Bill Gates: "People should just buy a CD and rip it. You are legal then"

Bill Gates: "People should just buy a CD and rip it. You are legal then"

Summary: At a recent junket up in Redmond, Bill Gates told the audience of invited bloggers that DRM has "huge problems" and that people should "people should just buy a CD and rip it. You are legal then," (putting this in context, he said this is response to a question posed by Michael Arrington in relation to the long term viability of DRM). Does this signal a change in how Microsoft views DRM, or is it that Gates doesn't agree with the direction that Microsoft is taking with regards to DRM?

SHARE:
TOPICS: Microsoft
68

At a recent junket up in Redmond, Bill Gates told the audience of invited bloggers that DRM has "huge problems" and that people should "people should just buy a CD and rip it. You are legal then," (putting this in context, he said this is response to a question posed by Michael Arrington in relation to the long term viability of DRM).  Does this signal a change in how Microsoft views DRM, or is it that Gates doesn't agree with the direction that Microsoft is taking with regards to DRM?

Now, Gates is a smart man and he carries a Zune.  I don't think that there's any chance that he's not worked out for himself that the current DRM model that's used as a wrapper for media simply isn't working out as a deterrent against piracy.  What's more, it's a major hindrance to those trying to work within the limits of the schemes in place. 

What really worries me is that a smart guy like him can't come up with a better mechanism.  Microsoft has rolled out the Zune Marketplace which sells DRMed media yet Bill Gates is suggesting that people go out and buy and rip CDs.  Interesting that this is the best advice that he can offer.  What would happen if consumers shunned digital downloads in favor of CDs and DVDs?  Would this weaken the RIAA and MPAA and make them back-pedal on DRM?

But Gates doesn't just see ripping CDs as a way to avoid DRM hassles (unless the CD happens to contain copy protection, in which case you have an extra hurdle to jump), but also as a way for consumers to stay on the right side of the law.  Seems like Bill Gates doesn't subscribe to the RIAA's view that ripping CDs is evil, which is yet another interesting insight into how he thinks.

But maybe this is Gates' way of signaling defeat at the hands of the recording industry, which is a real shame.  Microsoft wields a lot more power than Apple and could have negotiated deals that would have meant a greater level of freedom for consumers. Instead it decides that the best thing to do is pay Universal Studios a "Zune tax".  That can't be a good thing.

While I don't see the current DRM model as being workable (it works for the type of consumer that sees media as being disposable, but for anyone trying to maintain a media library, it's far from workable), I also don't see a totally DRM-free world as being workable either.  Somewhere in-between those two extremes lies a better solution (which, I hasten to add, is never going to suit everyone) but don't ask me what this solution would be.

As an aside, I have to admit that the "grilling" that these hardcore bloggers gave Bill Gates was, on the whole, pretty lame (along with Arrington's question, I think that Niall Kennedy's question about Linux IP was the only other serious one).  For example, Steve Rubel, who says admits that "this has been on my calendar for over a month now and I had plenty of time to process it mentally before Gates arrived," came up with "what's on your Zune?".  Tough question!

Topic: Microsoft

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

68 comments
Log in or register to join the discussion
  • Very good reason why

    Copyright law as written has many exceptions to when you can and can't copy. These exceptions are not binary and require that the end reason for the copy be taken into consideration.

    For example "ripping" your CD (making a digital recording under the definition under the law) is both legal and protected due to section 1008;

    [i]No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.[/i]

    If the end use is noncommercial then you can make the recording.

    This is further complicated due to the fact that the record labels wish to use DRM not just to enforce their rights under copyright, but also to prevent the user from doing things specifically they are allowed to do because copyright law limits the copyright holders authority eg; resell a song;

    [i]? 109. Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord40

    (a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord[/i]

    Finally copyright holders are trying to add additional rights that they do not have under copyright, and enforce it with DRM, eg; Dictate to the consumer which devices and number of devices a song will play on... copyright holders do not have this right.

    [i]Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

    (1) to reproduce the copyrighted work in copies or phonorecords;

    (2) to prepare derivative works based upon the copyrighted work;

    (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

    (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

    (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

    (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.[/i]

    The ones pushing DRM are pushing a Lie that copyright holders enjoy, legally, 100% control of their works- which is not true. They claim the only way they would have the incentive to create these works is if traditional exemptions/limitations and consumer rights be suspended including the right to own the copy you purchased.

