How To Get Rid of DRM Effectively: Open Letter To Steve Jobs and The RIAA
Written by Ernesto on February 11, 2007This week Apple CEO Steve Jobs suggested that it would be a good idea to get rid of DRM. A great idea that most of us, except the RIAA, probably agree with. If the music industry ever wants to significantly reduce piracy, they need to offer a product that is at least equal in quality to pirated copies, and DRM supported music isn’t.
The New York based intellectual property law attorney Bennett Lincoff shares this opinion and suggests a licensing system that would benefit both consumers and the music industry.
Lincoff sent us a copy of this open letter he wrote to Apple CEO Steve Jobs and RIAA Chairman Mitch Bainwol, in which he suggests an alternative business model that could work for all parties.
Mr. Jobs says that DRM cannot effectively protect recorded music when it is transmitted digitally. He is right. The music industry’s many experiments with DRM have all met with effective technological countermeasures. Moreover, news of each successful hack quickly found its way to everyone who cared. There is no reason to believe that the results will be different next time, or ever.
For his part, Mr. Bainwol insists that DRM is essential to the music industry’s survival in the digital age.
The problem is that the Internet is fundamentally incompatible with the music industry’s traditional sales-based revenue model. Through the Internet, the market for sale of individual recordings can be saturated in a moment’s time and without payment of any royalties to songwriters, music publishers, recording artists or record labels. Neither law, nor technology, nor moral suasion will change this fact.
Mr. Jobs suggests, and I agree, that DRM should be abandoned as a tool for the protection of recorded music. However, before Mr. Jobs can implement his DRM-free utopia, the music industry must have a viable alternative business model by which it can continue to thrive. Mr. Jobs has not suggested one. Mr. Bainwol denies that one is needed; intending, instead, to continue efforts to preserve the industry’s sales-based revenue model. In any event, in the absence of an alternative business model suited for digital transmissions of recorded music, Mr. Bainwol cannot even begin to discuss the possible elimination of DRM.
I propose such an alternative in the attached White Paper (mirror).
Mine is a comprehensive approach to rights licensing and rights management that does not depend on the efficacy of exclusionary DRM technology for its success. A solution that simultaneously protects the integrity of copyright, promotes technological innovation, facilitates the growth of all manner of licensed digital audio services (including P2P), and meets consumer demand. In the aggregate, music industry rights holders would do no less well financially under my proposal than they do now under the system that my proposal would replace.
With this alternative business model in hand (which includes a plan for its implementation), there can be no further justification for the music industry’s failure to respond constructively to the changed circumstances imposed on it by emergence of the global digital communications network.
The paper (pdf and html) that is discussed in this letter is titled: “Fixing What’s Badly Broken: A Proposal to Maximize the Licensed Availability of Recorded Music for Digital Transmissions and to Make the Music Industry Whole Again as the Digital Music Marketplace Develops”
It starts with a very detailed and accurate analysis of the current situation, and then discusses the proposed license based revenue model.
The proposal is a great read, and one of the most comprehensive and realistic alternative I’ve seen so far. Let us know what you think.
Previously: ShareTV.org: TV Torrents Made Easy
Next: Documentary: Militainment Inc, War as Entertainment
31 Responses
Dear Sir,
I read your white paper with great interest, and while i’m not fluent in English, especially with Law-related terms, I think I managed to understand most of it.
There is however one question I could not find an answer to : how would you propose to regulate the future of Peer-to-Peer sharing, which would probably be “Darknets”.
Let me try to explain : how would you enforce the Digital broadcast licence in a decentralized peer-to-peer network using encryption and onion-routing technologies ?
These technologies are designed to anonymize all digital transfers in a way no one, not even the emitter or the receiver, can know “where” the file came from.
These technologies are already available to the technical-savvy users, and will be used in the next-generation of consumer-level peer-to-peer networks, meaning that in some years from now, it will be quite impossible to estimate the nature of network streams between users.
And I bet these users will use that anonymity to share music or other copyrighted works without paying any licence.
Thanks for your time,
Mister F.
@Mister F
Nobody will ever be able to effectively kill off piracy, no more than anybody could ever hope to eliminate any of the other items that exist in the black markets of the world. The larger question at stake though is that at what point do you adapt to a new business model? At what point do the numbers become too hard to ignore? Imagine if the music industry had embraced digital music distribution from the start when Napster first appeared 8 YEARS AGO! Its pretty sad actually.
