So, it means they lie when they insist that DRM is about piracy. And if they lie about this, they can lie about whatever else it is for. So it's logical to assume it's something bad. The unethical nature of DRM and its derivatives like DMCA-1201 which are forced on people through undemocratic means only prove the point that intentions behind it are never good.
> It's a great example of the reality of film industry economics
I meant it's a bad example of competition that can be used as a case study. Because it didn't turn out to be DRM-free despite being crowdfunded. My point above was not to debate the benefits or downsides of crowdfunding vs. publisher funded production but to say that successful DRM-free examples provide practical ways to demonstrate that DRM is not needed. So Veronica Mars is not relevant to the subject at hand.
> First, backers of the movie were entitled to a digital download as part of the Kickstarter reward.
They made a mistake of assuming it means what any normal person would expect - a DRM-free video file. Not some DRM Flixter garbage. Their second mistake was trusting WB to act decently like many other authors of the crowdfunded projects who release their works DRM-free. But WB is WB. They had to know better that if the pledge never said "DRM-free" explicitly, they were risking never to get it.
> As a rule of thumb, about 30-35% of respondents in surveys cite DRM policy as a major influence on buying decisions, in fields from e-books to videogames.
Very interesting, good to know. Do you have any links to such surveys?
> Here's an alternative scenario: a big studio decides to do DRM-free releases, and its domestic and overseas distribution network cuts presale revenue offers by half.
What does the network care? Network is the middleman, not the owner of the IP. According to Netflix for example, they don't care about DRM and wouldn't use it if not for publishers' demands (I don't believe them though, since they have some content which they own, and it's not available DRM-free either). So why would distributors care about DRM? Usually they blame all that on the publishers, not the other way around.
And if some distributors want exclusivity - they can get it. They can agree that the publisher will sell that content only through their channel. What does it have to do with requiring DRM? Same thing can happen with a DRM free release.
Here are some papers examining the issue through surveys: http://www.mtm.uni-koeln.de/team-loebbecke-publications-conf... http://people.cs.uct.ac.za/~aarnab/drm/papers/survey.pdf http://www.nclnet.org/images/PDF/ncl_dvdsurvey_report_040620... http://www.mirlabs.org/iasl/volume_1/IASL_Vol_1_Paper_12.pdf http://beta.orionshoulders.com/Resources/articles/26_22273_I... (last one only for statistical masochists)
And if some distributors want exclusivity - they can get it. They can agree that the publisher will sell that content only through their channel. What does it have to do with requiring DRM? Same thing can happen with a DRM free release.
No it can't, what are you smoking? Are you going to put up money to buy territorial rights for content which the publisher is going to give away DRM-free? Of course not, there's a high risk that you'd never recoup your investment. Territorial markets matter a lot, because those block sales represent the production's best hope of breaking even. All those markets are different, which is why distributors exist in the first place; they know their local markets better than any individual studio or producer can, and they have the cash flow to write a check based on the budget and the quality of the cast attached to the project.
This is how most commercial movies get financed: a large chunk of the budget is ponied up in advance by the international distributors. In turn, they have some control over the release window (which varies by country for all but the most giant projects, because every country is different with different holiday weekends etc. which are more important to consumers than all but the very biggest movie releases), and they impose touch contractual requirements on the studios. This is a completely different market from Netflix. When Netflix licenses something, they (in most cases) already know how it performed and can negotiate the cost of the license based on that date. International distributors are taking much larger financial risks at a much earlier stage of the business cycle. They're like VCs, not simple retailers.
I don't mean to be rude, but you're making these breezy and uninformed statements about a ~$35 billion industry that's been running for over a century and is one of the most competitive and meritocratic sectors of the economy. You keep saying how stupid the people at the studios are, and yet you obviously don't know the first thing about how the industry functions.
You said it's economics, yet your comparison doesn't make any sense economically. Banks analogy is not similar at all. The fact that DRM can be broken makes it completely irrelevant because of the nature of the digital space. Once it's broken, duplicates of DRM-free pirated material are shared ever since. Purpose defeated. As Cory Doctorow often points out, one of the core mistakes of DRM proponents is trying to measure the realities of the digital world applying the physical world logic.
