stories filed under: "drm"
Viacom: Wrong On Almost Every Thing
from the nice-work dept
It's no secret that we think Viacom has made some really bad strategic moves recently (while sister company, CBS seems to be making the right moves). However, it's still impressive to see Viacom CEO Philippe Dauman lay out so many wrongheaded strategic positions in a single speech. Clearly, Viacom's strategic sickness comes from the top -- and it's going to strangle the company as others, who actually pay attention to basic economics and trends, run rings around Viacom over time. Let's take a look at all the issues that Dauman is wrong on.- DRM and watermarking: Dauman says the way to defeat piracy is for companies to "unite against piracy by installing more safeguards." How's that been working so far? Right, it's only made the problem worse and pissed off a bunch of folks by treating them as criminals. Limiting what people can do and treating them like criminals diminishes value, rather than increases it. As more and more companies are learning this, it's simply going to push people away from stragglers like Viacom.
- Spurring creative output: Dauman insists that copy protection and watermarking are necessary to "usher in an unprecedented period of creative output across the globe." Apparently he hasn't been paying attention. We're already in an unprecedented period of creative output across the globe -- and it isn't because of copy protection and watermarking, but because of increasingly simple tools for content creation, promotion and distribution -- all of which are held back by things like DRM and watermarking.
- Easy copying and distribution seen as a problem: Dauman apparently complained about how awful it is that "all manner of intellectual property" can now be reproduced more easily than ever "at the click of the mouse." Only in the world of someone who doesn't understand basic economics would that person lament the fact that the tools of creation and distribution are getting cheaper. For most people who recognize that they're selling benefits, not products, having the cost of production and distribution drop to virtually zero would be seen as an opportunity, not a problem. Unfortunately for Viacom, there are plenty of companies that do view the easy reproduction of content as an opportunity rather than a threat, and that's going to hurt Viacom if it continues its current policies.
- Supporting ISP plans to filter traffic: Dauman apparently applauded AT&T's efforts to filter copyrighted content. It's not hard to see why he would support this, but it seems like a model designed to simply waste AT&T's money. There's no clear way for AT&T to profit from this -- and, if anything, it will just annoy users of AT&T who will look to go elsewhere. At the same time, given the high number of false positives in takedown notices (including those from Viacom), it's only a matter of time until this filtering effort starts blocking perfectly legitimate content. It's also not clear how AT&T determines what is and what is not infringing content. Especially as media companies start to recognize the promotional qualities of otherwise infringing content, this will only get messier.
- Against net neutrality: While there's a good argument against net neutrality regulations, Dauman's reason for being anti-net neutrality is the false belief that if net neutrality was mandatory it would hamper anti-piracy efforts. This one is just wrong, as it appears Dauman doesn't understand net neutrality at all. And, of course, that doesn't even start to get into all the reasons why the entirety of Viacom's anti-piracy campaign is misguided (parts of which we've discussed above).
- US pressuring foreign countries to fight copyright battles for Viacom: Funny how Dauman is against gov't intervention when it comes to net neutrality, but when it comes to having the US gov't act as Viacom's personal police in international disputes over copyright law, he's all for it. Copyright is about incentives, not protection, and different countries have learned that there are many ways to create good incentives for content creation, that don't require excessive protection. Dauman's push to have US diplomats force other countries to follow the US model threatens all kinds of interesting new business models over what is, essentially, a private commercial dispute concerning an obsolete business model.
- The Pirate Bay: Dauman slams The Pirate Bay for making movies available, suggesting again that he's confused about how technology works. The Pirate Bay isn't making the content available, but acting as a search engine for content. It's like blaming Google for all the content on the web.
- Speaking of Google... Dauman then goes on to defend Viacom's $1 billion lawsuit against Google for infringing content on YouTube. He may be right here that it will be a defining landmark case, but he's still on the wrong side of it for a bunch of reasons we've discussed here repeatedly. Given how many (non-Viacom) companies are recognizing the benefits of having people share their content on YouTube, asking Google to automatically block all shared content is ridiculous. It would harm all of those who are happy to have their content shared, just to protect an obsolete business model.
