Michael Eisner, Steve Jobs, & Digital Copyrights

by , 10:00 AM EST, March 5th, 2002

I cracked open the fortune cookie that came with my General Tso's Chinese take-out last night and read the fortune. It said "The worst missteps are often the ones not taken." That's pretty ambiguous, like most fortunes are, but the words came shooting back to my attention after reading words from two leading business leaders.

The first - big surprise - is Steve Jobs. After accepting a technical Grammy award from the National Academy of Recording Arts and Sciences last week, he told a reporter from the Wall Street Journal that "If you legally acquire music, you need to have the right to manage it on all other devices that you own," He of course was referring to the recent encryption methods being tested on consumer CDs that block mp3 encoding from computers. As an added feature, this same wonder technology also prevents them from playing on many existing CD players and car stereos.

The second is Michael Eisner, president and CEO of Walt Disney Corporation. Mr. Eisner was recently testifying before a senate commerce committee. His opinions on media control are a bit different. "The 'killer app' for the computer industry is piracy," Eisner said. And while referring to Apple's "Rip. Mix. Burn." ads said it promises "that they can create a theft if they buy this computer". I find it funny in the extreme that the supposed minority "niche player" gets attention for the large volume of music theft on the internet!

Jobs understands that consumers want content fast and they want flexibility in what they can do with it. Eisner only understands that he doesn't want the current music distribution system to change, even though he has customers asking for it. Instead, he wants Congress to bully us on his behalf.

I've seen people try to get free music through networks like gnutella. Eisner says it's easy! Let me tell you, it can take a lot of work and time to get acceptable results. Searches are seldom fast or complete and even if you can find what you're looking for, the download speed from the person you are downloading from can vary wildly. Now, imagine being able to go to a recording company's Web site and get a single song from a fast server that was encoded well for say, a dollar. Would I prefer that to slow searches, multiple downloads and lots of wasted time? In a heartbeat. The part that Eisner doesn't "get" is that many consumers are more interested in the convenience of downloading music than the price tag.

Music companies could distribute a song to one or a million people for virtually the same cost. The overhead from distribution would be nearly zero for an unlimited number of units. The difficulty in setting up those kind of servers is negligible and in most cases they already have the legal rights to use any form of distribution they wish. The benefits are obvious. The reasoning behind their inaction is more mysterious. Maybe it's because it would be a distribution system that WE the consumers want and would benefit us foremost. Perhaps it's because the technology now exists for them to exert more control than ever over their content after it's sold. After all, people were copying cassettes a long time before the CD was even created. But there was nothing the industry could do about that at the time.

The Grateful Dead once tried to stop the illegal bootlegging of their live concerts until they figured out that it only helped to drive their popularity upward. Eisner and the rest of the movement that aims to limit our use of digital content could learn a lot from the band as well as that fortune cookie. In short... Wake up and smell the money.