Anyway, I thought we already agreed above that DRM is not used for the purposes of preventing piracy. So why are you going back to it?
> Are you going to put up money to buy territorial rights for content which the publisher is going to give away DRM-free? Of course not
You still didn't explain why. DRM has no effect on piracy. Content with DRM which the publisher A agreed to sell through distributor B will be pirated the moment it will appear from B. So, why can't that agreement involve DRM-free content? The result (piracy wise) won't be worse.
> there's a high risk that you'd never recoup your investment.
How is that risk high when there is no DRM, and low when there is one? I don't see any connection between DRM and risk. It's like saying that sailing on a ship with broken lifeboat which is beyond repair has less risk than sailing on a ship without one. Risks are the same because the lifeboat is irrelevant (in our case that's DRM).
> All those markets are different, which is why distributors exist in the first place; they know their local markets better than any individual studio or producer can, and they have the cash flow to write a check based on the budget and the quality of the cast attached to the project.
That's fine, but again, what does it have to do with requiring DRM? With all your attempts to explain why publishers or distributors might require DRM, you still didn't provide any sensible reason for the root cause of requiring it so far. I get the reason of "We need DRM because the other side requires it", even though it's a bad justification. But I'm asking about the root. I.e. who requires it first. Publisher? Distributor? We already agreed that it's not because of piracy. So why can't they drop DRM from all this then?
It's very similar, because of the abstract nature of money. Think about it.
You keep offering your premise 'DRM has no effect on piracy because it be broken' - as an argument, but it's only your opinion, not a fact. You don't put up with DRM because it's technically easy for your to circumvent, but a lot of people do and are even willing to forego consuming something until it becomes affordable or accessible. By your logic, DVD sales and streaming revenue should already be zero because pirated versions are available. Since people are clearly still willing to pay for these products and services, how do you explain that?
We already agreed that it's not because of piracy. So why can't they drop DRM from all this then?
You keep saying this, but I don't agree with it. DRM makes piracy more difficult, which imposes a delay on the time between release and the availability of pirated versions; it limits piracy to those who know how to break the DRM, making it easier to identify vectors of piracy; it distinguishes pirated from non-pirated content and so has an evidentiary function in copyright infringement cases.
It also provides a way of tracking distributors' activity and preserving publishers' options to serve media to new channels on a timescale of their choosing, allowing them to figure out how to market it, package it, and charge for it, which are reasonable sorrt of things for businesses to want to do.
I'm not going to keep up with his conversation if you just keep repeating your own opinion over and over and trating it as fact. It isn't.
Sorry, but you are wrong. It's not an opinion, but fact which can be demonstrated by observing how fast pirated materials with DRM stripped off appear after DRM-ed releases come out. Q.E.D. DRM never deters piracy. And as you said, dropping DRM can gain as much as 1/3 of sales which are otherwise lost due to users opposing it. So not dropping DRM is simply insane from any business standpoint.
> You don't put up with DRM because it's technically easy for your to circumvent, but a lot of people do and are even willing to forego consuming something until it becomes affordable or accessible.
No, you didn't get what I was saying. That's not how it works. It works like this:
1. DRM-ed release comes out.
2. A few pirates who know how to break DRM break it and make the content available DRM-free to other pirates.
3. Any subsequent pirate who is interested in that content takes it from that DRM-free pirate source never dealing with any DRM.
4. Legitimate users on the other hand are left to deal with DRM junk.
That's it. I'm perplexed that so many people don't get this.
> By your logic, DVD sales and streaming revenue should already be zero because pirated versions are available.
No, not all people are pirates. However dropping DRM will turn part of the current pirates into paying customers increasing current sales of the same content. Plus it will gain sales from those who aren't pirates but simply oppose DRM. Total gain overall.
Some mention the same idea I brought above:
> DRM systems were widely resisted by many other interviewees. They were quite openly considered rather as a cause to piracy than a tool to inhibit it.
DRM, on the other hand, causes the most inconvenience for customers, and little to none for pirates.
Digital content is easily duplicatable. When DRM is broken, pirates redistribute it to all others without limit. In the bank analogy (to make it comparable), it's like becoming an infinite fake bank, so all subsequent criminals don't need to rob the original bank anymore, but can take from that secondary source as much as they want to. That's exactly what makes DRM completely irrelevant in reducing piracy.
