In terms of incendiary writing, the following sentence ranks so low on the scale as to be imperceptible:

we will feed you beer, hug/high-five you up and down (pick your poison), give you merch, and thank you mightily for adding to the big noise we are planning to make.

That was Amanda Palmer's offer to instrumentalists willing to join her on stage during tour appearances. And then the internet exploded for most of five days before Palmer reappeared to say this:

me and my band have discussed it at length. and we have decided we should pay all of our guest musicians. we have the power to do it, and we’re going to do it. (in fact, we started doing it three shows ago.)

So. Here's the deal. I had 1,600 words assembled in an orderly fashion and was gently (but firmly) herding them through the Amanda Palmer "free as in volunteer musicians" minefield. It was quite possible many of these words, some multisyllable, some a bit sweary, wouldn't make it all the way across. But, it was this close to being a "thing," a monumental defense of Amanda Palmer's absolute right to ask for fans to pitch in on tour despite her having $1.2 million worth of Kickstarting (mostly spent) in her hip pocket.

Because she had every right, no matter how seemingly large the amount at her disposal, to ask people to volunteer to be her sidemen/women. The problem was her critics (and lord, there were quite a few of those) were blinded by all the money she had, especially when comparing it to the money they had. Here's Bob Lefsetz, breaking it down:

They believe she should pay.

Because she raised a million dollars on Kickstarter and they didn’t!

Amanda ankled her major label deal, she makes money on Twitter, she uses the new technologies to both reach people and profit and they don’t like it. They could join in, but then they might fail, and they wouldn’t be able to sit at home at bitch.

But before the (probably) bloated opus could hit the front page, Palmer decided to shell out cash to her volunteers, freeing up the money by shuttling money back and forth between line items, robbing Video to pay Sax Players, as it were.

my management team tweaked and reconfigured financials, pulling money from this and that other budget (mostly video) and moving it to the tour budget. 
all of the money we took out of those budgets is going to the crowd-sourced musicians fund. we are going to pay the volunteer musicians every night. even though they volunteered their time for beer, hugs, merch, free tickets, and love: we’ll now also hand them cash.

Was it the right thing to do? No. It wasn't the wrong thing to do, either. It was simply a thing to do. When you're trying to tour and all anyone wants to talk about is whether or not the VOLUNTEER sax player is going to get paid scale or at least, more than hugs, it's often simpler to do the thing that drops the ongoing dialog down to a manageable dull roar, or at least a trifle more supportive roar.

Not paying was never wrong. Take away the crowdfunding aspect (which seems to be what the critics get hung up on) and Palmer's offer is every diehard fan's dream. Get on stage with your favorite artist! Get beer/hugs! In any other situation, there's no controversy. Only people who get to live their dreams for a night and those who get to see others living their dreams. Try these hypothetical offers on for size:

- Lady Gaga, major label artist, sends out an invite for interested fans to jump onstage and perform for a couple of tracks in exchange for discarded wigs, unused wardrobe and travel bottles of Ciroc. (Feel free to substitute a major label artist you can actually tolerate for Lady Gaga, if need be.)

- Indie legend Weezer sends out an open invitation for interested fans to perform onstage with them at their tour stops in exchange for corrective lenses, sweaters and "Pinkerton" CDs rescued from the cutout bin.

- Label-free artist Jonathan Coulton sends out an open invitation for interested fans to perform interpretative dances during his live appearances in exchange for retweets and a 4-song EP dedicated to you and recorded backstage while you wait.

Viewed this way, the same invitation Palmer made sounds like pure gold for diehard fans. Each of these artists is offering a chance for local artists to become local heroes, if only for a night. In exchange for their time, effort and expertise, the contributing fans will walk away $0 richer in direct monetary terms. But who would turn that down? No fan is going to tell one of their favorite bands, "Thanks, but I'd rather be paid." Or, "Not interested. I'd rather watch from a safe distance away."

Palmer's offer is different. It's not different because her offer is any different than the hypotheticals posed above. It's different because of one thing: $1.2 million in transparently spent, crowdsourced dollars.

If Lady Gaga declines to pay supporting volunteers, it's the label's fault for not spotting her enough money to do the show the way she envisioned it. If Weezer does it, it's because working for indie labels means tight margins. If Coulton does it, it's because he has to finance his own touring via ticket, album and merch sales.

But, because Amanda Palmer pre-financed her tour, a majority of her detractors saw "$1.2 million" and wondered if she's blown it all on ridiculous stuff like, well, who knows exactly, but presumably wasteful, more-money-than-brains accoutrements. The debacle turned musicians into accountants and Palmer's actual accountants into a "crazy moebius strip of waste."

But that's ridiculous. Beyond the fact that the source of the money does make her offer wrong, there's the poor underlying argument from some musicians that there's something "wrong," or at least "diminishing" about playing for free. There isn't. Everybody does it.

if my years working as as street performer taught me anything, they taught me to accept help in every way, to never be too proud or afraid to ask for it. i never got pissed at a passerby for not throwing change in my hat. i stood there knowing that maybe 15 people later, maybe 20, maybe 100…someone would. it’s literally an opposite strategy from someone deciding that they, on principle, won’t gig for free.

i’ve built my life as a musician, like many many people in rock and roll, playing for free….a LOT.
or playing for beer.
playing for exposure.
playing for fun.
playing just to be able to sell merch.
playing to do somebody a favor.
playing a benefit to help a cause.

It's also important to note that Palmer was only asking for a little bit of the artists' time. She wasn't asking them to tour with her gratis or even perform the entire show. 

we’re looking for professional-ish horns and strings for EVERY CITY to hop up on stage with us for a couple of tunes.

