January 2006

Patrick Ross calls out DRM critics:

During the Grokster debate we always heard how P2P was simply a technology; it wasn’t evil. That’s true; the problem always was with the piracy on P2P, piracy encouraged by P2P software makers. Here a movie label is using P2P as a distribution tool. I’ll say this to all those opposed to DRM; if you can convince me this service would exist without DRM, I’ll make a donation to the Electronic Frontier Foundation. This new service, it seems, is further market innovation, driven once again by technological protection methods.

Ross is repeating an old refrain. In 1982, Hollywood’s top lobbyist, Jack Valenti, told us that the movie industry wouldn’t survive if Congress didn’t outlaw the “record” feature on the VCR:

But now we are facing a very new and a very troubling assault on our fiscal security, on our very economic life and we are facing it from a thing called the video cassette recorder and its necessary companion called the blank tape. And it is like a great tidal wave just off the shore. This video cassette recorder and the blank tape threaten profoundly the life-sustaining protection, I guess you would call it, on which copyright owners depend, on which film people depend, on which television people depend and it is called copyright.

Valenti said that “the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” Valenti told us then–just as Ross tells us today–that if consumers were given the unfettered ability to make copies of movies, it will bankrupt Hollywood.

Valenti turned out to be spectacularly wrong. The videotape aftermarket grew to rival ticket sales as a revenue stream. It turns out that consumers value the convenience, legitimacy, and positive experience of purchasing legal content, even if they have the physical capacity to engage in piracy. Recording movies off the TV and editing out the commercials turned out to be too big of a headache for most Americans to bother with.

That was the experience in 1982, and there’s every reason that it would happen again in 2006. Legal downloads are better organized, more convenient, of higher quality, and less legally hazardous than piracy. The vast majority of consumers are likely to choose such legal downloads even if it’s physically possible for them to break the law.

Ross assumes, against all evidence, that DRM is an effective piracy deterrent. Peer-to-peer services already offer almost illegal copies of any movie on the market. All the DRM in the world isn’t going to make those networks go away. So what exactly is it supposed to accomplish besides pissing off paying customers who discover they can’t play their Warner Bros. movies on their iPods?

Update: Mike says that Warner Bros. will be charging as much for downloads as it does for the corresponding DVD, despite the enormous savings the studio will be enjoying on packaging and transportation costs. Why would any consumer pay the same price for the same product in a less convenient and untested format?

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Ars reports that Amazon.com is planning to roll out a video-download service in April:

Amazon’s vision includes a try before you buy model, where you could download or stream a movie for a fee, and apply that fee as a credit towards the purchase price of the corresponding DVD, should the content tickle your fancy. Another idea is to provide free downloadable versions along with regular DVD purchases, to draw in those who would rather swing by the closest Wal-Mart or FYE for their movie needs, because they just can’t stomach waiting a couple of days for their DVDs to be delivered.

This is eerily reminiscent of MP3.com, the audio-streaming service that was unfortunately struck down as copyright infringement. The difference, of course, was that MP3.com was founded on the radical notion that once you purchase a CD, you have a right to do as you please with it as long as you don’t share it with others. If the last few months are any indication, Amazon’s service is likely to be quite different: sure, you’ll be able watch the movie right away, but you’ll only be able to do so with the official Amazon player, and on devices that adopt Amazon’s DRM format.

It will be interesting to see if Amazon releases yet another DRM format, or decides to piggy-back on one of the existing ones. There are already three major video DRM formats (Apple, Microsoft, and Google), all of them incompatible. The last thing we need is a fourth. At some point, consumers are going to start getting headaches when they have to keep track of which of their movies play on which of their devices and applications. Hollywood seems to consider irritating their paying customers a good business strategy.

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Declan wonders if the video iPod will spark a DMCA revolution:

In 1998, politicians bowed to pressure from the entertainment industry and voted overwhelmingly for the Digital Millennium Copyright Act. Part of that law made it a federal offense to sell or distribute software that can rip DVDs.

In other words, believe it or not, Apple CEO Steve Jobs would be guilty of a federal felony if iTunes transferred DVDs to an iPod as easily as it can music from a CD.

While these Draconian penalties have angered digital-rights types for years, the prohibition really hasn’t affected a broader audience. But the recently released video iPod changes this and–if we’re lucky–will prove to be a flashpoint that sparks actual reforms.

We can hope.

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