It would be hard to rule out piracy completely, but they sure can reduce it.
Quality, availability and pricing are the keywords. I bet that quite a lot of people are willing to pay for downloads if the quality is good (so no DRM) and the price reasonable.
The music industry needs to compete with piracy.
“The music industry needs to compete with piracy.” @ Ernesto.
You’ve said it all, man. I still hope someday they’ll see that it’s just that simple.
[quote comment="48273"]It would be hard to rule out piracy completely, but they sure can reduce it.
Quality, availability and pricing are the keywords. I bet that quite a lot of people are willing to pay for downloads if the quality is good (so no DRM) and the price reasonable.
The music industry needs to compete with piracy.[/quote]
will still be hard to compete with FREE, especially when people have become so used to it having done it for so many years.
Navin over at BT Inc. said it well though, that a service has to provide a valuable and worthwhile alternative to piracy if it is to succeed.
does anyone else don’t understand how this intellectual “property” lawyer did manage to write an open letter on January 21, 2007 alledgedly adressed as a response to Steve Jobs February 6, 2007 piece?
Or did I just misunderstand Ernesto’s introduction?
[quote comment="48349"]does anyone else don’t understand how this intellectual “property” lawyer did manage to write an open letter on January 21, 2007 alledgedly adressed as a response to Steve Jobs February 6, 2007 piece?
Or did I just misunderstand Ernesto’s introduction?[/quote]
Let me clarify. The open letter is quoted in the post, and is a reaction to Jobs statements. The white paper was already there.
As someone who pays for unencrypted MP3’s of some of my favorite bands off eMusic.com I can say that i have never once been tempted to share that music.
And the industry has never lost a penny though me but gained alot.
The use of P2P networks is a concicous decision to break the law. I’d bet most people don’t copy their DVD’s and put them onto BitTorrent.
They would happily download them however. who rightly invalidates a license they have? It’s NOT the majority that the RIAA would have you believe.
I haven’t brought a single track from the RIAA companies since this became an issue to me a few months ago. I doubt i ever will again.
The use of P2P networks is a concicous decision to break the law. I’d bet most people don’t copy their DVD’s and put them onto BitTorrent.
No, it’s a conscious decision to get access to the culture and knowledge that is interdicted to the humanity’s great majority, because of a prohibitive price that is fixed by a oligopoly-controlled market. And that is something that is often forgotten by those who criticize “piracy”, because they don’t know what is to be economically and culturally underprivigiled. That is why I think a voluntary global license is the only solution to the P2P conundrum. Otherwise, it will be worthless.
I also use eMusic.com.
If I am looking for music, this is the first place I look. If what I am looking for is available on eMusic I purchase it. If however, the music I am looking for is NOT available free of DRM I download it from p2p or other means.
I refuse to pay for music which is DRM protected - I have 3 computers and many devices capable of mp3 playback but do not have the time to invest in circumventing copy protection in order to play the music I have purchased.
I’m sure I am not the only person who is forced to pirate music by the very mechanism designed to prevent piracy! I have not shared any of my music purchased from eMusic.com and do not intend to.
will still be hard to compete with FREE
Evian’s doing fine.
This repsonds to the question from Mister Flagada:
First of all, thank you for having taken the time to read my paper and to comment on it.
You have raised an interesting issue: What impact might the Darknet have in a world — unlike today’s — where licenses are abvailbe for sharing of music through P2P networks?
Under current circumstances, where licenses are not available for P2P (at least not the type of P2P that most consumers want — completely free of DRM) consumers are faced with an unappealing choice. Either stop using P2P, or continue using it but risk liability for copyright infringement. Copyright owners are within their “rights” to sue consumers who chose to share files through unlicensed P2P networks. Of course, as you know from reading my paper, I think that the industry’s campaign of infringement litigation against consumers is misguided and unfair; but my opinion does not change the legal foundation of the industry’s lawsuits.
