Monday, July 28, 2003

DRM Goes Ever So Handy

Forward Lock

Combined Delivery

Separate Delivery

Note these terms. These terms are the new world of Digital Rights Management [DRM] in the mobile phone world. And remember, as much as people bellyache about Palladium and computers locking your data in, there are more mobile phones in use than actual PCs.

These three terms, specified by OMA, govern what you can do with stuff you get on your mobile phone. Right now phones can get ringtones, screensavers, text messages -- and it is a huge industry. The money spent by consumers to download Robbie William's latest hit as a ringtone is very significant compared to what consumers spent on buying his latest single, if my sources are to be believed. Very significant.

But if you download it to the phone, you can get it off, exchange it, send it forward, and content owners hate that. So there mobile phone makers specified a new datatype, the DRM datatype, which is basically about taking content -- a JAVA midlet, an image, a ringtone -- and encrypting it, wrapping it up. And you can only decrypt it if you have the rights to go with it, which contains the key to decrypt the content.

In the case of Forward Lock the little envelope around the content doesn't contain a key. Fortunately, the content is also, in this special case, not encrypted. However, your phone sees the little envelope and says 'aha, this content is forward locked', and then your phone will not let you forward your image or ringtone to anyone or anything. You can install it, use it, play it, delete it -- but it don't go off the phone to another CPU, nuh-uh, never.

In Combined Delivery, the little envelope around your content will actually encrypt your content, but also ship with the key right in the envelope. But this key is a special key, it can contain all kinds of directives to the phone like 'hey phone, only play this twice' or 'hey phone, only let the user see this image for a year' or 'hey phone, let the user forward this only to two other people, and the people forwarded to can't forward it at all'.

The most sophisticated one is Separate Delivery. It is like Combined Delivery, but the key can be shipped separately. So say you get your video, your MP3, your program, you download it from somewhere on to your phone, or it is pushed -- and you won't be able to do anything with it. It'll be encrypted. All it will say is 'Purchase Rights Now?' with some icons and info of what it is, and if you say yes, it'll take you to a WAP website where you can enter your credit card. And then the owner of the content can send you a key, and that key can have the same restrictions like in Combined Delivery. So you can all share and download the same cool content, but each phone will have to purchase its own key and rights.

So notice who is enforcing this? Yup, the phones. The phones have to be good boys and girls and not let the nasty user do nasty things with the content like save it to a computer, forward it to a friend, watch or listen to it more often than the content owner says you have paid for.

Remind you of anything? Region-coded DVDs. DVD players are supposed to have a region code, Region 1 is the US, region 2 is for EU, etc, etc, and a region 2 DVD is not supposed to play on a region 1 player, and such. Well, why do I have a South-Korean -- or is Sampo Chinese? -- DVD player that plays every region? Because someone decided consumers would pay more not to deal with silly restrictions. In fact, I heard that in the EU, region coded DVD players are on their way out since it may legally not be enforceable from a consumer-rights POV.

How long before one rogue Chinese manufacturer makes a DRM-capable phone that is not compliant? It will download the little envelopes just fine, and decrypt the content just fine, but it won't be all mean and not allow you to forward. Or maybe it will ignore the key directives and let you play as often and as long as you want, and beam the content to all your friends. It will happen.

Or maybe it will happen by accident. These DRM OMA specs are convoluted and difficult to implement. A mistake may creep in, and suddenly Nokia or Sony-Ericsson will release a model that don't play content cop right, if you press the right keys and look at it sideways just so. The model will be recalled, fixed, amended the moment this becomes known, but baby, will it sell on eBay.

So one of the guys on High School bought the superbad Chinese DRM-capable-but-DRM-less phone. Or that 'buggy' Motorola. Guess what: he's now the most popular kid in school, who will take the pooled cash and buy the MP3s and videos legally -- and then beam them to everyone who payed the pool.

I swear, this whole mobile/handy DRM thing can't last. There are just too many phone-makers, and not all of them play nice. China is big on making its own phones, being independent. They'd love to stick it to those overbearing big mobile companies trying to invade their turf -- and free content will be the ticket.

[Cloned from my Slashdot blog]

Tuesday, July 22, 2003


Due to the thunderstorms, we lost electricity in the Nokia building.

Backup is on for emergency lighting and the key-card doors, so everyone can get around. All unsaved work on desktop computers was lost mid-keystrokes. Everyone with a laptop (me) can still do local work.

Before the outage, everyone was working silently, and the environment felt "quiet". Now that the air-conditioning and all the fluorescent lights and all desktop computers are out, the building is really quiet, even with people talking.

(I am posting this over my personal cellular/mobile wireless modem. I suspect network is out too.)

Sunday, July 06, 2003

Buying A Hard Disk For Music

I engaged in some willful consumerism today. is ripping his complete CD collection, and, together with my music directories, we simply didn't have the disk space anymore. We went to Microcenter to price external hard-disks (IEEE 1394 and USB 2.0 capable) and found out to our surprise that each 50 Gig is around 100 bucks. That's not much for serious space.

This is making me think about the future of music. The reason Dino is ripping his CDs is so he can stream them to our stereo using the TiVo. That he is willing to go through this with all his discs shows how ubiquitous home MP3s of your own collection end up being really nice. Listen to everything wherever. iPods et. al only make it more compelling. We listen to music more often now that the whole collection is available with a simple remote control, instead of trying to find a CD among your stacks and stacks on stuff.

So before I cracked one-third of my laptop's LCD screen into oblivion, I was actually wondering if I could allocate the funds to buy a 500 buck old apple laptop and an iPod so I could buy iTunes. The Apple iTunes store is not just getting great reviews, it is getting great downloads. People like having music choices, not being stuck to the structure of CDs, being able to impulse buys for one, ten, fifty songs, after they have been able to decide they like them, on the spot. I would like to be able to find a lot more new stuff.