    Another Lie these same proponents of DRM are pushing is that you do not an never did own your copy;

    [i]? 202. Ownership of copyright as distinct from ownership of material object

    Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.[/i]

    The final Lie they are pushing is that their is a state right to control playback/enjoyment of utilizing your copyrighted work;

    [i]301. Preemption with respect to other laws2

    (a) On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

    (b) Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to ?

    (1) subject matter that does not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression; or

    (2) any cause of action arising from undertakings commenced before January 1, 1978;

    (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106; or

    (4) State and local landmarks, historic preservation, zoning, or building codes, relating to architectural works protected under section 102(a)(8).[/i]

    What they claim is that their contract should not be preempted because playback/private utilization is a right given to the creator from the state. In this case the forge a contract with you where you do not own the copy you paid for , but you do own the media it is embedded on (If it breaks or becomes damaged they don't have to repair it), and in exchange for the revocable consideration of being able to utilize (play, read, load & run) the work you agree to give up all your rights. The problem is there is no state or equitable right that gives these copyright holders the right to control utilization (play, read, load & run) and the consumer would not pay money for any work if there was.

    In addition to the above in order for DRM to work it must prevent the owners computer, copier, recorder, player, or other device from playing back unless authorized or recording. This means the owner can not have control over the device's they own- think about that for a second....

    That is why DRM is unworkable. DRM is broken not just at a technological level but on an ideological level and to be quit frank most current DRM schemes should be made illegal/unenforceable and would be except that anytime someone with deep enough pockets to afford a lawsuit that goes all the way to the Supreme Court breaks DRM and gets sued, the copyright holders quietly settle the case.
    Edward Meyers
    • You've got it precisely

      Thank you, you've just saved me a lot of time in finding the appropriate legal references.

      If you think DRM is solely about copyright protection, then you're falling into the trap set by the record labels. DRM was never about copyright protection, rather, its always been about corporate control. With DRM, the corporation deploying it owns the content, dictates all the terms of use, and can change these terms at any time.

      True, in some cases the terms are similar to the copyright protections we're used to, but they don't have to be and often aren't. Worse, terms you agreed to today might be reasonable, but tomorrow they may not be.

      And if you don't believe me, re-read Edward Meyers post above. He's pointing out most of the legal differences between copyright protections and DRM.
      Feldon
    • Why would the legal system break DRM?

      You wrote:
      "DRM is broken not just at a technological level but on an ideological level and to be quit frank most current DRM schemes should be made illegal/unenforceable and would be except that anytime someone with deep enough pockets to afford a lawsuit that goes all the way to the Supreme Court breaks DRM and gets sued, the copyright holders quietly settle the case."


      As you read about the Napster case, did you notice the attitude of the Judge? She was outraged. In addition to destroying Napster, I think she would have ordered jail time if possible.

      Attempts at objective study of file-sharing have found the content companies increase profits because of file-sharing. Even the content companies' own paid studies have found the effects minor compared to other factors.

      But when a Judge was confronted by all this evidence, he decided the content companies must have suffered a loss based on his own status as a reasonable man. Wrote something like: "It stands to reason..."

      The legal system is solicitous of the content companies and sympathetic about alleged damage. Measures with the justification of protecting the companies' property are treated well. And if not sufficiently well in Court, then in Congress.

      So I wouldn't consider DRM to be hanging by a thread. Lifelines will be made available as needed, I think.
      Anton Philidor
      • Napster was not about DRM

        Anton,

        To begin with you are making the mistake that DRM has any effect on piracy at all. The RIAA's own data smashes that assumption to bits.


        Next did you not read the Lexmark appeal? How about the Skylink case?

        http://www.eff.org/legal/cases/Lexmark_v_Static_Control/20041026_Ruling.pdf
        http://www.eff.org/Cases/Chamberlain_v_Skylink/20031113_opinion_granting_summ_judgmt.pdf

        When the DRM exceeds copyright protection it has been slapped down. That is exactly what the issue is. DRM is not being used to enforce copyright but to give copyright holders rights they never had/are specifically limited from by copyright law.
        Edward Meyers
  • Gates is a smart man

    Smart enough to realize that DRM is an awful deal for consumers, a stupid waste of money for media rights-holders. Really, the only one DRM is good for is the DRM supplier, who make lots of money selling an unneccessary and useless product.
    tic swayback
    • I wonder...

