Perfect DRM

It's called the printed book. As big as the video game industry is, the book industry is bigger. Last year, Barnes & Nobles, Borders, and Amazon pulled in $11.5 billion in terms of book sales (this isn't including sales of coffee or non-book items in these stores). Add in the sales of Wal-Mart, Target, and local independent retailers and you'll have to agree that it's still a big market even in today’s age.

Go to any Barnes and Nobles and you'll see a ton of people reading for free. Someone might walk into a B&N, pick up a magazine and read it cover to cover, or even pick up a self-help book, and read it while taking notes on a separate sheet of paper. Sometimes, you might actually buy a book when you want to enjoy re-reading the material at home, or if you want it as part of your collection. Books are cheap. Hardcover books are more expensive than paperbacks; and art books may be the most expensive of them all but the print quality and binding makes it all worth it.

Casual copying is possible but not easy. There's nothing stopping me from photocopying a whole book cover-to-cover, but very few of us have stacks upon stacks of copied books. It's too inconvenient to copy something when it's cheap enough to buy. Likewise, everyone has taken a class or two where the professor hands out a photocopied textbook chapter, recognizing that students are unlikely to find value from the rest of the textbook or beyond the term.

If a book publisher thought like the movie industry and wanted to prevent casual copying of a book, they would have made every page black text on a red background. It'd be so hard to read and intrusive that no one would ever buy a book again.

Finally, all of us can name plenty of famous authors. We recognize the effort and time an author has put into his work and may purchase a book in order to support an author in the hopes of seeing a sequel, even if only in theme.

The Difference Between Books and Movies

Now, as an experiment, imagine that you had a Star Trek replicator in your home and could get any book you wanted for free with the simple command of your voice. Would anyone still buy a book? No way. Would anyone still want to write a book? Not a good one.

That's the predicament of digital music and digital video right now. Unprotected content over large BitTorrent networks is akin to having a Star Trek replicator. In order to have a DRM model that parallels the book model, you have to make copying music and movies as tough as photocopying a book.

Hollywood studios shouldn't panic about sites like YouTube or even the torrent sites. I can see the problems with leaked prerelease copies of shows like 24, but after a show has been broadcast, it’s hard to make a reasonable common-man standard against sharing of the recording. You can already get the full book experience for free, and it doesn't stop people from buying books to support their favorite authors.

The next step is appropriate pricing. There's something wrong when a soundtrack CD costs almost as much as the entire movie on DVD. In countries like China, where pirated CDs can be bought by the pound, Hollywood has tried releasing lower-priced DVD movies with good success. Again, most people are reasonable. Just look at iTunes when it comes to music. DVD movies and DVD television shows continue to have good sales thanks to bonus features like behind the scenes footage, or commentaries. Many people without a HDTV prefer DVDs for the 16:9 widescreen experience. As long as there is added value (think hardcover book) or convenience, physical media will continue to thrive.

The biggest hurdle will be promoting authorship. In books it's easy. In the movies, it's hard to get people excited about buying a DVD or Blu-Ray/HD-DVD to support the actor who already makes $20M a movie, or the director who's first in line for that latest supercar. People never hear about the screenwriters who may only get $100K for the first draft of their screenplay and another $30K for their second draft. Since a screenplay can take several years of work, many writers are making less than minimum wage. I challenge you to name ten successful screenwriters. Do you know who Terry Rossio and Ted Elliot are? What about Felix Chong and Siu Fai Mak? David Koepp?

Promoting the screenwriter also serves an additional purpose. Right now, it's easy to see the actor's work and even the director's work. It's tangible and direct. What's often lost is the contribution of the screenwriter. I'm not talking about the dialogue (ultimately only a minor element in the grand scheme of things) but in terms of the story, character, and theme. These are purely concepts of intellectual property.

Until Hollywood can turn screenwriters into celebrities too, they'll never be able to convince the public to buy movies even if they can enjoy it for free in the same way the public buys books even after reading it for free.

The solution to movie piracy isn't fancier and more complex copy protection, it is bringing screenwriters, the creators of Hollywood's most conceptually-pure intellectual property, to the center stage. Only when Hollywood recognizes the value of pure intellectual property will consumers also recognize the true value of intellectual property and support their favorite screenwriter.