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Dave's rebuttal of Macrovision's response to Steve Jobs' open letter about DRM in iTunes

9am, 22nd April 2007 - Geek, Rant, News, Humour, Apple, Hardware, Legal

Fred Amoroso, CEO & President of MacrovisionOn February 6th this year, Steve Jobs wrote an open letter to the world talking about his views on DRM. He called it "Thoughts on music". Some time later, Fred Amoroso, the CEO & President of Macrovision (pictured) wrote his own open letter in response to Steve's. Since all this "open letter" writing is really just a bunch of blog posts (CEOs don't have blogs - they just write something and get their web team to stick it on the home page for a while.) I thought I'd make my own in response to Macrovision's, mostly because it's just so wrong... about everything.


I would like to start by thanking Steve Jobs for offering his provocative perspective on the role of digital rights management (DRM) in the electronic content marketplace

Just a minor quibble here: you're placing words in Steve's mouth. His letter was about DRM in music sold online, specifically in the iTMS for iPods because that's the area he has reliable figures for.

While your thoughts are seemingly directed solely to the music industry, the fact is that DRM also has a broad impact across many different forms of content and across many media devices. Therefore, the discussion should not be limited to just music. It is critical that as all forms of content move from physical to electronic there is an opportunity for DRM to be an important enabler across all content, including movies, games and software, as well as music.

Well done for spotting that. It must have required a serious application of time to see through the veil. However, did you go on to ask yourself why Steve may have limited himself to the music industry ? It's not because he only dislikes DRM on music. It's because he sells 80% of all digital music players and hence has a much bigger stick to beat the music industry with. Steve picks the fights he can win. It now looks like he's talked EMI into a truce and that should help convince the other three of the big four. Once they are on his side and can see the benefits to themselves of not alienating their own customers then my prediction is that Jobs will go after online video. It's not a big stretch to see the connection between iPod Video, Apple TV and the iTunes Music Video store.

I believe that most piracy occurs because the technology available today has not yet been widely deployed to make DRM-protected legitimate content as easily accessible and convenient as unprotected illegitimate content is to consumers. The solution is to accelerate the deployment of convenient DRM-protected distribution channels - not to abandon them. Without a reasonable, consistent and transparent DRM we will only delay consumers in receiving premium content in the home, in the way they want it. For example, DRM is uniquely suitable for metering usage rights, so that consumers who don't want to own content, such as a movie, can "rent" it. Similarly, consumers who want to consume content on only a single device can pay less than those who want to use it across all of their entertainment areas - vacation homes, cars, different devices and remotely. Abandoning DRM now will unnecessarily doom all consumers to a "one size fits all" situation that will increase costs for many of them.

Once again, you haven't asked yourself the next question: "Why ?" Why hasn't the technology been widely deployed ? Well, Steve went into some detail about this in his letter but I'll summarise it here: DRM involves keeping secrets from the consumer so that only you can control what they can do with their music. The more people know your secret, the more likely it is that the secret will leak out and render the DRM inneffective.

Let's also tackle this "renting" myth. Some consumers may only want to listen to their music on their iPod and never on their computer and never on their home entertainment system and never in their car. Where is the cheaper option for this hypothetical consumer to purchase their music ? Buying a whole album from any music store is not much cheaper than buying the same album on CD. People aren't getting music more cheaply because it's only playable on two or three devices but rather because it's cheaper to only buy the two or three good songs from the album and it's much more convenient to download music than to drive to a store, purchase, drive back and rip the CD to mp3 using your computer. It becomes much more expensive if, later, you decide that you would like to listen to that album in your car after all and have to buy it again. The iTMS allows you to transfer your music to five different devices but the rub is this: they still have to be able to decode the DRM, which means they must be made by Apple. Your computer and iPod, your girlfriend's computer and iPod, your Apple TV... and that's it. If you have another device you would have to de-authorise one of those first five to use the new one. If you can't do that because, for instance, your iPod was stolen or your computer died, then you are sorely out of luck.

Lastly, DRM costs Apple money. Money which they ask the consumer to pay. The money goes to the engineers who have to create the DRM software and the sysadmins who have to deploy it. It goes to them all again when someone breaks the current DRM scheme because, clearly, the consumers don't want it and the engineers and sysadmins have to create a newer, better, stronger one. DRM also increases the bandwidth costs for Apple, the consumers and everyone in between.