Palmer's transparency worked against her. A full breakdown of where that $1.2 million is going has only prompted questions on the validity of some of the line items. Her response that it would cost $35,000 to secure the additional musicians for the entire tour is greeted with "but, but... $1.2 million." It almost seems as though fans were happier when all the money was raised and spent in complete opacity. When the sausage making apparatus was still hidden, and the money routed through middlemen, being invited to jam with your idols was a dream come true. Now, somehow, it's a slap in the face to struggling musicians everywhere?

Artists performing for free do not diminish the art form or drag all other similar artists into a race for the bottom, pricewise. Neither does one artist asking other artists to perform for free. There's nothing disingenuous about this offer. Anyone who thought they were being taken advantage of needed to do nothing more than not respond the offer.

Were these volunteers being screwed? If they were, it was being done so skillfully and pleasurably that they never noticed.

when we handed the musicians their surprise cash backstage in new orleans the other last night, they laughed like mad and said “after ALL THAT, you're going TO PAY US??!!

moreover: i feel like we accidentally put ALL of our volunteer musicians into a weird situation that they didn’t bargain for….they unwittingly signed into a kerfuffle they never asked to join. all they wanted to was to hop on stage, rock out, and drink beer with us, etc.

so you all know: when this all started going down last week, jherek sent an email out to his current list of volunteers telling them that we totally understood if all this controversy was weirding them out. and we gave them an opportunity to pull out, no hard feelings.

since this started, not a single musician has pulled out.

One of the saddest aspects about this whole debacle is that the artists who did decide to play for free were treated as traitors to The Cause simply because they didn't demand to be "treated with respect", respect in this case being dollars. That's some ugly artist-on-artist hate right there. Not that there weren't other sad aspects, what with the internet being involved and all:

I can’t tell you how many “you’re such a stupid cunt” and “i’d pay to travel just to fuck up your gig…if i played violin” tweets i’ve seen in the past few days...

Lots of criticism along the lines of "I'm a classically trained musician and it's hard enough to find paying gigs without rich musicians refusing to pay us for our contributions." Well, it's probably true that it's hard for a violinist or cellist or sax player to find paying gigs, but in no way did Palmer's "unpaid gig" offer hurt you unless you yourself accepted... but then, if you hate the idea so much, why the fuck would you? Just to make a point? Weird thought process. It's as if they believe every artist looking for a cellist or whatever will just point at Amanda Kickstarting Palmer and say, "She doesn't pay, therefore neither do we."

The problem with this "NO UNPAID GIGS" stance is that it only ends up hurting the idealist who take it. You might believe that if enough people turn down unpaid gigs (and make a lot of angry noises about it), then at some point, those needed instrumentalists will run out of artists willing to work for free. If you can manage to hold together a career long enough for every invitation to come accompanied with payment, good on you. You've beaten some very long odds.

Most of this discussion is now academic, as Palmer will be paying all contributing tour musicians from this point forward. That's what living in public does. Transparency is double-edged and every Palmer detractor was seemingly a music school grad with an accounting degree. To her critics, this offer "proves" that her breakdown of the $1.2 million was filled with waste. Now they can pat themselves on the back for righting a wrong and turning "instrumentalist" back into a paying job.

But Palmer paying cash doesn't make the world better for struggling artists, just as paying in beer didn't make it worse. If someone wants to reach the million-dollar-Kickstarter level, they need a whole lot more than one artist paying other artists. And most of these artists who decried the previous situation just aren't up for the level of commitment involved. In fact, most human beings aren't up for it. Living like Amanda F. Palmer isn't easy, and the rewards only come after years and years of killing yourself day in and day out:

You’re just not willing to work that hard.

That the only thing holding you back is you. Amanda does not know the word “no”. And every effort is an investment in her career. Money is secondary. She wanted to raise a million bucks on Kickstarter, did, and now it’s almost all accounted for, profit is next to nothing.

If she sleeps, it’s not for long. I felt lazy just being in her presence. But that’s what it takes to make it today. Hard work. Are you prepared? 

And hard work is not e-mailing journalists who don’t care, it’s not badgering people to watch your YouTube clip and like you on Facebook, it’s doing something so good people are drawn to you.

Palmer has delivered the narrative, lived out in public, that if you're willing to run flat-out, day after day, for more than a decade, you can get to this point. And the response from so many musicians to her open invitation was basically: "You made it to the top. Now, lift the rest of us up." You won. Now you owe us.

Everyone got the same offer from Palmer. There's no shame in saying "no." But there's also nothing wrong with saying "yes." Artists, including Palmer herself, have done unpaid gigs for exposure, charity, or simply because they were dying to perform and doing it for free was the only way to get it done. Either way, it's up to the individual. Someone else accepting a perceived screwing from an artist that a thousand armchair accountants have already decided has the money to pay in no way diminishes your chances as an artist. These chances remain what they have been, and will be, for years in either direction: slim to none. 

In the end, I'm neither relieved nor disappointed this turned out the way it did. I'm glad that Palmer will be able to concentrate on what she'd clearly rather be doing: touring and entertaining. The Kickstarter money was freely given to her during that campaign, but apparently had plenty of strings attached once she started talking about unpaid gigs. I get the feeling that many of her detractors didn't contribute to the fundraising effort (indeed, it's doubtful that many had even listened to her music -- Steve Albini, along with other commenters in that thread, clearly stated that he hadn't), but it certainly didn't stop them from having strong opinions on how an artist they'd never listened to should spend money they didn't contribute.

I guess it sort of works out for everybody -- musicians get paid and Palmer gets back to work. But no wrongs were righted and the long, hard road to success didn't get any new shortcuts.

... isn't it about time that we recognize the patent system is really, really broken? Courtesy of the always awesome Saturday Morning Breakfast Cereal (and my friend Tom who sent this over), I present to you, yet another example of "the patent system" being a punchline: Also, I splork we had more common sense around the patent system (and, since we're splorking, copyright and trademark as well).

