“Freely Trading”

by on February 7, 2007 · 26 comments

Ed Felten has a great analysis of Steve Jobs’ DRM essay:

[Jobs's] real scorn is for outcome (2), where Apple licenses its DRM technology to other companies. It’s easy to see why this is the worst outcome for Apple–the company loses its ability to lock in customers, but everybody still has to put up with the cost and hassle of using DRM.

What the letter really does, in typical Jobsian fashion, is frame the debate. It does this in two respects. First, it sets up a choice between two alternatives: stay the course, or get rid of DRM entirely. Second, it points the finger at the major record companies as the ones making the choice.

This is both a clever PR move and a proactive defense against European antitrust scrutiny. Mandatory licensing is a typical antitrust remedy in situations like this, so Apple wants to take licensing off the table as an option. Most of all, Apple wants to deflect the blame for the current situation onto the record companies. Steve Jobs is a genius at this sort of thing, and it looks like he will succeed again.

Meanwhile, over at the Wall Street Journal is a great example of the point Felten made last week about the way the labels have framed the DRM debate. The Journal‘s coverage of Jobs’s essay has the sub-headline “Apple Chief Now Favors Making Downloads Of Songs Freely Tradable.” If you didn’t read the article carefully, you might get the impression that he’s advocating overturning the Grokster decision. But no, Jobs is simply saying that we should abandon DRM, an anti-copying technology that doesn’t actually do very much to prevent copying.

  • http://weblog.ipcentral.info/ Noel Le

    I wonder, what kind of leverage does Apple have with iTunes if DRM is completely abandoned by the music labels.

  • http://weblog.ipcentral.info/ Noel Le

    I wonder, what kind of leverage does Apple have with iTunes if DRM is completely abandoned by the music labels.

  • Doug Lay

    I wonder, what kind of leverage does the PFF have with Congress if DRM is completely abandoned by the music labels. Ten years of shilling for a truly crappy idea, all for nought.

  • Doug Lay

    I wonder, what kind of leverage does the PFF have with Congress if DRM is completely abandoned by the music labels. Ten years of shilling for a truly crappy idea, all for nought.

  • http://weblog.ipcentral.info/ Noel Le

    Doug, if the music labels totally jettison DRM, then I”ll run for Congress on an “outlaw DRM and repeal the DMCA platform.” I’ll license your blog posts and use them as my campaign slogans.

  • http://weblog.ipcentral.info/ Noel Le

    Doug, if the music labels totally jettison DRM, then I”ll run for Congress on an “outlaw DRM and repeal the DMCA platform.” I’ll license your blog posts and use them as my campaign slogans.

  • http://bennett.com/blog Richard Bennett

    The thing that amazes me about DRM is how anybody can get so damned excited over it. It’s not like the solution to global warming, world hunger, terrorism or AIDS depends on whether American teenagers get their music videos for free or with their daddies’ money, is it? Demanding that hard-working creative people give their work away for free is the height of narcissism.

  • http://bennett.com/blog Richard Bennett

    The thing that amazes me about DRM is how anybody can get so damned excited over it. It’s not like the solution to global warming, world hunger, terrorism or AIDS depends on whether American teenagers get their music videos for free or with their daddies’ money, is it? Demanding that hard-working creative people give their work away for free is the height of narcissism.

  • http://weblog.ipcentral.info/ Noel Le

    Well Richard, apparently, there’s a branch of libertarians who believe that the mere existence of something like DRM, thats not consistent with their ideology, is a restriction to freedom.

  • http://weblog.ipcentral.info/ Noel Le

    Well Richard, apparently, there’s a branch of libertarians who believe that the mere existence of something like DRM, thats not consistent with their ideology, is a restriction to freedom.

  • http://www.techliberation.com/ Tim Lee

    Noel, what on Earth are you talking about? I don’t know of a single libertarian who thinks that the existence of DRM is a restriction on freedom. What we object to is laws that give DRM special legal status.

  • http://www.techliberation.com/ Tim Lee

    Noel, what on Earth are you talking about? I don’t know of a single libertarian who thinks that the existence of DRM is a restriction on freedom. What we object to is laws that give DRM special legal status.

  • eric

    “Demanding that hard-working creative people give their work away for free is the height of narcissism.”

    Welcome to the United States of America, circa 2007.

    Height of narcissism. That sounds about right. Of course, it misses the point of whether DRM actually accomplishes its stated goals and whether it is truly a benefit, overall, to those “hard working” creative types.

    But to answer your question more directly, the reason people get so excited about DRM is that, at least in my age group, a large number of us are really passionate about music. Passion = emotion. When we buy the albums of the artists we like (sad to say, there are fewer of these around every year), the artists who produce quality work, who speak to our souls in some way, and then we encounter these infernal obstacles to transferring those recordings easily to another format, or perhaps sending a track to a friend, that hurts in a very visceral way that would not apply if we were only talking about a toaster that didn’t work properly.

