Why Steve is the better Bill

The music industry is an entertaining place. As honorary buffoons of the traveling trade show circuit, we were allowed to poke fun at their musty business models (“still trying to protect our flailing horse carriage factories since 1875”). Paint their potential saviours in gruesome colors (“some mobile network providers have higher earnings than the revenues of all you guys combined”). Or tried to scare the #%@! out of them by explaining some tech basics (“in 2010, a top of the line hard disk will be able to contain every piece of music which has ever been recorded – preferably preinstalled”).

It has been fun. But now it’s gone. The industry execs took over. They slaughter their holy cow DRM (well, almost). Make fun of their business models. Come on, it’s just not fair.

But why does this make Steve the better Bill? Read this: Apple – Thoughts on Music. And the we can talk about it a bit more.

PS The music industry is really an entertaining place. But people working in the industry tend to suffer from a very specific occupational hazard. They become a little bit hard of hearing.

Axel Ehssan Springer

OK, that’s a pretty German thing. Bernt von zur Mühlen asks in the media newsletter Medienbote: Where are the Web 2.0 Portal founders? Meaning: old media has had a tradition of reinventing itself from within. And gives some examples. Like Axel Springer (founder of the German multi billion Euro media empire Axel Springer Verlag). Or Helmut Markwort, reinventing for Burda the weekly news mag sector in Germany. Or Helmut Thoma, building up RTL from a softsex pirate station to Germanies leading tv network. His question: has old media now lost its knack? Instead of buildig up their future from scratch again, they buy their future.

Well, we talked about this one before. Real innovation (as in paradigm shifts) has never been the game for the incumbents. At least not in media. So he’s getting something wrong here. The founders are busily starting up their businesses. And the incumbents are busily picking the raisins. And everything’s just fine.

Bill sez: DRM s*cks

Well, of course he didn’t. But he meant it. Or how would you explain an advice like this, while meeting the politburo of the US blogosphere: People should just buy a CD and rip it. You are legal then. As Techcrunch’s Michael Arrington notes.

Now, what is this all about. DRM is a well loathed acronym of the digital entertainment world. Depending on your point of view, it either stands for Digital Rights Management. Meaning, as a publisher you can remotely control the access to digital data. Or Digital Restriction Management. Meaning, it’s a stupid/devious scheme to extend a business model of the 15th century (Johannes Gutenberg invents European movable type printing, thereby enabling mass media production) into the 21st century, which causes immense collateral damage.

To be honest, I understand both positions. Probably the most important digital media topic right now is the question of the content value chain. It’s a nice thing, that now everybody can get worldwide distribution. It would be even nicer, if this distribution could be monetized. In the current setup, producing user generated content means you become an active member of the attention economy. Attention economy always means, that all your efforts will pay out, if you get enough attention of a player with a more tradtional economic approach. It’s the American Idol model. Lots of people give their heart and soul, accept the possibility of public humiliation, to finally get an intern job at a global whatever conglomerate.

I theory, DRMing digital content would transform an infinitesimaly copyable digital file into ressource of virtual scarcity. Transforming it into a sellable good. Sounds good. Unfortunately, this just theory. In it’s current setup, DRMed content is cumbersome for consumers and adds layers of cost and complexity for copyright owners: choosing a DRM, licensing a DRM, paying for DRM – and paying for 1st level customer support, because the consumer does neither understand the tech nor the legal licensing stuff involved. And it can get worse. Just ask Sony BMG about its brilliant idea to infect consumer computers with black-hat-hacker-style root kits.

Of course, DRM is about Digital Restriction Management. Take a freely accessible set of data. Shrinkwrap it using DRM. And whoosh, you’ve restricted the total accessabiliy, and made those restrictions manageable, too. The concept is of course highly attractive. Let’s say, if you put some sensitive data on an intranet. In mass media, there a two different proponents. Traditional media companies, wanting to protect their traditional business model. And governements from überdemocratic countries like China and Iran. And that’s where the collateral damage starts. Because unfortunately, if you really want to shrinkwrap some media into a closed shop, you have to include pretty much all devices which potentially might be used to play such a file.

Which translates into: for protecting a nice old business model we put everything in place to jumpstart a dystopian surveillance society, modeled after Orwell’s 1984 and the East-German Stasi.

But I think, it really stands for Does it Really Matter. Correct me if I’m wrong. But even in a totally shrinkwrapped media world, you will have to leave some space for consumer produced media. Uncle Umpty will have to be able to make his dreadful birthday movies and post them somewhere in the digital realm. The next Robbie Williams will have to put some first moves and shakes onto a web site of his choice. And let’s not forget consumers. Yes, DRMed music downloads are picking up and the iPod saved the Apple. But the digital format of choice is still yer good olde MP3, no strings attached. When the Bill says: People should just buy a CD and rip it, he’s just stating the obvious. Guess where all the music is coming from, filling all those iPods. And the gazillion other MP3 devices out there in the wild, wild consumer world.

But let’s come back to the digital value chain. Is DRM evil? Nope. But it can be used for mighty evil things. So better be careful of the collateral damage. In its current implementation, DRM ist mostly stupid. Interoperability is a word consumers should not have to learn to hate (as it per se does not exist). DRM can be a nice thing in a confined setup. But it’s not a silver bullet. As a value chain of one chain link is a pretty feeble excuse for not being able to adapt to the brave new world of networked entertainment.