We've written a few times about the Childrens Online Privacy Protection Act (COPPA) and how it was put in place without any data and without much concern for unintended consequences. As danah boyd has shown in her research, COPPA hasn't necessarily done much to protect children. Instead, it's made parents teach their kids it's okay to lie about their age. It's also why so many websites have seemingly arbitrary restrictions on kids under the age of 13. It's one of those "think of the children" laws that people want to like because it sounds good, and no one wants to support big businesses preying on children. But, the reality is that it has tremendous problems -- unintended consequences that limit various services -- and does little to actually protect children.

And, of course, the FTC wants to expand it even further.

They're asking for comments on the proposed changes in the rules, and if you develop websites or apps, you might want to speak up. CDT has put together a letter people can sign if they don't want to write up some comments themselves. They also have explained many of the problems with the new proposals. For example, it expands what COPPA applies to in very broad ways, potentially creating liability for developers without them even realizing it:

The FTC plans to put COPPA obligations on plugin developers if they “know or have reason to know” that their plugin has been installed on a children’s site. “Plugins” include analytics providers, advertising networks, social media plugins, embedded videos, or anyone else who provides third-party code for websites. Under the FTC's proposed change, if plugin developers receive a user’s IP address through a plugin that’s been installed on a children’s site, they could face legal liability for collecting children’s personal information.

It’s unclear how a plugin or platform like Twitter is supposed to “know or have reason to know” that someone has cut and pasted a line of their code into a children’s site. The FTC says that plugin developers “will not be free to ignore credible information brought to their attention.” But the FTC doesn’t say what counts as “credible.” Would developers have to assume every random e-mail is a credible tip that could saddle them with legal liability? Even if the FTC did provide clarity, though, it would still be extraordinarily burdensome to place legal obligations on plugin developers based on the actions of others.

The end result would almost certainly involve those companies putting a lot more limits on their apps, and create a huge cost (and potential liability) for all sorts of plugin and app writers. But there's an even bigger problem. While COPPA was clearly limited at sites directed at children, the FTC seems to think this wasn't enough, because other sites not directed at children might still attract children... and so they want this problematic rule to expand to sites who don't even cater to children:

Things get worse with the FTC’s second major proposal: expanding the scope of sites deemed “directed to children” from sites aimed primarily at a very young audience to include sites and services that are “likely to attract an audience that includes a disproportionately large percentage of children under 13 as compared to the percentage of such children in the general population.”

This convoluted standard raises a number of serious issues. Not only is it difficult for site operators to gauge what proportions of their audience fall into arbitrary age buckets, but the FTC also gives operators no sense of what it means for an audience to be “disproportionately” composed of children in comparison to the general population. If a site’s audience is 20 percent children, is it disproportionately composed of children? What about at 30 percent? It’s not clear from the language, and it won’t be clear to website operators trying to run their sites while staying within the bounds of the law.

In fact, as CDT notes, this change almost certainly will do the exact opposite of what the rule intends. That is, it will make sites feel they need to collect more data about who is accessing their sites to make sure that they know if their audience includes kids, in which case they'll have to take steps. But that means they'll be... collecting more data about kids -- which is exactly what COPPA is supposed to stop.

The FTC folks who support COPPA are certainly well meaning, but they seem to have little concern or interest about the real impact of the law and their specific rules around it, and how it not only fails to help protect children, but puts a serious damper on innovation as well.

Drinking wine on special occasions is a popular tradition all over the world, but it seems like more people would like some other excuses for drinking wine, too. Red wine had gotten a lot of publicity for various health benefits, but if you want to drink some wine, maybe you should be asking yourself why you need so many different reasons. Here are just a few interesting links about wine to go with your favorite beverage.

• There's a persistent statistic that wine drinkers tend to live longer than teetotalers or people who drink other forms of alcohol. But according to a recent study, those wine drinkers also correlate highly with people who possess healthier habits in general. So wine could merely be the drink of the healthier -- and not some magic elixir for longer life. [url]
• Some Australian researchers have developed a process to turn wine into clothing -- and it also works with other forms of alcohol. Bacteria are used to ferment the alcohol into a formable fabric, and the garments retain characteristic odors of their original beverage. So if you really like the smell of beer, there's a perfect shirt for you.... [url]
• There's a possible "miracle molecule" in red wine called resveratrol -- and it seems to give older mice some improved mobility. Consuming more red wine might seem like the easy answer for older people to gain mobility improvements, but the study also suggested that a 150lb human would have to drink 700 4-ounce glasses of red wine a day to see an effect. Good luck with that! [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

We last left Zynga back in August with EA filing a lawsuit against the casual game company in which EA makes claims of copyright infringement. EA had accused Zynga of cloning its Sims Social game when Zynga made its game, The Ville. Well, Zynga has finally fired back with filings claiming innocence of copyright infringement as well as accusations that EA had attempted to establish a "no hire" agreement between the two companies.

In the first filing, Zynga moves to have a bunch of language from EA's filings stricken as it feels that much of it is "redundant, immaterial, impertinent and/or scandalous." It feels that a lot of the information presented, such as third party disputes, games and comments that do not pertain to EA's specific claims of copyright infringement, are simply included to paint Zynga in as negative a light as possible. 

Zynga also specifically rejects the idea that The Ville infringes The Sims Social by attempting to show that much of what EA claims to be infringing is either a natural part of a life sim or part of an evolution in design of other Zynga created games. This can be found in the second filing in which Zynga shows successive screen shots of its games YoVille, Cafe World and The Ville. Each with very similar UI elements. 

Next, Zynga brings in a comparison of Zynga's CityVille and EA's SimCity Social games. It does so to highlight that even EA gives in to tropes and design choices common to the genre it works in. Coming off this, Zynga makes the claim that this lawsuit is nothing more than EA's response to being unable to compete in the social gaming marketplace.

