Re: [dvd-discuss] .002 Online again -- DRM Business Case for Si

["John Zulauf" <johnzu(at)ia.nsc.com>]

Since DRM is about exactly controlling feature sets, one can "securely"
use the same features to guarantee DRM is never enabled.  For example a
"signed" video driver that stubs out the Macrovision control calls
cannot be replaced in a secure system with one that doesn't stub the
calls.  (Think of the son-of-P2P hacking law, allowing a "copyright
holder" to hack your drivers to reenable Macrovision HW).

Thus, the Si vendor is the position of having to implement the feature
one way as another.  If it exist, and no legal protections prevent it,
it will be used to help the squeakiest-wheel-with-the-deepest-pockets. 
So far the Si industry hasn't been squeaking up. "I hear the silence of
the lambs" says Hollywood Lechter.

The real question isn't one of feature sets -- it's one of involvement
in the public policy debate.  So far the tech industry is sleeping
through this one -- or more correctly cowering from the (mickey) mouse
roar of the all to effective lobbying of the media cartel.

I've actually heard industry lobbyist tell me "we can't go up against
Jack Valenti," and they won't until the see (if it is true) that the
health of the industry is at stake.

Richard Hartman wrote:
> 
> Your "Prisoner's Dilemma" works both ways.
> 
> One way: if we don't come out w/ a DRM-enabled hardware,
> someone else will and they will get all the goodies.
> 
> The other: if we only come out w/ DRM-enabled hardware,
> someone else will come out w/ DRM-free hardware and they
> will get all the customers who don't want to put up
> with that cr@p.
> 
> Truely the best case for businesses would be to come
> out w/ both DRM-enabled _and_ DRM-free hardware.
> 
> --
> -Richard M. Hartman
> hartman@onetouch.com
> 
> 186,000 mi/sec: not just a good idea, it's the LAW!
> 
> > -----Original Message-----
> > From: John Zulauf [mailto:johnzu@ia.nsc.com]
> > Sent: Monday, September 30, 2002 8:34 AM
> > To: dvd-discuss@eon.law.harvard.edu
> > Subject: [dvd-discuss] .002 Online again -- DRM Business Case for Si
> >
> >
> > Greetings all,
> >
> > I managed to get "copyright issues" on my annual goals list,
> > and thus am
> > able spend work time on this list.
> >
> > I have a personal goal of exploring this question:
> >
> > "What is the business case for (or against) DRM collaboration?"
> >
> > Believe it or not most corporations have no great passion for the
> > fair-use and free-speech issues.  Their POV (arguably
> > understandable) is
> > the best return for the investors.  My goal is to show that
> > even if the
> > short term tactics are those of collaboration (building products with
> > DRM support or technologies) long term it is in the interest of the
> > stockholder of technology companies to oppose the DMCA, CTEA, et. al.
> >
> > My initial case *against* DRM was the following (from the POV of a
> > semiconductor company)
> >
> > A. DRM reduces functionality of a technology product (hereafter
> > "Product")
> > B. Reduced functionality reduces the value of "Product" to
> > the customer
> > C. Reduced value reduces supply-demand curve intersection point (i.e.
> > lowers the average selling price (ASP) of "Product"
> > D. Reduced ASP of "Product" places pricing pressure on the components
> > ("Si" -- i.e. silicon) -- reducing ASP of "Si"
> > E. Reduced functionality of "Product" is artificial, thus "Si" is no
> > less (and probably more) complex
> > F. Lower "Si" ASP with equivalent complexity implies lower margins and
> > ROI for "Si" QED.
> >
> > This argument has several clear weakness
> >
> > Attacking "B" -- if DRM entices media companies to release otherwise
> > unreleased material (for example movies still in theater, or prior to
> > DVD release) -- then the device acts as an access enabler,
> > with *added*
> > value to the customer.  This is true whether the the product is funded
> > by the end-customer (who sees value in enhancing their couch potato
> > abilities) or by the service provider (who see value enhancing their
> > average revenue per user (ARPU, or sometimes just RPU -- read "are
> > pooh")
> >
> > Attacking "F" if the "B" attack is true then a DRM enabled "Si" device
> > may in fact have higher margins and volumes than one without.
> >
> > Finally the "Si" vendors may be in a "prisoner's dilemma" -- "if we
> > don't collaborate, someone else will".   Though this is typically
> > couched in a more "customer focused" way.
> >
> > From my POV "Si" vendors are really in this position *because* of
> > current laws and policy -- and focusing on the immediate
> > customer blinds
> > one to the longer term threat of stagnation (technology progress gated
> > by the most paranoid) and longer term opportunities (new
> > killer apps --
> > e.g. video rip-mix-burn or ...)
> >
> > Anyway this is a first statement of the problem to this
> > forum.  Overtime
> > I'll have other more target questions.
> >