically, DRM means you have the cyphertext AND the key... so, YOU have the plaintext also.
    But one'll say: "but the thing is protected, inside an IC, etc. .etc.". So I say: The analog/digital loophole. How? Simple. Even if your audio output is digital and encrypted, you pry open your digital loudspeaker, reverse-engineer the digital datapaths till you find the DAC and plug some wires there. Even if it is completely integrated in the same IC, you rip off the coil from the speaker, and wire your ADC there so you have a reasonably-high-quality analog input.
    Even if all plasma/LCD tv sets are all-encrypted, they'll have to put _some_ color in _each_ pixel in the end, so you just yank the screen off and see how is color represented for each pixel. End of story.
    Now, I know that the USofA (and Australia? and where else?) they have that insane DMCA thing, but this depends on each one to combat idiot legislation. I am doing my part down here (I keep an eye for legislative insanity, and scream as loud as I can when I see one)
  • by Anonymous Coward on Wednesday August 30, 2006 @06:26AM (#16006084)
    China does this because they're still not fully integrated into the new, globalized economy. Once this happen, they won't need counterfeiting anymore and they will stomp it out. Judging by their success in effectively stomping out internal political opposition, there is no doubt whatsoever that counterfeiters will be doomed once they're not useful anymore to Chinese economy.

    It may not be the big companies making this gear, but _someone_ will be making it.

    Oh really? You can maybe build a PC in your home, you can maybe assemble a working motherboard in a home lab, but how do you make TC-free chips? Have you any idea of the cost involved? And how hard will they be hunted down by the market-friendly law enforcement? You can't relocate a chip factory that easily, you know, and they're easily found out.

    The world is shrinking. There is no way out. Nothing you can do. Say goodbye to your "rights", they've been already bought and paid for.

    Get used to it.
  • Re:Biased question (Score:3, Insightful)

    by Peter La Casse ( 3992 ) on Wednesday August 30, 2006 @07:46AM (#16006278)
    Ah. 'No one is arguing that protecting the works of content creators is unnecessary.' Never mind then. :)

    Now that you mention it, why is it necessary to protect the works of content creators? It's not like content creators will all stop creating content if all content was public domain. Some industries would fail, but it's not our responsibility to prop them up with artificial business models. Some content, like $300 million movies, might not be created, but people would still make movies, and people would still pay to see movies in theaters. People would still watch TV and listen to the radio, because that's convenient, so those business models might not change much right away.

    Follow-up: if it is necessary to protect the works of content creators, why is it necessary to protect them this much? Someone yesterday suggested changing copyright to 7 years. How is the current situation better than that? Or better than 15 years? Or 20 years?

  • drm is snake oil (Score:3, Insightful)

    by orabidoo ( 9806 ) on Wednesday August 30, 2006 @08:04AM (#16006335) Homepage

    For all the noise about it, for and against, and all the moral high, low and middle grounds that the slashdot crowd so loves to argue about, the obvious fact is that RIGHT NOW we have a working economy without DRM. So obviously one is possible.

    Just look at it. The music industry's entire catalog is pretty much available on a digital, easily rippable, non-DRM'd medium: the good old CD. For all their noise and complaints, I don't see the labels shutting down CD stores to prevent "piracy"... and you can be sure that 99% of illegal music copying originates in CDs.

    And if you look at video, you have the same thing. The DVD was originally DRM'd, but that was broken a long time ago and DVD ripping programs abound these days, from reputable sources even. Do you see the industry putting a stop to DVD sales, or somehow trying to prevent computers from having DVD drives with ripping ability in them? Actually just the opposite is happening - until recently people didn't have much of a (legally bought) movie collection at home, because original VHS tapes of movies were way expensive, so people resorted to renting them. The industry has actually figured out that by pricing movie DVDs quite cheap, people will buy lots of them, and the industry makes a BIGGER PROFIT!

    So what's all this DRM noise then? Well, Yahoo themselves summed it up pretty well [], and considering their position in the industry, you'd think they know what they're talking about:

    DRM doesn't add any value for the artist, label (who are selling DRM-free music every day -- the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform.

    As far as I can tell, that's good news for all of us. DRM is now like cryptography export regulations were a decade ago: a big threat that we all get so worked up about, but is ultimately irrelevant on its own grounds.

