Dear MPAA: DRM Is Not A Requirement For Releasing Movies

from the nice-try,-but...-no. dept

We've written about the request from the MPAA to the FCC to grant a waiver that would allow the MPAA to use "selectable output control" (SOC) in order to block DVRs from recording their movies. As we noted, the movie studios basically would like to add in another movie release window, letting movies appear on television before they're released on DVD. Of course, there's absolutely nothing stopping them from doing so today. However, they claim that it's impossible for them to do so unless they get to implement DRM via SOC to stop people from recording these movies. The MPAA's own defense of this plan was exceptionally weak, but now some others are actually coming forward to defend the MPAA's position.

Ryan Radia, over at the Tech Liberation Front, has a long and thoughtful article where he tries to paint the MPAA's position as being pro-market and anti-regulation: "Consumers are willing to pay to watch new movies at home, and content producers are willing to transmit them, but government is standing in the way." It's a neat twist, but it's 100% wrong. The government is not standing in the way. If consumers are willing to pay, the movie industry can absolutely offer up the movies and let them pay.

Radia's claim is based on the entirely false premise that the MPAA needs this special kind of gov't approved DRM in order to release its movies. Radia plays a neat trick in spinning this the other way, claiming: "But content owners aren't required to ensure that all movies can be easily timeshifted and archived." Yes, indeed, nor are movie studies required to use DRM.

There is absolutely nothing stopping the movie industry from making use of this "new business model" other than its own unsubstantiated fear of non-DRM'd content. It's not a government regulation. It's not some weird FCC rule. It's the MPAA itself.

Mark Cuban gets it right when he points out what a huge mistake the MPAA is making in even bringing this issue up in the first place:
For all the money the RIAA wasted on trying to stop digital piracy, about all they accomplished was explaining to everyone exactly where and how to steal music. Please do not make the same mistake. Right now its a hassle to unitlize the analog hole to copy movies. Most people have no idea how to do it, particularly for HD delivered movies. Please do not go through a big process of teaching people exactly what the analog hole is in hopes of getting companies to prevent its use. All you are going to do is turn on the lightbulb for many who would otherwise not have a clue.

The theatrical exhibition industry just experienced a phenomenal several weeks with The Dark Knight setting record after record. People by the 10s of millions went to the theater, many multiple time to enjoy the unique experience of going to a movie. Could you please, please, please use the money you are going to spend fighting the unfightable and instead spend it on promoting the fun of going to the movies ? More people going to the movies is more people getting excited about movies. More people getting excited about movies means more people watching movies on TV, which is good for revenues, and more people buying DVDs or legal downloads of the movies. Again, good for revenues.
Piracy is not, and has never been, a real threat to the movie industry. The movie industry is doing incredibly well by releasing good movies that people want to see. Even if they're available for unauthorized download, movie watching is a social experience, and the better the industry makes that social experience, the better it will do. Wasting time demanding unnecessary DRM isn't necessary. It's not blocking any business model. Wasting money fighting for this "analog hole" to be patched won't stop piracy at all. If anything, it will attract more attention to that analog hole, while pissing off more viewers and making it that much harder to get movie fans to want to pay money to see movies. Even if the MPAA prevails, it won't put a dent into unauthorized file sharing. People will figure out how to get around the SOC protection, and once a single copy is out there, it's everywhere. Focusing on stopping file sharing is a lose-lose proposition.

So, please, movie industry, stop pretending you need DRM for your business models. You don't. You never have. And the more you pretend you do, the more trouble you're causing.

Filed Under: business models, drm, movies, mpaa, selectable output control, soc


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  1. icon
    Mike (profile), 7 Aug 2008 @ 1:11pm

    Re: All part of the same business model...

    It is incredible that lots of people here insist that some laws should only apply to this and not that. That just because money or sandwiches are things and digital data is infinite THEN one cannot be stolen and the other can.

    No. No one is saying that something can be stolen. They're saying that if a product is *infinite* then the supply curve suggests there are other business models that embrace that infinite nature in a way that is helpful.

    There is NO difference between a house, a car, a sandwich, money (on notes and coins OR on an internet bank), a DVD, a film or a computer file. All these things were made by someone OR belong to someone OR can be accessed through someone OR has its access controlled by someone.


    There is a HUGE difference, which is that the supply of the first group is scarce. The supply of the second group is not.

    And, as your basic economics should have taught you, supply is a big part of determining price.

    Should a ticket for THE DARK KNIGHT cost 10x the ticket for that French film nobody cares to see?

    You seem to be under the wrong impression that the supplier sets the price, rather than the market. That might explain why you don't seem to understand supply and demand either.

    DRM may not be the best thing on Earth. But it is the future. Get used to it and learn to live with it because it is here to stay. Of course there will be always those who circumvent it. But it's going to be so hard, very few people will get it done right.

    The history of any sort of artificial protectionist system says that you are 100% wrong. Not a single one has ever stuck around for very long -- because others eventually learn how to embrace the non-artificially-restrained market to their advantage.

    And then, those of you relying on artificial scarcity see your business models disintegrate.

    Have you note noticed that both the software industry and (finally!) the music industry are moving away from DRM?

    I produce films and I got lots of people on my payroll. Yes, I want all the money I can get from my work... and work of those on my payroll - because I have to pay them.

    Which part of the business model did you not understand? You are falsely assuming that DRM is necessary to make money. It's not.

    The movie industry is not evil. Stop treating an industry that gives you pleasure as evil.

    No one said they're evil. Short-sighted? Yes. Clueless about economics? Yes. Self-destructive? Yes. Evil? No.

    Stop treating pirates as heroes who steal from the rich in order to give to the poor.

    We're not doing that either. Don't make silly assumptions. We're pointing out that those of you in your industry can actually EMBRACE these trends to DO BETTER and MAKE MORE MONEY by NOT treating your biggest fans as criminals.

    The industry KNOWS the difference between content circulation that generates revenue (which is good) AND content circulation that hurts sales.

    It's become quite clear that many in the industry do NOT know that difference. Study after study after study has shown that your industry has gotten it wrong repeatedly.

    What most of you do not see is that a film is as important to its industry as a certain formula is to the pharmaceutical industry. We give away trailers and clips just as Pfizer gives samples. Why should we allow someone to consume our products for free at the time revenues are most critical?

    Because if allowing those people to consume for free INCREASES demand for a different aspect of your business model, you come out ahead.

    I agree with the MPAA about the need for DRM if they believe there's a market for (paid) TV screening of the film BEFORE the DVD release. It is obvious to me that DRM is needed in that case otherwise the DVD sales performance will be compromised (and home video sales are a VERY important form of revenue).

    Hilarious. This is from the industry that once insisted that the home video market was "the boston strangler" of the movie industry. But it "knows" when something helps and when something hurts, right?

    Yeah... ok...

    If there's no DRM for that matter, there will be simply no move in that direction (the advanced TV screening, that is) because the movie industry is not dumb.


    Until some more thoughtful and future-looking studio decides to embrace a better business model, does the earlier screenings, and the rest of you look lost. That'll be fun.

    Some people here are saying DRM is horrible and it is worthless. No it isn't. I cannot see one single industry who does not care about security and access of the goods they produce.

    Then you don't look very hard.

    Yes, there were movies before DRM and the industry was raking on money 70 years ago too... but that was before digital, game consoles, internet, P2P, home video and cheap pirate DVD copies sold for a dollar or two at the street.

    And yet you expect that it's consumers who need to change rather than the industry? Sorry, that's not how marketplaces work.

    DRM is here to stay. Embrace it.

    Infinite goods are hear to stay. Embrace it, or perish.

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