I think we would need some actual data to establish this. How many iPod owners are buying “near exclusive offerings?” Of this number, how many consider it an important factor in their purchase?

Color me skeptical.

Capital is not necessary for innovation. You can have innovation without capital (just look at Charles Babbage, who designed an extremely complex mechanical computer on paper) but obviously capital does not, of itself, dream up the iPod killer or the next Harry Potter book. Rather, it requires human ingenuity and creativity.

The point of Trapnel’s argument was not that capital isn’t helpful or useful to innovation, but that the State intervenes in the economy to artificially favor corporate capital against, say, independent artists or inventors in the ongoing race for innovation (at least, that’s how I understood it). The justification for the monopoly of IP is that it is an unequivocal good to grant this privilege, and Trapnel simply introduced some doubt into that thesis.

Capital is not necessary for innovation. You can have innovation without capital (just look at Charles Babbage, who designed an extremely complex mechanical computer on paper) but obviously capital does not, of itself, dream up the iPod killer or the next Harry Potter book. Rather, it requires human ingenuity and creativity.

The point of Trapnel’s argument was not that capital isn’t helpful or useful to innovation, but that the State intervenes in the economy to artificially favor corporate capital against, say, independent artists or inventors in the ongoing race for innovation (at least, that’s how I understood it). The justification for the monopoly of IP is that it is an unequivocal good to grant this privilege, and Trapnel simply introduced some doubt into that thesis.

It really doesn’t matter the small percentage of songs from iTunes played on the iPod. Its more important that iTunes gives near exclusive offerings that other services don’t. And you know that iTunes will only play on the iPod (at least currently). This ads enough value to the iPod so that MP3 music owners will buy it rather than other players.

We agree that Apple is really tapping 2 markets: the market for its iTunes store, and the market for MP3 songs. The first, which deals with DRM:), makes the second more valuable. By buying an iPod, MP3 users get a player that will also give them access to exclusive offerings.

Perhaps you are getting confused by the very real fact that iTunes integration is a big selling point for the iPod. But this has nothing to do with DRM, and everything to do with the fact that iTunes is a very well-designed MP3 playing music program. People like iPods because they are gorgeous, hip, and user-friendly; people like iTunes because it is a great piece of software; people like them both even more because they are designed to work well together. I repeat: none of this has anything to do with DRM. I use both an iPod and iTunes all the time, and my position on DRM is pretty obvious by now. I use both iTunes and my iPod to play DRM-free MP3s. Which is why your comment about “iPod vs MP3 players”–as if the iPod weren’t an MP3 player itself!–is so bizarre.

Now: if the time comes when many consumers will have built up a significant library of DRM’d iTunes tracked, then this will, in fact, result in a lock-in effect that will help the iPod withstand rivals. But we’re not there yet, not at all.

iTunes has a couple more deals with the Studios than other music services. Those studios signed with Apple b/c of DRM agreements. iTunes, while not a big profit maker for Apple, induces folks to get the iPod.

Granted that most songs on the average iPod are not bought from iTunes, the fact that iTunes offers many labels/tracks not available many places elsewhere, which can only be played on the iPod, is enough of a case for DRM.

I should have clarified this, but when you talk about DRM and Apple, its probably important to mention both the iPod and iTunes.

Also, completely unrelated, would you please start using question marks? witout tehm yuo coulds as wells be writeining lieks dys

So tell me Tim Lee and XT, what do you folks think of the US venture capital system. Is it a waste of money. Should all the capital flowing from VCs be diverted elsewhere besides commercial firms. How should profitable companies (who often act as VCs themselves) (re)use their revenue.

Also, XT, did you catch my point about the iPod and DRM. Although it plays MP3 files, the iPod is successful because it excludes non-Apple DRM. This probably marks the difference in success between the iPod and your usual MP3 player. W/o that kind of exclusivity enabled by DRM and the DMCA, seriously, why would Apple invest in creating the iPod and its peripheral products.