Thursday, February 15, 2007

Even Record Execs Hate DRM

If you weren't convinced before, how about now?

Mr Mulligan said he was "surprised" at the strength of the responses which came from large and small record labels, rights bodies, digital stores and technology providers.
The study revealed that about 54% of those executives questioned thought that current DRM systems were too restrictive.

Also, 62% believed that dropping DRM and releasing music files that can be enjoyed on any MP3 player would boost the take-up of digital music generally. However, Mr Mulligan pointed out that this percentage changed depending on which sector of the industry was answering.

Among all record labels 48% of all executives thought ending DRM would boost download sales - though this was 58% at the larger labels. Outside the record labels 73% of those questioned thought dropping DRM would be a boost for the whole market.

Monday, February 12, 2007

Why DRM-less Music Will Be Cheaper

The Economist is skeptical that in a world without DRM, the price per song will decrease.
This prompts Wired's blog to speculate that music prices could fall if DRM were abolished, as consumers would no longer have to subsidise expensive DRM systems that will only grow more complicated over time. That strikes me as extremely unlikely. Even if Apple employs a huge, lavishly funded DRM programming group, how much could it be costing? A few tens of millions? According to CNet, in the first nine months of 2006, iTunes sold 695 million songs at $0.99 a pop. The DRM problem cannot be enough to knock more than a few cents a song off the price . . . unnoticeable even to heavy iPod users like me.
The cost of DRM free music will drop, not because the marginal costs have declined, but because it removes a barrier to entry.

New entrants to the market will have a difficult time maintaining DRM systems and convincing the Big Four that there music is piracy free. Once they no longer have to maintain DRM, the Big Four don't have many reasons to prevent every Dick, Jane and Harry from selling music online.

Since the marginal cost of an MP3 is very close to zero the expansion of competition can really only drive the costs down.


Wednesday, February 07, 2007

I Hear The Fat Lady Singing

When the largest supplier of DRM says that it needs to go away the end is truly near.
Apple CEO Steve Jobs has made a surprise call for the end of digital rights management technology, which is designed to stop copyrighted music from being shared illicitly. Jobs says Apple would sell only DRM-free music on iTunes if it could.
I've talked about DRM and its demise here, here, here and here.

Tags: ,

The Good News Is That You Can Still Get Movie Popcorn At Home

I predicted that all of the major movie studios would sign up for downloadable movies and that it would take long.

Turns out that it took less than 5 months from the moment of my prediction.
This morning, [name withheld] is rolling out what it calls a "beta" of its pay-per-download video service
it features new and recent releases from every major Hollywood studio, including Sony (Columbia, Screen Gems, MGM), Warner Bros., 20th Century-Fox, Disney, Paramount, Universal, and Lionsgate.

Now why on earth would I withhold the name? So that I can say "I told you so" yet again.
But several weeks ago, in the midst of rumors that Apple was close to announcing a deal with Disney, Wal-Mart's David Porter - the executive responsible for stocking the retailer's shelves with DVDs and CDs and whose influence is so immense in Tinseltown that he's been named to Premiere magazine's annual power list - made the rounds of Hollywood studios.
Not only did Disney not worry too much about cutting a deal with Apple, Wal-Mart is jumping into the game with both feet forward.

The movie industry has been a lot smarter and much quicker to embrace the digital age than the music industry. [side note: what I can't figure out is that many of these companies are the same. Do the different divisions just not talk to each other?]

So with Wal-Mart bringing movie downloads into the mainstream I expect a couple things to happen. First, prices will start dropping, though I'm not sure by how much. Second, one of my first predictions in this area will start coming true: near simultaneous theatrical release and home video release.

It won't be quite there this year, but the time will start shrining. When the media finally reports on it, expect another "I told you so" post from me.

Tuesday, February 06, 2007

Democrats Soak The Poor

Democrats want to collect money from those evil tax dodgers.
House and Senate Democrats say the government could collect as much as $100 billion more a year by whittling the tax gap — the unpaid taxes, mostly on unreported earnings, that the I.R.S. estimated was about $300 billion a year.
Kip rightly points out that most of these unreported earnings take place near the bottom of the earnings scale, but he forgot the biggest culprit - waitresses and waiters.

In my experience, tipped employees report less than half of their actually earnings. The people that earn tips, but aren't 'expected' to earn tips (maitre'd, valets, dancers, etc) probably don't report anything at all.

Its unfortunate that when Democrats say they care about the little guy more people don't realize that the caring stops at the voting booth.

Saturday, February 03, 2007

Linux To Self-Destruct

I've always had the feeling that Linux was going to implode upon itself but was never quite sure what the mechanism was going to be. I think I've figured it out.
The Free Software Foundation is reviewing Novell Inc.'s right to sell new versions of Linux operating system software after the open-source community criticized Novell for teaming up with Microsoft Corp.

"The community of people wants to do anything they can to interfere with this deal and all deals like it. They have every reason to be deeply concerned that this is the beginning of a significant patent aggression by Microsoft," Eben Moglen, the Foundation's general counsel, said on Friday.

The foundation controls intellectual property rights to key parts of the open-source Linux operating system.
Making decisions based on the purity of the players sounds like a sure fire way to limit growth of a product. Having self-righteous technocrats in charge is equivalent to a death sentence for any project.

Its A Good Day

According to Cato@Liberty, Utah has passed a universal school voucher program.

the Utah House of Representatives passed the nation’s first universal school voucher bill (HB 148) in a nail-biting 38-37 vote. From what I hear coming out of Utah, it’s going to pass the Senate next week as well, and be signed by the governor.
There are three things that keep me awake at night about current policies in the US: healthcare, energy policy and education. These sectors are the last vestiges of command economies left in the country, they are also the sectors of the economy that most people complain about because they are either overly expensive, low on quality or some combination of both. Fixing the problem seems so abundantly obvious to me (let them compete) I just can't understand why the vast majority of the polity doesn't come to the same conclusion.

Its great news that one state is taking the plunge into competition in education. Yes there are some short comings. One of those shortcomings ($3000/student, half what public schools get) may actually be a blessing in disguise.

Public schools are so over funded this will be an excellent opportunity to show how efficient the market is at supplying superior quality at a lower cost. If the prices were at parity private actors would take the money even if they could do it more efficiently.

I'm very optimistic that the program is going to be a resounding success and that it will spread to many parts of the nation. Too bad we are going to have to wait for a decade or more to get there.

Side note: Telecommunications used to bother me, but the internet and wireless is managing to beat down that command economy quite well. The land line monopoly is very nearly at its end.