Central Planning Didn't Work In Russia And It Doesn't Work On Your Set-Top Box
from the competition dept
Here's a roundup of movie-download services -- Apple TV, Vudu, Movielink, Unbox -- all of which have underperformed expectations. This won't come as a surprise to Techdirt readers, as we've panned these products before. And the reasons they've flopped are frankly pretty obvious: high prices, restrictive DRM, and no easy way to move videos to the device of your choice. I won't re-hash those arguments, but I think it's interesting to compare the anemic development of the digital video marketplace with the rapid development of digital audio a decade ago. The fundamental difference is that Hollywood kept a tight grip on the digital video market, while the DMCA didn't come along soon enough to give the music industry control over digital music. They tried to outlaw the MP3 player, but because there was no DRM involved, they lost in court, and the result was the flowering of innovation that led to the iPod and other MP3-based devices.
There's still something of a mystery here, though: most video download services are not just bad but spectacularly bad. For example, Hollywood sunk $100 million into Movielink before giving up and selling the whole mess to BlockBuster for $20 million. Even assuming that Hollywood wants to limit how its content is used, it's obviously not in their interests to make things this crippled. So what's going on? I think a key insight is offered by an excellent paper that Columbia law professor Tim Wu wrote a couple of years ago called "Intellectual Property, Innovation, and Decentralized Decisions." Wu's basic insight is that too much centralization of control over any one part of the economy can lead to poor decision-making. In an extreme case, such as Soviet Russia, a government can try to run a whole economy by central planning. But the same principle applies on smaller scales. The modern cell phone industry, with half a dozen competitors, is evolving a lot more rapidly than the old Ma Bell monopoly used to. And on the other hand, there's a lot more innovation going on in the open Internet than locked-down networks of cell phone companies. (Apple doesn't seem about to change the walled garden wireless model.)
The same principle applies to the digital video marketplace. Right now, Hollywood has veto power over innovations in the video space. They've made some dumb mistakes, like charging too much and mandating the use of DRM. Unfortunately, thanks to the DMCA, competition hasn't had a chance to kick in. People can't route around Hollywood by using DVD-ripping software the way they routed around the record labels in the 1990s using CD rippers. So if somebody has a great idea for a digital video product, they have to go begging to Hollywood before they can implement it. But Hollywood isn't run by technologists, so they make bad decisions. And because nobody else is allowed to enter the market without their permission, the whole world suffers for it.
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Filed Under: central planning, drm, movie downloads
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Isn't that redundant? The R in DRM stands for "restriction."
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Re:
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That's an example of doublespeak there for you. Read 1984, then come back here with a straight face and try to say that again.
THEY SAY it stands RIGHTS but it MEANS RESTRICTIONS.
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Re: DRM
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Re: Re: DRM
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Re: Gary
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Re: "...restrictive DRM,..."
Not everyone knows that. They know what DRM does but might not know what it actually stands for (hell, I didn't). I think it's completely in place in a general article like this.
Tse
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Re: Re: "...restrictive DRM,..."
>> "restriction."
> Not everyone knows that.
...and here we see a perfect example of how stupid the average end-user can be; I still don't know that :D
Tse
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Hollywood?
So Fox, and Universal, and MGM, and Sony, and Disney, and Paramount, and Lionsgate, and Dreamworks, and Warner, and all of the other studios move in lockstep with one another?
Huh. That explains all of the defections and musical chairs and backstabing that occured over Blu-Ray and HD DVD. And why I can get Warner TV shows on iTunes, but not NBCs. And why I can rent Universal movies, but not NBC TV shows. And so on...
Saying "Hollywood" is engaged in central planning about as meaningful as saying "Silicon Valley" is engaged in central planning. Each area is comprised of individual companies that bob and weave each according to their own ideas of what consitutes their own best interests.
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Re: Hollywood?
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First Catestropic Failure..
Digital Video Express (DIVX) also appeared on PC World's list of "25 Worst Tech Products of All Time" in 2006 (as a "Dishonorable mention").
It's only a matter of time before ALL DRM has the same fate as it's parent.
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People Will Route Around Hollywood
The US is not the dominant source of culture in the world. Where's the biggest movie industry in the world? Mumbai, India. There are other choices of content. You may laugh, but once upon a time people laughed at the idea that the US could rise to challenge Europe. It took about a century for that to happen; now it's the turn of the Asians.
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Re: People Will Route Around Hollywood
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DRM
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What a Joke
There is no way to compete for Hollywood, they have already LOST.
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Control what becomes popular
Don't think Hollywood is being stupid or losing out by not taking advantage of digital distribution! They're neither stupid nor going about things the wrong way, for their goals. They're doing everything right! They are succeeding in maintaining the control they're after.
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Ripping DVDs
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Re: Ripping DVDs
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the real thing drm stands for from the superbly re
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The reason DRM is digital rights management, is because its trying to protect the rights of the distributer of the digital content.
Use your brain people.
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...and it doesn't work at Apple either. Someone tell Uncle Steve to try a different tact.
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And the last world-famous blockbuster to come out of Bollywood was...? They might technically have the largest movie industry, but at the moment, I can't think of a single movie produced in India that has had a world-wide debut. I'm sure there are probably some, but I can't think of any.
And every last one of those applications is illegal to sell or use in the USA because they bypass the (weak) encryption on the DVD, which is a violation of the DMCA.
Two points;
1. It only stands for "rights" if you believe that the content creators have the right to restrict what you can do with their content beyond what the law normally allows. For example, region codes are a form of DRM. Do the movie studios really have the "right" to keep me from playing a LEGALLY purchased DVD from another country?
2. DRM completely and utterly fails to "protect" the rights of the content creators and only annoys honest customers. Case in point; The movie Across the Universe was available on the net as a "ripped" copy several weeks before the US release of the DVD. The DRM clearly didn't do anything to prevent the film from being illegaly distributed. On the other hand, I know someone who bought the deluxe 2-disc edition and it won't play in his slightly older DVD player because of the additional DRM that Sony placed on the disc. I could easily copy the DVD and remove the DRM, but that would be illegal under the DMCA. Since the store won't take back DVDs once they've been opened and Sony didn't offer to refund his money, he's stuck with a movie he can't play. What "rights" are being protected? Sony's right to rip people off by selling them an intentionally defective product?
Regardless of what the acronym officially stands for, there's no denying that the entire purpose of DRM is to restrict what customers can do with the products that they've legally purchased.
Since when did corporations gain the "right" to control what I do with a product once I've paid for it? Does GE get to decide whether or not I can store pork products in my refridgerator? Can Panasonic have the final say over whether I'm allowed to watch porn on my TV?
So why do the content industries get to dictate where and how I can watch the content that I've paid for?
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So what's your point? That you're ignorant?
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#25
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I think the world suffers a lot more from the yearly outpouring of utter shyte that oozes up from Hollywood. We're all better off NOT watching it.
But I understand the point, nonetheless...
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Which is good huh - after all, Hollywood made a lot more money at the box office than on VHS in those days.
LOL
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But they are too stupid and uninnovative to realize that.
If Radio sells music, VHS sells movies, and library's sell books (in the END we all know that's the NET result) then why wouldn't easy to use digital movie technology do the same for the Movie industry?
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They are not the least bit stupid. As long as you keep thinking all they're interested in is gross dollar amounts -- with no regard to the investment-in-marketing side of the picture -- you're never going to be able to understand and eventually defeat the enemy.
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Perhaps you could help me spot the Bollywood movies on this list;
http://en.wikipedia.org/wiki/Highest_grossing_films
What was the last Bollywood movie to make over $500 million worldwide?
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