rights we hold dear

I was browsing portable mp3 players today at Fry’s when I noticed something: every single non-Apple portable mp3 player had this omnious “DRM PROTECTED” tag with an even more insidious lock-shaped icon underneath it on its box.

It’s not like they’re hiding it… a lot of players, like Hyundai’s and Philip’s place this phrase and the icon right under the “1GB” or “512MB” size indicator. Samsung placed its right in the middle of its packing, underneath a “Samsung” logo. They market it as a feature no different from having an FM tuner build-in. It’s a feature! DRM is a feature! One that you seemingly can’t live without. Somehow, I lived without it, and I remember life being better without it.

Well, I have no interest in rehasing old arguments about piracy and theft, but I do have an interest in the English language. Let’s just strip away the pretenses and call DRM what it really is: licensing. Instead of purchasing a DVD or CD, Warner and Sony and Universal would rather license it to you. Ideally, they want to charge you every time you watch it, listen to it, get off to it, and that’s probably where everything will head in 2020. I’m sure their executives are having their own DRMgasm thinking about this possibility. They don’t like this idea that you own something. They want to own you.

They want you to believe it’s about piracy. Theft! Thieves they cry. The reality is that most of the world’s piracy isn’t done by anime fansubbing groups or even the unscrupulous people who sell the hard word of said subbers on eBay, rather by cartels in Russia and China. Fortune recently posted an interesting article where their head of distribution of Warner visited China and was shocked to see aisles and aisles of counterfeit DVDs of Sex and the City… and how he couldn’t find a legit copy to purchase. That’s where piracy war should be fought. Those are real lost sales, and worst yet, since they are nearly identical to the real thing, people think they are buying the legitimate product. A double whammy. Yet, do you see the RIAA or MPAA suing huge Chinese corporations who turn a blind eye to pirated goods? No, you see them suing college students.

Why? Protecting their copyright? Hardly. They want to enforce a more lucatrive business model. They know they won’t win against China and Russia, and they very intelligently turned it into a way to justify their further milking of the US and European markets. Many years ago, when I bought a CD or VHS tape, it was mine. I could copy it, I could mix them, I could do whatever I want with them. Okay, I can’t make copies and sell the copies, but I could at least make mix tapes for me friends (yes… tapes). (A lot of times, my friends would like a song or two and end up buying the whole CD. Viral marketing at its greatest. And the media companies shoot themselves in the foot trying to kill it.) It’s like if I went to Safeway and bought a loaf of bread. I could make a ham sandwich. Tuna. PB&J. French toast. Or even, Oyashiro-sama forbid, feed them to the neighborhood birds. If the bakers told you, “You’ll have to sign this 10 page licensing agreement that said you won’t share this bread with your girlriend or roommates, you won’t make any turkey sandwiches, and you can only use Kraft brand mayonnaise,” would you still buy the bread?

But that’s what licensing (DRM) really is. It’s restricting the use of a product that you fully and legally paid for. I wouldn’t mind if it were offered cheaper, but it’s not. It’s being forced down our throats at premium prices. In that Fortune article, Warner mentions that they are planning to allow encrypted downloads of movies using Bittorrent, but you can’t burn these movies to DVD, even though they won’t be significantly cheaper. Let me get this straight. I get to suffer through a huge download, make my own bandwidth available to help you distribute your product, can’t burn the file, yet you’re not giving me a financial advantage for doing so? You’re pocketing the money? I mean, how does this stop piracy? How is encrypted downloads that you can’t burn to DVDs going to stop China or Russia from cranking cranking cranking fake DVDs?

I have a novel idea. Why not make everything cheaper? There’s a local cineplex that shows movies that are about a month old for $2.50. If you offered me a chance to download a movie using Bittorrent for $2, I would definitely buy it. $10? Hell no. If a local cineplex sitting on prime Milpitas (yes, I’m being generous with “prime” when used with Milpitas but please bear with me) can charge $2.50 a movie, why should a digital download be more expensive than that? Consumers get their product direct and cheaper than before, movie studios cut out the middlemen plus save on distribution, and best still, it’ll combat piracy in China. (The movie theaters suffer, and I can’t be happier. I paid $10 to see a frickin’ maintee of Da Vinca Code. $12 for evening.) Instead of going into a store and paying US$2 for a pirated DVD, they can pay US$2 for a legit digital download. Right now, there’s zero chance a Chinese consumer will buy a legit DVD… with digital, maybe 10%… but it’s a start. But the media companies are too greedy. They don’t see how growing the market volume and making distribution cheaper will increase revenue even if the retail price drops. They don’t see how cheaper products will beat piracy in ways DRM can’t. And their myoptic and flawed vision most certainly can’t see how the public so desperately wants this.

