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[P]
A Financial Perspective on DRM

By chlorus in Media
Mon Nov 26, 2007 at 12:36:15 PM EST
Tags: DRM, digital music, ebooks, finance (all tags)

I noted yesterday that there seems to be some media fanfare surrounding Amazon's launch of a digital book tablet. It occurred to me that the markets surrounding media such as books, music and movies bear more than a passing resemblance to financial markets, and as such, perhaps they were amenable to a similar method of analysis. Being the owner of a sizable collection of paper books, this led me to consider the drawbacks one faces when Digital Rights Management restrictions are put in place.


Digital distribution of entertainment media is a promise that may finally be realized with the advent in recent years of high speed internet connections available direct to most homes. Consumers stand to benefit from the instant gratification offered by on-demand content delivery, while publishers will reap enormous savings from the elimination of the warehousing space and logistical infrastructure necessary to manage vast inventories of unsold products. Digital media can, of course, be copied as many times as one wants at virtually no cost, which poses a problem for publishers who have built their businesses around distributing a product in limited supply. The solutions to this problem that have been presented so far have enforced a sort of adversarial relationship between distributors and law-abiding consumers and are born more of greed than a desire to equitably solve the problem at hand. The disadvantages, as I see them, can be outlined as such:

Credit Risk

When people make loans, one of their main considerations is the prospect of not being repaid. This prospect is quantified as credit risk, and large lenders and bond mutual funds act to mitigate this risk by lending money to many different entities, diversifying their loan portfolio. That way, if one borrower defaults on their obligations, the loss amounts to a small overall loss to the loan portfolio.

It's probably not immediately clear, but an analogy can be drawn between this and books, music and movies. When you purchase a paper book or, more recently, music CDs, tapes or vinyl, the information remains available to you in perpetuity, so long as you take good care of your media. In contrast, many of today's DRM schemes only function so long as the company providing it continues to offer the service and hardware readers. In essence, when one purchases media encumbered by these sorts of DRM schemes, one is taking on undiversified credit risk with an indefinitely long time horizon -- that is, you're counting on Microsoft or Apple not going out of business any time in your life and making all of your media instantly unreadable. Worse yet, unlike in the credit market, there are no such strong and well-defined legal protections to offer you recourse in the event that the company defaults -- they may choose to end (or more likely, "upgrade") the service at any time and render your library of purchases useless. Ask anybody who purchased a DIVX player if they're still using it to watch movies.

Liquidity Risk

In financial markets, the liquidity of an asset generally refers to the ease with which it can be exchanged for other assets, usually cash, without affecting its selling price. Any major exchange-traded stock is considered fairly liquid, as the quantities that most individual investors deal in can be bought and sold nearly instantaneously during the trading day without affecting the market price. On the other end of the liquidity scale is real estate -- when you wish to sell your house, it may stay on the market for days, weeks or even months before a buyer can be found that is willing to pay your asking price. Quicker sales are facilitated through negotiating a lower price. Thus, real estate is a relatively illiquid asset.

With digitally-restricted media, one suffers much more odious illiquidity. Unlike with books, CDs or DVDs1, which can be given to friends for free or even sold on the newly viable secondary markets facilitated by eBay and others, DRM media is generally non-transferrable. The primary offender that comes to mind in this respect is Sony's PlayStation 3, which has the capability to tie the video games played on it to a unique machine, effectively destroying any secondary market that might develop.

Conclusion

While books and music are almost never bought as investments with the expectation of making a profit, in the financial markets, investors rationally demand a high return premium for taking on such extreme risk. Asking consumers to take on such risks with no prospect of them materially benefiting in return is an incredibly unreasonable proposition and, to me, is the chief mechanism standing in the way of widespread adoption. While DRM schemes of this nature may flourish for now, it is only a matter of time before consumers wise up, the markets become more efficient, and people demand a fairer deal from large media companies. Publishers may not like it, but attaining the same characteristics for their digital products as they have for their physical products is the best hope they have for slimming down their distribution costs and stemming the tide of digital piracy.

  1. A form of DRM present on most studio-released DVDs ties them to specific regions of the world, and thus cannot be played outside their designated region without a specialized DVD player, somewhat restricting their liquidity.