Finally, we have the third filing in which Zynga makes its most bold claim yet.

Zynga claims that EA CEO John Riccitiello wanted to establish an illegal "no-hire" agreement with Zynga that would prevent the company from hiring employees away from EA. The filing says Riccitiello had grown upset that many EA employees had moved over to Zynga, and had gone "on the war path" to put an end to the talent bleed.

The company also says EA filed its lawsuit in August not because it believes Zynga copied The Sims Social, but because the company wanted to discourage its employees from jumping ship.

If Zynga's accusation is true, then EA's attempt at establishing such an agreement is serious business. These types of agreements, in which the companies agree not to hire anyone that applies, if they work for the competing company, and will often report the employee to his/her boss, are generally very bad for workers and quite possibly illegal.

These agreements are so serious that the Department of Justice had been investigating a number of tech companies, including Apple and Google, for this practice back in 2010 with evidence finally surfacing earlier this year.

Of course, EA believes this claim by Zynga is just a smokescreen.

This is a predictable subterfuge aimed at diverting attention from Zynga's persistent plagiarism of other artists and studios. Zynga would be better served trying to hold onto the shrinking number of employees they've got, rather than suing to acquire more.

Regardless of whether these claims are true or not, this shows just how far this legal dispute could go over the coming months. Here we have two powerhouse game companies fighting over something that really in the end will have no bearing on the future of the games industry.

In the end, what do we actually get out of dragging two companies' reputations through the mud? What will either company get out of winning this lawsuit? If EA wins, it will get to claim that it slayed the big bad cloning monster and Zynga will slink away and only clone the games of much smaller companies. If Zynga wins, the games industry as it is now will continue forward exactly as it had been. Either way, nothing substantial will change. So again, what's the point?

You may recall the story we had earlier this week about Canadian University OCAD requiring students in an art history class to buy a $180 book that didn't even have any images, because they couldn't properly license them. Instead, it had big white boxes and students were expected to go online to see the right images. Beyond the ridiculousness of the situation itself, it was clear that there would be no resale value at all for the book.

OCAD got in touch to let us know that they've now put out a statement on the situation (pdf) in which they admit that the situation was far from ideal, and they're taking steps to deal with it. The dean claims to have met with the publisher, Pearson, who "was highly responsive." That's not too surprising, given just how much attention that original story got. They must have sensed that being on the wrong side of this one would not end well. The plan now:

• Guaranteed end-of-term buy-back of the custom text (dollar amount to be announced next week); they want to take it out of circulation.
• Provision (free) of print copies of the Stokstad text (which contains the vast majority of missing images) to all students who have purchased the reader, to use as a print-based cross-reference; these would be the relevant volumes of the portable version of Stokstad (much easier to carry) – details on how this will roll out next week.

The pricing on the buyback may still be a concern, but clearly the loud outcry and vast internet interest in the situation resulted in the university and the publisher deciding that this whole thing was a mistake. They probably should have realized that before pushing an art history book that had no images, but at least they're trying to make it right.

There have been a few stories of late about the possibility of backlash over failed Kickstarter projects. After all, for all the cool things about Kickstarter, anyone investing in a project there is taking a risk, and some of that risk leads to dashed expectations. Kickstarter has apparently been taking those concerns quite seriously, and issued some rule changes directed at hopefully limiting the disappointment factor for supporters of physical products, mainly by doing more to highlight the risks and current state of the offerings.

New projects will be required to detail what the risks and challenges of the project are, and how they intend to overcome them. It should be pretty interesting to see how those sections turn out. To be honest, I could actually see that being really useful for people behind these projects, as it's not uncommon for enthusiastic creators to not even want to confront the risks and challenges they're facing. Forcing them to do so will hopefully lead to more realistic assessments of what can be done.

The other rule changes seem a bit strange to me, and I'm not sure they'll be as effective. The first is to ban renderings or simulations of products:

Product simulations are prohibited. Projects cannot simulate events to demonstrate what a product might do in the future. Products can only be shown performing actions that they’re able to perform in their current state of development.

Product renderings are prohibited. Product images must be photos of the prototype as it currently exists.

I can certainly understand why they're doing this, as it will clearly give a much more realistic picture of where things are at the moment. But it seems like requiring renderings and simulations to be clearly marked as such might be a more effective solution -- along with showing what the actual current state of the technology is. Since many of these projects need money to finalize development, it seems fair to show what they intend the final product to look like.

The other ban is on offering multiple quantities of a reward, unless it really only makes sense that way (like where you need a pair of devices to make something work). That's to reinforce the idea that this isn't a "store" for pre-buying things, but to really get people to invest in the project itself. While it does often feel that projects got a bit lazy with upper tiers that were little more than "5 of x," I'm also not sure that this one really makes that much sense. Kickstarter defends the decision this way:

The development of new products can be especially complex for creators and offering multiple quantities feels premature, and can imply that products are shrink-wrapped and ready to ship.

I understand the line of thinking... but I could see that taking away value from potential buyers who are willing to take the risk and buy in on a product early, where they'd like multiple quantities.

Either way, it's fascinating to watch how Kickstarter continues to evolve -- and to note that the company (as it has for a long time) seems very keen on listening to what people are saying, and figuring out reasonable ways to avoid any problems.

It's baaaaaaack. Despite a summer uproar that caused the DC taxicab commission to dump a proposed plan that would have artificially kept Uber's prices high, the commission is back, and it's got another (bad) proposed rule (pdf) that would make life difficult for Uber and its independent drivers.

If you're unfamiliar with Uber, it's a pretty great service that makes it really easy to use your phone to get a car (usually a black car akin to a typical car service, but in some cases smaller cars or even actual cabs). Users have a credit card on file, so you never have to even handle payment stuff as it's all done automatically. It's also been innovative in how it works with drivers, who are independent contractors. Using Uber is more expensive than a cab, but it's so easy and useful that almost everyone I know who uses it, loves it.

