From what I’ve gathered, you can look at legal circumvention this way: 1)does the act of reverse engineering for interop pose infringement. I believe courts are somewhat lax on this prong, they tend to be or rigid on the next, which is, 2)does the interoperable product infringe or defeat the purpose of the DRM scheme. The purpose of DRM can be seen as preventing unauthorized copying. Streambox fell to the second of these, as did BnetD.

Does this mean you’re in favor of allowing companies to circumvent DRM in order to ensure interoperability?

X, to address some of your points. I’ve been busy, so I haven’t been replying in detail.

The majority of songs played on the iPod are MP3 formats, but Apple captures the value of its MP3 compataibility by excluding Apple DRM schemes. DRM is important to the iPod because of this.

Also, I believe Braden Cox’s insight on your CD analogy is fundementally right. You even prove the importance of DRM for allowing price discrimmination and scaled offerings by saying that folks don’t want to buy entire CDs. With DRM, producers can offer and price at smaller units of goods (songs rather than CDs). Without DRM, producers can only offer all or nothing.

…suppose in 5 years someone finally, definitively, kicks the iPod’s butt and creates a player far superior on every dimension. All of a sudden there are going to be some very, very unhappy customers who realize that All Their Songs Are Belong To Apple.

No, nobody’s songs belong to Apple. How do you gather this X. Even if songs did “belong” to Apple, the party that beats Apple out of the market should address backwards compatibility to lower switching costs for consumers (which is the only near term way I see Apple losing the music player war).

IPRs are PRECISELY prohibitive arrangements that grant market power–if they weren’t, nobody would WANT one. … IPRs, and the DMCA through DRM, restrict competition.

Not so fast X:) Parties seek IPRs to obtain market exclusivity, but competitors are restricted from distributing copies of the copyright/patent, not goods that legitimately compete with it. Also, IPRs do not automatically confer market power. Just by obtaining a copyright or patent, a party does not exclude competition for the product or services market. See my citations to Profs Edmund Kitch and Mark Lemley, which address your concerns.

…suppose in 5 years someone finally, definitively, kicks the iPod’s butt and creates a player far superior on every dimension. All of a sudden there are going to be some very, very unhappy customers who realize that All Their Songs Are Belong To Apple.

No, nobody’s songs belong to Apple. How do you gather this X. Even if songs did “belong” to Apple, the party that beats Apple out of the market should address backwards compatibility to lower switching costs for consumers (which is the only near term way I see Apple losing the music player war).

IPRs are PRECISELY prohibitive arrangements that grant market power–if they weren’t, nobody would WANT one. … IPRs, and the DMCA through DRM, restrict competition.

Not so fast X:) Parties seek IPRs to obtain market exclusivity, but competitors are restricted from distributing copies of the copyright/patent, not goods that legitimately compete with it. Also, IPRs do not automatically confer market power. Just by obtaining a copyright or patent, a party does not exclude competition for the product or services market. See my citations to Profs Edmund Kitch and Mark Lemley, which address your concerns.

1-DRM is not a necessary evolution of the market. The point being made by several here is that consumers choose non-drm options when possible. Many people don’t download songs, but simply buy cds and rip them themselves to use on an ipod, which represents a choice of drm-free digital media.

2-if DRM integrety was not enforced by the DMCA, some contend here that there would be more competition in the personal digital music player market. Companies would come up with players that can circumvent DRM so you can enjoy music bought legally from any service on any hardware.

Note that nowhere here have I assigned an ideology to technology. I’m simply stating that DRM is not an option that is favored by consumers and DRM-integrity enforcement through the DMCA probably results in less comptetition. My previous post was to point out that there are companies forming that recognize that most consumers do not want to be pirates, they simply want a convenient solution and so they offer it to them. My personal opinion is that large labels are actually scared of that. Downloading songs without the DMCA reduces their possibility of vendor lock-in and thus effectively puts anyone who can code a website to offer songs for download on the same footing as any of the large labels (at least as far as distribution of music goes). What saves larger labels, now, is the fact that they have running contracts with major artists and hold the rights to a lot of the music people listen to every day. But this has started changing and will slowly change, as Tim said it, not because of the DMCA anti drm-circumvention articles but despite the DMCA.

Again, I don’t think I’m understanding this situation from an ideological standpoint. I’m simply stating my interpretation of the state of the market and it’s possible evolution to something different.

