Re: Forwarded Invite to Discussion of EME at the European Parliament, Oct. 15, 11:00-13:00

On Mon, Oct 21, 2013 at 10:50 AM, cobaco <cobaco@freemen.be> wrote:
> But there's the rub: It *is* possible to use the open web for that content
> You don't need DRM for that from a technical perspective
> It is in fact a whole lot easier without DRM

Indeed.

> The problem ofcourse is not technical, it's with the business model of the
> (traditional parts of) the industry.

What business model are you referring to?

EME is motivated by the Netflix use case. If the studios allowed DRM
to be removed from Netflix, what business model would be impacted?

Even with DRM in place, Netflix competes against illegally-distributed
movies. Dropping DRM would not change that.

Even with DRM in place, the marginal cost for viewing another movie on
Netflix is zero for the end-user. Dropping DRM would not change that.

Would dropping DRM make people terminate their Netflix subscriptions?
Unlikely. No one is subscribing to Netflix because of the DRM. DRM
provides no positive value to the end-user. Reasons to subscribe to
Netflix include convenience and doing things the legal or right way.
Subscribing only briefly to download content and then unsubscribing
would for sure defeat convenience and would also defeat the point of
trying to do things the legal or right way (assuming that end-users
would still be contractually prohibited from taking that action). At
most, such brief subscription for hoard downloading might lower the
risk of getting caught and the risk of penalty compared to downloading
the movies illegally from outside Netflix (and they are available
illegally outside Netflix even now that Netflix has DRM).

Would dropping DRM from Netflix cause demand that is currently not
satisfied by Netflix to be satisfied somehow through Netflix in a way
that would eat into the studios making money from alternative ways of
satisfying that demand? If a given title is available on Netflix,
since the marginal cost of viewing another movie on Netflix is already
zero, chances are that the demand of people who are subscribers is
already satisfied through Netflix when technically possible. Apart
from devices that don't support the right kind of DRM failing the
"when technically possible" reservation, the other key thing is
connectivity. Currently, if you plan to watch a movie in the near
future without connectivity, Netflix isn't your solution. If DRM was
dropped and the terms of service remains the same, nothing would
change as long as the user obeys the terms of service. If we assume
that the user is willing to disobey the terms of service in a way that
makes getting caught unlikely, we could assume that occasionally users
would play back a movie in real time in order to record it for viewing
later without connectivity. For people who value convenience, that
would still be a lot less convenient than off-line rental/sales from
iTunes. As for cases where the demand for no-connectivity viewing is
already satisfied from illegal sources or where people simply choose
to forgo watching a movie in the case of no connectivity, there'd be
no change to business.

It seems to me that in order to believe that the business model of the
movie industry would be negatively impacted if DRM was removed from
Netflix, one has to believe that a substantial number of people who
are currently subscribing would hoard-download and then unsubscribe
and/or believe that ToS-violating recordings for later off-line
viewing would substantially cannibalize iTunes off-line rentals/sales
and that this impact wouldn't be offset by new people who previously
haven't subscribed because of DRM becoming subscribers.

I hope people who are opposed to DRM avoided accepting the talking
point that DRM for streaming is needed to uphold the present business
model of the movie industry.

-- 
Henri Sivonen
hsivonen@hsivonen.fi
http://hsivonen.fi/

Received on Monday, 21 October 2013 12:28:18 UTC