March 26, 2017

DMCA Week: Where's My DVD Jukebox?

A difficult challenge in thinking about public policy is understanding which innovations have not happened as a result of bad government policies. For example, it’s generally believed that the Bell phone monopoly stifled innovation in the telecommunications sector during the 1950s and 1960s. But if we had been assessing things from the standpoint of the mid-1960s, it would have been hard to say exactly which innovations were missing. It wasn’t until after the Carterfone decision in 1968, and further liberalizations in the 1970s and 1980s, that we started to see just how many innovations could be unleashed by a competitive market: modems, answering machines, fax machines, competitive long distance service, etc.

We face a somewhat analogous situation with the Digital Millennium Copyright Act. Like a lot of other people, I’ve made the argument that the DMCA has stifled important high-tech innovations. And the DMCA has been on the books long enough that if we’re right, then we’re probably missing out on some important innovations. But it’s difficult to say exactly what they are; they’re what Bastiat called “what is not seen”, and what Don Rumsfeld called unknown unknowns.

But while we can’t say for certain which innovations have been precluded by the DMCA, we can find plenty of hints. Just last week, Apple CEO Steve Jobs commented that “the whole category [of ‘digital living room’ video devices] is still a hobby right now. I don’t think anybody has succeeded at it. And actually the experimentation has slowed down. A lot of the early companies that were trying things have faded away.”

What’s striking about this is how different the evolution of digital home video products is from the explosion of digital audio products a decade ago. The period between the introduction of the first MP3 players in 1998 and the release of the iPod in 2001 was a period of fevered innovation in both hardware and software. Numerous companies, some of them fairly small, introduced music players. By the time Apple entered the scene in 2001, it was entering an already-crowded market. In contrast, we’ve seen only a trickle of new digital video devices. The Video iPod, Slingbox, and YouTube were all introduced in 2005. These are all great products, but they’re also curiously limited. We haven’t seen general-purpose video devices that replace DVD players and cable boxes the way the iPod has largely replaced CD players and is gradually replacing the radio. Today’s home video experience would be completely unsurprising to someone from 10 years ago.

How is the video market different from the audio market was? There are obviously a lot of factors, but it seems to me that the DMCA is one of the most important ones. It has made it effectively illegal to rip video from their DVDs the way people ripped audio from their CDs a decade ago. And the ability to rip CDs into MP3 files created the foundation on which the digital music device market was built, eventually leading to the iPod.

Consider two products that have not been widely adopted, due largely to DMCA-related legal problems. One is the XBMC Media Center, which used to be known as the XBox Media Center before Microsoft’s lawyers came knocking. Two years ago, I pointed out that the XBMC had significantly more functionality than a lot of “legitimate” media players. I think that’s still true today. One of the most important features was the ability to rip DVDs and store them on your hard drive for later playback. Unfortunately, the DMCA makes it essentially impossible for mainstream technology companies to duplicate this functionality.

XMBC, or other software like it, could have been the WinAmp of video, allowing law-abiding people to build libraries of legitimate video in an open format. That, in turn, would have created a market for digital video hardware to store, play, and manipulate these files, just as WinAmp and other MP3 software made the MP3 player market possible. But because the DMCA makes DVD-ripping effectively illegal, there is no legal way for people to get their existing DVD libraries into an open format, which drastically reduces the demand for open video devices.

Or consider Kaleidescape, an innovative, and very expensive, DVD-jukebox device that was introduced almost five years ago and has faced legal trouble almost from its inception. As Ed put it back in 2004:

DVD-CCA [the cartel that controls the DVD standard] is trying to maintain its control over all technology related to DVDs. In the good old days, copyright law gave copyright owners the right to sue infringers but gave no right to stop noninfringing uses just because the copyright owner didn’t like them. These days, copyright interests seem to want broad control over technology design.

Kaleidescape ultimately won its lawsuit, but the decision turned on fairly narrow contractual grounds that don’t provide much room for others to enter the market. The bottom line is that it’s still effectively illegal to sell a product that will rip DVDs to an open video format.

It’s not like Hollywood hasn’t been trying to produce a viable video platform. Way back in 2003, Hollywood had two proprietary download services called MovieLink and CinemaNow. Unfortunately, they crashed and burned. This part of the story is actually strikingly similar to the music industry, which had a proprietary download services of its own that did just as poorly.

What’s different is that video entrepreneurs don’t have the freedom that audio entrepreneurs did to opt out of the incumbents’ preferred platforms and build their own. It’s worth remembering that the recording industry tried to sue the first MP3 players out of existence. What we’re seeing in the video market is what the digital audio marketplace would have looked like if the recording industry had won its lawsuit against the first MP3 players. The recording industry lost that lawsuit, and entrepreneurs went on to build products that were much better than the “official” ones being pushed by the labels. Unfortunately, entrepreneurs in the digital video market don’t have that same option.

If the DMCA were not on the books, it seems likely that products like Kaleidescape and the XBMC would be growing rapidly in popularity. Many of us would have set-top boxes with 500 GB hard drives capable of ripping dozens of DVDs to an open, standard format for subsequent streaming to any display in the user’s house. The existence of those boxes would spur the creation of a wider market for other digital video products designed to interoperate with the emerging open video standard.

