Stan Liebowitz of the liberatarian think-tank the CATO institute has recanted much of his earlier writing about file-sharing and the music-industry. He says that the fantastic volume fo file-trading (he puts the number of tracks downloaded at 500 percent of tracks sold) should have an equally massive impact on music sales if we are to believe that file-sharing is bad for the music industry. But CD sales have not been hit in a way that is commeasurate with the antiicpated impact of file-sharing; depending on who you ask, sales are flat, or have fallen five percent, or 10. This has led Liebowitz to change his tune; he says that it seems that file-sharing is just like the VCR, the piano-roll, the radio, and all the other entertainment technologies that have caused the industry to cry wolf but have ultimately increased their market.
Liebowitz also does a good job of explaining what's wrong with the music-industry's dumb-ass "rights-managed" download services, but fails, ultimately on DRM itself. First off, he fails to acknowledge the intractatability of making DRM work — providing an untrusted party with the key, the ciphertext and the cleartext but asking that party not to make a copy of your message is just silly, and can't possibly work in a world of Turing-complete computing.
At least not without the DMCA's anti-circumvention clause, which protects technical impossibility with a law enjoining people from investigating the use of their lawfully acquired property, even if the investigation results in a lawful use (say, breaking the Adobe eBook DRM in order to copy some text and paste it into a critical essay). CATO should be foursquare opposed to the DMCA's anti-circumvention, which also has the effect of preventing any interoperable technology (think VCR+ or Hitachi's IBM I/O devices in the 1960s) from being created without a license from the technology's originator.
He also fails to understand the impact of DRM and anti-circumvention on fair use. He makes a silly argument along the lines of, people can go to libraries and make fair uses of "unprotected" media there. The problem is that fair use isn't a laundry list of uses that you're allowed to make. It's specific to the facts of each use. Each new technology creates new fair uses (think of home taping) that are made explicitly without the permission of the rights-holder. DRM makes it impossible to make any use that the rights-holder hasn't previously permitted, unless you circuvment the DRM (which makes you liabile to civil and criminal penalties under the DMCA).
(via /.)