However, taxi and limo services are some of the most highly regulated local markets out there, and Uber just keeps running up against those random or pointless rules and regulations. In this case, the new DC rules clearly seem designed to mess with Uber. Among some other things, it would require drivers to give riders a paper receipt, and would also say that you can't have a car business with fewer than 20 cars. That really mucks with the way Uber partners with drivers, who are often one-man (or woman) shops, doing this to make money. But, in some cases, they can also allow someone to build up their own "fleet" of cars, but which operate via Uber's platform. But under these rules, it may be difficult for drivers, or for entrepreneurs buying up a few cars, to really embrace this model. Finally, the new rules prohibit dropping people off outside of DC by saying you have to stay within the territory you're registered in.

For its part, the DC taxicab commission disagrees with Uber's assessment of the new rules expressing a clear bit of frustration with the company:

"They don't what they're talking about," Linton says. "They often don't know what they're talking about."

He also pushed back on a few other points:

According to Linton, the regulations would still allow for independent sedan operators with one car, and would only eliminate companies with a handful of cars that he says most frequently try to game the system. Linton says paper receipts will prevent drivers from charging for miles they didn't drive, and the regulations will only prevent sedans from operating in jurisdictions they aren't registered in—i.e., an Uber trip from Maryland to D.C. could be driven by a car from Maryland or D.C., but not from Virginia.

In other words, he's got perfectly good reasons that the rules aren't bad... except for the simple fact that none of his explanations make sense. Even if it does allow single car operators, why should it be illegal to own between 2 and 19 cars? They say the smaller shops often game the system -- but in that case, go after them for such gaming of the system. Don't completely wipe out all the other good players with such a broad blanket ban. As for paper receipts... huh? I don't see how a paper receipt prevents a driver from overcharging. Even worse, this somehow suggests that Uber's drivers are doing that. But I've never seen or heard any such complaints against Uber. Is there anyone clamoring for a paper receipt from Uber? And, if there are such mysterious people out there... um... is it really that important to pass a rule for them?

Honestly, these rules seem much more designed -- as so many rules are -- to protect legacy players against upstarts like Uber.

And, of course, this is happening all over the place. We already covered the situation in Boston, but there was recently a similar mess in New York City where Uber partners with real cabs (as opposed to car service cars), but which the city is trying to block.

All of these efforts seem like crony capitalism at its best: taking existing inefficient systems, and then blocking unique innovators, whose customers seem pretty damn happy for the most part. Uber, of course, long ago realized something very simple: even though it's fighting these battles on every front, the publicity from it is the best advertising it could ever get. In fact, we've heard that the use of the service tends to go up significantly after such fights. This, of course, frustrates Uber-critics on things like the taxicab commission, as they suggest that Uber complains about these things solely for the publicity. Even if that was the case, I don't see how Uber's wrong. If it gives them publicity for a service people like, more power to them. The real question should be why we still allow such a blockade on innovation by various taxi commissions.

We were just talking about how incredibly broken the system is for establishing webcasting rates, in part because the law itself explicitly says that the Copyright Royalty Board (CRB) Judges should look to prevent disruptive innovation and preserve "prevailing industry practices." In practice this has meant that basic webcasting rates, established by CRB judges, are usually somewhat insane and impossibly out of touch with reality. It's only gotten worse over time -- and the last round ended up being so crazy that everyone basically agreed to ignore those rates and set their own. And while those rates were lower than what the judges wanted to set, they're still ridiculously high, significantly limiting the amount of webcasting available today. Even the leaders in the field, like Pandora, admit that with current rates, it's basically impossible for the company to ever make a profit.

Of course, some have looked at the discrepancy in royalty rates between webcasting and other offerings, like satellite and cable radio, and thought that the best way to deal with this is to massively increase royalties on those other services, effectively creating the RIAA bailout bill of 2012. Senator Wyden, thankfully, has other ideas. Today's he's introduced a bill in the Senate, the Internet Radio Fairness Act (IRFA), which tries to fix a bunch of issues with royalty rate setting. Like a bill introduced by Rep. Chaffetz in the House, Wyden's bill would shift internet radio rates to the same process as satellite and cable, rather than the other way around. Those royalties, while still high, are much less onerous.

It also seeks to fix other issues, including the ridiculous rule saying that internet radio broadcasters aren't allowed to make backups of the music they legally purchased. IRFA makes a slight change to the rule, allowing backups solely for the purpose of webcasting. The bill also looks to fix the somewhat awkward situation under which the CRB was recently found to be unconstitutional due to everyone ignoring the appointments clause (thus, in the future, CRB judges would have to be nominated by the President and confirmed by the Senate, rather than appointed by the Librarian of Congress). This process would at least somewhat increase the level of oversight for who gets on the CRB. More importantly, the bill would require CRB judges have a bare minimum level of experience related to this topic, rather than no experience at all, as often seems to be the case today.

There are two other very interesting aspects to the bill as well. Because, historically, the judges have more or less established rates by staring into space and picking what number "feels" right to them (only a very, very slight exaggeration), rather than what the market would really establish, the bill requires the judges to look at actual agreements in the marketplace, and tries to bring more transparency to those royalty rates. I would imagine this section is going to freak the labels out quite a bit, as they rely on secrecy to try to extract crazy high rates for other services.

Finally, the bill would also seek to establish a global music rights database, somewhat similar to proposals we've discussed before, when TopSpin's Ian Rogers suggested such a thing. There are related efforts underway elsewhere, and the goal here is to:

include all known or copyrighted musical works, the writers of the work, the owners of the rights, the entity on behalf of those owners who can licenses such rights on a territory-by-territory basis, and all known sound recording data.