    It is the very nature of music, the language of heart and soul and emotion, that makes the DRM issue such a personal one. This is not to say that there isn’t an element of wanting a free lunch. But for many people, it is far deeper than that.

  • eric

    “Demanding that hard-working creative people give their work away for free is the height of narcissism.”

    Welcome to the United States of America, circa 2007.

    Height of narcissism. That sounds about right. Of course, it misses the point of whether DRM actually accomplishes its stated goals and whether it is truly a benefit, overall, to those “hard working” creative types.

    But to answer your question more directly, the reason people get so excited about DRM is that, at least in my age group, a large number of us are really passionate about music. Passion = emotion. When we buy the albums of the artists we like (sad to say, there are fewer of these around every year), the artists who produce quality work, who speak to our souls in some way, and then we encounter these infernal obstacles to transferring those recordings easily to another format, or perhaps sending a track to a friend, that hurts in a very visceral way that would not apply if we were only talking about a toaster that didn’t work properly.

    It is the very nature of music, the language of heart and soul and emotion, that makes the DRM issue such a personal one. This is not to say that there isn’t an element of wanting a free lunch. But for many people, it is far deeper than that.

  • http://weblog.ipcentral.info/ Noel Le

    Well Tim, then make sure you say that in posts where you blast DRM without even mentioning the DMCA. There was one post where you said (rough recollection): “DRM as central planning,” thereby casting DRM as something inherently evil.

    Even without the DMCA though, DRM can be successful in accomplishing the goal of furthering business models and maintained despite success hacks. Remember, DRM need not deter all piracy, it only has to deter piracy to the extent that a strong business model is viable.

  • http://weblog.ipcentral.info/ Noel Le

    Well Tim, then make sure you say that in posts where you blast DRM without even mentioning the DMCA. There was one post where you said (rough recollection): “DRM as central planning,” thereby casting DRM as something inherently evil.

    Even without the DMCA though, DRM can be successful in accomplishing the goal of furthering business models and maintained despite success hacks. Remember, DRM need not deter all piracy, it only has to deter piracy to the extent that a strong business model is viable.

  • http://weblog.ipcentral.info/ Noel Le

    Well Tim, then make sure you say that in posts where you blast DRM without even mentioning the DMCA. There was one post where you said (rough recollection): “DRM as central planning,” thereby casting DRM as something inherently evil.

    Even without the DMCA though, DRM can be successful in accomplishing the goal of furthering business models and maintained despite success hacks. Remember, DRM need not deter all piracy, it only has to deter piracy to the extent that a strong business model is viable.

  • http://weblog.ipcentral.info/ Noel Le

    Well Tim, then make sure you say that in posts where you blast DRM without even mentioning the DMCA. There was one post where you said (rough recollection): “DRM as central planning,” thereby casting DRM as something inherently evil.

    Even without the DMCA though, DRM can be successful in accomplishing the goal of furthering business models and maintained despite success hacks. Remember, DRM need not deter all piracy, it only has to deter piracy to the extent that a strong business model is viable.

  • http://www.techliberation.com/ Tim Lee

    Noel, my point about central planning really isn’t that hard to understand, is it? Central planning describes a situation in which decisions (in this case, decisions about how media devices will work) are made in a top-down fashion, with most of the power resting in the hands of a central authority. In contrast, decentralization is a situation in which decisions are made in a bottom-up fashion, with each participant having a high degree of autonomy.

    The Soviet economy, the United States federal government, and the Ford Motor Company are all examples of institutions that exhibit a high degree of central planning. The New York Stock Exchange is an example of an institution that exhibits a low degree of central planning.

    Now, as you can see from my examples above, centrally planned institutions are not automatically bad from a libertarian point of view. Obviously, libertarians don’t consider Ford workers oppressed. It’s probably not possible to create an automobile in a totally decentralized fashion, so some degree of central planning is inevitable, and as long as no one is forced to participate, libertarians have no reason to criticize the arrangement.

    However, it’s also true that in general decentralized systems tend to outperform centralized ones. This isn’t an “official” libertarian position, but I think it follows pretty directly from Hayek’s arguments about spontaneous order. Obviously, as noted above, there are some cases where centralization is unavoidable. But my contention is that when they’re possible, decentralized systems will outperform centralized ones.

