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Hollywood And DRM

Is Hollywood more concerned with piracy or with using digital rights management (DRM) to create a “forced scarcity” to generate new revenue streams for their product?

Here’s a provocative take from Ken Fisher at ARS:

Access control technologies such as DRM create “scarcity” where there is immeasurable abundance, that is, in a world of digital reproduction. The early years saw tech such as CSS tapped to prevent the copying of DVDs, but DRM has become much more than that. It’s now a behavioral modification scheme that permits this, prohibits that, monitors you, and auto-expires when. Oh, and sometimes you can to watch a video or listen to some music.

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.

I remember clearly the moment I was explaining the DVD player to my dad. He waved his hand over the vast collection of VHS tapes he had acquired and cried — “I have to buy this all again?”

Yup. Again, and again, and again.

Fisher also links to a BusinessWeek piece on why Hollywood studios (with few exceptions) are holding out on posting new movies to iTunes. Short answer: nothing to do with piracy and everything to do with a “lax” DRM that lets you share an iTunes movie as you would a conventional DVD.

Fisher remarks:

As it turns out, five devices authorized for playback is too many, and the studios apparently believe that this is “just as bad” as piracy. Hollywood believes that iTunes Store customers will add their buddies’ devices to their authorization list, and like evil communists, they’ll share what they have purchased. This makes little sense, because the way iTunes works, you can only issue so many device authorizations at a time. You could share with a friend, but then your friend would have to be authorized to play all of your purchased content, taking up an authorization. Inconvenient, huh? But is it a big problem?

I can walk in to Best Buy right now, buy a DVD, and lend it to every person I know. Who hasn’t lent a DVD to a friend or colleague? This is perfectly legal behavior, but you can see that Hollywood hopes to stop this kind of thing via DRM. Thanks to the DMCA, once copyrighted contents have been encrypted, your rights fly right out the window.

It’s true that piracy is a genuine concern, and Hollywood and the music industry are right to protest it. So here’s a question: If various content industries try to double down, using their legitimate interests in curtailing piracy as a Trojan Horse to sneak in more restrictive usage rights (i.e. to restrict things you’re accustomed to doing — legally — for free), will consumers balk or pay up?