All this comes from some paranoid and unhealthy urge of publishers to restrict copying (even legal copying).
I think that the millions of happy Netflix customers, including me, are going to respectfully disagree with you on that one. I don't illegally download media, but I don't want to have to commit to purchasing every single show or movie that I watch.
Netflix (as it is all streaming and not really "renting") isn't the greatest example. For some things that I can't stream on Netflix, I often rent from the iTunes store. The cost is much less than a purchase from the same store. The only difference is the understanding that the digital media I'm renting will no longer function after a well-understood period of time. I'm an adult, I can make informed consent to that arrangement.
I wouldn't be happy with this being the only media option, but I like having that as one of the many options in the media ecosystem.
All these reasons have completely no application to digital goods. So what's the point in renting them, or making the purchase price any higher? I see none, except someone's potential greed may be.
You can say, that renting an object more often produces more profit, in case when one time fee is charged for each renting, so that's the reason for the time limit. But then again, this is only valid when the resource is limited (physical object), and each user prevents others from renting it. In case of the digitial data which costs nothing to duplicate, the resource is unlimited, so this reason doesn't apply. And if we are talking about the same user renting it again and again, then what's the point? Purchase makes more sense again.
The bottom line, I think that renting of digital goods is a pointless idea. And since as we see it causes DRM in result - it's a bad idea too.
The price of something is instead based exclusively on willingness to pay for it. The market has proven that people are willing to pay more for digital goods that they own and can consume over and over over digital goods that they have a short-term access to.
Anyway, ask anyone if they prefer to buy and not to overpay, rather than rent. Just because someone devised an idea of renting digital goods for no reason except their own greed is not a reason to say that it's a good idea. It gives no benefits for the user and can be used as an excuse to drive prices up on purchases as you said yourself.
That's a fundamental misunderstanding of basic economics. The market always sets the price. If the price that is set by the market is lower than the cost to produce that item, then you just don't have a viable product to sell.
The basic real-world reason that renting of digital media exists is because some people are willing to pay more for the added value of being able to watch it over and over while some people aren't.
This is rather devoid of meaning. What is the market if not a label we use to reference the extremely complex interactions of individuals with varying degrees of information and rationality in an adversarial system? Of course the actual price to produce a product influences what people are willing to pay for it! This is why companies fight so hard to keep that information secret. This is why I refuse to buy a typical cell phone plan that charges absurd amounts for data and text and stick to prepaid. I influence the market because of my knowledge of how much it actually costs to send a text. The market absolutely reacts to the actual costs of products.
Very few people have the time and knowledge to do a supply chain or BOM analysis before they buy anything. Hence, there is little incentive for companies to price products based on cost. Cost is a factor only when analyzing profits.
Hence, cost is usually whatever the market is willing to pay. Saying it is unethical or wrong does not change reality.
There is a lot of misconception surrounding this principle.
To oversimplify, in the short term, price is determined by the interactions of supply and willingness to pay.
However, in the long term (in a competitive market), new suppliers will enter the market if existing suppliers are making supernormal profits, and existing suppliers will exit if they are making subnormal profits.
This means that, in the long run, price will converge to the average total cost of production, in a competitive market.
Of course, Netflix is not operating in a perfectly competitive market, but that distorts the price in a different way. It's not quite technically correct to say that price is based exclusively on willingness to pay for it; even in noncompetitive markets (true monopolies, as opposed to monopolistic competition), one can just as easily say that price is determined by the quantity that the monopolist wishes to sell.
I don't subscribe to Netflix, but in my opinion if Netflix allowed downloading, what many people would do is make a list of movies they wanted to see, subscribe to Netflix for a month, download all the movies they could and then cancel. Then spend the next year or so watching the movies at over the course of a year or so. You don't get Netflix's recommendation features and everything's dated, but you could download many more movies in a month than you would want to watch. If people who were currently Netflix subscribers switched to this method, then Netflix would see its subscription rates drop. Since their costs would remain the same, they'd have to raise prices significantly. One of the advantages of Netflix is the low price, so many people would cancel outright, but first they'd want to build up a store of all the movies. Maybe some people would be willing to pay for a continuing subscription based on convenience, but I think that for the most part Netflix's user base would turn into one-month bulk downloaders.
