Douwe Osinga's Blog: Microsoft: the not so evil empire?

Tuesday, December 30, 2003

Recently I came across this review of different digital music services. The bad news is of course that except for e-music, all services require some kind of digital rights management (DRM) software, which usually is used to minimize the rights of the consumer, i.e. it limits the number of computers you can play your music on and the number of times you can write a song to a CD. My opinion is that we’ll need more and better DRM, so that people will finally see that it is terrible and do the right thing, i.e. vote with their wallets for systems with fewer restrictions.

But there is one aspect of DRM that is often overlooked: interoperability. If I buy a CD, I can play it on pretty much whatever CD supporting device I want, whether it is a stereo or a computer from whatever manufacturer. If I buy a DRM protected song from Apple’s iTunes, it will only play on computers running Operating Systems from Apple or Microsoft and only on iPods as far as non-computer devices go. Transferring music to a device from Dell or Creative is just not possible. You’d have to re-buy the song from a different music store. Even if I bought the song with almost no restrictions, without interoperability, it just won’t play. Maybe this is where the RIAA wants us, but it is hard to explain to the average consumer.

This where Microsoft comes in as the empire. Of the six reviewed services, five were using DRM from Microsoft and guess what, if you buy a song from one of the five, it will play on software from all five. And Microsoft licenses its technology to lots of hardware manufacturers, so problem solved. Microsoft, the evil monopoly to the rescue of Joe Sixpack. The DRM market, like the OS market, is a natural monopoly, so either the government or some company ends up with control over it. Better give it to Microsoft, who we know and watch anyway, then to a new devil, or worse, to the government, whose space shuttles still use 386’s.

Economic theory about natural monopolies was developed to describe mostly network-like markets, such as electricity or railways. It just doesn’t make sense to lay multiple tracks to railway stations from different companies or to install multiple sockets from different companies in houses. In the same sense, but different, is it impractical to have three different desktop operating systems popular, because we’d need all applications developed in three-fold.

The problem with this argument as far as OS’es and DRM goes, is that it doesn’t work like that in practice. Take for example the Office market, where Microsoft enjoys its biggest monopoly. Of course, if every company would use different formats for spreadsheets, documents and databases, it would be chaos and the now centrally dictated structure would be preferable. But we could have multiple providers of Office software using the same document formats. Interoperability through Open Standards is the alternative.

For Operating Systems this argument is clear; we already have a number of companies offering versions of Linux, which interoperate great. For DRM, the problem is of course trust. Microsoft convinced the RIAA that Microsofts DRM is completely safe and impossible to crack (sounds weird). How can the entertainment industry trust the Open Source people, aren’t they the same information-wants-to-be-free hippies who invented Gnutella and Bittorrent?

How can they not. On the long run, only open systems can be trusted. And if the alternative to open standards is a Windows OS for every CD-player, then the choice is clear.