On the blogs I follow there are many people who recommend all kinds of tracks they are listening to. I'd love to be able to click a link when they write it and then get my iTunes or Rhapsody 30 second pre-listen and then know whether I like it or not. Download, store, transfer to iPod, have. Perhaps a special link isn't necessary, a mozilla or safari plugin that will look terms up in iTunes (Mac or Windows, when the latter comes out) and then take you there. Read a friend rave about music, right-click, find it.

It is total materialism, but at only one dollar a pop, and actually not at such egregious terms for the actual artists as CD sales. They get 12 cents. Why is this good? Because the big labels don't subtract all kinds of shady deductions like 'breakage', an old holdover from when vinyl and wax rolls and other product actually broke. Artists on big labels get a small fixed percentage of breakage deducted from their royalties since that product was assumed to have broken and thus unsold. It is still being deducted now that artists have music shipped on the non- or way less- breaking format of CDs. Behold the corporate masters, they will recoup from artists even what they didn't advance or charge.

Now take CD Baby. Their model is to be some kind of Internet store for indie artists, but they structure themselves as a record label. Unlike the big record companies hey don't advance money for an artist to record, they won't promote an artist, they won't fork money to get the artist played on radio, nor ship their CDs to stores, of which they own none themselves anyway. What they will do is pure order fulfillment, and give most of the cash to the copyright holders who partner with them to sell their stuff on the label. Greg reports that his partner, who sells some CDs through CD Baby, actually gets real checks.

Apple has said they only want to deal with aggregate entities like record labels, they do not want the hassle of being like and have to deal with all these copyright holders individually. But CD Baby has been offered by Apple to join the iTunes online music store. CD Baby has said that they want to, and not only that, they will allow anyone with music to offer it on the music store through them, for a very small cut, thus allowing independent artists access to the iTunes virtual store shelves while Apple gets to keep not having to deal with masses of independent artists and tiny labels. Everyone gets what they want.

Now take a look at this and this These are articles and questions about how recording actually getting cheaper, to the point that you can make something very decent by yourself at home. Ok, so people whose music depends on acoustic recordings will always have to fork big-ish money for mics and soundbooths to do great recording, but electronic music is already at the stage where it is born on a harddisk and never need leave there. Mixing can then all be done on a good modern PC with ProTools -- no need for a huge expensive mixing console. Making Pop quality music is coming to the masses.

So, distribution electronically is kinda taken care of, you no longer need a huge advance to make a record -- just gamble on your maxed out credit-cards... so what exactly can BMI or Sony Music with their leeching contracts do for an artist? Well, only they can create phenomenons the size of Britney and Madonna. Only they have that promotional muscle. But suppose you don't want to take the craps shoot when you sign to a big label to be the one of the 100 they sign who gets backing, suppose you want to retain all creative and copyright control, suppose you don't want to be molded, suppose you aren't as radio friendly as Madonna and Britney, and suppose now that all you want is to make a living, or a side-gig, and not be the biggest act in the world. Suppose you only want to get heard. What do Sony and Bertelsmann have for you now? Nothing. They aren't interested in small fry. Their business model is structured around that one who makes it really big compensating for all the advances and promotions they never recoup from the 99 failures.

But you still need some form of promotion. People need to know you are making stuff (Dino is telling me to say 'Hi!' to my livejournal because he actually thinks I am chatting) before they will flock to iTunes to buy it. How do you do that? Read a couple of paragraphs upstream: I wanted to try all this music that other people were mentioning. (In marketing/business speak, what I am saying is that Sean and A. are 'opinion leaders and taste-shapers' for me. Perhaps for many others in our interconnected communities too.)

Hmmm. So I am seeing a new direction for independent labels, that doesn't involve trying desperately not to go out of business dealing with the distribution channels of the big labels -- no matter how indie they are as labels, they end up needing those channels, and all kinds of licensing and rights-management hilarity always ensues. One that is a simple extension of what small labels already do. Get your related bands together, sign reasonable contracts for artists whose music works with each other. Make their webpages, help them manage their merchandise through the volume contracts you as a label can get, offer the artists music on iTunes and other electronic stores, do the CD fulfillment when people want CDS, take all the minor promotional things off the artists hands. But also, identify the people who are opinion leaders in their groups: Djs, clubbers, programmers of background music in bars and stores, the cool kids, etc, etc. Get them product, they'll tell others.

Do this on a small scale, no need to create a Britney or Justin. Keep contracts with your small roster of local or perhaps geographically very dispersed talent simple. Organize their electronic presences together so people finding one artist find others in your group. Take your cut from the sales. Nobody gets exploited. Everyone makes a small living. Shift away from having to deal with RIAAs and payola and ClearChannel, but go whole hog on mainly electronic distribution and promotion, tapping the interconnected networks that arise around any taste, any sensation, any social trend. The web groups everything together. Eschew billboards and MTV, go for bloggers, journalers. Don't spam, though. Never spam.

Hell, if a mainly electronically organized label actually makes enough money, they could perhaps advance money for studios, organize tours, the works. And we consumers get our friends to tell us what is good.

The only real problem left? What to do when our harddisks crash now that all our music has been acquired in non-physical form. I foresee a market for very easy, very cheap backup solutions.

Thursday, July 03, 2003

Do Not Use The Corporate Firewall


Why do I have a tiny laptop with a GPRS wireless connection? So I can read all my email and LJ and Plastic without touching the corporate network. With the way certain companies monitor either every packet or every keystroke just to be able to fire you with cause for being human and having a life, I see this as necessary for sustaining my connected life.