RealDVD Empowers Consumers — NOT
Friday, October 3rd, 2008 by Patrick RossAfter 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.
October 5th, 2008 at 10:36 am
[...] RealDVD Empowers Consumers — NOT [...]
October 16th, 2008 at 4:28 pm
[...] service does not in fact promote fair use and how in fact if the service were allowed to go forward consumers would be harmed, but it’s clear I must continue to hold a stop sign up to the tidal wave and make clear how [...]
November 10th, 2008 at 7:01 pm
Hi.
I’m a student looking to get a job in the recording industry. I have been following both sides of the issue of media piracy since long before I enrolled in college to bring my passion for film audio to life.
And this article completely, utterly misses the point.
The reason why your statement that RealDVD does not empower the consumers is simple: it completely ignores the wildly postulated claims by executives and artists in most of the major industries that media transfer was EXACTLY where the industry was moving to. Look at John Lennon, telling fans that eventually they would be able to buy the Beatles’ music and transfer it to whatever format they wanted. there are thousands of similar promises made with the release of each new technology. And yet, the film industry and the recording industry are loathe to support them.
What is forgotten, is that while some consumers forget, many consumers do NOT, and the trail of empty promises abandoned in favor of CEO payouts is traced like a trail of empty beer cans to the drunk redneck in the trailer park down the road.
Empowering consumers? Hell yes. See, unlike the MPAA, the people who are eventually going to take YOUR jobs are realizing something: our consumers AREN’T your shareholders or CEOs. The people who are our future current and future consumers are the folks who, in a very short period of time, are going to wonder why they are paying for media saddled with laws and restrictions that affect them far more than any piracy organization. They are going to wonder, and then they are going to dabble, and then experiment, and pretty soon we’ll have to switch to a system that completely ignores media sales. Because YOUR ORGANIZATIONS are placing short term unit profits ahead of actually retaining or raising support amongst new fans. You know, fans? Those people who actually hand real currency to their local (or online) retailers to experience our products?
If the entertainment industry adapts to a world where the consumer is always right and always willing to prove it to you, it’s a foolish move to ignore their demands. the Warners, Disneys, Sonys, Viacoms and General Electrics of this world would do well to keep that in mind. It’s time to buckle down, and start using real consumers, not monetarily-imbued sheep, in their business plans.
But go ahead. After all, you’re only protecting the consumer’s empowerment.
November 11th, 2008 at 6:23 pm
Wow this article is the pendulatimate in stupid reasoning so typical of money hoarding idiots who cannot see the money where it is. So you like subscription services and thusly those of us that prefer to keep a movie in dvd format backed up because the format is flimsy and prone to programmed demise should be forced into your mechanism? How are you any different than the folks at Real whom you disparage? Are you also aware that streamed media may be captured and stored indefinately or aware of devices called DVR’s? So why are the folks who choose a media to be on demand somehow deserving of keeping the movie they paid for stored as a backup but those of us who choose to backup our DVD formatted movies are reviled as being ignorant of economic models and ulitmately pirates? Perhaps it is you who lacks a grasp on reality and simply clutching at pennies when the dollars pass you by, ahh but then again you get paid to have an opinion no matter how asnine or ignorant it may be.
MPAA and RIAA have never had a grasp on reality when it comes to the people who made them the few dollars they have recieved. More and more bands and movies choose to go independant and bypass your “empowerment” every year, yes we can see that you are all for the artists studios and people you represent when even they jump ship enmasse. But the overall loss of sales, middling numbers, and a failing market for movies and music are surefire sign that your economic model is perfection, carry on, perhaps someday you too can expect a 7 trillion dollar bailout for running a market into the ground.
November 12th, 2008 at 12:48 pm
My goodness, such vitriol for a blog entry that’s weeks old.
Josh: Good luck with your search for a job in the recording industry, although your blog suggests you’d wish that industry go away. I’m assuming you’re just out of school, but I think once you are employed and realize the symbiosis between sales and employment you might have a slightly different perspective. But regardless, I wish you had actually addressed my point that it is important for consumers to be able to buy the rights they wish at the price they wish, and not enter a world where we pay one flat price regardless of what uses we desire, instead of going off on a screed against me and corporate America.
Fiend: Like Josh you get sidetracked into the music business, when this is about motion pictures. Any studio, large or small, can give any permissions it wants with DVDs, and many now include a free digital download of the movie with the DVD. I suspect we’ll see more of that. Consumers can accelerate that by not purchasing DVDs that don’t offer them what they want, but many DVDs continue to be sold and they seem content with not copying their DVDs. I know that flies in the face of your interest and those of your social circle. Oh, and the word you were looking for is “penultimate,” but that actually wouldn’t be used here because it means “second to,” as in the penultimate hole on a golf course (17th) or the penultimate quarter in a football game (3rd). Also, I assume you meant to call me a money “hoaring” idiot, not a money “hoarding” one, unless you are suggesting I am hoarding DVDs. If so, I’ve been called worse by strangers who go by pseudonyms.