On the other hand, if licenses for P2P were available along the lines that I suggest in my paper, I think it is fair to expect consumers to use licensed P2P networks (where the license would be obtained by the network operator on behalf of all of its users); or, if they participate in decentralized networks, to obtain the license in their own right (again, as I suggested in the paper). If licenses were available on reasonable terms, I would have little sympathy for individuals who chose to hide in Darknets merely to avoid paying a copyright license fee. (To be clear, I do not support the course the music industry has taken; but I fervently believe that public policy should strongly support the opportunity of music industry rights holders to earn ample rewards from their contributions to commerce and culture.)
The music industry must take the chance that if given the choice, the vast majority of consumers will participate in networks that are licensed. I don’t doubt that there will be many who will chose the Darknet route rather than participating in licensed services and networks. But, as I said in the paper, the digital transmission right cannot be subverted by one (or even many) unlicensed sites, services or networks. This is an important way by which the new business model I propose is distinguished from the music industry’s traditional sales-based revenue model.
All else being equal, I think it would be wrong for consumers to turn away from licensed services and use infringing services instead. In any event, those who do infringe will run the risk of being discovered and sued by the record labels (or by other music industry rights owners)for copyright infringement.
I could see something like $5/month - unlimited downloads of music/new releases. No DRM of course. I’m sure a lot of music lovers would go for that. That’s $60 a year for the music industry - $60 dollars more than they are getting from a lot of people right now.
Really though, I don’t think there is a solution. I think music artists should make most of their money from touring anyway. There albums should merely be publicity to get more people going to their concerts. Let’s face it, when an artist makes a record, the work is done ONE time, then copied over and over and over for pennies - yet, it’s always sold at the same price ($10-$15). By the rules of supply and demand, shouldn’t buying a CD cost about a quarter? And you wonder why people pirate.. lol.
Brad: Not all artists tour. The songwriter who is not also the recording artist can only make money from the music they create through royalties. The songwriter will not share in any of the money that is made from concert tours. But, of coucrse, without the songwriter there is nothing for the touring artist to perform. So, how would you compensate those songwriters who happen not also to be performers?
Benn: They’d have to start spreading the tour revenue around to the people who made it all possible. So nobody’s making millions anymore .. tough shit, who ever said what they do should be worth making millions anyway? I understand that not all artists tour, but in my eyes, most should - barring some physical limitation. Touring is part of the “musician” job title as far as I’m concerned.
To give a perfect example *except in the software industry* Gametap is exactly the kind of license system that needs to be put together for the music industry to become profitable again.
You pay a monthly, or yearly fee and you gain access to a a large library of games, many of which are old school games that can be played for free in some cases, but it’s hard to play on Windows XP or any of the latest OSes.
I gladly pay to gain access to games I used to play but cannot now due to lack of compatibility, or even old arcade games you can’t find anymore.
Subscription services is the only way to go.
“Not all artists tour. The songwriter who is not also the recording artist can only make money from the music they create through royalties.”
Tough luck. Let the songwriters perform instead of relying on royalties. This is more damaging to industry-backed songwriter teams of the Brill Building sort, than independent artist who write and perform their songs.
Who cares if Britney Spears’ songwriters will feel unmotivated to compose due to diminished royalty profits? I don’t, as long as Cat Power still composes and tours.
Dear Mr. Lincoff,
I think your proposal is very well presented and you seem to give an answer to every possible refutation. The problem is I think you misguide what is at issue when it comes to the distribution of digital music, because you tend to place too much emphasis on the distinction between the audio service provider and the consumer. This is overlooking the fact that in a not-so distant future every consumer will also be a distributor. In fact, nowadays BitTorrent and eMule/eDonkey, the two biggest file-sharing networks, already require the uploading of content in order to download. Consequently, any business model that is based on streaming will be obsolete. Thus, relying on this scenario of massive broadband access, what matters the most is what amount should we, as citizens, pay for a flat license fee for the distribution of digital content. I don’t believe in a universal compulsory levy, either. Your proposal tackles very efficiently the problem of digital transmission of music. But music should not be treated independently from other sorts of “data”, like video and text. This is a very complex and intricate question that must be considered globally, with due care for society’s overall well being. Therefore, it is most of all a matter of public policy that should not be exclusively handed by the representatives of the different creative industries. Ultimately, it is a government’s responsibility.