Most subscribers would still subscribe to a DRM-free Netflix, because it's considerably easier than maintaining a failure-prone array of hard drives to store everything you want to watch.
there are already copies with better quality than netflix available to everyone to download. and netflix is still in business.
i still have to download those better copies in less than 2 hours when i want to watch something not on netflix or hulu. and i now hate it. i used to love when there were no convenient way to pay for it.
so, quit the nonsense as it even goes against factual evidence
Now, a different and more interesting question is what would happen if Netflix maintained the legal requirement to only view movies through streaming and not to store them, but eliminated the DRM. This would make their model comparable to Amazon's MP3 store, except with for video rentals rather music purchases. Netflix certainly think that such a model wouldn't work for them, and I'm willing to give them the benefit of the doubt. You can point to MP3 stores such as Amazon's to say it would work, but it's interesting that even though MP3 purchases are widely DRM-free, music streaming is still DRM-protected (as near as I can tell: correct me if I am wrong).
so i cant create a content distribution company that allows you to download and convert the movie to some format you need tonwatch on some roadtrip because the middle man says i have to sell it to you via streaming.
If you want to talk about the death of ownership and the rise of rental, and how that might be damaging, that's a fine an interesting topic, but I don't see how it's about ethics.
http://www.defectivebydesign.org/what_is_drm_digital_restric...
If we consider anything that works to prevent media from being copied in violation of copyright, then there is one solution that does not have a central service, and is not rent-based: watermarking.
Every purchase is watermarked for the specific customer. If they give someone else a copy, it is detectable from who they received it, so legal action is possible. But fair use is never prevented, as copying is always technically possible.
(Yes, it is possible to remove watermarks, but it is also possible to get around DRM - all of these schemes are continuously escalating arms races.)
Online games that require validating with a central server after being downloaded? Try not to get a virus downloading a crack after the company goes under.
Your whole arguments abut price and overpay don't make sense. I call your arguments closed-mind and invalid. From a consumer's standpoint, there is nothing cheaper than being able to choose any movie you want to watch, unlimited at a bargin price like $7.99.
That being said, I and millions of other users think Netflix should have more movies. More newer movies but that's really impossible because stupid Hollywood movie companies like WarnerBrother won't sell them to any streaming company simply because they want to sell the DVD.
So, the argument that it's "cheap" is invalid, and a separate question to ask is, how much do you value your privacy?
I am paying $7.99 and I am happy to tell Netflix my preference (my ratings) because doing so do help refine results show up in my dashboard and also gives netflix an idea what people like XYZ. There is an equal opportunity for both users and the service to improve.
I am paying $7.99 for unlimited service. I can watch at any time, resume at any point, re-view at any time. I can always watch - downtime is statistically low. The streaming / connection is usually very good even for poor internet access. I am not giving up a lot of personal data to be honest. If I don't want to watch the movie / tv show after 20 mins I am still paying $7.99. I am not charged per movie. I can actually stream with my girlfriend instead of paying another $3.99 on Amazon for us to watch a movie together.
Tell me if this is not a bargain.
This is a purely a decision people can make. On the other hand, I never said FB isn't exploiting users' privacy to gain more profit. But if the argument is free services comes with a cost, well, "no shxt Sherlock."
Let's look at it this way. Do you think free software are truly free? Some people release free software in order to provide a premium version later time. Some people provide free software to build their skills and reputation. Some people provide free software to benefit everyone, and that's cool!
Do you think docker.io being an open source project really is free? How much $$ can dotCloud save by open-sourcing it? How many more customers will they get after releasing docker? How many people will now trust dotCloud now? There is a price and a gain, even from a pure altruist view.
DRM by nature is little different to public key encryption - it's a method of proving you are who you say you are. Usually there is some component that makes it resistant to tamper, but that in itself doesn't have to increase risk of breach.
You may raise the Sony rootkit debacle, and I say so what? That says more about Sony's failures as a consumer friendly company than anything about DRM.