You keep looking at it as consumers v producers in a zero sum game. This is a wholly inaccurate model. distribution is a business fundamental for reasons that I've explained above. In fact, it's a legal fundamental as well, because thanks to antitrust laws in the US film studios are prohibited from owning distribution channels like chains of cinemas
That's a bad example. WB didn't allow it to come out DRM-free despite it being crowdfunded. It should be a lesson not to trust these backwards thinking publishers ever.
It's a great example of the reality of film industry economics, even though it doesn't support your point. So what if they didn't let it come out DRM-free? Are you saying it would have been a runaway hit otherwise? No chance. At that, they gave refunds to annoyed customers who had problems with the Flixster purchase. If you think that the mediocre sales are the result of DRM you're looking at it from inside a bubble.
First, backers of the movie were entitled to a digital download as part of the Kickstarter reward. they didn't like Flixter, so WB issued refunds to people who had filed a support ticket, allowing them to download it via more popular outlets like iTunes or Amazon. This had zero effect on buyers who downloaded through those two main platforms. It may have deterred some potential online purchasers, but not many, I don't think.
As a rule of thumb, about 30-35% of respondents in surveys cite DRM policy as a major influence on buying decisions, in fields from e-books to videogames. As a second rule of thumb, home viewing revenue is about 50% of theatrical box office. (I'd have to write a few thousand words to fully describe sales channels and common deal structures in the industry. studios are very tight-lipped about the terms of individual deals, because that's very valuable commercial information, but we can also rely on the aggregate sums shown on tax returns and compare them with known box-office revenue, historical models, and so on. I'll skip the in-depth explanation and a raft of citations if you're OK with that; I have no reason to mislead you about this). So we can figure that potential lost sales from WB's DRM policy - which they are likely contractually obliged to stick to anyway - is about 1/6th of box office. Let's be generous and say it's 20% due to the extra publicity. It would actually be a lot less since core fans who were Kickstarter backers got digital copies and would not have had any incentive to purchase them separately absent DRM, but let's leave that aside.
Now, VM had production (including marketing) costs of ~$5.7 million. Box office revenue after 6 weeks in about 300 theaters is $3.3m, plus a few hundred thousand $ for worldwide (unsurprisingly low, given the limited international audience for the TV show). That's pretty bad from the studio's point of view. The studio (qua publisher) gets ~50% of the box office, so to break even the film needed to make $12m. Of course, the upside is that Kickstarter backers wanted a Veronica Mars movie more than they wanted financial profit, so Warner Brothers hasn't actually lost any money, but that's beside the point here. If we take our guess above that 20% of potential home viewer revenue was lost due to anti-DRM sentiment, that's about $700,000 at the very most. ---
Those will be forced by hard competition only. I.e. imagine a big publisher coming which doesn't want to be a part of their cartel and makes DRM-free releases. Many would prefer that, and it can force other publishers to drop their crooked reasons when they'll start losing profit.
Jeepers, biased much? Look, that's not going to make any difference because audiences don't go out saying things like 'let's go watch a Paramount film tonight' or '20th century Fox is my preferred studio.' Marvel, Disney and Pixar are unusual because they have such strong brands, but they operate within pretty narrow market/genre parameters. Film products are not easily substitutable, so your basic supply-and-demand model isn't applicable here because we're not talking about commodities.
Here's an alternative scenario: a big studio decides to do DRM-free releases, and its domestic and overseas distribution network cuts presale revenue offers by half. The upside potential is maybe 11-12%. The downside potential is not being able to take large projects into production because you either can't raise sufficient funding or you can't get a financial institution to provide bridge financing or issue a completion bond (which is essentially production insurance).
I'm sorry, but you seem to view studios like cartoon villains twirling their mustachios as they sit on top of piles of ill-gotten loot. The reality of film financing is that it involves large numbers of stakeholders in a very high-risk market requiring extremely conservative contractual arrangements. From the distributor's point of view, they have little incentive to pay large sums of money to a studio or production company that won't guarantee them exclusive rights within a particular territory. After all, the distributor isn't likely to capture any of the extra revenue from DRM-free digital copies.