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A Financial Perspective on DRM | 64 comments (55 topical, 9 editorial, 4 hidden)
tl; dr; don't care. % (2.00 / 6) (#1)
by Joe Sixpack on Sun Nov 25, 2007 at 06:00:29 PM EST


---
[ MONKEY STEALS THE PEACH ]

SHORTER (3.00 / 2) (#24)
by ray eckson on Mon Nov 26, 2007 at 12:34:03 PM EST

TL;DR;DC

GET IT RIGHT, FAILFUCK


wampsy: hey ray why don't you start up a site. you could call it ray5.
rusty: I gotta fix that stupid cancel bug.
booger: How's that for daring to get ray eckson all sniffy, you cow?
poopy: Not that I'm gay or anything, but for you I might make an exception.
[ Parent ]

i agree with this (3.00 / 3) (#2)
by Tex two point oh on Sun Nov 25, 2007 at 06:53:02 PM EST

not so much with respect to credit risk, although the failed DIVX machine is a good example of that happening.

with respect to liquidity risk, i definitely think that the video gaming industry has hopes of restrictive licensing as a long-term goal. in fact, xbox live arcade already has implemented this to some extent. for example, if you are totally done playing super puzzle fighter there is no secondary market where you can give the game to someone else.

conceivably the video game industry would have a lot to gain if they could completely restrict sales to individual users. they wouldn't have to worry about losing sales to people who beat games on rentals, and they wouldn't have to worry about losing secondary profits through the used game market.

the high capacity of hard drives is already here to allow that to happen. the only thing keeping it from happening now is a high enough number of homes with very fast bandwidth connections.

as soon as that happens, i expect the video game industry to adopt a two-tiered pricing model. $60 (or whatever for physical media) and $30 (e.g.) for non-transferable direct download to your console hd.

as customers become complacent in migrating over to the lower priced direct distribution, the console video game industry will eventually start to phase out physical media distribution

my guess is that this will happen sometime toward the later part of the next decade.

Here's another financial perspective (3.00 / 7) (#3)
by vadim on Sun Nov 25, 2007 at 07:38:35 PM EST

If it has DRM, I don't buy it.

If it supports DRM but doesn't need it (eg, a music player that supports some form of DRM), I will try to find something comparable that supports no DRM or as little of it as possible.

Only exception goes for forms of DRM that have long been utterly broken -- such as CSS on DVDs for instance.

I won't pay one cent for HD-DVD/BluRay until it's just as broken.
--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.

I was aiming more for explaining my rationale. (2.00 / 2) (#6)
by chlorus on Sun Nov 25, 2007 at 07:47:41 PM EST

I have come to understand that I'm different from a lot of DRM opponents as I am amenable to the existence of copy control mechanisms that replicate the ownership of a "paper" copy. I find the "information wants to be free" crowd distasteful and impractical. Further, if Michael Crawford is any ruler to measure by, I loathe the prospect of plunging quality as creators no longer get compensated for their work.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

"Information wants to be free" (3.00 / 3) (#9)
by vadim on Sun Nov 25, 2007 at 07:58:16 PM EST

I have come to understand that I'm different from a lot of DRM opponents as I am amenable to the existence of copy control mechanisms that replicate the ownership of a "paper" copy.
Ok, so here we disagree. For me, my computer is mine and should be under my exclusive control. Accepting DRM implies surrendering control to favor some third party I honestly don't care if it goes bankrupt tomorrow.
I find the "information wants to be free" crowd distasteful and impractical.
IMO, "information wants to be free" is the natural thing -- information tends to spread around unless it's artificially constrained. Keeping the current business model requires fighting against what's natural. Instead of trying to use DRM to fight against what can't really be avoided, it'd be better to adapt to the new times. For example, I'm a programmer, but nothing I do depends on restricting the distribution of my work. I do work for hire. Whatever happens to the results afterwards doesn't really matter. Problems must still be solved, and that's what I charge for.
Further, if Michael Crawford is any ruler to measure by, I loathe the prospect of plunging quality as creators no longer get compensated for their work.
Well, I don't have much against him, but I don't think he (or any single person really) is the best ruler to measure anything by.
--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.
[ Parent ]
It's not that "information wants... (none / 1) (#26)
by claes on Mon Nov 26, 2007 at 03:59:51 PM EST

to be free", it's that it is ridiculously inexpensive in terms of time and resources to copy information now.  500GB external drives are, what, $150?  The physical barriers to copying an object don't really apply to information.  It would be nice to be able to copy a spare transmission for my car[1], but I  can't afford either the time or equipment to do it. Our business and legal systems are adapting to this new situation.  It is going to hurt a bit.

