Is Selling Counterfeit Software Worse Than Bank And Identity Fraud?

from the equivalencies dept

There's a story making the rounds about a guy who's apparently going to jail for selling unauthorized copies of software on eBay, and the software industry is trumpeting what a huge victory this is over "counterfeiting," by claiming: "The Mondello case demonstrates that these pirates won't simply get a slap on the wrist when caught. They very well may end up doing serious time in federal prison." Right, but if you read the details, the conviction wasn't just for copyright infringement, but for identity fraud and mail fraud. That is, as part of his operation, he illegally obtained peoples' bank account info. That would appear to be a lot worse than copyright infringement, but the press seems to focus only on the "counterfeiting" angle, because that's the story the software industry association seems to be feeding the press. They want people to think that they'll go to jail for piracy, when that's quite unlikely.

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Content Industry Could Learn From eBay Seller Turning A Profit With Public Domain Content

from the competing-with-free dept

Last year, Mike made the point that saying you can't compete with free is saying you can't compete, period. Every business makes a profit by adding value so that customers will be willing to pay above marginal cost for its products. The fact that the marginal cost of content (once it's been created) is zero doesn't change that principle. You can add value to free content just like you can add value to any other product. The New York Times Bits blog nicely illustrates this with a post about the market for public domain content on eBay. Apparently, there are a number of people who make a living by finding obscure, copyright-free content on the Internet, burning it on a DVD or other convenient format, and selling it on eBay. Despite the fact that every one of those customers could have tracked down the video for themselves and watched it on their computers, a lot of people are apparently willing to pay for a DVD version.

This business model actually illustrates two good ways to add value to free content. First is convenience. A lot of people don't have a high-speed Internet connection, don't like watching videos on their computer monitors, or want to be able to take their content with them in a compact format. For those users, a DVD is a much nicer format than a file on their computer's hard drive. DVDs are also a much more convenient format for giving gifts: you can wrap a DVD and put it under the Christmas tree, something that's harder to do with a video on YouTube. Second is filtering and organization. There's way more content out there than any one person could possibly watch. So there's a lot of value in helping people separate the wheat from the chaff. That's a big part of the value we provide here at Techdirt: a lot of the information you'll find on our blog comes from other sites, but we try to highlight only the best and most relevant information, helping our readers to keep up with news in the technology world more easily. By the same token, people who sell public domain content on the Internet create value by filtering and organizing the information so it's easier for others to quickly and easily find what they're looking for.

I won't belabor the implications for traditional content industries. Like it or not, their content is available for free on peer-to-peer sites, and if they want to make a profit they're going to have to find ways to make their content more valuable than what you can get with BitTorrent. Two important principles for doing that are: use formats that convenient and versatile and make sure content is organized in a way that makes it easy for users to find what they're looking for. That means, for example, that you probably shouldn't cripple your products with DRM or sue companies that help people find your content.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Ads On eBay Piss Off Sellers

from the don't-forget-your-primary-business dept

By placing ads on its pages, eBay was able to make approximately $76 million in revenue during the second quarter of this year. However, in doing so, eBay has drawn the ire of it sellers, who complain that the ads distract buyers from placing bids on their listings. eBay claims that their analysis shows that the advertising on the site "does not get in the way of people who intend to buy or sell items on the site." Considering that eBay's advertising revenue has doubled in 2007 as compared to 2006, the ads are a good way to monetize traffic that does not end up making a purchase. Furthermore, since the ads are contextual, eBay argues that the product experience is improved since the ads are relevant to the user's query. eBay's findings make sense; if a buyer really is interested in placing a bid, it seems quite unlikely that they would be derailed simply by viewing an ad. In any case, sellers are not convinced; they continue to fear that the ads distract potential buyers, despite not having any studies that indicate such a trend. Perhaps this fear is actually symptomatic of the true problem that eBay is facing today: sellers are no longer ecstatic to be on eBay. And, there's data to back that hypothesis up: the number of items listed in the second quarter of this year was 2 percent lower than the previous year.

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eBay Misses The Point With Its Underwhelming Launch Of 'eBay Neighborhoods'

from the they-forgot-to-call-it-a-beta dept

After several years of stellar growth, eBay has been starting to feel a few pains due to its size. Buyers complain that millions of listings make it difficult to find what they are looking for. So, in an effort to make the shopping experience more comfortable, eBay has launched "eBay Neighborhoods," which seeks to create communities of like minded buyers and sellers. Upon first glance, this seems like a lackluster effort. Just 600 neighborhoods were created in the initial launch -- why limit this at all? User-created groups have seen great success at sites like Flickr and Facebook. By limiting users to an arbitrary list, eBay loses out on the possibility to exploit its long tail -- and with 559.1 million items listed in the second quarter, the long tail is most certainly there. When posting a topic for discussion, users are asked to "Enter a comma-separated list of eBay auction numbers." Wow, seriously? If eBay wishes to create a better sense of community amongst its users, perhaps it needs to take a look around at the many social networks that have popped up in recent years. Oh, wait, it looks like they are familiar with Yelp, since they seemed to have "borrowed" a few of their images. It doesn't really feel like eBay tried very hard with this product launch. Even the name "neighborhoods" seems antiquated, evoking memories of the late-90's homepage website, Geocities. Heck, if eBay wants to create communities, shouldn't it look to that huge social network (hidden in a telephony app) it already bought called Skype? Maybe that could help justify all those long lost synergies.

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Autodesk Sued By eBay Seller For Pretending Right Of First Sale Doesn't Exist

from the ah,-copyright-law dept

The folks over at Boing Boing are pointing us to a very interesting case where an eBay seller who was kicked off eBay is now suing software maker Autodesk for $10 million. The case raises some important issues that don't get nearly enough attention. In copyright, the right of first sale is designed to allow anyone who buys a copyrighted product the right to resell it without going through the copyright holder -- just as when you buy a chair, you can resell it without the manufacturer's permission. In fact, studies have shown that an active secondary sales market often helps boost the size of the primary market (if you'll be able to resell a product later, you're probably willing to pay more for it initially). However, short-sighted copyright holders don't always see things that way.

In this case, the guy had a legitimately purchased copy of AutoCAD and was trying to sell it on eBay. This should be perfectly legal. He had purchased a good and was trying to resell it. Assuming he had removed all copies on his own computer and wasn't using the software any more, there should be nothing to complain about here. However, instead, Autodesk sent eBay a DMCA takedown notice, claiming that the sale was a copyright violation. This would appear to be an abuse of the DMCA, sending a takedown notice on content that the seller has a legitimate right to put up for sale. Abusing the DMCA with false takedown notices can get you in a lot of legal hot water.

However, once again, the case takes a bit of a twist. Autodesk is claiming that the right of first sale doesn't apply in this case, because the guy did not purchase the software, but merely licensed it, thanks to the shrinkwrap license found inside the box, which the purchaser doesn't get to read until well after he or she has "purchased" the software (which appears like any normal purchase, rather than license). Unfortunately for Autodesk, some courts have already ruled that, despite mind-numbing EULAs that no one reads, if you purchase... er... license software, you still get certain ownership rights, which likely include the right to then sell the software. This case seems to have a little something for everyone interested in software and copyrights, between the questions on first sale doctrine, DMCA abuses and shrink wrap EULAs. It should be worth paying attention to as it moves forward.

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