Tuesday, May 17, 2005

Screwed for Sure

Hilary Rosen's piece last week raised a lot of hackles. The obvious irony is that she is complaining that Apple's "restrictive" DRM prevents her from using music from other suppliers than Apple. You see, she used to head the RIAA (bada-bam).

Of course, she is not being honest. CD's continue to work, and will work for some time to come -- very rippable and non-DRM'ed. There are plenty of places to get non-DRM music on the internet -- in fact, I have up to now avoided *any* DRM content, without sacrificing my taste for new music. For me -- recorded audio has just entered a new renaissance, with no industry pundits to kick it along. It is driven not as much by money as it is by human being's innate need to create and share (and thus I write this now).

Music distributors and licensing companies would like to get rid of CD's at some point, if they can replace it with a model where the customer would not actually have complete ownership of their content; recurring fees are so nice. It really does change the dynamic of how we think of content that we purchase -- instead of purchasing a book, it is more like going to a movie. The content only works as long as the fees are paid. If you don't value your audio collection anymore, you simply have to stop paying for it, and it will go away. Relax, you can get it back later.

Subscription models for content are going to continue to be popular. For young people, it is appealing to have a low monthly charge and have access to everything right now. Don't have to wait. You don't even have to buy the whole album just to get that one song. Never mind that the recurring costs add up - young people rarely worry about such things, just what it will cost per month. $20 a month is $240 a year. I wonder what the average budget is for a 20 something is for conventionally distribuited music (ie CD's) -- if it is even twice that $500 a year -- and this comparing content that is ephemeral (it stops working once I stop paying for it) versus sunk cost of CD's (I can always trade the ones I don't like for new music) -- things a tweener or 20 something may not think about.

This is the same market that cell providers target with their add-on services, pre-paid cell phones, and eventually their own music service. There is no immediate cost -- just a bill later. If the subscriber gets in a jam (car broke, just lost job at McDonald's), they just drop the service. This is the same response you hear when this same demographic group talks about cell services in general (look at the powerpoint slides in my last posting) -- that they will drop it if they can't afford it.

This is the market that everyone is after, not just for now -- but for their children. Now is the time that companies such as Microsoft, and content conglomerates such as Sony, can change the rules forever on how consumers purchase and use content. If they are successful, the CD will be gone in the next 10 years, and we will be left with DRM encrypted content -- if you are banking that the big players will continue to control all the media channels. I, of course, believe that they are one step behind, and that with every day, they fall a little bit more behind. That is for another piece.

Hilary Rosen's op ed piece is really just a rehashing of Microsoft's business strategy. Too late to the game for music downloading, Microsoft instead works with the other also-rans to go against Apple -- an enemy of my enemy is my friend. I would suggest that some of these folks should be careful who they make deals with. It is really Microsoft that wins in the end, not Yahoo, not Creative Labs, not Nokia. If everyone is selling essentially the same products and services -- at about the same cost -- sounds like consolodation is in order. There is really is no choice here -- if all the players are saddled with the same DRM, and feature sets are pretty much the same for all players -- looks like a tough market to work in.

The wonderful part is that it just gets better for Microsoft. They will roll out the Xbox 3 this next Christmas. Despite what Bill Gates says, it is a version of the Media Center that this time won't suck, unlike every other interation Microsoft has tried up to this point. It will loaded to the teeth with DRM -- not just for audio, but for Microsoft's push into on-demand video content. Maybe they will just buy Akimbo and be done with it. They may not be able to get VC9 to become part of the HDTV spec, but it may not matter -- if everyone in Hollywood ends up using their DRM.

Play For Sure is a joke, but a joke with an evil twist. Microsoft's DRM is not pro-consumer. It is not even pro-humanity. I have repeat this again and again. Their DRM is short-sighted. It not a done deal that Microsoft, the owner and holder of their DRM technology, will even exist 100 years from now. I have mentioned this to people, and the stock response I get is to not worry, it will be broken by some 17 year old programmer soon any way.

But what no one appreciates is that it will turn everyone into a criminal. Historians will have to routinely break DRM to be able to look at archived emphemera that our generation creates. They will be criminals given the laws that are on the books now.

Hilary Rosen gets it -- but isn't about to let anyone else in on this dirty little secret. She complains that Apple is not pro-consumer -- but in reality is acting as a mouth piece for a company that is even more anti-consumer. It is more doublespeak -- DRM is good for the consumer....right......

Microsoft may have found their way after struggling for a while. The desktop OS is rapidly not becoming that important any more -- it's network centric applications and mobility that are driving innovation these days. Have there actually been any major improvements in Word Processing in.....the last 10 years? Compare that with speed of change in webspace. Microsoft lost the bid to shunt webspace into some sort of proprietary framework with .Net, but they may have found their future in DRM and content delivery.

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