    Just like there comes a point where crypto knowledge is "not that hard anymore" and cannot be kept in a box, in the long term, the greed of DRM vendors combined with the fear of audio-visual producers is just not enough to make something as techically broken *and* useless as DRM fly.

  • by poptones ( 653660 ) on Wednesday August 30, 2006 @08:16AM (#16006380) Journal
    None of those people in grandparent (penny arcade, etc) would be making ANY money without the banking institutions - that is, unles they could ifnd a way to convince people to shove their money in envelopes, stamp it and mail it. Oh, but then they'd still be at the mercy of the post office, so if they were offering something the ever increasingly fundamentalist world governments dislike they could be cut off in an instant and hauled in front of some kangaroo court on "mail fraud" charges - or something much worse.

    Archiving is moot - the notion that a world of indiviiduals will be able to provide a more comprehensive archive is a fallacy; here's an example: I've bought at least two copies of grace jones' slave to teh rhythm, yet don't at present have one because the cassette and the cd both wore out. For months I have been jonesing for some of this out of print material and even amazon didn't have any used copies every time I looked. I checked p2p, torrents and usenet, and all that's there is her greatest hits and such. Finally it dawned on me I had installed real player for linux some time ago, so I hit up rhapsody... guess what? Not only is the CD I want there, but a halff dozen others as well. And Rhapsody gives me 25 "free full downloads" essentially every time I visit (I only allow session cookies) so... here's an example of DRM inciting the legit publishers to provide for me what no "commons archivist" have thus far been willing or able to do - high quality downloads (the sound actually is better than the last mp3 version I tried of the title track) that I can access from my desktop anytime, free.

    There is room for both - this notion that drm is inherently evil is as moronic as any other bigotry. And when all those bad and nasty things happen and linux DOES get locked out of the mainstream media industry, you'll need only go as far as your nearest mirror to see who to blame.

    Balance is what is needed, not zealotry.
  • by jcdick1 ( 254644 ) on Wednesday August 30, 2006 @08:52AM (#16006562)
    As I see it, the problem is that the CD or the MP3 is what is being defined as the product. I have said it before, and I will say it again, the music is the product, and not the media used to distribute it. If the artists want to be musicians, then they need to be making music, not CDs. The goal should not be a platinum-selling album, but a 250,000 attendee concert series. I should be able to go out on any night of the week, with ten dollars in my hand, and have my choice of any style of live music by bands that aren't local, regardless of where I live. So I say to the musician, "Don't be a recording artist, just be an artist." Will there be tons of money to be made? In the case of the Grateful Dead, you betcha. But you better have the staying power. Is there decent money to be made? Absolutely. You won't be buying a Ferrari any time soon, but then, if you are in it for the money, most people probably don't want to hear you anyway.
  • by LordRobin ( 983231 ) on Wednesday August 30, 2006 @09:05AM (#16006641)
    Repeat with me, once again: TCP/DRM does NOT work. [...]

    Simple. Even if your audio output is digital and encrypted, you pry open your digital loudspeaker, reverse-engineer the digital datapaths till you find the DAC and plug some wires there. Even if it is completely integrated in the same IC, you rip off the coil from the speaker, and wire your ADC there so you have a reasonably-high-quality analog input.

    If there's a better argument for why DRM does work, I've yet to hear it.

    Remember: Security is not about making stuff impossible to steal, it's about making it so difficult to steal that it's not worth it. The fight against piracy is being waged in two ways: first, make it so hard to make copies that only the elitist of techo-geeks will bother, and second, drive file-sharing sites far underground to avoid the law. You can't eliminate piracy, but you can push it so far out of the mainstream that 90% of your market doesn't know how to do it.

  • by Anonymous Coward on Wednesday August 30, 2006 @09:19AM (#16006715)
    all you really have to do is remove the ability to program machines that can either display drm content, or connect to the internet. This would easily solve the problem of copyright violations. Once you properly license web browsers and remove programmability from consumer machines, the ability to pirate would be greatly impacted. For instance, I have no real reason to need to program my home computer, and its only the existance of these "hobbyist programmers" that keeps me from enjoying a cheap quality consumer level broadcast style internet. If we restrict web servers to those licensed and supervised server operators with oversight guaranteed to prevent them from hosting illicit files like music not registered with government copyright offices and the RIAA, we can preserve intellectual property creation as a valid way to make a living.

