Wednesday, February 22, 2006

How to Get Rid of DRM: Content as a Utility

Sell the Hardware \ Give Away the Content
If only I could've been there to stand up and clap:
"Why are you such a bunch of big girls?" asked Birch. "Why don't you tell the content owners to just get stuffed?" He continued unabated: "You're too seduced by the content industry, Hollywood is not even a $10 billion industry. Hollywood is small compared to the telecom industry. Why don't you take a stronger line? Consumers don't want DRM at all. You can't sell DRM."
Thus the EET reports the outburst of audience member David Birch, who stood up during the Q&A part of a panel on DRM at the 3GSM conference in Barcelona and let rip at the telecom industry panelists. David Benjamin, who filed the story for the EET, reports that Birch also told the panelists that telecommunications industry is 15 times the size of the content industry.
In a later column at the EET, Spencer Chin approvingly cites the story of Birch's outburst, and manfully (though not entirely successfully) attempts to laud Birch for "stirring the pot" while simultaneously censuring name-calling at professional conferences.
I say bring on the name-calling. In fact, if Mr. Birch happens to read this post, we'd like to formally offer to let him have the mike for a moment so that he can preach, heckle, and harangue a bit more in a guest editorial on content vs. the carriers. Just drop us an email.
For my part, the coverage of Birch's rant definitely got me thinking. The total cost of Peter Jackson's King Kong was somewhere north of US$200 million. That's quite a bit, but such big-budget blockbusters are rare, and you can make and market a Hollywood movie for well under half that figure. Indeed, Brokeback Mountain had a production budget of only US$14 million.
In the tech industry, the price of a new fab is currently around US$5 billion, a price that puts such facilities out of reach for all but the biggest players like Intel and IBM. Still, that's 25 King Kongs, or over 350 Brokeback Mountains, or 1,000 five million dollar episodes of a big-budget HBO series like Rome or The Sopranos. My point is that, for even just half the price of a single 65nm fab, the tech industry could buy a few small studios and just start throwing tons of free content at the world. Or, for the full price of a fab, they could fund almost a decade worth of low- and medium-budget content to give away as an inducement for people to buy hardware.
Intel, IBM, and other tech companies with large investments in Linux know full well that you can sell a lot of hardware by giving away the software. Why not give away the content too? How many dollars worth of media center, home networking, and home network attached storage hardware could you sell if consumers knew that there were terabytes of free, unencumbered, high-definition, processor-intensive, storage-hungry, bandwidth burning, digital content awaiting them on the Internet—content that they could copy, share, and shuffle around among as many newly purchased media devices as they like?
I'll freely admit that 90% of what I know about the cost of Hollywood movies and TV shows I learned from Google over the past two hours. I'll also admit that drawing big-picture conclusions about how the tech industry could crush the movie industry based on a comparison of the cost of a fab to the cost of some movies and TV shows has a certain "late night dorm room bull session" quality to it. Nonetheless, I stand by my general claim that, for the price of what a single tech company invests in a single new fab, the hardware and telecommunications industries as a whole could dump enough free digital content on the world to fuel a very profitable explosion in consumer hardware purchasing.
So c'mon, tech industry. Why let Hollywood push you around and, even worse, hold hostage tens or even hundreds of billions of dollars in potential sales? If investments in open source can pay off in server hardware sales, why couldn't investments in free movies and music pay off in home entertainment, networking, and storage hardware sales?  


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