maximize best case, worst case, or average case? (TCPA

[Anonymous]

Robert Hettinga writes:

> All they have to do is auction the first copy off for a lot of money, cash,
> and let the market take care of the rest. That, by the way, is what people
> do now, of course, with advances, record contracts, and so on.

Brilliant.  Let the market solve the problem.  Why bother with the auction
part, then?  If the market's going to solve the problem for the 2nd guy
to hold the copy, why not let it solve the problem for the 1st?  The fact
is, quoting this mantra is simply a way of avoiding the hard issues.
You've got to show *how* the market is going to solve the problem.
Why would content creators get "a lot of money, cash"?  Obviously, only
if your #2 guy knows that he is also going to get a lot of money for it.
So you haven't taken a step towards solving the problem; you have simply
handed the problem off from #1 to #2.

The fact is that the market can't solve this kind of problem.  That's
right, markets are not perfect.  They do fine for ordinary, private
goods.  But information objects, absent successful DRM restrictions,
are effectively public goods.  That is, you can't restrict their
dissemination.  If you try to provide such goods only to a small group
of people, you've effectively given them to everyone.

This idea of digital content as a public good is developed in detail at
http://www.tidbits.com/tb-issues/TidBITS-602.html#lnk5.

Markets do not handle public goods well.  It is a standard theorem of
economics that they underprovide public goods.  There is no way to charge
for goods that everyone can get for free, and ideas like Kelsey and
Schneier's Street Performer protocol don't work because of free riders.

The traditional way to provide for public goods is by government.
If we don't get DRM, that's probably what we will end up with: government
subsidies of the arts.  Most musicians and other artists won't be able to
make enough money to live on even if their works are relatively popular.
The government will have to tax consumers and distribute the proceeds
to artists (and the RIAA, etc) in order to protect the content industry.

This is the true alternative to DRM.  Anyone who respects the power of
markets should understand that DRM is the key to allowing markets to
function with information goods.  If you oppose DRM, you are working
to insure that creative content will become a public good.  And if you
understand econmics, you will see that this is an outcome to be avoided
if at all possible.