Interesting post from David Friedman on the economics of games, movies, and their relation to difficulties with copyright enforcement. He discusses the various means a copyright owner has of collecting value for their content, and after noting limitations on a couple options, goes on to say:

That leaves technological protection, ways of selling access to intellectual property without letting the purchaser reproduce it.

There is an important limit to such protection: It only works for forms of I.P. that are not entirely revealed in one use. However strong the encryption on the digital file containing your song, a customer can still tape record it when he plays it—or record the signals his computer is sending to its speaker, thus eliminating the sonic middleman. However well encrypted your novel, I can still, if I really want to, photograph my screen as I read it and run the pictures through OCR software.

There are other forms of I.P. that are not fully revealed in one use.

He goes on to describe computer games such as World of Warcraft as an example of IP that is not fully revealed in one use, and movies as an example of things that are. He suggests that one will continue to see substitution of things like games for things like movies, as being best suited to the situation with enforcement, so long as the cost of making movies remains high.

This, I think, is a keen set of observations. (With one caveat; of course the protection for games like WoW can be cracked as well, it isn't as if all or even most enforcment problems are attributable to analog holes, so there is less of a gap here than a tidy mind would like). But I agree that that innovation on the provider side (such as those that affect the cost of making movies) is a more likely development than innovation on the enforcement side.

Note how we take the lack of innovation on the enforcement side entirely for granted. It is the stuff of law and government. It does not change much, and it is not supposed to. Thinking about what other methods and rules and systems of enforcement might look like is very much at the fringes, with the exception of a few tricks of vicarious liability. And so far this is okay. But at some point there wouldl be potential for mischief to be leading the entire market.