DRM and Exotic Inefficiencies

After a long business trip across the country this week ruminating on some of the discussions Orb Networks is having with various partner prospects, my laptop ran out of batteries and frankly I just needed a book to read on the way home. Without thinking about any correlation to Orb, I picked up Moneyball, a fantastic book by Michael Lewis, where I came across the term “exotic inefficiencies.” The essence of the book is how the Oakland A’s, one of the “poorest” teams in baseball manage to win so many games in contrast to the rest of the league, who have sky-high payrolls and, so it is assumed, the best players. But against the prevailing wisdom, the A’s keep winning.

As I got deeper into the book, the similarities to Orb and our own conversations with both technology and content distribution partners was stunning. It brought to mind a meeting we had with one of those protective content industry agencies (whose name shall go unmentioned, but whose last two letters are ‘AA.’) who actually said in a meeting, “Well, we like your idea, but that is not the way business HAS been done.” Ok. So how about the way business WILL be done? Blank stares all around and furtive glances between the lawyers indicating that we obviously don’t know how to play the game.

So, the Oakland A’s figured out that that the rest of the baseball industry experts were wrong in how to analyze players and we are finding that many in the various industries we touch have latched on to similar inefficient arguments revolving around Digital Rights Management (DRM). The Orb Media software checks your home PC to validate that you have the right to play the software and then sends a single stream to a single device. That is it—case closed. We do not facilitate multiple streams or creating copies of a file. If you want to engage in piracy, there are several other, much more efficient ways to copy or steal stuff. Right off the top, I can think of some much easier ways to pirate content than trying to hijack an Orb Media stream for the new Coldplay song: For example you can create a new, unprotected digital file thru the following:

1. In real time, take your copy-protected DVD or audio file and scrape the content from the analog hole.

2. Take the line-out from your TV or receiver and record onto a digital video or audio recorder.

3. With less than a couple hours work, apply some nifty, readily available hacks (thank you Google) to your WM10, Helix or FairPlay “protected” files.

OR

You could try to pirate an Orb Media stream to do the same thing. Good luck. It just isn’t worth it and in fact, if you did connect all the variables, you would end up with a copy that wouldn’t be worth sharing anyway (why steal a stream being sent to a cell phone at <40k?). And so, as the powers-that-be guard their treasure chests of content and chuckle smugly, the pirates of the world laugh loudly and the rest of us suffer. Which leads me back to Moneyball and the John Ruskin quote from “Unto This Last,” that starts off the book:

“Lately in a wreck of a Californian ship, one of the passengers fastened a belt about him with two hundred pounds of gold in it, with which he was found afterwards at the bottom. Now, as he was sinking—had he the gold? Or the gold him?”

-Curt Van Inwegen

Comments

[db]

Curt: Great post!

But, before you embrace "Moneyball" and its arguments about baseball economics too firmly as a metaphor for the media business, I'd just note that the A's have repeatedly fallen short of the ultimate success the richer franchises have enjoyed. Also, that the team's way of doing business has caused it, year after year, to lose its top talent to the teams willing to spend the big bucks. Billy Beane's genius aside, the failure to keep players like Giambi, Tejada, Hudson and Mulder here represent a different sort of failure of imagination; it's a failure that, ironically, creates the same problematic between consumers and product that the content industries have.