Unfortunately, that’s not how things have gone. Hollywood has managed to do what the recording industry was unable to do: to ban users from converting their legally-purchased content to open formats. As a result, the market for open digital video devices is a pale shadow of what it would be in a competitive market. We’re stuck with clunky, proprietary, and non-interoperable products like Apple TV that require users to re-purchase their existing movie collections in order to watch them on the new device. I think everyone would agree that it was a good thing that the courts didn’t let the recording industry shut down the MP3 player market a decade ago. So why do we tolerate a law that effectively shuts down the analogous market for DVD jukeboxes?

Comments

  1. Drew Dean says:

    I assume that “suer’s” is a typo for “user’s” but it’s rather amusing in context.

  2. There are other differences between audio and video that may explain the lack of such systems.

    In particular I have watched the dvd’s that I have bought approximately once. however I will listen to a Cd (or downloaded audio file that I like) 30-40-50 times.
    Unless I am atypical the market for these devices ids therefore much smaller than that for equivalent audio devices

    – or maybe there would be a market for a different type of video device – but thanks to the DMCA and other equivalent legislation around the world we’ll never know.

    • Also you’re less likely to take a video device with you in the car, train, walking, shopping centre etc etc. All the places you would use an MP3 player you probably won’t use a portable video player.

      • Govt Skeptic says:

        I’d give my pinky finger for a traveling video device with a nice display that could hold dozens of damage-resistant movies. Car rides, train rides, plane rides, grocery store — all good places for a traveling movie.

  3. Playing the devil’s advocate here … the recording industry in the US (note the distinction between the recording industry and the music industry) has almost collapsed amid the rise of the mp3 player. It’s quite plausible that the movie industry is trying to avoid a similar collapse, especially given the extremely high costs of producing high quality video. What has been good for consumers seems not to have been good for content producers. I’m not sure there is a direct link between the industry’s collapse and mp3 players, but it bears thinking about. On a related note … try comparing and contrasting the licensing requirements for using the “CD Digital Audio” and the “DVD” logos sometime. Use of the DVD logo is extremely restrictive.

    Richard’s comment about usage patterns is also worth considering, though I would argue that the market for DVDs is just as strong as the market for recorded music, which suggests that people would appreciate a centralized DVD library. I certainly use one … I built my own using the same open formats used by the XBMC.

  4. Essentially, Tim has made an economic argument against the DMCA. He is right that some innovation has not occurred due to the DMCA.

    However, I don’t think this argument is even necessary, and is in fact dangerous. Contained within this argument is the idea that somehow our freedoms need to be justified by their economic utility. That assumption should be discussed, rather than just be assumed. Many would disagree with this assumption; not that our freedoms don’t also generate economic benefits, but that that constitutes the primary value of our freedoms.

    If we value our freedoms independently of their economic utility (I would maintain that nearly everyone does, even if that realization isn’t conscious) than we just don’t need any arguments about their economic utility to justify our freedoms.

    So even if the DMCA had created several billions of dollars worth of economic growth, it is still a deep affront to fundamental human rights, namely the freedom of speech. Why do I need any argument other than that?

    • That is a good point – however it may be worth making the economic argumetns as a kind of reducio ad absurdum – i.e. this thing fails – even on its own terms and with its own assumptions.

      However if you do that you need to make your basic point about freedom too

    • John Millington says:

      “If we value our freedoms independently of their economic utility (I would maintain that nearly everyone does, even if that realization isn’t conscious)”

      All of the arguments in favor of DMCA were economic. It passed into law anyway, and has not yet been repealed, which I think is evidence that we do not, in fact, all prioritize our values the same way. Talking about the economic cost is a way to reach people to whom liberty is of lesser importance.

      I do see danger in letting them frame the issue as purely an economic decision, but in the case of DMCA the debate can be won even within that perverted context.

  5. “Use of the DVD logo is extremely restrictive.”

    I agree. I guess this is the reason why none of the current DVD standalones with USB slot is capable of playing DVD-Video from an attached USB-HDD.

    Also I’d like to point out that open formats for storing video media on jukeboxes (think Mediaportal = XBMC clone for PC) are already widely available: you can rip to containers like ISO, avi, mkv using codecs mpeg2, mpeg4, h.264. The problem is, you’re just not allowed to!

    Of course this stops noone from doing it with the DVDs they paid for (why should it? I can read my books wherever I want) but it naturally hinders innovation as Timothy pointed out.

  6. Richard’s and brent’s comments are interesting because they showcase how thoroughly our understanding of what we might want is conditioned by what’s technically and politically available, and by our own personal circumstances.

    Consider first that the licensing restrictions for DVD make it effectively unlawful to create a device that would rip video content to resolutions and frame rates (and hence storage requirements) more suited to portable use.Heck, think of all the fuss about getting dvd-player software on laptops to work, all of which would be irrelevant if you could just say “rip this to video and store it”.