Worse yet, is that the studios enjoy penalizing their paying customers. Let’s say that I buy a new HD-DVD, but I don’t have an encrypted HD input into my plasma, so this image constraint token (ICT) reduces the output to just DVD-level quality. Can someone please explain to me how this stops piracy? This isn’t a deterrent to the cartels running the show overseas, and it seems to unfairly penalize early adopters of HDTV. In other words, you’re screwing over the customers most loyal to you. Fantastic business model. I’m sure this will show up as a Harvard business case someday.

To their credit, a few studios are taking a “look-and-see” approach to ICT, but only because someone in the standards committee was smart enough to toss a “If you use ICT, you must clearly say so on the box,” and they fear people won’t buy their HD-DVD if they put up a ICT logo. Though, I get the feeling it won’t be long before I see ICT marketed as a feature along with a cute, yet insidious, icon just like how DRM is marketed these days. It’s a feature! ICT is a feature, and if you don’t like it, you’re a criminal! Remember that as the big media companies are happily taking away your consumer rights in the name of stopping piracy. In the end, whose the real pirate?

(To make this soapbox rant link back to anime, I can certainly imagine a company like ADV cleaning up the market… instead of $30 DVDs released two years after airing in Japan, why not $1 an episode iTMS downloads a month after airing in Japan? Can you imagine legit Haruhi 1-4 available now on iTMS? Let’s say it costs $10k to license an episode, and iTMS and production fees run half of a sale’s price, so they need to sell 20k downloads to break even. Guess what? On scarywater alone, Haruhi 1 has already racked up 80k downloads. Even if half those people went legit, it would mean a nice per episode profit even at $1 an episode. And if people want DVDs, package extras… like limited edition Mikuru-run cell phone strap or a 15 minute seiyuu interview. Who wins? Everyone.)

22 Responses to “rights we hold dear”

  1. I think you more or less hit the nail on the head, Jason.

    The genius of some American companies is to make their loyal customer base pay an arm and a leg for things they really do not need but will want to buy anyway. Media falls under this category and with the major media conglomerates working in unison, its open season on the Consumer. I would venture that this will actually enhance the growth of pirates and piracy in various forms of media. If customers are under the impression that the companies are out to gang-ass-rape them then even the most hardcore of them will consider buying a pirated product that features full freedom of use rather than an item that puts spyware into your computer or can only be used with select hardware.

    No protection scheme is infalliable and sooner or later someone will figure out a way to crack it. Then it will be all over the Net. Companies in China and Russia will be more than happy to churn out hardware that ignores current and future restrictions on use of media.

    Here’s a radical idea, why not just co-opt fansubbers? Their work does not need any sort of central office save for administration. If they get a comission for every episode they sub, it becomes possible for a company to market an episode online in a matter of days after its initial release. Since you pay the subbers on a comission basis, its a heck of a lot cheaper than a mass of translators sitting in your offices. Furthermore these individuals are already familiar with the ins and outs of the trade, how popular a series is going to be and where they can best distribute these files. P2P technology will only improve as cable networks become ever more commonplace. Why not ride the Internet technology wave rather than fight it? Napster may be gone but every time someone took down a P2P network, new ones spring into place. If the fat cats can only realise the sheer profit potential out of mass distribution rather than try to milk the consumer for every cent, it would be a win-win scenario for everyone. Trying to add ever more complicated layers of protection over media however is a lot like sitting at the shore and commanding the incoming tide not to touch you. It looks impressive but is ultimately futile.

  2. Thanks for a new way of looking at this. Licensing rather than sales. The eternal milking of the consumer, rather than selling better goods at cheaper prices. In Canada, a group of artists including Sara McLaughlin and Barenaked Ladies has come out against suing the fans. Novel idea. In Canada at least, even the better-known bands make much more money from concerts than from CD sales. Who makes money from CDs? The companies that ensure prices stay high and the fans are as frustrated as possible. I wonder how artists would make out if they bypassed the distributors and sold online at 10 cents a song and a dollar an album? It frustrates me to the the leviathans doing everything they can to prevent the arrival of a better business model.

