DRM technology and policy

[Derek Atkins]

Adam Back <adam at cypherspace.org> writes:

> I agree with Carsten's comments.
> 
> I consider there is no moral obligation to pay the author or
> distributor.  There is essentially zero copying cost once content is
> produced.

You may agree with him, but you've missed his point.

There *IS* still a moral obligation to pay the "artist" (creator of a
work).  Carsten's point was that the artist was only obtaining a small
percentage of the amount normally charged, and it was the distributor
making most of the money.

This about it this way: if <insert your favorite musical artist here>
never got paid for their work, what incentive would they have to
continue making music?  While musicians (and I know a few personally,
including grammy-award winning artists) do usually feel the need to
create music (sort of how programmers feel the need to write
programs), if they cannot make a living, feed themselves and their
family, then most likely they will find another avenue.

I agree completely that the proposed DRM systems exist solely to
continue the existing (IMHO broken) business model of the Big
Distributor.  The Internet gives us the opportunity to shift the power
from the distributor back to the artist.  But that does not relinquish
us from the moral obligation to pay the artist.

Adam, I don't know exactly what you do for a living, but would you
continue to do it if people morally felt that they should not pay you
for doing it?

==========================

John wrote:

> Suppose I've written a book.  I'll give you a
> license to publish it if you pay me $1.00 per
> copy.  You can have a thousand-copy license for
> $1000.00.  You could get a six-billion-copy
> license for even less than $6e9, since I would
> give you a quantity discount.  So there is no
> shortage of licenses.  Far from it.  AFAIK there
> is no shortage of paper or ink for making books.
> So I see no reason for believing that real
> shortages or 'assumed' shortages play any
> significant part in the business model.

Sure, the LICENSES are unlimited, but the LICENSES here are what map
directly to the digital world!  The thing that you are ignoring is
marginal cost.

The marginal cost of copying a book is significant.  Paper _IS_ a
limited resource.  There are a finite number of trees that can be
harvested and turned into paper.  There is a finite, non-zero cost per
sheet of paper (approx $0.01 retail per 8.5x11 inch 20# sheet, but
certainly less than that in bulk).  Ink, as well, has a cost
associated with it (and again, I believe it IS a finite resource -- it
takes time and effort to create the ink from its natural (or
unnatural) substances.

Similarly, the fixed-costs of the book-duplicating machine is
extremely signifant.  I don't know many people who have a printing
press in their basement (let alone access to one elsewhere).  Both the
availability of the technology as well as the marginal cost make it
extremely uneconomical to copy a book.  Why would someone go pay
$100,000 for a machine to duplicate a book they can buy for only $10.

Also the space constraints are high.  Storage of the duplicating
machine, paper supplies, and ink for duplicating a bunch of books is
rather large.  Also, the quality of a copy is usually diminished,
unless you take the time to reverse engineeer back to the source.  A
xerox is "worse" than an original master copy, and after N generations
the copies become effectively worthless.

None of this is true for digital media.

What's changed is that the marginal cost of duplication of a digital
work is SIGNIFICANTLY lower (near zero!).  The cost of duplicating a
CD is about $500 fixed cost plus about $0.30/copy.  And that assumes
you're duplicating onto CD and not using the network.  The space
requirements of a comuter and a bunch of CD or DVD media is tiny.  And
the quality of a copy is exactly the same as the quality of the
original, so an N-th generation copy is indistinguishible from a
1st-gen copy.

So the economics (and aesthetics) of making copies of digital media is
significantly changed from older, analog media.  Which returns us to
my thesis that the current business models don't work.

Something has to give.

-derek

-- 
       Derek Atkins
       Computer and Internet Security Consultant
       derek at ihtfp.com             www.ihtfp.com

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