I'm amazed this entire discussion here focuses on "DRM good" vs. "DRM bad".
The point is, it does not matter. We have entered a world where for pretty much the first time, the marginal cost of creating a copy of something is zero, for all intents and purposes. We don't have any economic theories (or business models) that can deal with that yet.
DRM is simply a symptom of that. The question is not "can (and should) people be prevented from resharing content", the question is, "what does content creation look like in a world where everything is shared"
A while back I was at a friend's house when we decided to watch a movie. My friend mentioned that he could stream The Avengers from his Netflix account, so taking his word on it I was like "Ok awesome"!
It turns out he was wrong. A Netflix search showed that the movie was only available via mail-in DVD, not Instant Watch. I joked that I was impatient and didn't want to wait a couple of days for a DVD to be mailed.
"Not a problem" he said; my friend just hopped onto Usenet and downloaded a Blu-ray copy of the film in about 45-50 minutes, in about the time it took to cook some BBQ for the both of us.
My argument is not about the legality of this scenario; it's that rather decentralized, open networks are doing a better job at distributing high quality content than the very corporations producing and selling this content. Considering that you have to pay anywhere from $10 - $20 a month for Usenet access, people buy into this service not because they want "free" movies/music, they're paying for the ability to download virtually any movie/album they want... at any time they please. It's like Netflix Instant Watch on steroids, at a more affordable price.
>Considering that you have to pay anywhere from $10 - $20 a month for Usenet access, people buy into this service not because they want "free" movies/music, they're paying for the ability to download virtually any movie/album they want... at any time they please.
Dunno about that.
I'd wager that "free" is a pretty damn big part of it, bigger than the size of the catalog for many folks.
The most prolific Usenet users I know aren't using it for convenience or access to rare content. They're amassing a hoard of utterly mainstream movies (Avengers...) and video games that could be enjoyed conveniently for a reasonable price from any number of sources.
Personally, if I cared to watch Avengers I'd have paid $5 to start streaming it on my Roku from Amazon immediately.
"Dunno about that.
I'd wager that "free" is a pretty damn big part of it, bigger than the size of the catalog for many folks."
Many folks will refuse to pay under any circumstance. This is not to "fix" that. iTunes, Amazon digital, Steam, and Netflix are proof that most people will pay to license content if the terms and technology are not intrusive enough, and they're not being exploited at the "convenience" price point.
Microeconomic models deal with negligible marginal cost products as a matter of routine. I don't mean to be rude, but you've been taking the wrong economics courses.
Another poster identified the issue: decentralized distribution, not low cost of copy, is the sea change. In past times governments responded to low cost of copy by legislating copyright. Now there's no practical way to centralize distribution of convenient copies of data.
Honestly, nerds fantasize about a world where all data is free, but information creators just respond by making their data inconvenient to obtain. Institutions of content creation have a high demand product; economically there's no reason to expect them to roll over and give up on making money.
That might well be - thankfully, nobody pays me for my economics expertise :)
What I meant by my statement is that the marginal cost is near-zero for everybody. I've just learned that a better way to say that is "decentralized distribution". I do appreciate you clarifying this. (I really do. It's rather hard to say "thank you" over the Internet without coming across as the most sarcastic person in existence)
And I don't expect content creators to roll over, but I do expect to see a significant shift in the industry. Because no matter how inconvenient the access to the first copy is, the second one is free. At some point, that'll need to be factored in, because it can't be prevented.
Nerds don't just fantasize about data being free. They fantasize about reducing the cost of manufacturing anything, including new intellectual content to zero. (or at least to some minimal amount of energy expediture)
And no, your Micro-economic models do not deal with that, but that's ok, because it's a fantasy. Right?
> The question is not "can (and should) people be prevented from resharing content", the question is, "what does content creation look like in a world where everything is shared"
DRM is an attempt to force rivalry and excludability onto information, which is inherently not a private good[1].
You can try and use a government fiat to legislate the market to behave a certain way, but at the end of the day, if those are at odds with the fundamental laws of economics and reality (ie, one's ability to copy information "for free"), you're playing a losing game from the start.
"DRM is an attempt to force rivalry and excludability onto information"
And here I thought DRM was trying to make difficult the non-permitted sharing of the results of someone's hard work, for example music an artist created, or books an author wrote, or the years of work a team of actors, cinematographers, move score writers, directors, producers, makeup artists, animators, janitors and all other people that go into making a movie.
The result (the movie) may be easy to reproduce, without these protections, but the artists/etc deserve the money for their trade.
That said, DRM generally gets way the heck too much in the way of everything, and I would much rather a generally honest society where people want to support the artist so that they can continue doing what they love and continue entertaining. I think we live in a society like that in general, and the people that choose not to support the artist's work are just a tragedy of the commons biproduct that we'll never be able to stop -- nor should we try to, because efforts to the contrary just make it harder for paying customers.
But meh. Sorry, my nitpick is with "DRM is an attempt to force [...] onto information." because while technically accurate ('data is just a really big number'!) it's the idea behind the data that gives it worth
> And here I thought DRM was trying to make difficult the non-permitted sharing of the results of someone's hard work, for example music an artist created, or books an author wrote, or the years of work a team of actors, cinematographers, move score writers, directors, producers, makeup artists, animators, janitors and all other people that go into making a movie.
