Disingenuous Comments from Michael Eisner

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Tim O'Reilly
Mar. 15, 2002 05:49 AM
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Amy Harmon's New York Times story, Piracy, or Innovation? It's Hollywood vs. High Tech was one of the more balanced pieces I've seen. After years of fear-mongering and legal action by the entertainment industry, it's good to see high-tech leaders like Andy Grove of Intel and Steve Jobs of Apple stepping up to the plate to give legislators and the public a more balanced view.

I wanted to weigh in from two perspectives. First, as the CEO of one of the country's largest and most successful computer book publishers, I am in a unique position to see both sides of this issue. My business is content and copyright, just like Disney's, but my subject matter is technology. And I want to go on record as saying unequivocally that the Silicon Valley perspective on this issue has far more substance to it than the Hollywood/Nashville/New York version. The legislation currently being explored in the Senate Judiciary Committee, to require computer makers to build copy-protection into its products, is extremely ill-conceived.

Steve Jobs was right when he said "most people want to be honest, and if offered reasonable choices, most people will choose to buy their content." We publish many of our books in unencrypted electronic form as part of our CD Bookshelf product line as well as part of our Safari Electronic Books Online service. Pirated versions of these products have been uploaded to countless web sites, many of them in Eastern Europe but accessible to US consumers. The net result: We have a constant stream of emails from customers telling us about infringing sites and offering their support for the legitimate product. Many (though not all) of the sites respond to a simple letter asking them to desist from offering the pirated version over the web. And our sales of all our products continue to be robust and profitable. We've seen absolutely NO difference in the sales of books that are available only in print from those that are available in freely downloadable online form.

According to the NY Times story, Michael Eisner of Disney says that he doubts that "any new business model could compete with digital copies that were free, flawless, and accessible from the comfort of his prospective customers' living rooms." And Peter Chernin, president of the News Corporation reportedly suggested that matters might be different if the tables were turned. "Let's say I decide to broadcast on my network the code for how to make Intel chips or Microsoft software," he said. "I think they'd find a way to stop it."

These entertainment and publishing industry executives are either being disingenuous or are ignorant of both technology and history. The software industry faces exactly the same conditions that the entertainment industry fears will destroy its markets. Software is digital, easily and perfectly copyable, and pirated copies are in fact available through a variety of illicit channels, but that hasn't kept companies like Microsoft from going on to become among the largest and most successful in the world. What's more, copy protection was widely explored by software companies in the 1980's, and what they learned was that consumers avoided copy-protected products. Consumer behavior gave marketplace advantage to companies that didn't use copy protection, and after a relatively short time, the industry got over its fears and got back to offering products that people were glad to pay for.

This is not to say that companies shouldn't use modest deterrents to piracy, such as watermarking or other methods of associating a digital copy with the purchaser of a product. It is relatively easy for the creator of those products to incorporate such schemes without requiring any action of computer or software vendors. Entertainment and publishing companies need to embrace the future and offer digital products at a reasonable price, using business models that will grow the market for everyone. If Congress bows to their short-sighted fears and mandates strong copy protection and technological barriers that punish legitimate users along with pirates, we will all be poorer as a result.

Tim O'Reilly is the founder and CEO of O'Reilly Media, Inc., thought by many to be the best computer book publisher in the world. In addition to Foo Camps ("Friends of O'Reilly" Camps, which gave rise to the "un-conference" movement), O'Reilly Media also hosts conferences on technology topics, including the Web 2.0 Summit, the Web 2.0 Expo, the O'Reilly Open Source Convention, the Gov 2.0 Summit, and the Gov 2.0 Expo. Tim's blog, the O'Reilly Radar, "watches the alpha geeks" to determine emerging technology trends, and serves as a platform for advocacy about issues of importance to the technical community. Tim's long-term vision for his company is to change the world by spreading the knowledge of innovators. In addition to O'Reilly Media, Tim is a founder of Safari Books Online, a pioneering subscription service for accessing books online, and O'Reilly AlphaTech Ventures, an early-stage venture firm.

What do you think about requiring computer vendors to build-in mandatory copy protection for copyrighted content? (If enough of you comment, we'll send the results to Senator Hollings and the SSSCA hearings.)
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Showing messages 1 through 6 of 6.

Mandatory Copywrite Protection
2002-11-08 07:02:40 anonymous2 [Reply | View]

The main problem is using copywrited products with non-copywrited products. They may not work well together, forcing comsumers to abandon paid for software so they can function at all. This is nothing short of armed robbery writ large. I'm sure a few of the software giants are rubbing their hands at the prospect of making old products useless and guarenting sales to comply with this stupid law.

experience
2002-03-18 07:01:21 bry [Reply | View]

Well I can't say I'm a very honest person if honesty is defined as obeying laws blindly. In other words I suppose I'm the average of law-abinding citizen, and I have no great compunction "against" downloading music or movies from the net. that said it has only been convenient for me to spend the time doing so in a small number of occasions
1. I downloaded a season and a half of futurama because they don't have it, even on video, where I live, if I could have gone to a store and bought it or rented I would.
2. I once downloaded a .wav file of the fat albert theme song. damn I love that song.

