Unconditional access

The control of intellectual property lies at the heart of the shift from an industrial-based to an information-based global society. Right now, a handful of content conglomerates are trying to use the transition to digital distribution to greatly expand their control over how we consume and share the content they produce.

To do this, they have used their influence to turn the original constitutional intent to proliferate ideas into a means to protect their oligopoly control over the distribution of entertainment content. Several recent developments, however, suggest that the pendulum may be swinging back to favor consumers rather than the content conglomerates.

Those who wrote the U.S. Constitution understood the need to protect intellectual property. However, they also understood that moving ideas into the public commons quickly would benefit the entire country. The first copyright protections granted by Congress were limited in scope, only protecting the work of American citizens who requested the government issue a copyright for their work. The duration for such protections was 14 years. If the authors or creators were still living after that, they could request a 14-year extension.

Copyright law remained essentially unchanged for a century, until the invention of the player piano, the first means of mechanical reproduction of a copyrighted musical composition. The scope of copyright law expanded to cover musical compositions and their reproduction. The duration of copyright protections was also extended.

Over the past 46 years, the duration of copyrights was extended 11 times. Today, the term of a copyright is the life of the author plus 70 years. It is no longer necessary to register works for copyright protection. My words in this column, for example, are automatically granted copyright protection for 70 years after I die.

The spirit and intent of our forefathers to quickly proliferate ideas into the public commons has been subverted. One could argue that these actions are appropriate for the times we live in. After all, who knew that the 21st century global economy would be driven in large part by the value of ideas, rather than the value of the products of the industrial revolution?

A kidnapped market

All of this would be less irritating, were it not for one fact. Among the special interests most active and influential in the battle to grant increasing rights for intellectual property are industries that used the 20th century radio and TV broadcasting technologies to create a new public commons for their creative efforts. Where would the music industry be today without the remarkable power of advertiser-supported radio to promote its artists? The 45rpm single, LP, audiocassettes and CD somehow managed to produce increasing revenues for the music industry without content protection technologies.

Before embracing VCR technology as a way to create the highly profitable home theater market, the Motion Picture Association of America (MPAA) viewed the VCR as a major threat. To protect itself, the industry turned to Macrovision for a lightweight copy protection system for prerecorded videocassettes. It implemented a much stronger copy protection scheme, the Content Scrambling System, with the introduction of the DVD.

With the ability to share digital media files via Internet connection, the content conglomerates claimed that the ability of consumers to make illegal copies of their content would kill the industry. This largely unsupportable claim was used to lobby for greater levels of control over the distribution of digital content, culminating in the passage of the Digital Millennium Copyright Act.

Broadcasters quickly joined in, claiming that the ability to make digital copies of HDTV content threatened the television and motion picture industries. They successfully lobbied the FCC to implement the broadcast flag, which would put a few bits in the headers of unencrypted DTV broadcasts that all downstream devices would detect. Once detected, the downstream devices would limit the scope of how that content could be viewed and copied.

A federal appeals court overturned the broadcast flag regulations, stating that the FCC has no authority to control downstream devices such as personal computers and digital networks. The pressure is still on Congress to pass legislation that would enable the FCC to implement a broadcast flag for both DTV and digital radio broadcasts.

Buying control

The consumer electronics and computer industries have been both friend and foe of the content industry. And some, such as Sony Picture Studios, are connected at the hip.

Content is the driving force behind the sale of many consumer electronics products, including radios, TVs, VCRs and DVD players. The development of recordable media, reel-to-reel audio recorders, audiocassettes, VCRs, CDs and DVDs enabled consumers to make copies of entertainment content. The MPAA tried to kill the VCR, but lost the battle in the U.S. Courts, establishing precedents for consumer fair use rights, which were later solidified by congressional legislation.

The incorporation of CD-ROM drives into personal computers turned the PC into an entertainment appliance with the ability to duplicate audio CDs. And the networking of PCs via Internet connection made it possible to share music and video files, setting the stage for the current battles to curtail illegal file sharing and to require PCs to enforce content protection measures.

The music industry was dragged reluctantly into the online music distribution business, in large part through the success of Apple's iPod and iTunes music store. The store has sold more than 2 billion songs, and the service has expanded to include television shows that can be viewed on a PC, an iPod and now on the big screen via Apple TV.

In order to get the media conglomerates to agree to online distribution, Apple implemented a DRM system called FairPlay. It encrypts the downloaded content and gives the user the right to play the content on a limited number of PCs, iPods and Apple TVs.

The system has been strongly criticized because it tightly couples the content to Apple iPod music players. Competing systems cannot play these tracks. This led several European countries and now the European Union to investigate Apple's business practices, suggesting that the company should allow competitors to use FairPlay.

In February, Apple's Steve Jobs published the essay “Thoughts on Music.” In it, Jobs calls for the elimination of DRM protection for music, noting that the music industry does not protect the songs it releases on CDs. (See “Web links” on page 18.)

On April 2, Jobs met with one of the big music companies, EMI, in London to announce that the EMI online music library would be available DRM-free this month. EMI conducted consumer research studies that found that nine out of 10 consumers would pay more to purchase music without DRM restrictions, especially if the tracks were of higher quality.

Apple will charge $1.29 for a DRM-free track, 30 cents more than the cost of a DRM-protected track. Another change is that the DRM-free tracks will be encoded using the open Advanced Audio Coding (AAC) standard at 256Kb/s. The DRM-protected tracks are encoded at 128Kb/s. The higher quality DRM-free tracks will play on all existing iPods and competing music players that support AAC. For sales of complete albums, there will be no premium for the DRM-free tracks.

Jobs announced that more than half of the 5 million songs available from the iTunes store will be available DRM-free by the end of the year. This suggests that at least one of the other major music companies will offer DRM-free music in the near future.

When asked if Apple expects to offer DRM-free movies and television shows, Jobs responded, “We are offering nothing really new here since people can buy music without DRM on a compact disc. Video is different from music because the movie industry does not currently distribute 90 percent of its content without digital rights management.”

It's a step in the right direction — one that will be closely observed in the coming months, with the potential to reverse the trend toward ever more onerous content restrictions.

One final rant

The entertainment industry cannot exist without widespread sharing of its experiences. This is how they influence the culture and create a market for their products. Many artists already know this. Giving away their music helps sell their music too. More importantly, it creates the demand to fill venues where they perform and make most of their money.

Why do movies with [insert the name of your favorite Hollywood star here] enhance the box office draw? Could it have something to do with culture? Could it be that the endless promotion that occurs over radio and TV, in magazines and on the Internet creates a market for the work of that artist?

Sharing an entertainment experience is not the same thing as piracy. We put locks on doors and cars because there are people out there who want to steal from us, not from the companies that built our homes or cars.

Content pirates are not stealing from you and me. They are competing with the content owners in the marketplace where we buy entertainment. They are capitalizing on the fact that this content is overpriced, limiting the legitimate market for its sale.

There is only one reason to protect entertainment content: to artificially prop up the price and the legacy distribution models that are being disintermediated. Ironically, due to pressure from the music industry to increase its prices for the music sold through the iTunes store, Apple has challenged the possibility of a DRM-controlled digital world.

This is the vision of the world that I reject. Someday, the ability to proliferate cheap content to the masses in a matter of days will replace the current broken models. When the content conglomerates finally figure this out, they will make more money than ever.

Craig Birkmaier is a technology consultant at Pcube Labs, and he hosts and moderates the OpenDTV forum.

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