So DRM increases costs, increases hassle, restricts what you can do with your music and, in some case, forces you to buy the same music again. Given all this, I think consumers would prefer the "one size fits all" model.

Well maintained and reasonably implemented DRM will increase the electronic distribution of content, not decrease it. In this sense, DRM is an important ingredient in the overall success of the emerging digital world and especially cannot be overlooked for content creators and owners in the video industry. Quite simply, if the owners of high-value video entertainment are asked to enter, or stay in a digital world that is free of DRM, without protection for their content, then there will be no reason for them to enter, or to stay if they've already entered. The risk will be too great.

Generally, the producers of content would love to enter a the digital world. The thing is, the producers are not being asked. It's important not to confuse the music labels with the content producers. Sure, the music labels supply the up-front money and their expertise in finding the right people for the job and distributing the final product but the main thing signing with a music label will do for you is get you noticed. Some "talent scout" from a music label decides who is going to be the "next big thing" and promotes the living heck out of them. Every radio station in the country receives a free CD with their best songs on it. They get appearances on TV talk shows, ads on the subway, gigs at major music festivals. All of the stuff they wouldn't have been able to get on their own. In return, the music label gets their souls. Actually, they just get a really big IOU and a commitment to create four more albums and, of course, the copyrights to the songs on the album. The artist's souls usually just wither and die. Having just spent enormous amounts of money on a couple of kids who they hope will write music that the public will like and will sell enough records to recoup their costs, the record labels now want to make as much money as they can from the sales of these songs. Very little ends up going to the actual artists. So the artists would be better off if they could, somehow, get popular without needing a record label to pay every influential person in the country to say "Hey, look at these guys. Aren't they cool ?" That's where the Internet comes in. The Internet is so big that even the smallest of niches have thousands of people crammed into it. Better yet, your distribution costs don't scale with the distribution of your audience, they scale with the size of your audience. i.e. As your costs get larger, your income gets larger to match it. If you find your niche - and trust me, there's one for you - then there will be enough popularity to keep you going.

So, after all that, do the artists want DRM ? No. Artists want to be recognised for their artistic merit and to be compensated enough to continue performing their art. Artists don't want to squeeze every last penny from their appreciative audience, they would rather have an entire crowd singing along to their songs at a gig without having already paid for the songs at home than to have no one at the gig because they couldn't afford it. In the end, artists are what matter. They will keep right on producing songs with or without the music labels and they will find a way to get those songs to their audience. If DRM hinders that process, the process will drop DRM and, if needs be, the music labels who promote it.

I agree with you that there are difficult challenges associated with maintaining the controls of an interoperable DRM system, but it should not stop the industry from pursuing it as a goal. Truly interoperable DRM will hasten the shift to the electronic distribution of content and make it easier for consumers to manage and share content in the home.

If there are problems with a technology then the industry should look for alternative methods of achieving the same goals. Ignoring the reasons that Steve mentioned that DRM cannot be interoperable, a truly interoperable DRM may hasten the shift to electronic distribution (however, it certainly does not make it any easier for consumers to manage and share content in their own home) but at what cost ? Going down the DRM route now will commit the labels and distributors to that route in the future. Consumers will be stuck with it until they can bypass the labels entirely. The more investment they have in DRM the more they will invest in flogging the dead horse, hoping that it's not really dead... just sleeping. DRM is pining for the Fjords.

Towards the end of Macrovision's response, Fred takes the liberty of assuming that if you have read this far then you must agree with him and will believe any old bald-faced lie he cares to spout. He offers to absorb Apple's FairPlay into Macrovision's own DRM offering and hence make all songs "just work" on all music devices everywhere. He likens the introduction of DRM to the introduction of television and the PC into the home. Yes, truly a revolution in entertainment. Finally, he repeats the one actual point from the article, the fallacy that he wants us believe: that DRM is good for us because without it, there will be no music, no video, no games, no software of any sort. I don't think anyone will be fooled.

Related posts:

Much ado about DRM
How different must a copy be before it is no longer a copy ?
iPhone and Security: Spreading the FUD.
Distribution and layers
How to recover your data after a crash


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