  3. I’ve been reading this same kind of thing all over the internet, and agreeing to every one of them. I’m glad there is an uprising beginning. The thing that pisses me off is that this DRM crap is forcing MTP on us. Fewer and fewer mp3 players are using UMS to transfer files, and it grates on my nerves. I don’t want to have to use Windows Media Player XX just so I can use my dang mp3 player. This means that, as I upgrade my mp3 players, I’ll be forced to upgrade my operating system as well; otherwise I won’t be able to get songs from my 5-year-old computer onto my player.

  4. I remember when I got my first Mp3 player 7years ago, it have those annoy protection, that require you to use thier program to tranfer song into it, and you can’t put the song out. Every since then I have got my self 2 other mp3 players, neither of them have it, they are just Usb drive + player combo, much nicer (maybe because i have got them from Asia, Hong Kong)

    But I can tell you all is that aside from the top model from brand name company that cost 3 times as much, all other brand mp3 players have no protection what so ever and they can some time cost cheaper than the same storage sizes USB drive. I walk by those store and have to wonder at times who’s paying a leg and a arm to by those crippled mp3 player at sky rocketing prices?

  5. There are even trying to use the excuse of Piracy, BitTorrent and Trojan Horses (!!!) to install government-run Internet traffic monitoring systems in Hong Kong.
    Shame to those who spent half a century and yet never learn to respect privacy (not to confuse with piracy). They only worry about their asses might be kicked in the next minute. No wonder they always ended up with a burst bottom. :D

  6. Excuse me, but I should be suing the likes of Apple for using MY copyright.

    Just let me point out something.


    I should be suing them for associating me with their buggy methods of milking people and mental trauma.

  7. I agree with you entirely omni. Though in a business sense it is definatly easier to bully the colledge students than to even try to get their hands on the piracy companies in China and Russia. Even the Central Government are playing whack-the-mole with these companies, certainly these forgien companies don’t really stand a chance don’t they?

    Well, i heard that this war against piracy in Chana could be won though, Warner are actually selling cheap legitimate copies (around double the pirated price) of their movies. They’re called light versions which include nothing but the DVD-cut of the movie itself. Those that want all the normal goodies DVD has to offer, buy the full one. DVD-cut of the movie at a slightly higher price, so far it does sell to the public. It’s a classic “if you cant beat them, Be them”. Only if other companies learn the same and stop milking off us poor customers…

  8. yeah Satalexton,

    I heard that also, plus those company didn’t just sale cheap with out add-on they also sell them soon after the movie is on theater, some times in just days.
    And I think that’s the key parts, cause many peoples don’t go to theater, and they arn’t going to wait for ages to get DVD.

    Saddly they don’t do that in Hong Kong, only in mainland china.

  9. Great post. I’m hoping that the market’s ultimately going to kill the movie industry’s insane DRM dreams–just read this article in the Post about what Movielink and CinemaNow apparently consider to be reasonable DRM, and I think anyone would agree they’ve created such horrific DRM restrictions and boneheaded pricing that no one will ever buy it:


    You’d think from the DIVX (not the codec, the “pay us $2 every time you watch your movie until you die” format that bit it in the late 90s) vs DVD format wars they’d learn their lesson, but they just don’t get it. In the end, I think the movie industry will go through the same process the music industry did–they’ll try out some more boneheaded DRM schemes dreamed up by their legal departments that no consumer in their right mind would buy into, be shocked when no one buys their “service”, and in the end run to Apple with their tails between their legs and go with iTMS and a more reasonable DRM setup and pricing (which will still be more annoying than no DRM at all, but hopefully much better than some of the crap like Movielink is trying to pull). I’d love to see anime go that way too, even at $3-4 an episode I’d be all over it, as long as I could burn it to DVD to watch on TV and to have a backup. A lot of niche titles that might not be profitable for a US company to license when you factor in the expense of DVD masters, packaging, distribution, etc., might just be profitable if they were in an iTMS-like direct download model.

  10. in France making a private copy of a DVD or CD you own is now forbidden and in Germany they’re planning on adapting the same law … that’s ridiculous -.-

  11. minikui: wrong. The new french law (that is not yet voted) does not forbid you to make a copy of your cds or dvds. On the contrary, it states that the maker of the cd must let you the right to do a number of copy that may be limited (possibly to 0…).
    If it were to be forbidden, the “taxe sur la copie privée” that is taken on cds, dvds, flash memory could no longer be sanely taken, and it amounts to quite an important sum.

