Monday, January 15, 2007

DRM and Scarcity

Ars posts an article about DRM, arguing that Big Content's pursuit of it has nothing to do with piracy:
The basic point is that access control technologies are becoming more and more refined. To create new, desirable product markets (e.g., movies for portable digital devices), the studios have turned to DRM (and the law) to create the scarcity (illegality of ripping DVDs) needed to both create the need for it and sustain it. Rather than admit that this is what they're doing, they trot out bogus studies claiming that this is all caused by piracy. It's the classic nannying scheme: "Because some of you can't be trusted, everyone has to be treated this way." But everybody knows that this nanny is in it for her own interests.
This is a good way of painting the economic argument against overly restrictive DRM and calling out the studios for their dubious arguments.

The article also links to a BusinessWeek article on Apple and Hollywood, where an anonymous studio executive was quoted as saying "[Apple's] user rules just scare the heck out of us," in regards to the fact that iPod users are allowed to share movies downloaded from iTunes on 3 other iPods and in the context of the recent announcement of Apple's new Apple TV.

Which gets us to YouTube and the NYT's most recent article on the site, discussing it's uneasy relationship with Big Content.  The NYT uses Eminem's movie 8 Mile as its focus and the problems Universal Music has faced with parts of it showing up on YouTube:
So in an odd twist, Eminem’s songs from “8 Mile” are cleared for use on YouTube, while much of the accompanying video is not. In what could be an indication of the kinds of deals the studios might strike, Universal Music earns the higher of two amounts when its songs are used in a video: a flat fee per clip or a percentage of advertising revenue.“We don’t want to kill this,” said Larry Kenswil, a Universal Music executive. “We see this as a new source of revenue for us.”

See, it's all about squeezing every ounce of new revenue out of the market.  It's not that Big Content shouldn't be able to police piracy, but it shouldn't be attacking fair use rights under the pretext of fighting piracy in an effort to simply broaden the kind of revenue it can collect.  Certainly, the Internet has created new ways for Big Content to sell its products, but the Internet isn't so new/different and threatening so as to justify granting them more control than they've ever had before.

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