July 27, 2004
The Practical Impact of Lock-in
Speaking of lock-in issues, I want to get back to an argument made by a few blog-commentators (Brad Hutchings among them) that, even if you accept that the DRM lock-in’s theoretical impact from business and social welfare perspectives, there is no practical impact because people can easily get around the DRM. If they can do so, then they are by definition not locked-in.
The point most often made is that the iTunes Music Store songs can be burned to CD, ripped, and re-encoded in MP3. You can do so without violating the DMCA and it’s trivially easy. That’s true, but note that the same argument would not apply to Janus-wrapped songs that do not allow burning. In any case, you can output to the soundcard and record. There are also methods that, though illegal, are available and thus would seem to diminish lock-in effects in practive. Circumvention devices are still available, so people can go that route as well. Moreover, there are other environmental factors that seem to limit its effects further. The availability of MP3s over P2P does so. To some limited extent, so does the limited competition in music services and formats.
As noted in the iTMS case study, the extent to which all this is true does indeed limit the effect of lock-in. Whether it entirely eliminates the effects in practice is far more questionable. In fact, it appears that the empirical evidence is to the contrary. If people were so easily getting around the DRM, why would eLabs find that consumers are frustrated by this limitation? (See Paul Gluckman, “Building Business on Legal Downloads Isn’t Easy, Panelists Say” Washington Internet Daily (Feb. 10, 2004)). Why would SunnComm be getting similar complaints? If the limitations of DRM were bothering no one, why would anyone complain?
Some people then take this argument and turn it into a criticism of the DRM-does-not-impede-piracy argument. The argument goes: if people are not actually creating unencrypted copies, then DRM does limit what can get on P2P. But this misses a critical point. If many, or just a few, or maybe even just one user gets around the DRM and uploads a copy to P2P, the DRM is basically irrelevant in stopping piracy (save for the narrow, presently theoretical exceptions discussed elsewhere). However, for the consumers who are buying legit and don’t evade the DRM, the DRM lock-in effect remains.
Filed by Derek Slater at 10:57 pm under General news
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