Macrovision recently committed a study (via Futuresource) that seemed (in their opinion) to determine that DVD copying exists (OMG!) and that it had the effect of robbing sales. Here is an eyes-wide-open critique in the LA Times -

My bigger complaint with the study is that it didn't look at the other side of the coin -- how purchases might increase (and unauthorized copying deterred) if Hollywood made it easy for consumers to make a handful of copies for personal use. Here's Futuresource's bottom line:

| In conclusion, as studios' revenues from DVD
| are in decline, protecting revenues is even
| more vital than 12 months ago. The study showed
| that the number of people admitting to copying
| prerecorded DVDs has increased since 2007. The
| vast majority of these copiers admit they would
| purchase at least some of the titles on DVD if
| they had not been able to copy them - clearly
| indicating the significant levels of lost
| revenue due to home copying.

However, the survey also shows that copying is confined to a minority of users, and that most of those users are motivated to copy for seemingly legitimate purposes. So an alternate conclusion is that enabling at least some copying would make discs more valuable to the public. And higher perceived value usually translates into higher sales.

This seems absolutely right to me, and GalleyCat notes that ebook sales continue to rise, despite digital book giveaways around every virtual corner.

The value of free reasserted itself to me in this exactly this manner when my brother in law became gravely ill. In a rush to try to obtain valid California copies of living wills and DNRs, and powers of attorney for health and finances, I knew I could turn to Nolo.com, and purchase and download a copy of the book that I needed. Many of these forms are public documents and available for free, but Nolo's book also provides useful advice and narratives that inform decision making about literally life and death issues. That might be worth $13.19 to me.

Generally, what you get from a Nolo download is an unencrypted, DRM-free PDF. And that means that I could do what I needed to do: I could email a copy of it to my other brother-in-law, an attorney, working at the hospital. He was the one responsible for working with these documents, and he was too busy to do the information search and the content purchase. I could do that part of it for him.

Some publishers might see that as a lost sale; that would be a crass response. The capacity to do with a book as I see fit is a tremendous facilitation; a benefit that I know I can obtain through Nolo purchases; something I can count on in a moment of great need and stress. Basically, I can purchase on behalf of somebody else. (I have done this for an aging parent). And sure, that ebook without DRM might conceivably wind up in the hands of a few other people. I cannot control such a book, by definition, when it leaves my machine. I think that is not much of a loss for Nolo to risk over-managing.

Nolo's DRM-free books makes sales for me, and it motivates the future purchase of other Nolo titles; Nolo's trust in me - their consumer - buys my devotion and allegiance, fosters reputation, and increases referrals. Not a bad trade for abandoning the consumer frustrations of DRM. And this line of thought takes me back to my first sale post. Because that's what I can do with this type of digital book -- buy it, and give it to someone else.

If I was wickedly malfeasant, I could buy a slew of Nolo titles, and set up a website hawking them for my private gain. But I'm not going to do that, not merely because it's not worth my time and trouble; more importantly, Nolo has my affection. It would be wrong; it would hurt them. If that was not enough for those that would tend toward the wayward path: Nolo would find out and take the site down. End of problem.

Nolo's value proposition - and they know it - is not in the content alone; rather it is in the content enmeshed in a skein of services, including updates on legal issues, the community of legal advice centered around Nolo, and their customer service.

Industries and companies that want to create or legislate closed systems that restrict my behaviors with products and services, and do not understand the leverage that openness can provide, must either provide incredibly compelling design and functionality, or fail hard. RIAA. MPAA. and AAPL.

Business Week recently covered an analyst's report on the phone market; particularly germane on this, the day of the iPhone's 3G release. Their conclusion:

[Analyst] Burden believes smartphones will grow in popularity as they decline in price, due in large part to companies like Nokia and Google (GOOG) developing free operating systems for mobile phones. The closed operating systems that run enhanced phones are typically built internally by phonemakers. Using open systems that are free saves money and gives customers access to a greater selection of applications, which aids carriers because they get more revenues when subscribers sign up for data plans to browse the Net. ...

While free mobile operating systems save just a small amount on a per unit basis, they have a more substantial effect on lowering internal development costs. "If companies adopt free software, it will save them some headaches. They can put their developing efforts into other areas," says Teng. "When software is free, companies can concentrate on what software they should incorporate into their devices to differentiate themselves to the consumers."

As many commentators have discussed over many years, Apple makes insanely great, closed systems. And the iPhone is very much a closed system, as thousands of users have discovered through bricked devices today, when they were unable able to update or activate their devices.

What this has to do with iPhones and ebooks is the matter of what happens to ebooks on the iPhone; a subject of much excitement and speculation. As new iPhone owners download the plethora of ebook readers and ebooks, each person should be asking: what can I do with this book? Can I loan it to another iPhone user, a friend or colleague? Can I give it to them? Do I have first sale rights, or is the ebook vendor attempting to sell me a license? Is this book locked into my iTunes experience, or does it truly belong to me as an unfettered property?

Consumers often permit companies with compelling products and services, like Apple, Google, Viacom, to define a normative set of social and economic expectations without open inquiry. That is a dangerous commerce.

I hope the iPhone becomes the breakthrough device for ebooks. But I want those ebooks to be the musical equivalent of MP3s, portable and open (such as DRM-free EPUB), and then I will gladly buy a slew of them.