After speaking on a panel earlier today at a conference here at Ball State University (apparently their football team is 5-0, or so everyone told me), a student asked me why he couldn’t legally make copies of his DVDs. I don’t know if the question was prompted by news of the RealDVD service by RealPlayer that offers to do that or by the news that litigation is now occurring between RealPlayer and MPAA over that service, but given that the issue has been on my mind I was thrilled to answer the question.

I asked him if he had ever used video-on-demand services. He had. Did he think it was a good thing that sites like Hulu.com offer free, ad-supported movies and TV shows online? He did like that. Does he like the fact that if he chooses he can download-to-own a movie from, say, iTunes, stream one as part of his Netflix subscription or rent one via digital download from Amazon? Yes, he said, these are all good things. What did he think about the fact that some DVDs come with a free digital download as well? That too, apparently, was good. (I didn’t even bother to tell him that there are over 50 sites in the U.S. alone that offer these services legally for motion pictures and TV shows.)

Well, I replied, the motion picture industry is doing what everyone eight years ago was shouting at creative industries to do — develop new business models. But each of those business models is predicated on the notion of certain use rights associated with certain price points. When a consumer can voluntarily expand the rights that come with one of those services — in essence open the door to multiple copies of a work not licensed for that — that eliminates any monetization models except one: selling full use rights to the work at one fixed price. That’s the path RealNetworks has put us on.

RealDVD claims it is empowering consumers by allowing them to pay RealPlayer for the ability to make multiple copies of DVDs. But the end result of this could well be that one model of digital offerings, where we all pay one price and get the same set of rights. I happen to like subscription models. My in-laws like rental models with physical products (DVDs) but have no interest in versions they can store on a computer. Some people might want to put motion pictures on several computers, an iPod and a phone. Others might not need so many platforms. Yet all of us will eventually pay the same price.

That does not empower consumers. That denies them choice.

I recognize there is a demand to copy DVDs. That demand has been there for awhile, and circumvention technologies circulate online despite the fact that their distribution is illegal under the DMCA. But as was the case when iTunes and, yes, even RealPlayer’s Rhapsody service came along after the original Napster, just last month a new initiative was launched to meet demand in the video space. This is an effort to create a “buy once, play anywhere” standard. The Digital Entertainment Content Ecosystem includes technology companies, retailers and studios.

Sometimes we forget that creative industries don’t create these works to lock them up. They create them so people will enjoy them (and yes, they hope to profit as a result). When they see we want uses not initially anticipated, they work to meet that market demand. Are they as quick as infringers? No, and they never will be, because when running a business if things are working you stick with them. Innovative infringers, on the other hand, are looking to disrupt, not maintain. Disruption, or creative destruction as Joseph Schumpeter called it, is inevitable. But creative organizations adapt, grow and meet shifting consumer demands in new ways. That is what is happening with studios today.

So back to my questioner at the panel discussion here today. He probably didn’t want to hear about digital business models. He wanted to copy his DVDs and wanted to know why he couldn’t. I told him the economic reasons why that right didn’t come with his purchase, but we now also know that true mobility for a single movie purchase is coming.

RealNetworks is hoping they can find a lot of folks like this student, who are impatient and willing to adopt a technology that clearly infringes by circumventing CSS in order to do what they want to do. RealNetworks is counting on the fact that diffusion of responsibility will mean this student and other fans of motion pictures will not see their actions in the larger context of the negative impact on consumers in the market or on creators’ rights.

Certainly they will find some of these people. But RealNetworks knows better. They know they are promoting infringement. They know they have abused their rights as a CSS licensee. It’s not for me to get into an examination of why they might do this; it’s no secret they are struggling financially but only they know their reasons for starting this fight.

But this is not a fight from which creators should back down. MPAA is fighting this on behalf of its studio members. But in a way they’re fighting it on behalf of all creators who find technology companies adopting a model of “infringe now, sort out the details later.” In an age when creative industries are launching new and innovative business models on a daily basis, such an approach is inexcusable.

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This entry was posted on Friday, October 3rd, 2008 at 7:15 pm by Patrick Ross and is filed under copyright law, drm, internet, market forces, piracy, property rights. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.