    But also consider that most of the people reading and commenting here are childless. I can’t think of a parent of under-10 children in the US who wouldn’t kill for a portable dvd/video jukebox.

    • I didn’t really mean that there was no need for something a bit like a dvd jukebox – I guess what I really meant was that – because of the different usage patterns a dvd jukebox would be very different from an audio jukebox. What a successful one would look like is unknown – because of the DMCA – but here is my take…

      Firstly it would automatically scan the tv schedules and record anything that matched my family’s known viewing habits. (it could get to know these habits by observing what we watch and looking for specified keywords)

      Secondly it could search the internet for suitable stuff on the same basis.

      Since almost everything will only be watched once there is little point in going through the process of storing files from physical DVDS

      The difficulty here is devising a payment mechanism that doesn’t require DRM – resulting in a clumsy and annoying system.

    • I have two kids – 3 and almost 5 – and there is no way in H E double hockey sticks that I am getting my kids a portable video player. At all. Ever.

      It’s bad enough that they know about Transformers being on Youtube, without teaching them how to not love reading books on long car trips etc.

      • Anonymous says:

        Motion sickness suffices to teach that.

        No form of media is inherently superior, be that books or movies or music, so it’s silly to favor one over another. Each has its place.

  7. Richard — you’re pretty much describing a tivo.

    Where I believe you’re wrong is the “almost everything will only be watched once” line. In households with kids, almost everything that’s not offensive tends to be watched dozens of times, and would be watched even more if not for the inconvenience of either reserving DVR space or transferring disks in and out of the DVD player. Even in adult-only households, someone is buying all those boxed sets of their favorite shows, and probably a lot more people would be doing so if watching them wasn’t, relatively speaking, such a pain. There’s also the huge market of people and places where tv gets used as wallpaper; almost all of those would benefit from a jukebox rather than reliance on broadcast TV.

    • Not quite – the key feature is to record things I might want – not just things I already know about.

      What I am describing is a “local storage version” of what BBC Iplayer WOULD have provided if only the content industry hadn’t stomped on it – the ability to see anything from the BBC archive at any later date. The BBC has been happy to allow this for some programmes where it completely owns all the rights (mainly factual radio programmes) but was unable to do so for anything that had any “licenced” content or where they thought the commercial arm could make money selling DVDs or CDs later.

      As far as kids viewing habits are concerned I noted a strong tendency to watch the same video again and again then ultimately move on -when my kids were younger – still not quite the same thing as adults do with music.

      Another big difference between video and music is that there is simply a lot more video than music – which is why it is repeat watched less.

      I think the real point in all this is that we are arguing about a thing that doesn’t exist – which is why there is room for differing opiniions about what it woulfd have looked like!

      Personally all I can say is that different usage patterns mean that it would probably not have been very similar to the existing audio devices

  8. A couple of background points: I have two children (and a requisite collection of Pixar, Disney, and other films appropriate for their ages), and I’m a multiple-watcher -> most of the movies I own I’ve seen several times, some more than a dozen.

    I have, actually, four problems right now. One, the DVD media itself is fragile. Two, the DVD media itself is considerably more bulky than many other media types, even if you were to store the contents of the DVD uncompressed (for example, my old Nokia N800 had two SDHC card slots and an 800×480 display, right now I could carry 20 movies on a handful of 8GB SDHC cards in my pocket, rather than in a large CaseLogic wallet). Next, there is the problem of persistence. Some movies I purchased on VHS and then again on DVD, just like some music albums I purchased on vinyl, cassette, and then CD. While I respect content creator’s desire to market their product to me, I’m decidedly less sanguine about supporting a revenue model that is largely based upon the desire to sell me the same product on fungible media… multiple times. Finally, there is the problem of future ubiquity; I have no desire to purchase a video format now and then be forced to repurchase it again in three years (and again 10 years after that) because the hardware market demands that I display a certain type of media through a certain type of player using a certain type of interface on a certain type of monitor… and the only configuration available is to make my existing archive of video files look horrible on the system the market chooses to sell to me. I would like my high-definition display to be suitably configurable to show lower resolution video in its native format, thank you very much.

    Right now, I’m more or less checked out of the market for video products, because they all come with too many strings attached. When I can buy product and then manipulate it myself, and the hardware I can acquire can provide the functionality I need to display that manipulated product in the way I desire it to be displayed, I’ll re-enter the video content market.

    Right now, they don’t sell what I want to buy.

  9. Anonymous says:

    The article raises an interesting question about what advances we might have seen had it not been for the DMCA. Unlike the pre-Carterphone days in the US, when other industrialized countries were also dealing with monopoly telecom / PTT incumbents, the US was the first nation to adopt DMCA-type restrictions. Many areas of the world, including much of Asia and Europe where there are many extremely capable tech firms, are not burdened by the sorts of content industry restrictions we face here in the US.

    It would be interesting to compare the state of products and services available here in the US with what can be found overseas. If consumers in China, South Korea, and Western Europe have access to compelling products that are not available here, it might even become a an argument for reforming or repealing the DMCA that would gather some traction in Congress.