I am willing to believe that's what it originally meant to do, but it has proven wholly ineffective at that goal. If you want a pirated work, you don't interact with a DRM-encumbered disk at all — you just grab it off the Net. The effect of DRM on movie piracy seems to be insanely close to zero.
However, it is much more effective at doing things like forcing honest people to buy multiple copies of a movie to watch in their living room (where they have a Blu-Ray player), in their bedroom (where they have an Apple TV) and in their car (where they have a DVD player).
> You can try and use a government fiat to legislate the market to behave a certain way, but at the end of the day, if those are at odds with the fundamental laws of economics and reality (ie, one's ability to copy information "for free"), you're playing a losing game from the start.
How do you quantify "for free"?
If we mean "at no cost to the taker," then it's equal to theft, which is obviously not much of a position to take. I'm guessing this isn't what you mean.
But if we mean "at no cost to the original holder," then that is not really true. There is no marginal cost for copying information, but he has already incurred a potentially very high fixed cost. Excluding that cost from our analysis of the situation leads to a distorted view of economics and reality.
> How do you quantify "for free"? If we mean "at no cost to the taker," then it's equal to theft, which is obviously not much of a position to take. I'm guessing this isn't what you mean.
This usage of the word "theft" only makes sense when dealing with private goods, as I explained in my original post. We're dealing with a good (information) that is entirely nonrival and fairly non-excludable, putting it somewhere on the spectrum between a common good and a public good.
> Excluding that cost from our analysis of the situation leads to a distorted view of economics and reality.
Applying the economics of private goods to goods that are neither rival nor excludable leads to a distorted view of reality as well.
> This usage of the word "theft" only makes sense when dealing with private goods, as I explained in my original post
If I had indeed used the word "theft" to refer to it, that would be a good point. However, I did not. I said that if you're only considering the cost to the recipient, then the same analysis could apply with equal validity to theft.
> Applying the economics of private goods to goods that are neither rival nor excludable leads to a distorted view of reality as well.
Talent is both rival and excludable. That is my point. The marginal cost of transmitting the information is essentially nonexistent, but the cost of producing it in the first place (which depends on a finite supply of talented time) must be taken into account or we'll come to bad, unrealistic decisions.
> I said that if you're only considering the cost to the recipient, then the same analysis could apply with equal validity to theft.
If I choose to redistribute a piece of software, there is zero opportunity cost to either me, the supplier, or to the receiver.
> Talent is both rival and excludable.
...No, it's really not. "Talent" isn't even a good; it's an attribute - the fact that you're using the word in this way makes me suspect you don't really understand the underlying economic principles.
> The marginal cost of transmitting the information is essentially nonexistent,
As is the cost of producing a copy, which cannot be said for physical goods.
> but the cost of producing it in the first place (which depends on a finite supply of talented time) must be taken into account
I understand that you're trying to draw a comparison to the logic behind drug patents, but when you're dealing with a good for which the redistribution and production of all units beyond the first has zero opportunity cost, artificially imposing (by fiat) a cost on the redistribution and production is neither feasible nor efficient[1]
[1] In the economic sense of the word, not the ways it's often used colloquially.
Books have been around for quite some time. The major change isn't that the marginal cost is now zero. The incentive and techincal ability to use copyrighted works without a license has been present for a long time. The difference is the decentralization. In the past, if you printed a batch of unlicensed books, it was very easy to shut you down or sue you. Now, anyone can make the copy and it's not viable to go after them all.
The problem with DRM is that to the casual observer it looks like something is being done. Whilst in reality the main effects of DRM is generally to make usability , security and privacy worse.
Once people start putting this crap in the systems it becomes entrenched and more difficult to remove.
> We have entered a world where for pretty much the first time, the marginal cost of creating a copy of something is zero, for all intents and purposes. We don't have any economic theories (or business models) that can deal with that yet.
I'm not sure that's true. It seems to me that SaaS is a business model that directly addresses the situation. Take a look at 37signals' apps, the current #1 video game League of Legends, GitHub, etc. None of them require DRM — they just don't give you anything you can meaningfully "steal." It's an extremely resilient business model, and I will bet you any sum of money you like that the industry will continue heading in the direction of services.
That is indeed the most direct analogy from a logistical perspective, but I suspect the actual media analogy in terms of effect is just to put out "safer" content (e.g. Yet Another Blockbuster 3: Bust Blocks Harder), which also offers pirates less incentive to go through the trouble to copy it since it isn't very interesting — except when you're walking by a Redbox thinking "What should I do tonight?"
I'm not so sure that's right. We already have a model that works with content like this: research universities. The media content only has to be discovered a single time then it basically stops being scares and can be easily made available to everyone. It's fanciful to imagine but I could see movie or music "universities" popping up to create this kind of content. I wonder how appropriate funding through grants and the like would be though? I think media is usually a lot more splintered than typical academic research but I could also see something like that providing an opportunity for artist who could not otherwise support themselves off of there work.
If anything though we already have a model for dealing with content that is at least similar to what entertainment media is turning into, but its not so much an area business traditionally deals with.
The point is, it does not matter. We have entered a world where for pretty much the first time, the marginal cost of creating a copy of something is zero, for all intents and purposes. We don't have any economic theories (or business models) that can deal with that yet.
DRM is simply a symptom of that. The question is not "can (and should) people be prevented from resharing content", the question is, "what does content creation look like in a world where everything is shared"