Technology is “ideology neutral,” granted it represents “freedom” or anything else by how the market values it. Lets not assign technology subjective ideological values and bypass the market’s decisions.

1. It’s impossible to do an exact apples-to-apples comparison, because the labels are refusing to release DRM-free music, generally. So we don’t have the chance to compare 50 Cent’s track on iTunes with Fairplay vs. 50 Cent’s track on eMusic with no DRM. It’s hard to compete with free, but it’s ALSO hard to compete with big-name labels backed with massive advertising and exposure; it’s rather astounding the eMusic is doing as well as it is. So I agree that my piracy comparison is slightly unfair, because of the ‘free’, but people compete with free all the time (private schools, bottled water, cable television, etc., etc.). The point about music CDs does hold, and is even stronger because here the comparison is unfair the other way–most people don’t WANT whole albums.

Just be serious: are you really claiming that people LIKE DRM? At the moment, most aren’t bothered much by it, because it doesn’t interfere with their iPod use, and the iPod is still, by far, the best music player out there. But suppose in 5 years someone finally, definitively, kicks the iPod’s butt and creates a player far superior on every dimension. All of a sudden there are going to be some very, very unhappy customers who realize that All Their Songs Are Belong To Apple.

1. This is pure question-begging, except perhaps for the caveat about ‘obvious’. IPRs aren’t LIKE other property rights; you already HAVE a property right in the object that instantiates the idea/creative expression/whatever. IPRs are PRECISELY prohibitive arrangements that grant market power–if they weren’t, nobody would WANT one. Just like tariffs, their effect is limited just to the extent that people can substitute around them–Kim Harrison instead of Laurel Hamilton for vampire-romance, 50 Cent instead of Eminem, one patented process (or OSS) versus another. My claim was: IPRs, and the DMCA through DRM, restrict competition. It’s not a refutation of my claim to say that market processes will mitigate these effects; that’s like saying tariffs on sugar aren’t bad because we get corn syrup to compete. What markets are doing is trying to route around the damage; that doesn’t mean the damage isn’t there.

1. “Consumers overwhelmingly choose, whether through CDs or through internet piracy (~1 billion tracks -per month-), DRM-free music.”

Regarding internet piracy, consumers aren’t choosing DRM-free music, they are choosing FREE music. It’s hard to compete with free.

1. “[i]t comes down to “nobody will compete unless they believe they can get a temporary monopoly.” This is exactly the argument that free-marketers have critiqued so strongly back when it was used to defend feudal guild privileges, when it was used to defend tariffs and subsidies, when it was used by Galbraithians to defend favoring industry concentration, etc. etc. throughout history.”

The examples cited are of free marketers arguing against government regulatory actions that created obvious market preferences for particular industries like textiles, agriculture, etc. These were economic regulations, as opposed to property rights.

More importantly, these were PROHIBITIVE arrangements. There is no way that a market can work around a tariff unless the market creates a substitute. So instead of sugar we have high fructose syrup in many of our foods. There’s a difference between the market for sugar and the market for music. You can still get music in different formats, and it’s still music. It still sounds the same to most ears on most audio devices, at least at 128k+ bit rates.

At least in this regard, I believe X.Trapnel’s fear of hyper-Schumpeterian monopolies about the DRM is overblown. And any externalities associated with the DMCA (call it an assignment of a DRM property right to the content creator) and a lack of interoperability might be mitigated by Coasian bargains among competitors (licenses) and the exemptions that exist in the DMCA.

X hit the nail on the head in his response. Consumers cannot be said to be embracing DRM as something that makes sense to them. Most people in most situations are choosing non-DRM music. No one answered my post in the other thread, but X. makes the same point, only more thoroughly. Forget piracy. Even legal music purchases are mostly non-DRM. If we’re looking to the marketplace for answers, the marketplace is speaking.

I submit that as downloading from ITMS and its DRM-laden competitors increases and CD sales decline, interoperability will become proportionately more important to the consumer and they will become ever more convinced that DRM does not make sense. How they will express that resistance, I don’t know. Time will tell. Perhaps the CD will simply refuse to die, in spite of the increasing number of obituaries being written for it.

I think the market of completely legal drm-free music download is coming. The market has inertia, but I see it changing. Slowly.