Response to “A Bite Out of Apple? iTunes, Interoperability and France’s Dadvsi Law”

10 07 2008

This is in response to Christy’s post about the same article.

I think Apple and its competitors’ implementation of DRM technologies is interesting because it demonstrates their need for an artificial standard to control their digital goods – much the same way they set artificial prices for goods that cost next to nothing to create. The digital marketplace has its advantages and barriers like any other market, I suppose.

Upon first reading the article, I didn’t find a close connection to The Long Tail but realized that the consumer battle against DRM, and Apple in this instance, is a byproduct of The Long Tail economy. That is, digital music companies are faced with a nearly endless demand for niche products, increasing competition and unprecedented piracy and are therefore exploring securities that may stagger the growth of the greater market to defend their digital goods.

Sobel’s article really picks up on the burden of states to intervene when DRM and other digital rights technologies prohibit interoperability for consumers. In more simple terms, Apple’s FairPlay DRM limits my ability to play a song I purchase on iTunes on competing MP3 players.  I should be able to play a song I purchase on any device that is compatible with its file format, regardless of the DRM protection. Dadvsi’s Law is France’s attempt to reconcile this conflict. Sobel says Dadvsi’s Law is imperfect, favoring DRM holders, but also says “… the role of governments in limiting the reach of TPMs [technical protection measures] is inchoate.

You ask in your discussion outline, “Can a model similar to The Long Tail be applied to online music sharing services?” I think the model already exists. For iTunes, its competitors and even illegal file sharing services, a few new, popular songs (and for illegal sites, those yet to be released) will draw the largest number of downloads, and all the other songs available will individually draw a few downloads – but these songs will add up to significant number of total downloads. DRM plays into how companies can monetize these downloads and retain and expand their shares of the market. Companies implementing DRM believe they are protecting their digital goods and increasing patronage of their services, but if their DRMs are limiting interoperability consumers will find alternative means of obtaining the same goods, legally or illegally. Even Steve Jobs recognizes this flaw. Sobel points to him saying that on average only 3 percent of songs on iPods have DRM, and he even shifted the blame for DRM to the music labels when facing legal opposition in Europe.

You also ask, “Do you think such digital rights management practices support or hinder growth/development?” I think DRM practices support growth and development of, in this case, music to a point. Artists do want to know they will compensated for their work, but if they think the resulting interoperability becomes so restrictive that it’s turning off their fans, they’d probably be better off without it. At the rate of hacking DRM technologies, (nearly every DRM created has been hacked) I don’t think it’s a very effective means of protection, and consumers are showing the true values of the digital goods their obtaining – paying for the artists they respect (think Radiohead’s In Rainbows) and taking everything else.




2 responses

21 07 2008
TWoN - Part One « Net-Centric Economics

[…] Paolo & Brian (Christy’s article – note Paolo also posts to his blog) […]

3 11 2008
Bookmarks about Drm

[…] – bookmarked by 2 members originally found by netwirb on 2008-10-14 Response to “A Bite Out of Apple? iTunes, Interoperability and … […]

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