Apple v Publishers : DMCA v the 55 Chevy

By Richard Menta 2/22/11

If the anti-circumvention clause of the Digital Copyright Millenium Copyright Act (DMCA) existed in the 1950s the major auto manufacturers would be able to sue hot-rodders and bootleggers for thousands-of-times the cost of a new car. It took around 18 seconds for the average car in the middle of the 20th century to go 0-60 (as opposed to about half that today) and to improve performance hobbyist and liquor runners would boost power by replacing existing heads and manifolds with aftermarket products by companies like Edelbrock. The law would have made it illegal for car owners to modify original equipment, just like it does for Playstation modders today.

Think of what this alternative reality might have looked like. To demonize all those who dare flirt with aftermarket equipment the auto industry might publicly call every one of them a bootlegger. Edelbrock would be treated with the same disdain as the record labels treated Limewire and NASCAR would be denounced as a means of promoting bad behavior. For its part NASCAR might find itself invoking the safe harbor clause ala Google.

Precedents can be a bitch, even when they are utilized in imaginary situations. Apply the DMCA to Fords and Chevys and we see how whole industries could be undermined. You can see that effect today.

Richard Menta

Ironically, the DMCA is finally unveiling some serious backlash against the very content suppliers who pushed for the law - and specifically it's the anti-circumvention attributes - in the first place. Right now print and music services are visibly angered at Apple's new rules for subscription services. Apple has mandated that services must offer an App version for any subscription where they access Apple mobile devices and then pay Apple a 30% cut for the privilege. This means, for example, that Comcast/NBC must now kickback a significant piece of the money they now draw from Hulu subscribers, money they did not have to share with Apple until now. Furthermore, these companies can't add an iPhone tax to recoup some of this money. Prices for Apple App subscriptions must be the same as prices for all subscriptions regardless of platform.

In fairness to Apple, one can make a very good argument as to why Apple deserves a cut. It was the App store that rescued Pandora from an early demise. As for Hulu it just hit one million subscribers and is projecting $200 million in revenue by fall, most of that money propelled by the Hulu Plus app. Furthermore, if we go back a couple of years to when Apple was negotiating for content for the iPod, suppliers were quite aggressive in their own dollar demands. The tide has turned and it is Apple making the aggressive demands. Of course, there is no negotiation of terms. Apple named a figure, the same percentage Apple charges for paid applications, and immediately began deducting it from the subscription streams that funnels through Apple's system.

If it were not for the anti-circumvention clause in the DMCA, content suppliers could simply offer their iOS applications from their own web sites and bypass the Apple App store and its rules altogether. Apple only allows iOS devices to load applications through the App store and the DMCA protects that corporate mandate. Even if bypassing the App store is technically easy it runs afoul of the law. Publishers and media companies are handcuffed. The very petards they created to control others now controls them.

Content creators could band together and instruct their lobbyists to push for repeal of that onerous clause. Yeah, I know...