  • by gutnor ( 872759 ) on Wednesday August 30, 2006 @09:48AM (#16006937)
    You summarized the wet dream of xxAA, Sony, Microsoft, Apple, ...
    with a minor correction

    "we can preserve intellectual property creation as a valid way to make a living"

    should be

    "we can preserve intellectual property creation diffusion as a valid way to make a living"

    Intellectual property creation has been a valid way to make a living since thousands of years. That's diffusion that is a relatively new problem. Intellectual property laws are usefull to prevent diffusion companies to use your Intellectual property to make money instead of you. Idea is not bad in theory, but has been perverted too much in the recent year and nowadays seems to serve only the opposite objectives.
  • Re:Biased question (Score:2, Insightful)

    by DevStar ( 943486 ) on Wednesday August 30, 2006 @10:06AM (#16007060)
    Weird. Computer games can be downloaded for free, or acquired for a very small fee from your neighbourhood copy-peddler. And still the game-development industry is steadily increasing its revenues.

    There's a difference between something being free and your ability to steal it. If I could go to a legit website or to my local Best Buy and get all games for free or pay for them -- guess what? I'd take them for free.

    Now I don't copy music, because it is illegal, and frankly I don't music so badly that I'd copy it. With games it's even trickier since if I'm not getting games from a trusted source, who knows what I just installed on my computer (see Rootkit).

  • by Kadin2048 ( 468275 ) <> on Wednesday August 30, 2006 @10:08AM (#16007070) Homepage Journal
    While I certainly can't argue with you about your personal feelings on commissioning work or not, I think you're very mistaken to say "Since the dawn of time it's been like this. If you create something, you take a risk doing it. If people like it, it may pay off." That's quite untrue. In fact, the whole 'at-risk' business model of entertainment is fairly new in terms of being universally dominant.

    Throughout most of human history, artists made great works basically on commission, at least until they had developed enough of a reputation to ensure a market for their work. We hardly even remember the people that bankrolled the creation of much of our reportoire of classical music (unless it happens to be named for them), and yet without them it might not exist.

    Traditionally, a person might get their start by working on direct commissions that offer very little creative control to the artist. An example might be a commissioned portrait, or a piece of music where the end-product is spelled out rather precisely ("I want an opera in the Viennese style, about ..."). The client takes very little risk, because the acceptance criteria are clear, and the artist gets some income and develops their reputation. Provided that they can develop a market for their work, then in the future they can produce in advance, knowing that the next time someone comes through their door, they'll be able to sell them the previously-produced symphony/painting/whatever.

    You say that you wouldn't put a down payment on a creation that hasn't been made yet, but I suspect that you do this all the time without really thinking about it. If you've ever paid a wedding photographer, you've done exactly that; you're commissioning artwork, by paying in advance (or agreeing to pay) for somebody's time. If you've ever had a house built, same thing applies: you're paying a "creator" (the tradespeople/contractors who do the construction) to make a "work" (the house), according to an agreement (perhaps plans, or perhaps just your general idea of what you want). A better example might be an architect; they design you a building based on your (potentially vague) criteria and desires, in return for payment. This might not seem very 'artistic,' but it's the exact same concept. And in the economic model I'm suggesting, there's really not much difference between a general contractor and an architect and a painter and a performance artist. They are all skilled tradespeople, and all get compensated for the time that they spend on projects, based on the demand that exists for their trade.

    The current economic system favors tradespeople who can produce works which are easily reproducable: you can't take the same house and sell it 10,000 times over, but you can do that with an audio recording; thus a recording artist seems like a more potentially lucrative career than a carpenter. However, once technology collapses the inflated-value bubble that one could previously create by selling copies, the recording artist is left in the same posistion as any other skilled person; their income arrives as a direct result of finding people who will pay for them to do whatever it is that they do.
  • by Kamots ( 321174 ) on Wednesday August 30, 2006 @10:17AM (#16007138)
    Ah... but all you've done is made it impossibly difficult for the average person to exercise thier fair-use rights. Format-shift? Time-shift? Space-shift? Nope! Make a clip for a school presentation? Nope! Make a backup? Nope!

