October 29, 2008 8:32AM

Ten Years of the DMCA, and Little to Cheer about

This week is the tenth anniversary of the Digital Millennium Copyright Act, which Bill Clinton signed into law on October 28, 1998. I was on last Friday’s Cato Daily Podcast discussing the DMCA’s detrimental effects on high tech innovation, and I’ve got a post at the Freedom to Tinker blog discussing one likely casualty of the DMCA, digital juke box software:

What we’re seeing in the video market is what the digital audio marketplace would have looked like if the recording industry had won its lawsuit against the first MP3 players. The recording industry lost that lawsuit, and entrepreneurs went on to build products that were much better than the “official” ones being pushed by the labels. Unfortunately, entrepreneurs in the digital video market don’t have that same option.

If the DMCA were not on the books, it seems likely that many of us would have set‐​top boxes with 500 GB hard drives capable of ripping dozens of DVDs to an open, standard format for subsequent streaming to any display in the user’s house. The existence of those boxes would spur the creation of a wider market for other digital video products designed to interoperate with the emerging open video standard.

Unfortunately, that’s not how things have gone. Hollywood has managed to do what the recording industry was unable to do: to ban users from converting their legally‐​purchased content to open formats. As a result, the market for open digital video devices is a pale shadow of what it would be in a competitive market. We’re stuck with clunky, proprietary, and non‐​interoperable products like Apple TV that require users to re‐​purchase their existing movie collections in order to watch them on the new device. I think everyone would agree that it was a good thing that the courts didn’t let the recording industry shut down the MP3 player market a decade ago. So why do we tolerate a law that effectively shuts down the analogous market for DVD jukeboxes?