      Where all the PRO-Microsoft, PRO-DRM people are going to be with this...
      ju1ce
  • TRY TO MOVE WMA FILE 2 ANOTHER PC

    RIGHT. I DL'D OFF OF NAPSTER TO WMA FORMAT - PAID FOR THE DL, RIPPED OTHER WMA FROM CD'S. LATER ON TRIED TO MOVE THEM TO MY NEW MACHINE AND MY NEW LAPTOP. MSGS SAYIING I CANT DO THAT, BLAH BLAH BLAH THEN IT TRIES TO CONNECT TO THE INTERNET TO RAT ME OUT , THEN TOTALLY DISABLES THOSE FILES NOW I CANT EVEN PLAY THEM ANYMORE - WHAT A TOTAL WASTE OF TIME AND MONEY. DAM NEAR IMPOSSIBLE. LONG LIVE MP3.
    michael801
    • There is a little check box

      about protecting content ripped as WMA. Uncheck that, and all your problems go away...

      They hide things like that in help files, or FAQ's on the web.

      I will agree with you on MP3, though. It is the most universal format out there, and the least hassle.
      mdemuth
  • Why?

    Why have all the other bloggers not also published this account?

    Now, many of them have noted only on their websites that the story is attributed only to techcrunch, i.e., if you can read, they are disavowing any knowledge of it........No one doubts that MS does not want to have to deal with DRM, that's not my point. DRM = bad. My point is simple. If Mr. Gates actually said in context about what to do about DRM, "Just rip a CD", then why are the other bloggers at the meeting not all over this? Why have NO major news sources picked this up? Why?

    Why does no one get the point that what he clearly means is DRM is NOT going away, so if you have a problem with it just buy a CD and rip it? Why?
    Master Guru
    • DRM doesn't have a chance

      I don?t see how DRM can survive. People utterly hate it. As I see it, companies will have to create business models around the reality that people want to be able to use content they acquired, easily and freely ? with no one looking over their backs (at least with designs to regulate them or do them harm). If a market will not accept a technology, there is no way the technology can survive in that market. End of story.

      What content providers should have done, was sat done with consumers (including those using P2P networks), and tried to figure out what they want, and how they could make money from these people?s behavior. Instead they declared war on them ? a practice that is unheard of in other industries.

      I think one thing content providers should consider doing, is starting subscription services (similar to emusic.com) and offer special rates to kids in various age ranges for unprotected content. I think they should also consider offering special rates to people in different parts of the world ? based on what they can pay. These services (which would be much better than P2P services) would pull a lot of demand away from P2P services, and content providers would put a huge dent in piracy, and make a whole lot of people paying customers.

      I also believe content providers could derive a significant amount of income from embedding their wares with ads, and distributing them freely. They could do a whole lot of work refining their ad systems ? particularly with the work of psychologists ? to maximize their incomes from ads. E.g. I think food ads should be the most common ? because quite frankly, everybody has to buy food and eat. A free music track therefore could e.g. contain a 5-10 second audible ad overlay at the beginning of the song, for Burger King. The ad overlay could activate for maybe 5 plays of the song, then become silent for subsequent plays of the song. Alternately, as a free song is played on a device a quiet, graphic ad could be displayed on the device, and below it, a text box could be made available so that the user could search for precisely what he wants to buy, if he is not particularly interested in the ad.

      I believe that there are a lot creative ways digital distribution can be made to work that is palatable to consumers, which would be very, very profitable for content providers. One thing is for sure, employing punitive schemes like DRM is not going to work, and content providers will have to take a much more ?carrot? approach to make things work.
      P. Douglas
      • Music sales almost outdated

        I don't understand why majors are still working on the DRM model. In fact, Many artists are not making a lot of money from CD sales anymore. Instead, they use blogs like myspace to reach their public and sell concerts tickets.
        One big problem of DRM is its cost (or tax) impacted to the final price of the CD (like the zune tax, or Ipod tax in France).
        If you take away this tax music can be sold cheaper. I think selling music cheaper is the solution. Would you rather DL music from bittorent/limewire/emule for free and illegally, or would you rather pay 10c for a track on a legal website ? I guess i would choose the 2nd solution.

        By selling music cheaper or providing it for free artists can organise concerts and get paid by bars and concert places. This is what's going on in the indie music scene and it will soon be generalized to "commercial" music. Skipping intermediaries and placing the artist at the center and not at the end of the chain gives him more credit & money for his music. If you take away the music majors' 80-90% commission on sales, he can sell at a cheaper prices.