I have concerns that how such a database is set up can lock in place certain terms or rules, potentially limiting some innovative uses, offerings and services, but it is an interesting idea worth discussing, and would move a highly opaque system that the labels have long abused to one that is much more transparent and open. For pretty much all of these reasons, I expect that the RIAA is going to come out vehemently against this bill, preferring, of course the one that bails them out.

Either way, Wyden's statement on the introduction of the bill is dead on:

“The Internet has shown itself to be an incredible tool for enabling innovation and competition to make existing industries better,” Wyden said. “However, there are those who seek to stifle that evolution by pushing through onerous and unfair laws to limit competition and protect the status quo. Fourteen years ago, when online radio was in its infancy, the incumbent interests were successful at getting laws passed to discriminate against the Internet. This bill puts Internet Radio on an even plane with its competitors, and allows the music marketplace to evolve and to expand--which will ultimately benefit artists and the internet economy.”

This isn't a huge surprise, but EU and US regulators both approved Universal Music's deal to buy EMI today. Under the terms from the EU, they will have to sell off some EMI assets, including the iconic Parlophone label. There is a part of me that thinks that the complaints against this deal are a bit overblown, seeing as it's about linking up two dinosaurs who've failed to adapt -- and bringing them together won't fix any of the major problems those two labels face. But there are some very real concerns about how this could impact innovation online. For better or for worse, setting up digital music services today requires doing deals with the major labels. If you're just doing webcasting (i.e., broadcast) there are agreed upon -- but insanely high -- rates you can use (more on that later today). However, if you're doing anything interactive or offering digital downloads, then you have to cut deals.

A story earlier this week at the Huffington Post, does a really nice job laying out how this deal effectively gives a few Universal Music execs veto power over any new music startup. Because if you're launching a music service today, you generally want it to offer a lot of popular music, and between Universal Music and EMI, they control a huge portion of that market -- much of it historical back catalog stuff, but also some of the more popular mega-acts today. The HuffPo writeup notes that Steve Jobs played the labels off of each other to get them to sign on to iTunes. But, today, the new UMG could control that process.

According to Paul Vidich, a former Warner Music executive who closed the iTunes deal, the pending merger between Universal and EMI could put an end to that state of affairs.

"Without a UMG-EMI license, they won't have a business," said Vidich, referring to new digital startups. "Within the new UMG-EMI there will be only a handful of senior executives who make these key licensing decisions. So this small group will become the gatekeepers for music startups that require these licenses. The psychology, pay packages and strategic interests of these executives will have an outsized impact on diversity and innovation in the entire online music industry."

Remember, Universal is the company whose former CEO, Doug Morris, once gleefully explained how he didn't understand technology and didn't even try to hire someone who did, because he wouldn't know how. Amazingly, his board let him keep his job for many years (he's since moved on to head up Sony Music). Morris' replacement at UMG, Lucian Grainge, has talked about how the CD format is important to the company's future. And he's now basically the guy with veto power over any new music service.

That does not bode well for the online digital music marketplace.

Back in February we wrote about the ominously-named "Clean IT" project in Europe, designed to combat the use of the Internet by terrorists. At that time, we suspected that this would produce some seriously bad ideas, but a leaked document obtained by EDRI shows that these are actually much worse than feared (pdf), amounting to a system of continuous surveillance, extrajudicial removal of content and some new proposals that can only be described as deranged.

Here's EDRI's summary of the central issue:

The leaked document contradicts a letter sent from CleanIT Coordinator But Klaasen to Dutch NGO Bits of Freedom in April of this year, which explained that the project would first identify problems before making policy proposals. The promise to defend the rule of law has been abandoned. There appears never to have been a plan to identify a specific problem to be solved – instead the initiative has become little more than a protection racket (use filtering or be held liable for terrorist offences) for the online security industry.

Instead of tackling concrete problems, the vague threat of "terrorism" is constantly invoked -- without ever defining what that means -- to justify a range of extreme measures. At the heart of the plans lies the "voluntarism" we discussed a few weeks ago:

Governments should stimulate self-regulation by Internet companies

And where there are laws, it must be OK for law enforcement agencies (LEAs) to ignore them and have content taken down on demand:

It must be legal for LEAs to make Internet companies aware of terrorist content on their infrastructure ('flagging') that should be removed, without following the more labour intensive and formal procedures for 'notice and take action'

Due process, who needs it? The plans also require some interesting new laws, like this one criminalizing merely posting certain hyperlinks:

Knowingly providing hyperlinks on websites to terrorist content must be defined by law as illegal just like the terrorist content itself

Here's another proposal -- no more anonymity online:

Internet companies must allow only real, common names. These must be entered when registering.

So what happens if you have an uncommon name? And then there's this:

Social media companies must allow only real pictures of users

Presumably you're not allowed to smile, either. Talking of social media, the Clean IT plans include the introduction of friendly "virtual police officers", constantly spying on, er, watching over Europeans online:

Virtual police officers must be used to show law enforcement is present, is watchful, in order to prevent terrorist use of the Internet and make regular users feel more secure.

The idea is that "virtual police officers" will be keeping an eye on you -- for your own safety, you understand. Other ways in which users will be protected from themselves is through the use of filters:

All kinds of Internet companies, LEAs and NGOs, but not governments, should promote the use of end-user controlled filters among their clients, the public and supporters

Note that "not governments" part -- people mustn't get the idea that this is censorship, oh no. Also required will be automated detection systems, because we know how well they work:

Automated detection systems must be used by LEAs, NGOs and Internet companies.

Among the even more interesting proposals in the leaked document seems to be the idea that the authorities can order encryption to be turned off, presumably to allow eavesdropping:

In some cases notice and take action procedures must lead to security certificates of sites to be downgraded.