[1] something that's roughly as valuable as, say, a  copy of HP OpenView that someone might have sitting  on their hard drive.



[ Parent ]

Storage has very little to do with it (none / 1) (#32)
by vadim on Mon Nov 26, 2007 at 04:26:41 PM EST

It happened with floppies, and it happened even before computers.

Culture is information sharing. People talk, gossip, discuss recipes, tell tales, teach how to dance or sing, how to repair a bycicle, lend books, discuss something they read in the newspaper, etc, etc.

Information spreads naturally in the absence of constraints. That's what it means.

--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.
[ Parent ]

Just Wait (none / 0) (#40)
by ewhac on Tue Nov 27, 2007 at 01:55:18 PM EST

It would be nice to be able to copy a spare transmission for my car, but I can't afford either the time or equipment to do it.

You mean, "Yet."

Have Google show you, "3D lithography" and "3D printers". The day is coming -- fast.

Schwab
---
Editor, A1-AAA AmeriCaptions. Priest, Internet Oracle.
[ Parent ]

you can't make a transmission out of plastic. (none / 0) (#48)
by chlorus on Thu Nov 29, 2007 at 10:04:03 AM EST

i think it's a bit more far off than you imply.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

I agree completely (none / 0) (#60)
by sllort on Sat Dec 08, 2007 at 05:05:45 PM EST

I have come to understand that I'm different from a lot of DRM opponents as I am amenable to the existence of copy control mechanisms that replicate the ownership of a "paper" copy.

I am of the same opinion. I have never seen a DRM scheme that replicates the ownership of a paper copy, and I have no idea, as a programmer, as to how this could be accomplished. Hence, I am an opponent of all existing DRM schemes, as you would be if you understood your own argument. However in  a very American way you have stopped thinking about the things you believe.

Hint: A paper copy locked in a safe will last 1000 years and survive the complete downfall of civilization and the extermination of the human race. You have a C compiler; replicate this behavior.
--
Warning: On Lawn is a documented liar.
[ Parent ]

Wow, that's haughty. (none / 0) (#65)
by chlorus on Mon Dec 10, 2007 at 11:46:46 AM EST

"If I understood my own argument."

If you could see beyond your own nose, you would admit the possibility that someone else could come up with a better way implementing DRM than you can. I simply laid my own ground rules for what I consider acceptable, regardless of the details of implementation.

However in a very American way you have stopped thinking about the things you believe.

Go fuck yourself.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

hint: computers don't last as long as books (1.50 / 2) (#67)
by sllort on Thu Dec 13, 2007 at 09:45:25 PM EST

and it's not because of programmers!

enjoy being angry.
--
Warning: On Lawn is a documented liar.
[ Parent ]

for entertainment products i could give a shit (1.00 / 2) (#5)
by balsamic vinigga on Sun Nov 25, 2007 at 07:41:13 PM EST

as long as the DRM is fairly transparent to me. As is the case with my ps3 games and blu-ray movies.

DRM on important information, though, would concern me. If I have a digital bookshelf full of texts and reference materials it would have to be non-DRM no if ands or buts about it.

---
Please help fund a Filipino Horror Movie. It's been in limbo since 2007 due to lack of funding. Please donate today!

You already paid for your movies, though. (none / 1) (#8)
by chlorus on Sun Nov 25, 2007 at 07:51:18 PM EST

Don't you think it's unreasonable that you may have to repurchase your movie library if Sony's DRM scheme decides that you're no longer a valid licensee?

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

well maybe that's the key difference for me (2.00 / 3) (#10)
by balsamic vinigga on Sun Nov 25, 2007 at 08:02:38 PM EST

i never feel like i'm purchasing entertainment in perpetuity because i feel i'll only enjoy for a little bit. I had purchased a few vhs movies but had no qualms about throwing them away once vhs became obsolete. If anything it did me a favor since i'm no longer storing the bulky bastards.

ultimately i feel like i pay to be entertained for a little while and not to own entertainment in perpetuity like i would reference material.  Perhaps that's one of the key differences, that and the practical value in texts reference material... entertainment would only have practical value for those in the entertainment industry, which i'm not in.

