Digital rights

A recent analysis of credit card purchases suggests that music lovers hate digital rights management (DRM), the software that tries to limit what we can do with our music and videos. The study shows that sales of digitally-protected music is dropping while online sales of CDs is increasing by comparison--meaning that we are still buying music, but prefer CDs that we can rip without limitations.

MySpace is the latest battleground for Universal, one of the world's biggest music publishers. The company is upset that MySpace users can post copies of music videos on their MySpace pages. Universal wants a piece of the action. The firm has already arm-twisted YouTube into sharing ad revenue because of grainy music videos posted on the popular video site.

Universal Music, the world's largest music publisher, successfully arm-twisted Microsoft into paying UMG a dollar for every Zune Microsoft manufactures. UMG did so using the dubious theory that MP3 players are just "repositories for stolen music" (an actual quote from a UMG exec). Microsoft apparently gave in to the extortion because the company was desperate to get enough music to sell on its Zune music Web site. Excited over the successful effort to blackmail Microsoft, UMG is now ready to go after Apple to impose an iPod tax.

A woman trying to sell shampoo on eBay has been told she cannot do so. She is apparently buying hair care products from a store or wholesaler and then selling the products on eBay, but the hair care firm Aquage says, "No." The firm is using the flimiest of pretexts, claiming copyright infringement because the woman took a picture of the shampoo and posted it as part of the eBay listing. They also claim she has violated distributor agreements, even though she has never signed any such agreements.

Glenn Harlan Reynolds has an article about problems with Amazon's brand new Unbox video download service, which serves as a contrast to Apple's new video service. The Unbox system only works on Windows (iTunes works on Windows and Macs), just for starters. But the gripes are apparently about a "phone home" feature (sometimes called spyware) of Unbox that seems to constantly want to connect to the Internet so that your computer can talk to Amazon's computers.

The recording industry trade association (RIAA), according to this blog run by two lawyers, is suing a woman for illegal music downloads. There is just one small problem; she does not own a computer and has never had one in her house, period.

The National Consumer Council in the UK says consumers are losing their rights to the music and videos they are purchasing. As content publishers try to fight piracy, they are making it more difficult for legitimate purchasers of digital content to actually play and own what they think they are buying. Publishers want restrictions on what machines can play what content (forcing hardware manufacturers to include built in controls), when it can be played, and how often.

A North Carolina judge has jumped hard on Diebold, the leading manufacturer of electronic voting machines. This issue is a state law that correctly requires voting machine manufacturers to escrow (provide) all of the code used in a voting machine so that it can be audited by an independent third party.

This article talks about Sony's Digital Rights Management (DRM) software that comes on Sony music CDs. The DRM works in part by installing a bunch of secret software on your PC, without your permission! In other contexts we call that computer trespass and/or illegal behavior.

What I and others have been predicting for years is starting to come to pass. As the number of broadband providers has narrowed to a duopoly of the cable and phone company in most regions, these firms are starting to muscle out third party service providers. VoIP startups are the first target because both the phone and cable company want VoIP customers of their own, and the simplest way to do that is to simply block all VoIP data packets except their own. Evidence of this is clearly visible as hardware manufacturers begin to sell VoIP blocking appliances.

RUPRI (the Rural Policy Research Institute) has an editorial that hits the nail on the head with respect to the challenges emerging from the cable/telephone duopoly that is tying up broadband markets in the United States.

We need clear policies at the local, state, and national level that preserve the right of communities, organizations, and individuals to use broadband for public and private purposes, without third party control.

In a great victory for the rest of us, a Federal appellate court told the FCC to quit mucking with television receivers and to stop meddling in areas for which the Commission has no authorization. If that sounds harsh, it's mild compared to what the judge actually said:

You're out there in the whole world, regulating. Are washing machines next?" asked Judge Harry Edwards. Quipped Judge David Sentelle: "You can't regulate washing machines. You can't rule the world."

The Wall Street Journal reports that the New York Times is considering a new approach to providing access to its news articles. Currently, you can view any article less than a week old. After that, you have to pay an absurd $2.95 to see the article.

Under the new scheme, you would pay $50/year to get access to any article in the past 365 days. They are apparently also considering an alternate scheme that would give you full access to the whole NYT archive.

With newspaper circulation in free fall, the Times is only one of numerous papers that must be trying to figure out what to do. While "the Internet" is often blamed for the general decline in newspaper circulation, I think the problem is more basic. I travel a lot, and try to read local papers wherever I go. What I see is a general lack of innovation, creativity, and news. I see this as the ClearChannel problem (ClearChannel owns 1000+ radion stations in the U.S.). As large chains have bought out more and more papers, those papers look more and more alike. Bean counters at the corporate level cut local staffs and budgets, force papers to use more syndicated content, and the result is dull newspapers with all the same (word for word) stories you can find on the Internet.

Newspapers don't look that different than they did one hundred years ago--the big innovation of the last twenty years is color pictures. I'm actually bullish on the future of newspapers; we still need someone to edit the news for us. In fact, I would argue that the role of newspapers--editing the news and providing quality control--is more important now with so many alternate sources available to us. Who has time to check dozens of Web sites daily? Papers condense many news sources and help us sort out the important issues. Newspapers and TV news will never again be primary sources of information, but I see the editorial function as still very relevant.

The Register reports on a new law enacted in Holland that can charitably only be described as "stupid." In a misguided effort to prop up the ailing music industry, the Netherlands has decided to impose a per megabyte tax on all hard drive-based music players, with the proceeds going to the music industry.

This means, according to the article, that the 60 gigabyte model of the iPod would have a tax of $235! According to the Register, Germany also has a tax on computer hard drives, and as they get bigger, the hard drive tax could exceed the base cost of the computer (that is, the tax will be several thousand dollars).

There are so many things wrong with this approach that it is hard to know where to begin. In the first place, the Holland law assumes that all music stored on portable music players is stolen, when in fact only a very small percentage is. So music lovers have to pay royalties twice--once when they buy the music, and again when they buy the music player. It's a windfall for the music industry, since only a small part of royalties actually go to the artist. It forces the music player retailers to become tax collectors, which is always a bad idea. And it will simply drive the purchase of music players out of the country. Holland is an easy drive from a half dozen other countries, and it's barely an afternoon trip to take the train to France, pick up an iPod, and go home.

The music industry does not have a "right" to make money. As markets and technologies change, businesses have to change too. This business of using laws to protect monopolies hurts communities and whole countries, as innovation and new products are simply driven elsewhere. It's a global economy, and Dutch lawmakers are naive in extreme to believe this law will work. It will only hurt the country's economic development as businesses see their customers go elsewhere, and not just for iPods. While they are across the border, they are likely to shop for other items as well.