  12. Licensing an anime episode after it’s out? Not even Japan is that fast, you got to want at least a month or two for the DVDs.
    Speedy R1 licensing doesn’t work because of reverse-importation (even though the average R2> average R1). Who wants to pay US$50/DVD for the R2 when the R1 cost >$30/DVD? -_-
    Plus Licensing outside Japan is the *last* source of revenue of the anime.
    Anime revenue source goes like this;
    R2 DVD, CD Drama, Merchandise then US license.

  13. >> Since you pay the subbers on a comission basis, its a heck of a lot cheaper than a mass of translators sitting in your offices.

    Someone tried to do this a while ago, and it failed miserably as the fansub groups that he contacted laughed him out. I think that most fansubbers aren’t in it for the money. It’s more of a doing it for the love of it… and once there’s a financial pressure, it’s not the same anymore.

    >> I wonder how artists would make out if they bypassed the distributors and sold online at 10 cents a song and a dollar an album?

    That’s about how much they make after the studios take their chunk out anyway. Most musicians make the bulk of their money through concerts.

    >> The new french law (that is not yet voted)

    I think everyone should write to their congressmen or representative and let them know that the _people_ don’t want this kind of law.

    >> Licensing an anime episode after it’s out? Not even Japan is that fast, you got to want at least a month or two for the DVDs.

    That’s what I’m advocating, and it’s been done before with IGPX and Miami Guns. It took, what, 2 years for Mai Hime… ? You’re going to lose a lot of sales waiting that long.

  14. First: I have a suspicion that vast majority of business people and media guys’ IQ rating is not in three digits.

    Second: Rapid licensing can be done. Almost every Korean TV Episode is available to be downloaded from the TV network themselves withint 24 hours of its broadcast and the fee is abour 30 cents per episode. Many bigger network also make you pay monthly membership fee of about $5, but they usually have higher resolution version as well as archive of older ( more than 1 month ) show. The format is such that does discourage saving the files, but the fact that it is available has reduced the illegal downloads quite a bit. Since there are many who does trade saved files of the episodes, there now is talk of making available the downloadable version for price of about $1 per episode plus about $10/monthly fee. It is not cheap, but many would gladly take it for the quality and peace of mind. One problem is that Korea, being very small, is literally covered with the latest communication cables of all sorts, for those paying $10/month fee to the internet provider can download stuff within the ISP network at speed exceeding 1 Megabyte/second as they do have something like direct optical cable connection to the main server, which just is not possible for country as large and as distant from Asia as USA. The fact that there are broadcasters generating revenue by offering their TV programs on line should be noticed and studied by Japan and USA. If Japanese broadcasters offered their animes on line, I think many people would love the opportunity.

    third: The mass media people and business people tends to believe that it is hard to overestimate the stupidity of the people. They forget that it is also easy to underestimate cunning and guile of the people. The mass is not intelligent but they are surprisingly tricky.

  15. The mass is also surprisingly lucky at guessing something with some but not sufficient information. It is this hidden competency of the mass that allows it to survive its stupidity and treachery. So many times a poll of random people give better prediction of a event compared to many so called experts. There is an article about this in last year’s Scientific American and Skeptics, so check those two magazines out if you have the time.

  16. For me, I perfer the Hakuoro approach:

    fuck’em all, no mercy.

    Violence is the only thing they’ll respond to, and that’s because the stupidity of the masses usually outweigh the cunning of the masses. PT Barnum says: “A sucker is born every minute.” And he’s right. And if there are legislators who depend on such people for their money, I say we arm ourselves with AK47s and shoot them all dead. But first, we get the armed forces to our side. Then the paramilitary organizations. Then we’re cookin’.

  17. Let me quote a result from this experiment with the ants. They have found that only about 20% of the ant population did the work; others were loafing around eating and killing time. They then gathered the working 20% up with the queen and transplanted them to a new colony. One week later, they found that, again only 20% of this selected group worked while rest were enjoying a vacation. Moral of the story: Like in the famous novel, Animal Farm by George Orwell, it is easy for those liberators to become oppressors themselves.

  18. Sorry for my bad English in advance.

    I somehow got lost reading this article, are we protesting DRM or the companies that abuse DRM ??