---
Please help fund a Filipino Horror Movie. It's been in limbo since 2007 due to lack of funding. Please donate today!
[ Parent ]

I can understand that. (none / 1) (#12)
by chlorus on Sun Nov 25, 2007 at 09:03:11 PM EST

Truth be told, almost all of my movies are rentals, since most have limited replayability value. Of course, if media companies succeed in eliminating secondary markets via DRM, there will be no such thing as rentals anymore.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

nah (none / 0) (#13)
by Tex two point oh on Sun Nov 25, 2007 at 09:07:39 PM EST

there will still be rentals of movies similar to the way xbox live does it (direct download+expiration&auto delete)... i really can't see any reason for that going away

[ Parent ]
caustic benifit (none / 0) (#28)
by A synx on Mon Nov 26, 2007 at 04:21:26 PM EST

Yeah it'll just be really expensive. And no competition allowed. :p Doesn't it worry you, one single person getting all the billions of dollars spent on rentals, money they can use without any kind of accountability? Do you really want Sony getting their hands on all that money?

[ Parent ]
what makes you think i advocate it? (none / 0) (#29)
by Tex two point oh on Mon Nov 26, 2007 at 04:22:56 PM EST



[ Parent ]
*opens mouth, inserts foot* (none / 0) (#33)
by A synx on Mon Nov 26, 2007 at 04:26:57 PM EST



[ Parent ]
Two more examples (2.66 / 6) (#11)
by horny smurf on Sun Nov 25, 2007 at 08:24:35 PM EST

google videos: They sold/rented DRM videos -- or at east tried to. After shutting down earlier this year, purchased videos were given 6 months to live. Google did (sort of) issue a refund in the form of a google checkout credit. Eventually, they offered an actual refund.

mlb.com: they sold drm laden videos of baseball games. In 2006, they switched DRM schemes and all previously purchased videos became unwatchable. mlb refused to give refunds (although it looks like they've since fixed the problem).

Well... (3.00 / 7) (#14)
by The Amazing Idiot on Sun Nov 25, 2007 at 09:19:36 PM EST

What alternatives do we have?

Our body of law gives rights to the creators and their protected ability of being the one to approve copies. Regardless of whether we agree or now with this, that is our situation.

Now, we take this to the "digital domain". Those older creators want, no.. need these protections as they see in the non-internet world. The only real way to "guarantee" this is by digital restrictions. The best way I think of this is that of a akin to a capability system and the copyright maintainer has an account on your machine.

However, our machines are ours. The geeks amongst us demand that we are able to control our software and hardware. What was unable to do in WinXP, Vista seems to offer the beginning of that capability system with the media companies at the kill switch. And to top it off, Vista has remotely disabling drivers for "holes" that might appear. For those that own a machine, this OS laughs in their face, as if saying "Bring It On!"

And there are many casualties. Those casualties are the Joe and Jane Publics that don't understand this issue close enough, or think that all needs to be done is burn to DVD... just like the iPod to music. When they find out that they are locked with binary garbage that cannot be used for any fair use purpose (backing up owned DVDs is fair usage).

And where are we now? When the users know they are eventually shafted, those that have the know-how will show others where to download the movies and the music they legitimately bought. Once they know they were taken advantage of, any feeling of "theft" (or whatever you call it) will be gone. The media companies had their chance to do their dealings with the public honestly, but have failed.

Just like língchí.. Death by a thousand cuts.

Citation needed. (1.50 / 2) (#17)
by V on Mon Nov 26, 2007 at 12:04:22 AM EST

"The primary offender that comes to mind in this respect is Sony's PlayStation 3, which has the capability to tie the video games played on it to a unique machine, effectively destroying any secondary market that might develop."
---
What my fans are saying:
"That, and the fact that V is a total, utter scumbag." VZAMaZ.
"well look up little troll" cts.
"I think you're a worthless little cuntmonkey but you made me lol, so I sigged you." re
"goodness gracious you're an idiot" mariahkillschickens
FUCK YOURSELF TO WIKIPAEDIA YOU WORTHLESS PIECE OF (1.75 / 4) (#25)
by ray eckson on Mon Nov 26, 2007 at 12:36:01 PM EST




