Microsoft: Why you shouldn’t kill FairUse4WM
Engadget recently wrote an interesting piece: An Open Letter to Microsoft – Why you shouldn’t kill FairUse4WM – Engadget.
While the tone is pretty candid, I have to say they have a point:
“Does the fact that we could quit and “keep” the music that we’ve been “renting” a problem? Theoretically, but what’s going to keep consumers paying those monthly fees isn’t the threat of losing access to their collection (though that’s part of it); what keeps them paying is the continuing access to a large, frequently updated catalog of new releases and older tunes.”
What if they were right?
On the fun side, what I love about the article is the last sentence:
“FairUse4WM means that all our PlaysForSure tracks will actually play for sure, so please don’t go and spoil it.”
Aug 28, 2006
Some of the things in the letter you can’t argue with. Such as; “Could those same people then put all the music they’ve just downloaded up on the P2P networks? Sure, but all that music is available there anyway, so it shouldn’t make a bit of difference in the grand scheme of things”. There are a couple of problems with this letter though.
1). I think they wrote this open letter to the wrong company. Microsoft is not the one dictating the use of DRM, the labels are. So all their rationalizations are targeted to the wrong people. Microsoft is trying hard to demonstrate to the media companies that their technology solutions are the most secure and that their platform is the only platform that media companies should release their content on. I will not be surprised if we see HD movies being released only on certain computer platforms in the future. This will put pressure on companies that don’t bend over backwards to meet the high security standards the labels demand. If you have read the white paper on some of the security features built into Vista, it is really frightening how far they go to try to make the media companies happy. They try to encrypt the entire media processing chain, all the way to the speakers.
2). The second problem with this letter is it leaves out a lot of details about the music business. The subscription services pay a completely different royalty structure for conditional downloads and streams. Both on temporary copies of the music and therefore have a different royalty rate. If these temporary copies were made permanent, this would trigger the compulsory royalty rate set by Congress of $0.09 per copy to the publishers and the record labels would require royalties at the same rate as purchased content. At that rate the subscription model would fall apart or it would have to be passed on to the consumer. It would be expensive for someone.
Aug 28, 2006
Nick,
I totally agree with you on that one. The existing royalty system would not allow a viable subscription service to operate without a DRM to prevent these permanent copies.
However what if the model was changed? What if you would put a cap on how much you can download in a month and charge a higher subscription fee?
I remember the days of CD by mail where people would pay a fee and get a bunch of CDs in the mail. It must have been cheaper for people to do use these services instead of going to the store and get the CDs themselves. It would be kinda the same thing.
If the rate is $0.09 per copy. Limit to 200 songs a month and charge $25. That’s 15 albums. I think people would buy into that. I wonder how many songs people download in a month anyway?
I think you’ll get a lot more people using these services even if they were more expensive than nowadays.
An example, look at mp3.com. They don’t have major content but they have tons of users. It’s a proof that it works.
Maybe the DRM was the wrong approach. Maybe we should go back to watermarking. So if a song ends up on the P2P, you sue the person who put it there in the first place instead of the one who downloaded it. I wouldn’t have a problem with that :-).