“I think the iPhone and Xbox 360 are such compelling consumer products that it’s actually a reasonable tradeoff to live with their DRM lock-in limitations.”
Jeff, i disagree that the tradeoffs are reasonable.
Part of the appeal I have for console games over computer games is the game is actually on a physical disk and, in the past, doesn’t require any installation on the machine. While this seems limiting to require a physical item, it is important to realize the consequences of it.
With a physical disk you can loan it to a friend, resell it, or trade it. You can even take it back it it’s crap. Over the years gaming I’ve bought lots of over hyped lame games.
The reason you cant take back computer games is once they are installed, you have the bits, no going back.
While I 3 my hacked iPhone. It’s a great gadget. The Apple DRM is too limiting and I refuse to buy music from Apple because of it. If the only mp3s you could put on the phone were Apple purchased only, i wouldn’t have one.
An other appeal many iPhone owners have is the ability to use existing songs as ringtones. Which Apple goes back and forth with 
Ringtones are a pet peave to many owners though. I know I’m not paying for a song a second time to use it as a ring tone, it gives free word of mouth exposure of the music. I feel that is payment enough. Other phones are more restricting though, both in music and ringtones.
The limitations of DRM are just too much for me to be interested in digital media.
“Point: If we all gave copies of media to our friends, the entire media would stop making things. They wouldn’t be able to afford it anymore.”
I mostly disagree and think the only people that should be punished are mass distributors.
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Artists get paid 1$ if that per album. They make there money on shows and merchandising. The money in the industry is all in the distribution and the artist sees very little of this. The record labels are the ones that make the big bucks here.
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Record labels falsely believe they lose money when a person listens to freely downloaded music. Many just simply would not have purchased the album and thus not ever listened to it. Those that download music participate in the perpetuation of the music’s meme. They talk about the band and songs, they like this, don’t like that. All contributing to word of mouth exposure.