DRM Doesn't Enable Business Models; Blind Fear Disables Business Models

from the get-over-it dept

A bunch of folks have asked if I had any comment on analyst Michael Gartenberg post over at Engadget claiming that DRM has been demonized too far, and for all the "bad" things about DRM, most people really don't mind it, and we should be happy that it "enables new business models." I've discussed this before, but not in a while, so it seems worth revisiting.

First, it's a lie that DRM "enables new business models." Gartenberg doesn't realize it, but he admits it in his post, when he suggests that DRM made all-you-can-eat subscription models possible, while immediately countering that point by admitting the real factors are elsewhere:
Take subscription services for example. Sure, I'd love a service that would allow me to download unlimited content in high bitrate MP3 format for a reasonable fee every month. Except economics and greed will never let that happen.
Notice what he says here. The DRM isn't what enabled the business model. It's fear of how people will use such a service that does. It's fear that people will actually use what's been given to them -- leading to the claim of "economics and greed" stopping such a service from ever coming about. But, that makes no sense. People already have access to pretty much every song ever recorded with no DRM at all. Claiming that they need DRM to enable such a service makes no sense. It's already there -- just not legally. So what does the DRM stop in such a service? Absolutely nothing. If the fear is that someone takes a song and shares it online... too late. It's already happened. The only thing that DRM does in that situation is put up a restriction on a legitimate, paying customer. That makes no economic sense at all.

And that's my real problem with DRM. It cannot enable a new business model economically. That's because it's only purpose is to limit behavior. There are no business models that are based solely on limiting behavior. It may be the case that some companies may be too afraid to implement a business model without this faux "protection," but that's entirely different than saying DRM enables the business model. DRM takes an economic resource and artificially restricts it. It takes away options, it does not enable them. DRM hasn't been "demonized." It's a pointless solution that prevents no unauthorized sharing and only serves to hinder the activities of legitimate customers.

Filed Under: business models, drm, economics, subscriptions

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  1. icon
    Kyote (profile), 27 Sep 2009 @ 10:29am

    Finally I registered

    I've been trolling here for a week or two and finally decided I liked Techdirt enough to register.

    I agree, DRM isn't an effective business enabling model. It's just another attempt, failed attempt, that is, to try to keep from changing with the times. The old ways may have been very profitable for them but every business has a turning point.

    Back when Napster first hit the scenes. Instead of hooting and hollering, they should have taken the opportunity to change. By doing what they did, it just got the word out about P2P sharing that much quicker. But opportunity always exists, it just doesn't have the same possible returns.

    The way things were done has had and continues to have a negative effect. I for 1 have not bought a single music cd since the original Napster was shut down. I get my music on the radio, via the net, so I don't have to deal with static.

    Netflix had the right idea where movies were concerned. Instead of making renting movies obsolete, it's grown like mad. Now they are beginning to stream movies instantly over the net.

    In pre-net days you could easily take your jambox and tune in your favorite radio station. Then pop in a blank tape and record to get a lot of good songs. And those with the inclination could edit those tapes to string their favorites together. Now it's just easier and you get what you want instead of waiting for it to be played.

    But now artists(at the urging of RIAA to be sure) are trying to go after radio now.


    I'll be happy when this is all over and they finally change with the times. I guess we just have to wait for the older moguls to die off before that will happen though.

    Anyway, that's my $.02 worth, though looking back it looks more like a buck and a half...

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