My solution to this problem is for music labels to sell licences rather than songs to individuals. Customer obtains music any way he can over the net, copying friend’s CD, etc, but to be legal she must obtain a licence once an evaluation period has passed. License is on record at music company, and customer has receipt containing licence specifics. Customer must present licence as proof of ownership upon demand.
I’ve been browsing through Mr. Lincoff’s site and I found a paper dated of November 2002 where he argues for this same model of collective licensing: A Full, Fair And Feasible Solution To The Dilemma of Online Music Licensing.
Responding to Mguel Caetano: My 2002 paper is actually much different than my most recent work. In 2002, I was advocating compulsory licensing. I no longer believe that to be a viable solution. My current proposal relies entirely on free market mechanisms and voluntary collecitve rights adminsitratoin.
“Licenses would be granted without regard to the
conduct of end users: It would no longer matter whether consumers only
listened to online transmissions or also downloaded them.”
1) to be able to listen to music over the internet, you MUST download them and store the music at least temporary in RAM or permanently on HDD.
2) to sum the repeated point of this former ASCAP guy up:
He wants another levy that the consumer should pay, even though there are in many countries already special levies on blank disks for example in place that goes to those copyrightowners.
Looks to me that Mr. Lincoff just used this “steve jobs incident” to bring up his old “sweeze even more money from consumers” sheme again!
Since i can’t articulate my self as I would want, I just second Mguel Caetano’s #18 post.
An interesting (even though it’s several years old) article penned by Courtney Love…
http://archive.salon.com/tech/feature/2000/06/14/love/print.html
~c
Responding to KDSE’s ocmment that my proposal only seeks to “squeeze even more money form consumers.”
Apparently, you missed where I wrote that under my proposal “consumers would not incur any liability merely for surfing the web, accessing streaming media, or downloading music files. Copying for personal use also should not require authorization. To be sure, consumers still would be required to pay network operators for Internet access, and they may be required to pay audio service providers for their activities on particular web sites or services. But whether consumers listen to streams or download recordings; make one or many copies of a recording for personal use; or use recordings on one or several playback devices would have no effect on their obligation to music industry rights holders. None of this conduct would require consumers to obtain licenses or pay license fees under the digital transmission right; and should not otherwise.”
Copyright music on the web is like a copyright image on the web. The RIAA have to understand that.
Lower the price of cd and offer non drm music downloads.
Thats the solution to getting people to buy music. There wont be a solution to crush illegal copyright of music.
A slightly different alternative is described in my article Published Digital Information is a Public Good: The Case for Voted Compensation.
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DRM does not help anti-piracy. I doubt the trading company(ies? :P) of the 1600s would lock heavy weights onto their cargo before shipping. Or possibly plant explosives on them which corresponds to some computers’ reactions to DRM protection.
Being able to make money off recordings was a temporary phenomena in the history of music — and thank God it’s over. From now on, as it used to be in the past, the best live acts will be the ones that earn a good living.
If the future, music CDs will be advertising, or made purely for collectible value of the packaged componants (not the music data itself) after the musicians are already famous.
mike18xx is right. If I could buy a bunch of songs and then buy a teenage girl too lipsync to them and make 100 million dollars off it I’d be afraid when people start to wake up too. God forbid we decide what we want to listen to on our own. They’ve got the whole business locked up tight. When we do start to show them we have our own minds they stomp it out immediatly. We start watching Indy movies so they start making 100 million dollar “Indy” movies for us. We start finding our own new music on the internet, they start American Idle where we pick who we like but they own them from the moment they walk through the door the first time. I know how to keep them from losing money to piracy. Release all the bands from there contracts and go get real jobs!
TO ALL DOWNLOADERS….!!!!
I am a debut artist who’s just recorded one of the most expensive debut albums in recent history.
We have just released my debut album as a FREE HQ Mp3 download.
It was a tough decision for us to make because of the vast amounts spent on the album. We had two of the biggest record producers in the world work on it…. at Peter Gabriel’s Realworld studio and at Abbey Road studio in london.
Despite all that, we recognise the massive potential the internet and free albums in particular offers. We launched last friday and have already had 1000’s of DL’s all over the world.
Come over and download for FREE.. it takes 2 minutes to DL because we have a dedicated server.
http://www.jackrubinacci.com
Thanks
Jack
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