I know that anecdotal evidence is not the best way to settle a debate of this nature but I only really care about how it affects me :) and I must say all these entertainment manipulations make me feel more sinned against then sinner, which of course makes me want to sin again and again. Got to get my stats up. maybe I should write my own mp3 downloading bot. :)

greggman misses one point..
2002-03-16 13:50:58 ruzz [Reply | View]

A very complex issue, no question. Many potential sides to play off and all can be made to be the correct side.

That said, greggman misses a fundamental point in relation to the idea of pirated software. It's cost. The very fact that many people will pay for a $500 package rather than steal it is proof to the argument that (most) people would rather be honest if given the chance.

I song, or a CD or movie costs next to nothing in relation to a real software package, or even in many cases a good computer book. My number one reason for ever having any pirated software is that the costs are prohibitive to purchasing. This feeling is further amplified by the constant upgrades (or money grabs) and the major players in the software world being against free trials.

It seems to me most of this arguement is somewhat moot in the sense that if the music is the only thing of value you and you can get the entire value by downloading it then you're naturally going to get a lot of piracy.

Take a look at the DVD market. While it is still somewhat difficult to copy DVD's it is possible and still DVD piracy is a fringe event to most people. Why? Because DVD manufacturers got wise and started pumping out extra incentives for owning them. The fight club box set's media (DVDs aside) was worth the money I paid for it.

They add in small incentives, like steel cases, ect. which make ownership something more than just having the actual movie.

The point I'm getting to here (slowly, shh, I'm hung over) is that if Music makers could find a way to integrate a portion of the product that makes it valuable without being the actual music more people would have an incentive to OWN it.

This principal works. Its the very point greggman made about why he doesnt like online books. There is an added benefit to ownership (being able to read and work at the same time, or carry it around with you, read it on the bus) that can't be had simply by downloading the book.

The best way to get people to retard negative behavior is to give them reasons they "like" for not doing the negative behavior. A good business person would peak the consumer's desire for ownership rather than close out every other alternative. When the music industry gets that idea figured out then they can see MP3's for what they really are: a nice free trial till I get paid on friday and get the very cool *insert band name here* bio booklet or some such thing.

sorry if this was muddled. I hope it was clear enough to still get the underlying point I was trying to make.

DVDs are not pirated YET because it's not convenient
2002-03-17 00:05:46 greggman [Reply | View]

I don't see that people will pay $500 for a piece of software as proof that people are mostly honest and will buy stuff if given the chance.

I see it as proof that they feel differently about software than music or videos. Whether it's because they want/need support or because they get the manual or because they are most likely using $500 software to earn a living. All of those reasons do not exist with music and videos for consumers. Hence a different attitude toward $500 software.

The reason DVDs are not pirated as nothing to do with DVDs having more value. It has to do with the fact that it's still to hard to do. It's easy to find MP3s. It's relatively hard to find DIVX files. (You've got to be proficient with IRC and then make some trading buddies, deal with UL/DL ratios, DL queues, etc.).

MP3s play the song pretty much the same as it does on a CD. Press Play, hear the song. A DivX file does not play the same as a DVD. As you mentioned those extras are missing but those extra are only missing because someone has not made a better format than DivX that supports all those extras.

MP3s take minutes to download, DVDs take hours.

All of that will change in the near future. The net will get faster, someone will make a better format. DVDs will be as pirated as CDs are now.

I would argue that there is nothing you could add to a music CD that would get most people to shell out the money given a free, easy, convenient alternative. Except for super fans, most people don't want liner notes, artist bios, etc. And if it was ever added someone would just make MP3 version 2 to add all that stuff in. A steel case? Well, as my MP3s go in my iPod I could careless about a case.

Would I rather have 100 DVDs in cases or 100 movies on an HD Video Walkman? I'd take the walkman. Sure a few people will be saddened that they no longer have a cool case but the rest of the world will move on like they did from big album covers to CDs and from CDs to MP3.

Disingenuous Comments from Tim O'Reilly
2002-03-16 11:44:21 greggman [Reply | View]

It interesting that you can claim Mr. Eisner is disingenuous and yet you gloss over that fact that software and books are not the same as music and videos. If I get a copy of a song, there is arguably NO need for a legit copy. Sure, you could argue that *today* it is possibly more convienent to own a CD than to have an MP3 file but iPods, CD burners and other things are quickly changing that. The same will happen for videos.

On the other hand, this is not true of books. A PDF file of one of O'Reilly many books is rarely if ever as useful as the book. When I want to use the info your books provide I usually want to look at it in the book since on the screen I want to see the particular app etc I'm working with.

Software can also be argued to be different from videos and music. Some software needs support. No music or videos need support. Some software needs manuals. No music or videos need manuals. Software is also often used to make money. Using Word to write a contract, Excel to do accounting etc. Music and Movies are rarely if ever used BY THE CUSTOMER to make money. There's a different dynamic at work when buying software. I know plenty of people that will pirate software for home use but buy it for work use. Not true with music and videos.

-gregg tavares

Disingenuous Comments from Tim O'Reilly
2002-03-29 11:34:34 su007 [Reply | View]

I disagree, the PDF version may be restricted but it can be unlocked. Also I believe there are HTML versions of the books avail. with no restrictions.

Also digital music can degrade due to many reasons, such as recompression, transfer errors, etc. A CD is a near flawless digital copy that would be difficult to match with a media file
(audio buffs know the difference). Also burned CD's are inferior to pressed cd's, and are more prone to skipping/scratching.

My $.02
Regards

Showing messages 1 through 6 of 6.

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