        At least some website are basing their model on this: like nomajors.com opening soon.
        Hellaynnea
  • Right diagnosis, wrong conclusion.

    You're right. Gates is a smart man. You're wrong about why he's saying DRM
    stinks. He's not "realizing" DRM is a raw deal for consumers and doesn't stop
    piracy, he's trying to fire a shot at the iTunes Store. Microsoft's DRM is draconian,
    but most people don't even realize their iTunes tracks have DRM. Until they buy a
    Zune.

    Gates isn't saying DRM is bad. He's saying non-Microsoft DRM is bad, even though
    he won't use those exact words. It's no different than when he accused Apple of
    denying choice because iPods won't play Microsoft DRM'd files.

    This is nothing more than a propaganda attack on the iPod and the iTunes Store.
    frgough
    • Interesting theory

      Hmm, works well with the other Zune conspiracy theory, that the payment to Universal was done solely to harm Apple's future negotiations. Fits in with the big picture idea that the Zune isn't about MS moving into this space, it's about taking down Apple as the market leader. I still maintain that MS isn't interested in the small potatoes of the handheld player market, or in having their own music store. They're thinking bigger. They want to be the DRM supplier to the world. They want a cut on every song sold, every movie or tv show sold, and every device that plays that media. That's where the real money lies. The Zune is all about not letting someone else dictate the terms of the market, about not letting Apple own the music part of things. That's why they're selling each Zune at a $50 loss. Making money isn't important here, positioning is important.
      tic swayback
    • I fail to see how ...

      .. Gates' saying "buy a CD" can be translated into "saying non-Microsoft DRM is bad".
      Adrian Kingsley-Hughes
      • Think of it this way....

        ....if all DRM stores were boycotted by the masses tomorrow, whose business would be hurt the worst? Answer: Apple's. From the ashes, Gates could then build his own DRM empire. Right now, all roads run through Apple. Which do you think is a better situation for MS?
        tic swayback
        • From the ashes

          Folks could still buy a CD and rip it if that happend...unless of course MS is planning to take over the recording industry and do away with all non-digital, hard-copy items like CDs that is. Besides, I thought Apple's DRM content was user-friendly to the point of being teflon-coated to the MS propaganda. If it is truly that good, then the masses won't boycott their iTunes anytime soon.

          Of course in my opinion [i]all[/i] DRM content is just a big corporation attempt to get me to buy(again) content I either already have or that I wish to use on a different device but won't work due to the DRM restrictions. I'll continue to support the CD industry not because I think either Apple or MS is better than the other, but because I can always be assured that I will own the content as long as I take good care of the CD.
          wcb42ad
          • The rise of the Phoenix

            ---Folks could still buy a CD and rip it if that happend...---

            But at that point the market would be wide open. Anyone, including Gates could say, well iTunes and all the other shops had it wrong before, here's our new DRM system that does it right, and hope to recreate the market from scratch (perhaps easier than overcoming the dominant lead of someone else).
            tic swayback
          • Yes, but....

            unless the DRM itself works well for the masses that theory is pointless. Say, for instance, that this has come to pass. MS is now the only major player in the DRM market. Is DRM itself still flawed? Yes. By its very nature it is protecting us from content piracy (which will continue to exist with or without DRM technology) while causing compatibility problems for the consumer. Most people will only take so much abuse before looking for other solutions. Even if MS did manage to take over the DRM market, it would still be the DRM itself that is the issue. Apple or MS, it is still a bad idea.
            wcb42ad
          • I agree with you

            I agree, and will never willingly accept DRM on products I own. But there are those who claim it is inevitable, and in some ways, it doesn't really matter if it's a success (either technologically or in terms of public acceptance) to companies like Apple or MS. They'll still profit richly from selling it to the media companies and the manufacturers. If the public doesn't buy it, then MS/Apple will gladly sell them the next generation, ad infinitum.
            tic swayback
          • You got it right

            [i]Folks could still buy a CD and rip it if that happend...[/i]

            And this is where the conspiracy theory falls down under its own weight. I think the problem is that Apple zealots are so used to following every single instruction from Jobs that, if Jobs said today that DRM was evil and then tomorrow that DRM was good, the Apple zealots would just say "Okay, that makes sense". They forget that everyone else actually thinks for themselves and if Gates said today that DRM was evil and tomorrow that DRM was good, people would say "Huh?" and then buy a CD.

            Conspiracy theories are good and all but they have to be able to withstand at least 10 seconds of non-zealot logic.
            NonZealot