The DMCA in the American

by on November 20, 2006 · 14 comments

Today, AEI is launching a brand new magazine titled The American. It’s a bimonthly print magazine combined with a website at American.com. The website is edited by David Robinson, who TLF readers last encountered in July, when I quoted his musings over at Ed Felten’s blog. Robinson asked me to do an article on Zune and the DMCA as one of the inaugural articles on the website:

After the release of its Zune media player last Tuesday, Microsoft faces some awkward questions about compatibility. For the last two years, Microsoft has promoted a digital music format called “Plays for Sure,” which it licenses to other companies that want to build their own player devices or music stores. But Zune uses a brand new and incompatible system. Consumers who purchased music in the “Plays for Sure” format won’t be able to play it on their Zune devices. Microsoft may get extra flack for locking its own loyal customers out of a previous version of its product, but walls between digital music platforms have a long history. “Plays for Sure” music and the new Zune format have always been incompatible with Apple’s wildly popular iPod, and with the iTunes music store.

Compatibility issues didn’t always plague the music industry.
You might think those compatibility problems would represent a market opportunity for third-party software developers. But copyright law stands in the way. The Digital Millennium Copyright Act (DMCA), enacted in 1998, prohibits “circumvention” of copy protection such as that found in Microsoft and Apple’s music formats. The copy protection gets called digital rights management (DRM). Format-conversion software is, in most circumstances, illegal unless authorized by the company that created the format. Hence, the DMCA gives software companies a legal tool to bar competitors from building products compatible with their own, promoting the balkanization of the digital media marketplace into a cacophony of mutually incompatible formats. Not only does that inconvenience consumers, it also reduces intra-platform competition and effectively locks small entrepreneurs out of the market for media hardware and software.

I think the magazine itself sounds like an exciting project. As their about page describes it, The American is “a magazine of ideas for business leaders. Modeled on Henry Luce’s original vision for Fortune Magazine, it surveys the full scope of American life through the lens of business and economics.” Check it out.

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