    So it should be clear that when I say that DRM is an example of central planning, I don’t mean that it’s “inherently evil,” much less oppressive. I’m simply pointing out that it exhibits the same inefficiencies that accompany all centrally planned systems. It’s possible that the benefits of DRM nevertheless outweigh the disadvantages of organizing things in a centralized manner, just as the advantages of an assembly line outweigh the disadvantages of Ford’s monolithic structure. But I’m just pointing out that centralization has costs, and those costs have to be considered when evaluating the business case for DRM.

  • http://www.techliberation.com/ Tim Lee

    Noel, my point about central planning really isn’t that hard to understand, is it? Central planning describes a situation in which decisions (in this case, decisions about how media devices will work) are made in a top-down fashion, with most of the power resting in the hands of a central authority. In contrast, decentralization is a situation in which decisions are made in a bottom-up fashion, with each participant having a high degree of autonomy.

    The Soviet economy, the United States federal government, and the Ford Motor Company are all examples of institutions that exhibit a high degree of central planning. The New York Stock Exchange is an example of an institution that exhibits a low degree of central planning.

    Now, as you can see from my examples above, centrally planned institutions are not automatically bad from a libertarian point of view. Obviously, libertarians don’t consider Ford workers oppressed. It’s probably not possible to create an automobile in a totally decentralized fashion, so some degree of central planning is inevitable, and as long as no one is forced to participate, libertarians have no reason to criticize the arrangement.

    However, it’s also true that in general decentralized systems tend to outperform centralized ones. This isn’t an “official” libertarian position, but I think it follows pretty directly from Hayek’s arguments about spontaneous order. Obviously, as noted above, there are some cases where centralization is unavoidable. But my contention is that when they’re possible, decentralized systems will outperform centralized ones.

    So it should be clear that when I say that DRM is an example of central planning, I don’t mean that it’s “inherently evil,” much less oppressive. I’m simply pointing out that it exhibits the same inefficiencies that accompany all centrally planned systems. It’s possible that the benefits of DRM nevertheless outweigh the disadvantages of organizing things in a centralized manner, just as the advantages of an assembly line outweigh the disadvantages of Ford’s monolithic structure. But I’m just pointing out that centralization has costs, and those costs have to be considered when evaluating the business case for DRM.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, if your point about DRM and central planning was clear, even in your own mind, you would have been able to explain it in about 1/5 the number of words you use above.

    I’m curious, do you perceive their being costs of decentralization? Does moving towards decentralization always induce more efficiency?

    I’m actually a supporter of decentralization. The decentralization of the tech industry that has facillitated viability for small and specialized firms, is the main motif of Prof. Chesbrough, who I often cite. Further, intellectual property rights provide for a more decentralized system of incentives than is possible under any subsidy or prize scheme. However, I don’t generalize, especially politically, as much as you do Tim, on centralization v decentralization.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, if your point about DRM and central planning was clear, even in your own mind, you would have been able to explain it in about 1/5 the number of words you use above.

    I’m curious, do you perceive their being costs of decentralization? Does moving towards decentralization always induce more efficiency?

    I’m actually a supporter of decentralization. The decentralization of the tech industry that has facillitated viability for small and specialized firms, is the main motif of Prof. Chesbrough, who I often cite. Further, intellectual property rights provide for a more decentralized system of incentives than is possible under any subsidy or prize scheme. However, I don’t generalize, especially politically, as much as you do Tim, on centralization v decentralization.

  • http://www.techliberation.com/ Tim Lee

    Noel, I’m not interested in getting into a long philosophical argument about the merits of centralization and decentralization. I’ve written at length about this in the past, and I’m sure Google will pull those posts up for you. I was just responding to your mis-characterization that I think DRM is “inherently evil.” I don’t. I think it’s bad technology and that using it is a bad business strategy, but I support their freedom to use them anyway if they so choose.

  • http://www.techliberation.com/ Tim Lee

    Noel, I’m not interested in getting into a long philosophical argument about the merits of centralization and decentralization. I’ve written at length about this in the past, and I’m sure Google will pull those posts up for you. I was just responding to your mis-characterization that I think DRM is “inherently evil.” I don’t. I think it’s bad technology and that using it is a bad business strategy, but I support their freedom to use them anyway if they so choose.

  • http://weblog.ipcentral.info/ Noel Le

    Thanks for the clarification Tim.

    By the way, I wasn’t even referring to you above! But as you addressed my point anyways, I figured carrying on the conversation would be interesting.

    As far as DRM is concerned, I don’ think its being deployed optimally. The problem isn’t DRM itself.

  • http://weblog.ipcentral.info/ Noel Le

    Thanks for the clarification Tim.

    By the way, I wasn’t even referring to you above! But as you addressed my point anyways, I figured carrying on the conversation would be interesting.

    As far as DRM is concerned, I don’ think its being deployed optimally. The problem isn’t DRM itself.

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