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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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November 12, 2005

Stringer's Choice

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Posted by Dana Blankenhorn

howard%20stringer%202.jpgThere are two salient points about the Sony scandal you will only read at Mooreslore. (Or at least you'll read them here first.)

The first point you've already gotten. Who's behind the scandal? It's not a Japanese.

It's a U.S.-based executive, Howard Stringer. He became chairman and CEO in March, after heading up the company's film and TV units. (He was pictured in my previous note on this topic.) Before joining Sony Stringer was at another American company, CBS.

Stringer is the key to the motive. Go back to that first link again.


As manager of the U.S. Operations, Stringer cut back a total of $700 million a year since 2001, and overhauled the studio operation by cutting TV producer deals and sharing costs on films.

Stringer reached his position of eminence by cutting budgets and cutting deals. Previous Sony chairmen were Japanese gadget heads. Stringer is a card carrying member of the American Copyright Autocracy.

The motive, then, is a simple truth about DRM systems.

DRM systems aren't about software. DRM systems are about hardware.

You might call this Job's First Law. Apple's DRM isn't about stopping you from copying stuff. It's about locking you into Apple's hardware solution. You can move stuff to your iPod all day. But switch to another platform and you have hassles. It can take hours to convert a music collection from, say, the Apple format to that of Windows. And when you start moving between hardware systems, that's when the anti-copying features really start taking hold.

Apple does not make music, nor does it make films. Apple makes hardware.

Sony makes both hardware and entertainment "software" -- music, movies, TV shows. Sony doesn't like seeing this investment "wasted" by your choosing a hardware system Sony does not control.

Thus Stringer ordered a virus onto "his" CDs in order to lock users into Sony solutions, and keep them from using other systems, such as Apple's. The rootkit runs on Windows PCs and prevents consumers from copying files onto their iPods.

In doing this in the way he did, however, Stringer threatens to take the whole DRM mountain down with him. It's one thing for American policymakers to protect American software makers. It's another thing to force Americans onto Japanese-controlled hardware.

Class action suits will take years to get through the courts, and what is the real damage to individuals worth, in the eyes of a court? We're not talking about bad medicine, we're talking about computers and music collections. Nobody died when Stringer lied.

Notice the language Stringer used this weekend. He is "suspending" a "program." He's perfectly ready to create another forced lock-in as soon as he can find one he thinks he can defend in court.

But once the connection between Sony's DRM and its hardware lock-in becomes clear you're going to see a major movement toward amending the Copyright Act, this time on the side of consumers, a movement led by hardware companies such as Apple.

Of course, that will merely level the playing field. Stringer will still be ahead.

That's why he did what he did.

Comments (1) + TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Copyright | Economics | Software | computer interfaces | law


COMMENTS

1. Brad Hutchings on November 13, 2005 01:21 AM writes...

This guy agrees with you, but like 12 days ago.

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