    Also DRM isn't about making something difficult to copy (not steal... but that's a different arguement). DRM is about making it difficult to crack the DRM. Once the DRM is cracked, it's easy to copy. That's the inherent flaw of DRM schemes.

    But... the hardcore hacker community will see this as a challenge and set out to rip and release as much as they can. We see that today with rips of movies being released before they're even released to the public, with CSS being cracked, etc, etc. There's a lot of people who are willing to spend thier time on these pursuits without financial compensation. They're not going to magically go away if/when DRM gets tougher to crack.

    Finally, as others have pointed out, once you've got a copy with no DRM, then we're right back to the filesharing we've got today.

    All DRM will do is keep paying customers from executing thier fair-use rights and not do much to stem the flow of illegal copies.

    If you want to reduce piracy then stop giving people new reasons to pirate stuff!
  • by Kadin2048 ( 468275 ) <> on Wednesday August 30, 2006 @10:19AM (#16007153) Homepage Journal
    This is an excellent point. I honestly don't understand that much information theory, but when you put it in those terms, it makes the flaws in the "intellectual property" business model seem even more fundamental than they already are.

    There are certainly ways to monetize information, but attempting to simply force it into a 'conservative' (in the 'conservation law' sense, not the political or economic one) distribution and business model, as if "information" are widgets that can be bought and sold on something approaching a commodity market, is not the way to do it.

    Rather, services which interact with information in some way are salable. E.g., when you pay some one to research a topic for you, you are paying not for the information that they return, but for their labor involved in finding and summarizing and presenting it to you. (Though it may seem to be the information that you're paying for, since that's why their labor has value to you.) The information itself, once transcribed into a non-conservative realm, has little real inherent value; the way to monetize it revolves around where the information interacts with more traditional property and service markets, not by attempting to sell the information itself.
  • Re:Public goods (Score:3, Insightful)

    by medarby ( 757929 ) on Wednesday August 30, 2006 @10:44AM (#16007359)
    ...competition will force prices to the level of manufacturing costs.


    Competition? What competition? Aren't we really facing multiple monopolies? It's not like Big Summer Movie #1 is offered by multiple companies. It's only offered by one. Competition is good if you consider the demand for ALL movies, but that's not really what happens. If I really want to see 3 movies this summer, I'll save my money and go to them, and not the 97 others that are released. Big Summer Movie #1 is not really competing with Big Summer Movie #2 or Crappy Art Movie #9864.

    Each DRM product is a monopoly and not affected by other DRM products. The only thing to consider is the demand for an individual product and the fact the the supply for that product is monopolized.

  • Re:Biased question (Score:3, Insightful)

    by poot_rootbeer ( 188613 ) on Wednesday August 30, 2006 @11:07AM (#16007543)
    But in large part you're creating a strawman, by specifying exactly the situation in which it is most difficult to make a profit.

    I disagree. The high creative capital + no manufacturing cost + no distibution cost scenario is a real-world one, facing every creative artist in the digital age.

    People *want* to spend money on entertainment.

    I disagree. People want entertainment, period. They are willing to spend money on it, but it is merely a means to an end. There's a reason why broadcast TV networks have viewerships many times the size of premium cable networks like HBO, and it's mostly because the former is free (as in beer).

    Music is cheap to make.

    I disagree. Recording costs for music may be down to the point where 72 minutes of audio can be preserved for $5,000, but there's no guarantee that the audio will be Music. Musicians invest a lot of time and often a lot of money developing their craft to the point where you would want to listen to what they create.

    accepting that people don't really need millions for doing what they love.

    I do not accept that. As a musician, I should have the opportunity to do what I love AND make millions. It is not and should not be a binary choice.
  • by Shaper_pmp ( 825142 ) on Wednesday August 30, 2006 @11:25AM (#16007699)
    Except that when you're sat at home wanting to back up your entire DVD collection, who goes on bittorrent and waits to download them all? And who just suddenly guaranteed that every movie I own is available on bittorrent?

    There are only so many hacking groups, and you can only rip and transcode so many movies per day, y'know. And with DRM+TCP both of those numbers are effectively set to decrease dramatically.

    You're missing the point - even if piracy is always possible, and even if making the ability to hack hardware a requirement doesn't stem the flow too much, and even if the more specialised requirements and necessity of having a physical (no doubt quickly-made-illegal) device doesn't make catching and prosecuting pirates easier, it's the normal users who are effectively stuffed.

