The technical implausibility and unintended consequences of digital locks are big problems for digital-lock makers. But we’re more interested in what digital locks do to creators and their investors, and there’s one important harm we need to discuss before we move on. Digital locks turn paying customers into pirates.
One thing we know about audiences is that they aren’t very interested in hearing excuses about why they can’t buy the media they want, when they want it, in the format they want to buy it in. Study after study shows that overseas downloading of U.S. TV shows drops off sharply when those shows are put on the air internationally. That is, people just want to watch the TV their pals are talking about on the Internet—they’ll pay for it if it’s for sale, but if it’s not, they’ll just get it for free. Locking users out doesn’t reduce downloads, it reduces sales.
The first person to publish a program to break the digital locks on old-style DVDs, in 1999, was Jon Lech Johansen, a fifteenyear- old Norwegian teenager. “DVD Jon” took up the project because his computer ran the GNU/Linux operating system, for which the movie studios wouldn’t license a DVD player. In order to watch the DVDs he bought, he had to break their locks.
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In 2007, NBC and Apple had a contractual dispute over the terms of sale for Apple’s iTunes Store. NBC’s material was withdrawn from iTunes for about nine months. In 2008, researchers from Carnegie Mellon University released a paper investigating the file-sharing impact of this blackout (“Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy”). What they found was that the contract dispute resulted in a spike of downloads on “pirate” sites, and not just of NBC material—it seemed that once people who had been in the habit of buying their shows on iTunes found their way onto the free-for-all file-sharing sites, they clicked on everything that looked interesting. Downloads of NBC shows went up a lot, and downloads of everything else went up a little.
More interesting is what happened after the NBC-Apple dispute ended, and the shows returned to iTunes. As the CMU paper showed, download rates for those shows stayed higher than they had been before the blackout. That is:
- Refusing to sell their viewers the content they wanted in the format they preferred drove those viewers to piracy.
- Once the audience started pirating the content they wanted, they quickly turned to pirating other content, too.
- Having become aware of and proficient in the ways of downloading, the audience developed a downloading habit that outlasted the end of the blackout.
Digital-lock vendors will tell you that their wares aren’t perfect, but they’re “better than nothing.” But the evidence is that digital locks are much worse than nothing. Industries that make widespread use of digital locks see market power shifting from creators and investors to intermediaries. They don’t reduce piracy. And customers who run into frustrations with digital locks are given an incentive to learn how to rip off the whole supply chain.
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It’s harder if you’re a creator, because many of the biggest investors have bought into the idea of selling with DRM or not at all. When it comes down to negotiating DRM, you just have to make a decision about whether you’re willing to let your creative work be put in some tech company’s jail in order to make your investors happy, or whether you’ll keep shopping for a saner, better investor.
Link to the rest at TechCrunch