- Google's reliance on intellectual property: Finally, Dauman notes that he can't understand Google's position in the YouTube suit, "given Google's own reliance on its software intellectual property." Again, this suggests Dauman doesn't actually understand either technology or intellectual property economics. Google doesn't rely on its intellectual property. Yes, it has many patents -- but that's not the basis of Google's success. The company relies on its ongoing ability to produce useful services that people want to use -- and then has built a business model that supports that (and supports it fantastically well, I might add). Studies have suggested that other sites have better technology than Google, but it's no longer the technology that keeps people coming back to Google -- but the overall experience. The clean interface, the better usability and the simple fact that many people feel that Google is trying to provide them with a useful service, rather than trying to figure out how to limit what they can do. That's not relying on intellectual property -- it's about creating a business model that supports what people want.
Filed Under: business models, copyright, drm, net neutrality, philippe dauman
Companies: viacom
Music Without Borders -- How Amazon Can Go One-Up On iTunes
from the drm-at-the-border dept
Recently, we mentioned that Amazon's MP3 Download Store got the DRM-free part right but screwed up on the pricing model -- the real Achilles heel of iTunes. As it turns out there's another angle from which Amazon could go one-up on iTunes: extend the offering across more countries. The moment I heard about the launch, I enthusiastically hit Amazon's MP3 Download Store and eagerly clicked on a "Buy MP3" link only to be greeted with a "We are sorry... We could not process your order because of geographical restrictions on the product which you were attempting to purchase. Please refer to the terms of use for this product to determine the geographical restrictions. We apologize for any inconvenience this may have caused you."Wow! What's that again? Geographical restrictions on music? Because I am a citizen of India and not a citizen of a country where the music labels think that DRM-free music should be made downloadable? That's just dumb. Similarly, a long time ago, iTunes informed me that I don't have a "foreign" credit card and hence it won't let me download stuff although I am willing to pay for it. There are more than a few ironies here:
- The music that I am trying to purchase is readily available DRM-free on CDs at a store nearby. So why place an embargo on the digital one?
- I can order stuff from Amazon and have them international-couriered to India, but I can't download a digital file off Amazon because I am in India.
Filed Under: drm, international restrictions, music
Companies: amazon, apple
Next Time You Announce An Agreement To Sell DRM-Free Downloads, Perhaps You Should Actually Have That Agreement
from the just-a-suggestion dept
Michael Robertson, the founder of MP3.com, Linspire, SIPphone and a number of other companies has a pretty direct formula for getting publicity for his new startups: do something outrageous that pretty much guarantees a lawsuit. Then just assume that the resulting lawsuit will drive the publicity of the startup. Of course, sometimes such a strategy can backfire. Earlier this year, Robertson launched AnywhereCD with the claim that he would be selling DRM-free downloads from Warner Music -- perhaps the most stringent holdout in ditching DRM. Except... apparently Warner Music thought it had agreed to something entirely different and quickly sued AnywhereCD. It was actually somewhat difficult to understand Warner Music's claim. AnywhereCD was selling the physical CD, it was just that they would then also offer the digital tracks from the same exact CD. Basically, all the company was doing was saving people the step of having to rip the CDs they had legally purchased. Either way, eventually Warner and Robertson settled, allowing Robertson to continue to sell the DRM free tracks... but only through the end of September. If you look at your calendar, you'll realize that this is the end of September and Warner Music certainly had no interest in renewing any kind of deal with Robertson -- so it should come as no surprise that AnywhereCD is shutting down. It certainly looks like the controversial marketing strategy failed in this case. Previously, the lawsuits tended to be from competitors. When the lawsuits are from your suppliers, it gets really difficult to build an actual business.Filed Under: downloads, drm, drm-free, michael robertson, music
Companies: anywherecd, warner music
Even Movie Industry Execs Seem To Think The DMCA Is Unreasonable
from the do-as-we-say dept