You make points about how DRM implies contempt for the consumer, but I don't see why that is the case at all. DRM can be a technology that enables more choices for consumers, and that implies respect for consumers, not contempt.
I'm no fan of DRM, but it seems to me you are overreaching in your arguments, which is making your point weaker.
I see no place for DRM in the open web, but at the same time I want the open web to be able to compete with other platforms. I don't know what that means the best choice is here.
Simple. Do you think placing surveillance cameras in everyone's home is an acceptable crime prevention practice? Or may be attaching a camera to each person right away? That's what DRM is. DRM is invasion of people's private digital space. And if you don't see it, it makes it even worse, since secret and massive surveillance is even more unethical, since people get "comfortable" with it. So all this "unobtrusive" DRM is actually even worse.
> DRM by nature is little different to public key encryption - it's a method of proving you are who you say you are.
No. DRM by nature is a way to restrict what user can do with the data, or if it goes further - reporting tool for those paranoid groups who deploy DRM. By its own nature, DRM implies surveillance and contempt to the user.
DRM (and abusive surveillance) does not enable any choices. All it does is taking away people's privacy and ability to exercise fair use to the data they bought.
And intentions of those who push for deploying DRM aren't even secret: http://boingboing.net/2013/05/26/us-entertainment-industry-t...
So, are you suddenly supposed to trust them blindly when they insult you by not trusting you?
Netflix runs custom clients to make sure I'm authenticated and authorized before streaming video to me and streams it in a format that only their software can decode. Sometimes these clients are built into my TV and other times they are written in Silverlight and are built into my browser, but that doesn't automatically mean they're a rootkit any more than Lotus Notes is a rootkit. The only reason it seems otherwise is that you have this weird manichean worldview where any DRM is morally equivalent to the Sony rootkit.
DRM is unethical not because it's always a rootkit. But because it's overreaching. The fact that it's prone to be malware just demonstrates the potential for abuse of overreaching preemptive policing.
> Renting of digital data is a stupid idea to begin with.
I don't think it's stupid. I think it allows consumers flexibility; they can pay more and fully own digital content, or they can save money and pay less for temporary access.
May be you have ideas how to enable renting of digital goods without resorting to unethical preemptive policing? Until anybody comes up with such, renting of digital data will remain a bad idea.
To put this in perspective. When you rent physical goods, do you find it acceptable to be tracked while you use them with some hidden surveillance mechanisms?
But I honestly consider renting of digital data stupid anyway, since it's pointless. There is a valid reason to have renting for physical goods - it allows reusing of the same object and removes the need to make another one which is costly. So it lowers the price for the user of the object as well. Digital goods have none of these issues at all. They cost nothing to duplicate. So renting them simply has no point whatsoever, and is used to reduce usability and out of paranoid fear of piracy, not because it's making anything cheaper and reusable.
I already explained multiple times why DRM is unethical per se. In short - it's overreaching preemptive policing, that's why it's unethical. DRM in digital sphere is akin to making a police state to prevent crime. Sure, some desire such stuff, but I find it unethical. That's why massive surveillance and DRM issues always converge.
Massive? I don't see a major difference. You accept running some black box surveillance software which exists because of the mere reason of some publishers considering you a potential criminal (infringer) without any warrant and probable cause, based on them by default not trusting you. Now, why are you suddenly supposed to trust them in return that they aren't going to abuse that?
I just can't though. You're not paying for a copy, you are contributing towards it's creation.
Creation of content, digital or not, costs money. Sometimes it's an excessive amount (e.g. Blockbuster movies) and sometimes a sane amount (e.g. "regular" and indie moves).
Continuing with the movie examples... Most cameras these days record digitally. Do you expect that, since copying a digital file is free, that the movies should be free? It's entirely digital after all.
I'm hoping you don't, because otherwise you place zero value on the time and effort spent by the crew producing the film and that would be bordering(?) on unethical.
Ah, so you're also against most car rentals? They are often GPS tracked to enforce rules about leaving the country and such. I see no problem with this. It is their property, and they want to know where it is.