    If I want to pirate the latest Stargate SG-1 or Desperate Housewives, I'm fine on bittorrent. If all I want to do is back up my $obscure_movie DVD that I already bought and paid-for, I'm boned unless I can rip it myself.

    Maybe you weren't aware of this, but many people like watching movies that there isn't a huge mainstream audience for, or that unaccountably aren't popular with the early-adopter geek set.

    And maybe you've missed this, but not everyone is interested in the pirate's viewpoint. If you just want to serially rip off movies, great. Ethically indefensible, but great. I've even done it myself before now. But there are those of us who value quaint concepts like personal freedom and fair-use copyright exemptions, and we're the ones who're getting fucked in the arse by DRM/TCP.
  • by NeutronCowboy ( 896098 ) on Wednesday August 30, 2006 @11:32AM (#16007764)
    Let's keep the discussion on-topic and the insults out of it, shall we? My post wasn't about DRM, it wasn't about who makes money or how (which what the first paragraph is about, I think), it was about current copyright law. You provided a fine example of finding a specific album that you were interested in. Good for you. But that's not the scenario that I was referring to.

    In your example, the album is fairly recent (1985). The company who produced it is still around, and the original rights holder is still available. To boot, you happened to have a media player that ran on the OS of your choice, which allowed you to play the music you bought. Great. Hooray. Now let's consider some other scenarios. Movies from the 20s are still copyrighted, yet a good number of the rights holders are dead, which makes finding the current rights holder a pain in the ass. Was it bought by someone? Inherited? Given away? Who do I talk to about archiving if I find a celluloid of some old movie that I would dearly love to present to the rest of the public? How do I do that legally? Keep in mind that time is running out - a lot of those old movies are pretty much falling apart by now. You might argue that what's worth preserving is already being preserved, but I think there's plenty of reasons not to let a small and highly specific subset of people decide what's worth preserving.

    Then there's another example - what happens if your OS of choice is deemed to not be the proper avenue for releasing music players? The drive towards trusted computing is exactly that - the drive to remove the ability of individuals to control their hardware and software. What good to you are all the Grace Jones files then? They'll be worth exactly the same as the random noise in your /null partition.

    The problem with copyright law - and by extension, DRM - is not that it makes things impossible to live with *right now*. It's the consequences of the current trend towards using copyright as some king of license to print money that are truly horrifying - if you are interested in anything that is not currently being flogged by the people in charge of the copyrights. If you are only interested in 20 year old stuff that's still more or less current, good for you. Before insulting dissenting opinions though, remember that there is far more to media and culture than what's being produced in that time frame. And that's what's at risk of being lost forever.

  • by Shaper_pmp ( 825142 ) on Wednesday August 30, 2006 @11:35AM (#16007805)
    If it can be played (by me), it can be copied (by me)? No.

    I don't care if professional pirating gangs on bittorrent can still pirate movies (although you'd have to be pretty out of it to think this extra layer of complication isn't going to slow the flow at all) - if I can't exercise my fair-use rights with media I paid for, that's fucking wrong.

    Come with me on a journey... I own $obscure_dvd. I want to back up $obscure_dvd. At the moment I can rip it to another DVD, or (even better) transcode it into Xvid and stick it on my machine for playing whenever I want. So far so legal.

    With DRM+TCP I can't do this. Even if $obscure_dvd does somehow gets ripped by TV-flavour-of-the-month obsessed pirates, and even if it has enough mass-market appeal that the torrents don't just die through unpopularity, by downloading it I'm comitting a criminal act - why the fuck should I have to become a criminal in order to exercise my legal rights?

    You're right - DRM+TCP is entirely "survivable" for people who only like mainstream media and just want fr33 sH1t 0ff t3h 1nTern3t5, but for those of us who give a fuck about our rights or prefer something a little more obscure than the latest Paris Hilton album, we're boned.
  • by Dravik ( 699631 ) on Wednesday August 30, 2006 @02:38PM (#16009403)
    This is how all artists made there living until about a century ago. This kind of system created all the great artistic masters of history and fed the millions throughout time we have never hear of.

I was playing poker the other night... with Tarot cards. I got a full house and 4 people died. -- Steven Wright