    Just by looking at the title I knew this article would contain words like “china” or “chinese”. Yep, as an axis of piracy.
    As Chinese I can’t really tell U.S. government’s policy on DRM, but Let me explain why such heaven-on-earth licensing thing never happened in my motherland.

    To start with, it’s for three major reasons:

    1. Licensing Price:
    Example: One of my friends works for one of the largest game publisher in China, I remember one day he told me they were about to translate the famous KEY game: AIR, and publish it as a legal translation work. However 2 months later when I mentioned that AIR project again, he replied with a sigh. Turns out KEY offer the game in exchange for 2,000,000 RMB (8 RMB = 1 USD, so 250,000 USD), games like AIR are around 50 RMB (6 USD) in Mainland China, there is simply no way they can sell more than 40000 copies of AIR (in fact, only five PC non-MMORPG games sold over 100,000 copies in year 2005).

    as a side note, KEY is quite infamous for its licensing price, they once attempt to charge a publisher 100,000,000 Yen (around 1,000,000 USD)

    2. Cultural Differences:
    I am not blaming this on *Human Rights*, but there is always people (usually people in charge) trying to prove this theorem: “Japanese Anime is Evil”. If you must know, there are rules like “local broadcasting corporations are NOT allowed to broadcast anime for more than 1 hour between 4pm and 8pm.” Also it seems like we can’t have totally legit Subbed Anime in DVD, all of them are *properly* dubbed (this fact still scare me)… Thus it’s obvious how Hard it would be to publish a decent & legit copy of Haruhi :-(

    3. Internet User Growth:
    Why would popularity in internet & IPTV boycotts the chance of cheaper dvds ? Because even the *legal*-anime-downloading sites are providing subbed versions of anime(quite understandable), which is again coming from Bittorrent network, or in some cases, Winny. Yes indeed it only costs around 20 RMB (less than 3 USD) a month & users can have unlimited downloads & all animes are updated to the latest, but in no way it is legal.

    So there you go, Japan wont issue a license + people in charge don’t like anime + nobody can say “they are absolutely legit” = You solution won’t work in China Let’s use Bittorrent.

    btw, Da Vinca Code ?? must be a spin-off of Da Vinci Code. : )

  19. >Bebeko Says:
    >May 29th, 2006 at 5:15:01 AM
    >Who wants to pay US$50/DVD for the R2 when the R1 cost >$30/DVD? -_-

    That may change once the anime distributors makes the transition to Blu-Ray/HD-DVD formats. On those new-gen formats, Japan and US share same region-coding, so you can view both countries’ next-gen anime dvds right off the bat. Awesome? Yes. Easy solution? Nope.

    As you mentioned, R2 DVDs range $50 or more per dvd for 2-3 episodes, while R1s features 4-5 episodes for almost half the price. Once anime makes the transition to next-gen DVDs, episode count and pricing would have to be roughly same otherwise it would create distribution/sales problems for both sides if one country favors importing another’s DVDs at expense of their own country’s distributor. And since Japan’s the main source of anime, it’s very likely that the episode count and pricing will fall within their favor – and it’s not very economical for Japan to sell discs with higher episode count, so we may end up with lower episode count, with some pricing rises.

  20. You are correct in that in oreder for a company to actually beat the pirates is to change marketing practices, but for companies looking for short term profits it suits them more to extort the unwitting. If anime DVDs are no longer profitable I can see them becoming a more specialized product, selling of episodes can only get a comapany so far. Selling of a veritable flood of PVCs, games, blankets towels, etc would probably becoem the main source of revenue in the future.

    In regards to privacy the march of technology has made it nearly impossible. Information yearns to be spread and what you do is no exception, thats why companies are willing to offer discounts if you sell them information about your spending habits. These security features is but a wasted investment no security is ever fool proof, its just like an arms race that the big companies are doomed to lose. The first distributor that follows a superior business model based on selling cheaper more easily attainable anime episodes will have a decided advantage over the dinosaurs lumbering about to produce dvds of questionable quality.

    Personally I keep my fan subs even if I get the DVDs, much easier to store more easily catalogued, and much easier to throw onto a hard drive for viewing in the next disaster zone.

  21. while browsing the internets, i found this on wiki


    if only DRM stood for that


    btw, iRiver ftw!

  22. haha i love how capitalism works…
    wait, it doesn’t after the ecomic markets become too big to reduce morals. XP

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