wampsy: hey ray why don't you start up a site. you could call it ray5.
rusty: I gotta fix that stupid cancel bug.
booger: How's that for daring to get ray eckson all sniffy, you cow?
poopy: Not that I'm gay or anything, but for you I might make an exception.
[ Parent ]
The Google (3.00 / 2) (#59)
by sllort on Sat Dec 08, 2007 at 04:55:31 PM EST

http://www.google.com/search?q=playstation+3+game+lock

I was able to get it in one search; you had unlimited tries and failed. If this site's moderation scheme made any sense, they'd delete you for failing so badly.
--
Warning: On Lawn is a documented liar.
[ Parent ]

"odious illiquidity"? wtf is that? (1.16 / 6) (#21)
by Ezra Loomis Pound on Mon Nov 26, 2007 at 05:54:02 AM EST

what a verbose piece of shit your article is.

:::"Let me tell ya, if she wasn't cut out to handle some fake boy online, well sister, life only gets more difficult, and you only get more emo as you age." --balsamic vinigga :::#_#:::
colonic irrigation (2.50 / 2) (#30)
by A synx on Mon Nov 26, 2007 at 04:24:44 PM EST

A more layman way of saying "odious illiquidity" might be "the screaming shits!" :)

[ Parent ]
You forgot to bold there, failfuck. (none / 1) (#35)
by Josh Smith II on Mon Nov 26, 2007 at 09:49:16 PM EST



-- Josh Smith recommends you take a hulver hike.
[ Parent ]
removing restrictions on copying (none / 1) (#36)
by guidoreichstadter on Mon Nov 26, 2007 at 11:03:43 PM EST

isn't incompatible with funding media development. you just have to more creative.


you are human:
no masters,
no slaves.
There are many.. (none / 0) (#37)
by The Amazing Idiot on Tue Nov 27, 2007 at 12:10:37 AM EST

...who fail to understand what digital means when media is present.

We can talk about the RIAA's understanding of music or the MPAA's denigrating of new forms of media, but that is aside he point.

They simply do not understand what the Internet has done, along with the utter digitizing of almost every form of media. What traditionally has been naturally hard to copy is now "Copy" and "Paste" over the network, whether it be USB harddrives or private bittorrent servers, or (gasp) Kazaa. Once one copy has found its way to any of these nets, it is bound to eventually migrate to the internet at large, where it is kept shared by popularity alone.

And now, we geeks and such are being insulted by the HD-DVD and Bluray because we aren't "good" enough to have unmitigated access to good media. Of course these videos are protected, but since we the people can also be producers, we have full control over OUR rights too, right? Wrong. As seen in the Blu-burners and other 'consumer' devices, DRM protections are not available to us. These rights are reserved purely for the big companies in which this was made.

Now, we're just waiting for the screws to be turned. The software and  hardware are cocked and loaded, waiting for the trigger to be pressed. At one time in our history, we had access to our media, but soon, we simply wont because we simply don't have the "rights" to play them. Pity.

Though, in the end, the HD media explosion is worth the price you put into the media's promises. I'm sure they won't turn on ICT...

[ Parent ]

Electronic books (3.00 / 2) (#38)
by the77x42 on Tue Nov 27, 2007 at 12:59:24 AM EST

In a twisted bit of irony, one of my economics professors wrote his own textbook and made it available online to purchase as a PDF. The cost of the book was about $25 if I remember. I paid $5 to a guy who bought it and he gave it to me on a floppy disk. At the end of the semester, the teacher ranted about how only half the class had purchased the book.

Now imagine if he had a DRM scheme. Still only half the class would buy the book. The other half would just pay $5 to have it printed. This is all just a bit of an aside.

What I really wanted to point out is that your article is woefully lacking anything worthwhile. Read: it's gutless.

Credit Risk
Any technology is going to be obsolete, DRM or not. Do you still get firmware updates for your Newton? Can you play your 3DO in HD? Hell, my fucking car needs leaded gasoline.
If the emulation community has taught me anything,  it's that nerds have too much time on their hands.  Take any semi-popular techno-gadget, and I bet there's at least a partial emulator in the works. Take this to DRM, and if the content is worthwhile, I bet there is a team working on cracking it.
The point is that if your technology is really important to you, there are ways around it. If it's not that important, than think of it as renting a movie from the video store. It's a sunk cost, it was entertaining while it lasted, now move on.

