Eric and I were talking about DRM this morning.
Larry Page is going to be onstage at CES in a few hours announcing something interesting regarding Google Video. As folks like Om and Cringely have noted, there are a number of potentially game changing and disruptive effects of such a move, but the DRM aspects are probably the most interesting and have the broadest implications for the future of media. It does seem obvious that whether or not google starts off charging $1.99 for cbs tv programs on google video, the endgame here is targetted advertising and IP-TV, not because "people dont like to pay for content" since that's not true - we pay for hbo, we pay for 20 second ringtones, etc. The pay per view is not the right endgame because it's not the most efficient; you constantly have to be jumping through weird and irrational hoops to make sure two people don't 'play' the same media file - that's just weird. Anyway, for now we'll have three proprietary and incompatible DRM technologies: Apple, MSFT, and Google. Apple is screwed. They have amazingly repeated the same damned mistake they made with the Mac O/S and made it a closed system. Microsoft is licensing their DRM to everybody who wants it. Did nobody in the Apple boardroom raise their hand and say "hey, remember when we did this before and we got our ass kicked?". The other long term effect of yet another drm system is that we are potentially approaching an age a few years from now where kids say things to their parents like "Mom, I'm going over to polly's. They use google. Do we have any google DVD's?" Since this is remarkably stupid, it seems inevitable that at some point (hopefully, before this bizarro universe becomes a complete reality) somebody with a great ad system will prove to the content providers that they can improve margins - driving down the production and distribution costs (via zero drm and no concern over piracy) and driving way up the ip ad targetting relevance and thus the effective dollars per view, eilminating the need for the drm overhead in the first place.
Interesting times. Initial reaction is to say Long google, hold microsoft, short apple. Sorry, i had a pundit moment and confused my amateur industry observations with the ability to pick stocks. By the way, it's fun to say things like "apple is screwed" when they are a gabillion dollar company with a soaring stock price and i'm over here rubbing two sticks together. Blogs are a wonderful thing!
Posted by Dick at January 6, 2006 01:06 PM