hyalineskies

With each successive MP3 player release, it seems that the ability of consumers to replicate or modify their downloaded audio becomes even more restricted. Decide to replace your WMA-based device with a shiny new iPod? Sorry, those WMAs aren’t going to play on the device without breaking copy protection, which in turn violates the always-referenced Digital Millennium Copyright Act. Want to turn those iTunes Music Store AACs into MP3 for playing on your car stereo? It’s not happening legally, either, thanks to the DMCA and fierce lobbying by the record industry.

This DRM annoyance is infuriating many music geeks and technology buffs alike, decreasing the utility of music ownership in a way that’s not captured by the current pricing scheme or primary market. In better, pre-DRM days, CDs purchased at the store could legally be transferred from format to format or simply copied for archival purposes. Now, however, transcoding files or making unrestricted copies of our purchased media makes us all criminals, turning all of us into dirty pirates for even actions that were at one point considered fair use. The old CD economy was one of purchased rights, in which our $15 would buy us a copy of an artist’s latest album. Once we had our own personal licence to the material, it didn’t really matter what we did with it as long as it was for our own use. Now, in the digital world, conglomerates such as the RIAA have helped construct largely restrictive systems of intellectual property management under the guise of anti-piracy tools. Now, our legally downloaded material only plays on certain platforms, can only be used in certain numbers of copies, and more. Our once purchased-rights economy is now an economy of rental rights (such as in the case of Napster,) or limited licences (such as in the case of iTunes.) Both of the new ways of dealing with music, either rental rights or limited licencing, are hardly new: going to Blockbuster and renting a DVD gives you a restricted licence to view the data, while sheet music producers in the early 20th century built heavily restrictive anti-piracy laws to limit the amount of time someone could play a piece of music before having to buy another copy (see a 2000 article in Atlantic Monthly about this, called The Heavenly Jukebox.) The thing that really seems to start the arguments about digital DRM is not really the concept of DRM itself, but rather the industry’s converstion to a rental model from the purchased rights model. In a rather painful admission, there’s little you can do about it.

Before I’m called a traitor, an RIAA sympathiser, and a bad ally of the open-source, free-information movement, let me clearly state that I’m not saying anything other than the truth. In the current intellectual property climate, the governments of developed countries have constantly reinforced the idea that the property rights of music belong to its root companies (or organisations that represent them like the RIAA.) They are not your rights. You have no more right to that content than what the industry wants to give you. The DMCA really does nothing new other than confirm that, sadly, you’re the pawn in the game. It’s sad but true.

As a result of this reassignment of property rights, we get systems like FairPlay and Windows Media DRM 10, plus the numerous cease and desist letters sent too social media companies like YouTube. Our outlets and methods of consumption become increasingly restricted to exactly the media that the large companies want. Set aside your Marxist arguments of wealth disparity and your conspiracist theories of RIAA lobbying: simply, regardless of the superficial rants and arguments, the companies own the property rights and you don’t.

Those that have some sort of conscientious objector status to DRM and thus pirate or circumvent copy protection for this reason are an identifiable minority at best. The greater market doesn’t seem to care: while CD sales are down, legal downloads are compensating for the majority of RIAA losses, making their piracy arguments somewhat laughable. At the same time, these statistics show that few consumers seem to care about DRM restrictions; either they are indifferent or the slightly-increased costs of buying the CD over the download are too much to make it worthwhile. The protestors can praise anti-DRM efforts all they want; they’re still heavily negligible.

What if, however, you were presented with two options when buying music online (from legal, Western markets; grey markets such as AllOfMp3 excluded:) buying a DRM-restricted track for $0.79 or buying an unprotected MP3 for $1.79. Would you pay more for the unrestricted track, given the price difference? Economic theory says that you would.

This idea of market efficiency after property rights have been assigned is known as the Coase theorem, and without going into too much detail, the theorem states that the market will be efficient regardless of the assignment of property rights given low transaction costs. In the case of the RIAA having the rights, technically you’d pay them for less-restricted content, while they make up the market failure in this added payment. In the opposite direction, the Coase theorem would state that the RIAA would have to actually cut back on its DRM, the intended goal of the copy-left, the EFF, and other free-information organisations.

Unfortunately, we’re in a position where we don’t have the rights, and thus it’s on us to try to pay more for the unrestricted content if we gain value in doing so. In many cases with independent music, this is certainly possible; download houses such as the electronic music-oriented Beatport allow downloads in not only unrestricted but uncompressed WAV format, giving you perfect digital audio data. With RIAA-supported artists, much of this unrestricted content is freely available by design in the compact disc format, in which no circumvention of copy protection occurs when ripping (even according to the RIAA FAQ.) Currently, however, nearly all legally-obtained digital content is heavily copy-protected due to the legal regimes that have passed laws like the DMCA. Even if we could get through to the artists to change this protection, it would take forever to navigate the legal jungle.

This is the primary failure of Coase’s Nobel Prize-winning theory, as well as its main criticism: the costs of fixing the issue are just too high to make it worthwhile. These costs, then, effectively make the transaction of paying more for unrestricted content infeasible. As a single consumer looking to pay for an unrestricted digital download, the dollar or so of value you’d pay isn’t enough to entice the holders of the property rights. The single consumer just isn’t able to move the enterprise.

What if, however, a coalition was built not to be anti-RIAA, but to work in cooperation with the RIAA and the DMCA? What if people got together in a community to effectively pay off the RIAA to gain increased property rights? It’s at a point like this where a Coasean solution becomes efficient, as the transaction costs are negated in the common scheme of things. If everyone contributed money as a collaborative consumer with a popular purchasing power, those feeling restricted by DRM could possibly wield a great enough weapon to slay the RIAA in a mutually agreeable game.

At first, the most ferocious defenders of the anti-DRM movement would quickly denounce such a system as impossible, but Jimbo Wales, founder of the Wikimedia Foundation, is currently exploring such a solution. In a rather mysterious post by Wales to the Wikipedia mailing list, he poses an interesting question:

Dream big. Imagine there existed a budget of $100 million to purchase copyrights to be made available under a free license. What would you like to see purchased and released under a free license?

Effectively, Wales is following the above model, and most likely it could work. By paying off copyright owners, you could do more than just purchase less-restricted content; you could purchase the rights to the content entirely. I doubt anyone reading this could do the same alone, but as a collective in support of freer intellectual property restrictions, there is little but our own stubbornness to the days when we had better rights to blame for us not doing so.

If you’re currently ready to track me down and kill me for writing something even vaguely in support of the DMCA, I think it’s best to realise that this is a post of devil’s advocacy: this argument is very valid given the current DMCA restrictions, whether or not it seems the most pleasing to us. While we donate to the EFF to fight these wars to return the rights to the people, there is little to explain — aside from the arguments of morality — why we aren’t trying to work in the opposite direction as well. While the solution of paying off the RIAA seems like extortion, it is simply economics. I read someplace recently a painfully true maxim that we seem to forget all too often: morality is the way we want the world to work, while economics is the way the world actually works. Unless we know the way it does work, there’s little we can do to change the world. While I’ve been the target of RIAA cease-and-desist letters in the past, I’m not naïve enough to ignore the economics of the situation. We may very well be in a position where we are required to take a step back to make a leap forward, and if we turn out to be wrong (and the majority of the consumers still do not care about DRM restriction,) there’s little we can do from either front to change the property rights issue. Until we either win or are able to clearly see inevitable failure, our unilateral way of attack is not all we can do. We may, as crazy as it sounds, may be able to change the world through what seems to be illogical economics.