But surely the most bizarre proposal for dealing with "abuse" -- an attempt to dress up as lamb the tired old mutton of "terrorism" -- is the following:

The use of platforms in languages abuse specialists or abuse systems do not master should be unacceptable and preferably technically impossible.

Incredible though it might sound, that seems to suggest that less common foreign languages would be banned from the European Internet entirely in case anybody discusses naughty stuff without the authorities being able to spy on them (haven't they heard of Google Translate?) You could hardly hope for a better symbol of the paranoid and xenophobic thinking that lies behind this crazy scheme.

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We recently noted that Senator Leahy had attached his mostly good ECPA (Electronic Communications Privacy Act) reform bill to another bill reforming the VPPA (Video Privacy Protection Act). The ECPA reform would update a decades-old law that law enforcement has interpreted to more or less mean they don't need a warrant to read your online email. Leahy's update would require a warrant. This is a good and important reform that should be supported. But, of course, law enforcement freaked out and it appears that Leahy has backed down, delaying hearings on the bill for now (funny how he really wanted to push through PIPA despite massive public protests, but a few law enforcement people get upset about respecting the 4th Amendment and things get delayed). From Declan McCullagh's coverage:

The delay comes two days after a phalanx of law enforcement organizations objected to the legislation, asking Leahy to "reconsider acting" on it "until a more comprehensive review of its impact on law enforcement investigations is conducted." The groups included the National District Attorneys' Association and the National Sheriffs' Association.

[....] A person participating in Capitol Hill meetings on this topic told CNET that Justice Department officials have been expressing their displeasure about requiring search warrants. The department is on record as opposing such a requirement: James Baker, the associate deputy attorney general, has publicly warned that requiring a warrant to obtain stored e-mail could have an "adverse impact" on criminal investigations.

Of course it would have "adverse impact" on criminal investigations. So do lots of things -- but those are the rules law enforcement plays by in a free society. It's not built to make law enforcement's life easy.

Either way, it appears that this bit of ECPA reform will get pushed off once again. Hopefully, when it comes back, it won't be watered down.

For what it's worth, both the EFF and the ACLU -- who strongly support ECPA reform similar to what Leahy has been proposing -- have also not been that happy with how Leahy introduced this bill, because they both oppose the changes to the VPPA, which they're afraid will weaken privacy for people. This is a (somewhat rare, but not unprecedented) situation where I disagree with both of those organizations. The VPPA was a specific and broad carve-out to deal with a single situation (bork bork bork). I think it's reasonable to update it to allow for things like letting people choose to let Netflix and social networks share info on what movies they've watched -- just like the can choose to show what music they listen to. I don't necessarily believe that it makes sense to link the VPPA to ECPA reform, but I don't think that passing the VPPA reform is so problematic that it should stop ECPA reform. Of course, if law enforcement has its way (and so far, that seems to be the case), ECPA reform might never happen. Is it really worth worrying about how you can choose to share your Netflix movies on Facebook while the Justice Department feels it can snoop broadly through your Gmail?

For a while now, we have written about how legacy gatekeepers need to adapt to modern culture and business models if they want to survive. The primary point of contention that keeps many of these companies from adapting is one of control. Many of them don't want to lose what remnants of control they have left in order to become enablers. This mindset is what will be the death of many companies as the world moves on without them.

Some companies are making at least a half-hearted, if not completely misguided, attempt at trying to be hip. However, it seems to have been about as successful as a 60 year-old trying to use modern slang in order to connect with kids. Take for instance this recent comment by Obsidian CEO Feargus Urquhart in which he describes an exchange he had with a publisher about Kickstarter.

We were actually contacted by some publishers over the last few months that wanted to use us to do a Kickstarter.

I said to them ‘So, you want us to do a Kickstarter for, using our name, we then get the Kickstarter money to make the game, you then publish the game, but we then don't get to keep the brand we make and we only get a portion of the profits’ They said, ‘Yes’.

If you can't see the huge glaring flaw in the unnamed publisher's approach, let me elaborate. This publisher wanted to use Kickstarter as the funding source for an as yet unidentified project, while still keeping every other aspect of the traditional publisher/developer relationship intact. This means that the publisher would pay no money upfront, limiting almost all risk for the success of the project, while reaping all the rewards. Seriously.

While it is great that this publisher had become aware of Kickstarter and its potential for success, the fact remains that those in charge do not understand it in the slightest. The draw of Kickstarter and other crowdfunding services is to help creators fund their works and bring them to market. Few potential backers will be willing to support a project in which the creator loses all rights and control of the work after creation. These services are about empowering creators. A deal, such as the one above, in no way empowers the creator.

Hopefully, this is just a simple misstep as the publisher learns to walk the unfamiliar path of a new business model. We can hope that this publisher learns from this mistake and will take the time to better understand the culture behind crowdfunding and can find success by adapting itself to this culture rather than trying to shoehorn crowdfunding into its current business strategy. Because if it isn't willing to adapt, it might as well give up now.

From SOPA/PIPA to the Digital Economy Act to ACTA to the DMCA, there's no shortage of bad legislation built to serve various copyright-driven industries. But just when you thought you'd seen the very edge of how far legislators were willing to go, someone comes along and tops it.

Technollama brings news that Panama is attempting to raise/lower the "bad legislation" bar (not sure which direction the bar would actually be traveling...) with its Proyecto 510-2012 bill, dealing with copyright and related rights.

The 510 Bill gives new powers to an administrative branch of the Ministry of Commerce and Industry called the General Copyright Directorate (Dirección General de Derecho de Autor, henceforth DGDA). Unlike similar copyright administrative offices around the world, the DGDA will have the power to impose fines on infringers without prejudice of further criminal or civil actions.

It's exactly what it looks like: the Panamanian copyright office is being given the power to chase down filesharers and fine them up to $100,000 PAB ($100,000 USD). In addition, the "without prejudice" portion means that filesharers can still be pursued by rights holders, even if the government has already levied a fine.

