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Sometimes I read something and am rendered speechless — and not in a good way. I had that reaction this morning to a staggeringly dense opinion piece in PC Magazine by Lance Ulanoff, about the “dangers” of DRM-free music, and how this is not only going to cause the ruination of the entire content industry as we know it, but flies in the face of centuries worth of economics. We even get a charming little vignette of Lance talking to his young daughter about bartering, etc.

Lance, who is allegedly editor-in-chief of the PC Magazine network, says the digital content industry is “on the road to ruin,” and that with each step towards removing DRM controls and offering music for free, the music business is “digging itself in deeper.” Lance must be looking at the digging from the opposite side, because to me it sure looks like they are digging themselves out rather than in. Not our Lance though. He says that the digital economy is on the verge of collapse.

As Mike Masnick notes over at Techdirt, the economic “arguments” that Lance puts forward (and I’m using that term very loosely) are completely out to lunch. A lack of DRM controls isn’t making music lose its value — the effects of digitization and the economics of abundance are, as marginal costs of production fall to zero, or close enough to make little difference. Putting DRM controls on music isn’t going to somehow cause value to reappear by magic. Value has moved elsewhere.

Note:

This isn’t really relevant, but I can’t help myself: Lance’s article also uses the word “staunch” to mean an attempt to stop the bleeding (metaphorically) in the music industry. The word is “stanch.” Staunch means dependable.

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

22 Responses to “How not to think about music, Part XVII”
  1. I was once told that there are facts and there are opinions. People can be stupid if they don't know the facts but anyone who thinks another person is stupid for their opinion is probably saying more about their own intelligence. Something to think about…

    There's nothing inherently incorrect about what Mr. Ulanoff says and while I don't agree with him there's something to be said for the fact that he's essentially endorsing capitalism (which has a history of working) while you're essentially endorsing (at least the knowledge based aspects of) marxism which has a history of not working. Further, I've scoured the multiple links on Techdirt and have yet to come up with actual respected economists who endorse the theories he put forth there. That doesn't mean they're wrong but it does mean that people who disagree with them probably aren't stupid for doing so.

    Again, I don't agree Mr. Ulanoff but his post certainly wasn't “staggeringly dense” and for you to say so really makes you come across as someone adverse to anything he doesn't personally agree with. Nothing he said was as far out there as the idea that a low marginal cost (it isn't zero because of things like bandwidth) will in turn drive the price of an item to zero.

    I guess it is nice to see you peeking your head out of the echo chamber you've built around yourself it would just be even better if you did so with an open mind.

  2. Hey Mathew, mentioned this on Twitter, but just letting you know that the analysis was mine, rather than Tim's — though, as I said, I think Tim would have said something quite similar.

    As for Tom's comment here, there are actually plenty of well respected economists who support the theories we talk about, which aren't even remotely close to “Marxist”. One of the recent Nobel prize winners in economics has come to similar conclusions, and future Nobel prize winner Paul Romer also has come to similar conclusions. David Levine, who is also a well respected economist has written an entire book on the subject.

    And that's just the advanced stuff. It's somewhat stunning to hear Tom say that respected economists don't support the theory that price = marginal cost. That's a pretty early chapter in any intro to econ book.

    So, I'm not sure why Tom would suggest that it's “out there” to think that price gets driven to marginal cost.

  3. […] which has resulted in him being made the most recent laughing stock by a number of bloggers and other journalists. Sure he may have made some pretty stupid points but he is no different from the large majority of […]

  4. This isn't really relevant, but stanch and staunch are variants, not completely different words for different meanings. American Heritage says 'Staunch is more common than stanch as the spelling of the adjective. Stanch is more common than staunch as the spelling of the verb.'

  5. Thanks, Chris — it's true that the American Heritage dictionary (and the
    Webster's) admit that both can be used, but I think they have weakened on
    that point in part because people continually use the words interchangeably
    when they actually mean different things. Stanch means to stop the flow and
    staunch means dependable — two different meanings, two different words.
    I'm sticking to my guns.

  6. Cost does not equal price. In a competitive market, it's hard to justify a high price when MC is at or near zero. Other competitors will just undercut your price, which will drive the price towards zero.

  7. […] digital-rights management and music not that long ago, which I also wrote a post about and called “staggeringly dense.” A commenter took me to task for that — and other things — but I’m going to stick […]

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