Liquidity Risk
As you point out in your conclusion, books, video games, and music are bought with profit in mind. You mention, however, that we shouldn't purchase these goods with no benefit in sight. Well, see, the goods themselves are the benefit. Just because I can't profit from a game, doesn't mean I won't buy it so I can play it. I buy books to read them. I listen to music. The main groups who would care if these things have DRM are people who 1) want to give them away (in which case they wouldn't be seeking a profit in the first place) 2) want to sell illegal copies (which is worse than making the illegal copies in the first place 3) people who don't want to pay for them and just download it.

I think most of us fall under #3. I hate DRM because I can't get my geeky shit for free. Not because of credit or liquidity risk. Because I can't break the fucking law anymore.

But DRM will always fail. It can be broken and will. Remember the real reasons why tapes and cartridges were phased out. It's not so you can get better picture and sound, it's because CDs and non-mechanical media are cheaper to produce. Eventually the cost to implement a successful (non-breakable) DRM scheme will increase to the point where the whole reason to go to this new media in the first place is moot. Then the DRM scheme will be broken shortly after. That's why DRM will fail -- it has a cost associated with it and that cost is a waste once someone breaks it.


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

Replies (none / 0) (#39)
by chlorus on Tue Nov 27, 2007 at 10:53:03 AM EST

Any technology is going to be obsolete, DRM or not.

And yet, the CDs my dad purchased in the late '80s are still playable, even if the player he bought back then has long since been sent to the trash heap. Given the short time scales of obsolescence associated with technology, 20 years is an eternity.

If it's not that important, than think of it as renting a movie from the video store. It's a sunk cost, it was entertaining while it lasted, now move on.

Then the analysis I have outlined dictates that they should only be purchased at an appropriate discount to an equivalent open format.

Just because I can't profit from a game, doesn't mean I won't buy it so I can play it.

You again fail to consider the price you are willing to pay for such things. If a publisher can use DRM to prevent you from ever reselling your purchase, then you should be buying it at an appropriate discount to similar resellable goods to account for the differences in intrinsic value. This pricing regime has not been realized in markets such as those for PS3 games or college textbooks, where the publishers are able to severely restrict secondary markets and yet prices are rising in relation to historical averages.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

recurring revenue stream (none / 0) (#58)
by kromagg on Tue Dec 04, 2007 at 08:29:26 PM EST

And yet, the CDs my dad purchased in the late '80s are still playable, even if the player he bought back then has long since been sent to the trash heap. Given the short time scales of obsolescence associated with technology, 20 years is an eternity.

The really fun thing about this is that you can rip the cds to some ridiculously verbose format (that conserves the digital information present on the CD) and then keep passing it on to new formats as the technology evolves. It might be slightly impractical to manage this media library right now but in essence you will have the option of keeping this data with you for the rest of your life. That probably doesn't sit very well with the music companies, who have been reselling the same songs over and over again for the past few decades. I think when it comes to profits, this would have a much larger impact than unlicensed copyinng.



[ Parent ]
What a douchebag professor. (3.00 / 3) (#46)
by Psycho Dave on Wed Nov 28, 2007 at 05:07:29 AM EST

Twenty-five dollars is way too much to be paying for a PDF file. Considering he doesn't have to pay the cost to produce the books (besides the rudimentary bandwidth costs and cc fees) every bit of that is gravy. Not to mention his salary at the school and a guaranteed two-hundred copies sold per semester.

Textbooks are the biggest scam ever. Some professors have tried to give some value to it. Like, I'd have to pay twelve bucks for one of those plastic spiral bound "textbooks" written, of course, by the professor, but it was kinda worth it because then you didn't need to take notes because the only material you'd be tested on would be in the book. Or when they made you buy their book, but it was actually a bound paperback that, while you might not want to keep it, you can be sure that you'll have something you can sell back to the bookstore at the end of the year.

[ Parent ]

I was concerned about his intent too (none / 0) (#53)
by the77x42 on Sun Dec 02, 2007 at 01:52:56 AM EST

As an economics professor, he was making upwards of $70,000 a year (this was actually published in the school newspaper).