We've pointed out for a long time that the DMCA is bad for innovation and needlessly inconveniences users. It seems the point is becoming so obvious that even senior executives in the movie industry are beginning to tacitly acknowledge (via Ars Technica) that the DMCA is unreasonable. At a conference on DRM last week, Scott Smyers, VP of network and systems architecture for Sony Electronics, admitted that he makes backup copies of his kids' DVDs. For those keeping score at home, not only is copying DVDs illegal under the DMCA, but Sony itself participated in a lawsuit to shut down a company making precisely the sort of DVD-backup software Smyers is presumably using to copy his kids' movies. Meanwhile, Jim Helman, the chief technology officer of MovieLabs, a research organization funded by the major studios, says that one of the most promising new devices on the horizon is a video jukebox that will let you rip your DVD collection onto a hard drive and then stream your movies to all the devices around your house. That is, unless the studio-backed DVD-CCA uses the DMCA to prohibit the creation of DVD jukeboxes. Helman and Smyers are absolutely right. If only their bosses would listen to them. They should point out to their bosses at the major studios that allowing people to create useful hardware and software products could be good for their bottom line, because it would make the movies they sell more useful to consumers.Filed Under: dmca, drm, mpaa, private copying
Companies: mpaa, sony
Sony Finally (Really) Dumps Proprietary ATRAC Format No One Wanted For Its Walkmen
from the what,-not-enough-rootkits? dept
It's been almost 3 years since Ken Kutaragi, then President of Sony Computer Entertainment, admitted that the company had made a huge strategic error in launching its digital music players and download store (Sony Connect) with its own proprietary ATRAC music format and DRM. Of course, admitting a mistake and actually doing something about it are two different things. A few different readers alerted us today that Sony is finally shutting down Sony Connect and ditching support for ATRAC in its new Walkmen, though they buried the details of it in paragraph 17 of a press release about the new music players. For those who had bought from Sony Connect and are now left with an unsupported DRM that won't be playable on any new music player... well.... you now have another reminder of why buying into DRM'd music is a huge risk. Sony is at least kind enough to explain to people how to get around the DRM using the standard cumbersome "burn to CD, rip anew" method, but that's definitely a pretty big pain for anyone who's purchased a sizable collection. Of course, that assumes that there was anyone out there who actually bought a sizable collection of music from Sony Connect and somehow that seems unlikely.Was MTV's Rhapsody Decision Really Punishment For Microsoft Abandoning PlaysForSure?
from the playsforsure,-huh? dept
We chalked up MTV's decision to drop Microsoft for RealNetworks in its online music store efforts to MTV's typical internet bumbling. However, there is another interesting possibility. MTV dumped Microsoft to punish the company for pulling the rug out from under them when it killed off "PlaysForSure" DRM. You may recall that Microsoft used to have its own DRM that it tried to get pushed as an industry standard. The company called it "PlaysForSure" in a bit of marketing hubris to try to make sure people felt comfortable with it. There was just one teensy problem. When Microsoft decided to get into the business of selling its own digital music players, it wouldn't support PlaysForSure, making the name that much more ironic. When your own digital music players won't play your own PlaysForSure DRM files, you have a problem. Not only did it screw over all the users who had been buying PlaysForSure files, it hurt all the different music stores, including MTV's, that had bet on PlaysForSure. So, with that in mind, it's no wonder that MTV decided to find someone else to partner with. Of course, you can still point out that MTV should have known better than to trust in Microsoft's DRM, but that's an issue for another day.Filed Under: drm, playsforsure
Companies: microsoft, mtv
Piecemeal DRM-Free Efforts Aren't Going To Unseat Apple's Online Music Dominance
from the keep-trying dept
Universal Music announced a couple weeks back that it would begin selling DRM-free music -- but not through the iTunes Music Store, in a bid to undermine Apple's dominance in online music sales. As we pointed out, this wasn't likely to happen, since few people shop for music according to what label it's on, particularly when it's a huge one like Universal. The label now says that its unprotected tracks will be available from a few different sources: a new service called Gbox, and through Wal-Mart's online music store. Both will undercut Apple's price for DRM-free tracks by selling them for 99 and 94 cents respectively, but that's hardly likely to make a difference, particularly in attracting iPod users, nor will it help their businesses since the margins on digital music are already pretty thin. The problem remains that most people don't pay attention to what label their favorite performers are on. Saying "we sell DRM-free songs from Universal/EMI artists" isn't going to have much of an impact in getting people to switch from iTunes, but it does seem to illustrate that labels and other retailers are looking to compete with iTunes on this front, which should be good news for consumers. Still, the iTunes Music Store's dominance will remain until another retailer can somehow convince all the major labels and a wide array of indies to let it sell DRM-free music. As long as Apple's rivals can only use a piecemeal approach to get music they sell onto iPods, it's going to be a long, fruitless, uphill battle. Competing with iTunes on price is only part of the equation. Rivals have to also match its selection; then they have to worry about matching its ease of use as well.Filed Under: drm, music
Companies: apple, emi, gbox, universal, wal-mart