He did spend a lot of time writing a book, but isn't that what professors do?

Why the fuck would the old goat want to gouge poor students?


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

[ Parent ]

Look at it from the artist's point of view (none / 0) (#41)
by Pentashagon on Tue Nov 27, 2007 at 02:34:57 PM EST

Artists take essentially the same risk. They have to loan their work to potential buyers and take the risk of never getting paid for it. Artists do have their choice of poison; either loan directly to the public and hope to get a trickle of small payments from their fans or loan (give, in the case of current copyright law) their works to a media company that will almost certainly abuse them but will take care of the messy details.

From this perspective, DRM is like a simple insurance policy that forces a certain percentage of the population to repay the loan until easy methods of circumventing it are found. As with any insurance, whether or not DRM is actually effective at protecting artists is an open question. The current answer certainly seems to be that it does not protect them, and can in fact hinder the sales of "protected" works.

Loan? (none / 0) (#43)
by chlorus on Tue Nov 27, 2007 at 03:16:54 PM EST

In what way to artists loan their work to publishers or the public? As far as I am aware, these are sales, not loans.

Peahippo: Coked-up internet tough guy or creepy pedophile?
[ Parent ]

i'm so sick of the term artist (none / 1) (#44)
by Tex two point oh on Tue Nov 27, 2007 at 04:40:31 PM EST

ffs please tell me what among the riaa engineered filth is considered art

[ Parent ]
I notice the term "law-abiding" (none / 1) (#50)
by cdguru on Thu Nov 29, 2007 at 11:17:25 PM EST

The problem today is that it is just too easy to ignore the law, the rights of the creator/owner of something and to generally do whatever you want.  This is assisted by the relative anonymity
of the Internet.  People will do things on the Internet they would never do in person.  For example, credit card fraud is far, far more prevalent on the Internet than in brick and mortar stores.

We also are seeing a much higher rate of just plain lawlessness in the US.  Shoplifting is a huge problem - as many as 10% of the shoppers are helping themselves without paying.  This is a huge problem for everyone because stores are faced with using ever more draconian measures to stop the losses.

This carries over to the digital world.  It can be assumed that without some kind of protection - of which DRM is one form - any digital work that is sold will immediately be shared, and not just with friends but the entire planet.

Before the Internet such sharing was fairly common but the amount of effort required to pass a copy of something to 10 friends seriously limited the amount of such sharing.  Today there is no difference in the effort required to share something with one friend and with all of the Internet using users worldwide.

So why the heck not share?

While it can be disputed that DRM is the ideal form of protection - it isn't - there is little doubt that some protection just makes sense.  If it is possible to share software, music, movies, books or anything else they clearly will be shared.  And why would anyone pay for something that is free?  This limits the revenue from any digital work to one sale.  Once someone buys it, there is no further need for anyone, anywhere in the world to pay again.  Unless for some reason they don't have Internet access.

This clearly divides the world into non-paying, sharing Internet users and digitally-deprived paying customers.

So are we going to have a wonderful period where everyone decides they should pay for digital entertainment, software and other materials?  I doubt it.  I think publishers and creators are just going to have to come to terms with there being one sale for anything digital.  This makes anything that is not in digital form far more valuable to both the creator/publisher and the collector.  The value of everything digital then ends up being zero, because that is the maximum anyone is willing to pay for it.

The answer is not DRM, it's a new business model (3.00 / 2) (#51)
by vadim on Fri Nov 30, 2007 at 08:05:20 AM EST

There's no need for DRM. What is needed is a change in the business model. Let's see several of the things you bring up.

Software: I'm a programmer. I don't charge per copy, I charge for labor. Want something coded? Sure, it'll be $X an hour, then you can do anything you want with it. If I wanted to reliably charge on a per copy basis, I'd set up a service of some sort.

Books: IMO they aren't in danger yet. I saw a PDF of Harry Potter floating around once. Great, I can read more than 500 pages on my screen. No way, I won't even bother. The actual book is cheap and much more enjoyable to read.

Movies: One word: Cinema. Make it *enjoyable* though. Comfortable seating, big screen, good quality everything, and kick the people with the cell phones and whiny kids out immediately. Make movies intended to be shown on fancy equipment, like IMAX 3D.

Music: Concerts. Offer to play for money.

More ways: Custom work, and asking for money upfront. Eg: "We'll release a new album for $X, everybody donating over $25 will get $gift"

--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.
[ Parent ]

cite or stfu (none / 0) (#52)
by Tex two point oh on Sat Dec 01, 2007 at 11:59:12 AM EST

10% of people who shop (basically everybody in the united states) shoplift? what a fucking moronic statement.

[ Parent ]
Riiiiiight (none / 0) (#54)
by garote on Mon Dec 03, 2007 at 12:36:50 AM EST

Riiiiiiiight.  And the price of all vegetables in the supermarket will drop to zero any day now, because they all contain seeds and can be planted to reproduce themselves infinitely.

You base your slippery-slope argument on a false premise.  Your point was as played out in the early 80's as it is today.

[ Parent ]

obsolescence (3.00 / 2) (#62)
by svampa on Sun Dec 09, 2007 at 04:13:07 PM EST

Years ago, there were a lot of ice factories, when fridges became popular those factories ran out of business. They didn't tried to forbid fridges.(or if they tried, they were ignored)

Years ago, when movies were silent films, there used to be a small orchestra in every cinema, when talking films appeared, all those musicians become unemployed. They didn't tried to forbid talking films. (or if they tried, they were ignored)

The distribution of music is not a business anymore? so what?.

There are two players in this business: The record company and the artist.

Record companies are advertising and financial companies. They bet their money on an artist, pay the advertising campaign, print copies, deliver them and in exchange they want a high percentage of each copy sold. They sell advertising to artists and get paid by final users selling copies.

They used to get their revenues from users, but now everybody can "print" a copy in his own home copy, and because of Internet, delivering a copy is not needed anymore. We, users, can get for free the services that record companies used to sell, we don't need record companies any more. So, now where do record companies get their revenues from?

I don't care. Record companies don't feel sorry for CD factories, or for vinyl factories. I don't feel sorry for record companies. But contrary to Ice companies and silent film musicians they are succeeding in forbidding "home copies".

On the other hand there is the artist, the author. How are they touched by free digital copies?

  • In a direct way, like companies, they don't get royalties from sold copies.
  • In a indirect way. If record companies disappear: First, they have none to sell their copies. Second, and more important, they don't get advertising services.

In fact, most authors earn their living from live shows, royalties are just a extra. Most authors only want the advertising service from disc companies, and most authors hate them. Just a small percentage get big money form selling discs. So what? I really don't care if Mr. Jackson can't build Neverland, or Julio Iglesias can't buy a new Jet, or Madonna can't spend xxx millions in his next house in Miami.

Authors won't disappear (Authors existed before records), but they won't earn millions any more. They will have problems in getting popular without companies that pay advertising. Will we miss some good authors because of the lack of advertising?. Perhaps, as we are missing good classic music players and authors because they don't get advertising. On the other hand, nowadays many good new authors are buried with old hits re-printed, re-versioned, re-re-released, or even by crap that only survives because we are flooded with advertising.

Before photography, there were a lot of good and bad portray painters, a lot of middle class houses (and every high class family) had portrays of his members and some ancients. Nowadays, very little houses have painted portrays. The portray painting has almost disappeared, and portray authors are not paid millions anymore.

History will say that there was an epoch were a few authors earned millions because the music had to be copied and sent with trucks everywhere. And there were something called "record companies" that earned billions. That is what history will say, unless they succeed in forbidding home copies.



[ Parent ]
Pretty good story, but... (none / 0) (#57)
by verifex on Mon Dec 03, 2007 at 11:24:58 PM EST

I already wrote this article in 2005, and it was a little shorter and to the point then this one is:
http://www.kuro5hin.org/story/2005/8/15/65325/3931

About DVD regions (none / 1) (#63)
by svampa on Sun Dec 09, 2007 at 04:30:12 PM EST

DVD regions are good for companies. Moreover, it is a dream that had become true: Global market to sell, but consumers divided.

Due the different standard of living, they sell DVD cheaper than in USA or Europe knowing that there never will be a market between USA and Mexico, for instance.

They love it so, that they are trying to shrink the region to a single computer.



A Financial Perspective on DRM | 64 comments (55 topical, 9 editorial, 4 hidden)
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