The bill goes even further than this astounding bit of rent-seeking:

[T]he DGDA has the power to unilaterally haul any alleged infringer, ask them to mount a defence within 15 days, impose fines of up to $100k USD ($200k for re-offenders), and on top of that this person may still have another civil case against them added to the administrative fine. Adding insult to injury, they also have to pay for the publication of the fine so that everyone knows what a nasty pirate they are.

So, you have a government entity pursuing citizens for copyright infringement (a civil matter, or so it used to be...), an act which opens them up to further civil action from the rightsholders. With this kind of enforcement, the Panamanian creative industries should be rolling in extracted filesharer dough. Or so you would think, if this bit of wording wasn't present in the bill:

The funds accrued by the General Copyright Directorate from the fees for the services it provides and the fines imposed in the exercise of its powers, will be aimed at improving its operational infrastructure and to boost the performance of its officers, complementary to the funds that the State Budget reserves for the operation of the entity[...]. The amounts corresponding to each official, shall not exceed fifty percent (50%) of the total basic salary monthly remuneration.

That's right, none of it goes back to the rightsholders. These fines get fed right back into the system that levied them. Not even back into the government in general, but directly back to the DGDA. Wow. How could that possibly be abused?

This is what I think will happen if the law passes as it stands. The DGDA will immediately try to monitor all torrent use in Panama, be it legitimate or not, and all people identified with IP addresses will be summoned and summarily fined. After all, the institution and its employees will have a direct financial incentive to assume guilt. Then those same people will be sent again and again, as there will be clear incentive to fine re-offenders.

Well, that's sounds like all the fun of copyright trolls combined with the "answer to no one" power of the government all rolled up into big ball of perverse incentives. I suppose the government will turn these filesharers over to the rightsholders once it's drained them of money to toy with the drained corpse through civil proceedings.

Meanwhile, the industries seeking this sort of protection will find that no one has any money left to purchase their products, much less pay off another set of hefty fees. While this may provide the rightsholders with some sort of second-hand vindictive high, it's hard to see how this betters their financial situation in the least.

Technollama calls the legislation "toxic." It is. And more than that, it's completely perverse in every sense of the word. It hooks an agency up to an IV full of money and trusts it not to repeatedly press the "dispense" button. Sure, it may cut down on infringement, but once a government agency is hooked on steady income, it usually comes up with new (and worse) ways to keep the buzz going. The dollar amount of the fines will be ratcheted up and the definition of "infringing activity" will become broader, perhaps encompassing such maximalist wet dreams as embedded video. It's ugly, any way you slice it.

Corporate contests. They so often lead to hijinks at the hands of technology, such as that time the internet decided Mountain Dew's new flavor should be "Gushing Granny." Oh, and there was that one online promotion that sent something called Taylor Swift to sing at a school for the deaf. But, lest you think that this volatile mixture of technology and corporate contests is good only for laughs, picture the following.

You're walking down a street in a European city, reading about how something someone did somewhere upset a major world religion, and you decide you need respite from the madness of the news. So you walk into a corner store, buy a candy bar, and tear it open, ready to bite into a soft, gooey explosion of stress-melting flavor-gasm. That, of course, is when the black helicopters and MiBs appear out of nowhere, rushing you with an ominous black suitcase. If someone froze you right there in that moment, what do you think you would likely expect to happen next?

Image source: CC BY 2.0

Well, you'd be wrong (probably). Because those aren't darkly dressed neo-terrorists that have for some reason decided to specifically blow you up with a neutron bomb (dear lord, you're self-centered). No, it's your friendly folks at Nestle, responding to the GPS technology in your treat to hand you £10,000 in cold, pants-crappingly terrifying cash. It's all part of the new Nestle contest to reward customers by tracking them down via GPS technology in their candybars within 24 hours of being consumed. They named this campaign "Nestle: we will find you!", because apparently "Nestle: we could find and kill you for eating our products anytime we wanted to" didn't strike quite the right tone.

Now, I know what you're thinking. You're thinking that there's no reason for me to think this contest will play out the way I described above. Well, here's Nestle's own ad for the contest.

Now, I'm generally all for creative promotions, but this all seems terrifying. A private company is going to track me down via GPS and throw a suitcase at me in a major city? Well, not me, since not only am I not European, but I'm one of the six people on the planet that absolutely hates chocolate...but you, sweet Euro-reader! It could be you who fudges your pants after eating fudge! So, in conclusion, the article gives a listing of the candy bars you should avoid if you don't want to be hunted down.

The grand prizes for Nestle's We Will Find You promotion, involve these four chocolate products: KitKat 4 Finger, KitKat Chunky, Aero Peppermint Medium and Yorkie Milk.

($10 says there's a porno parody of those candy names out there somewhere.)

It's great to see Amazon launch its music service (cloud player) in Europe. Normally we should be rejoicing the news of more competition in the user-friendly supply of digital content. However, European music and film fans have become accustomed to disappointment pretty much every time such an announcement is made for one obvious reason: you know you need to check into which handful of countries the service will actually be launched.

In the case of Amazon, the service is initially only offered in three countries: the UK, France and Germany. iTunes, similarly, had a very slow start in 2003 and dealt with 8 years of negotiations to overcome the insane hurdles the European copyright system poses. After 6 years of very gradual expansion, Spotify is nearly half way to getting there.

The snail’s pace roll out of online media services to other countries in the supposed “biggest single market in the world” is mainly due to the fragmented markets for copyright licenses. In the European Union, there are 27 different national copyright systems, one for each Member State. Each system has their own set of collecting societies, which represent the world repertoire of music exclusively for their territory.

For a music service such as Amazon’s cloud player to roll out into Europe, this means it has to negotiate licenses for each country. No pan-European licenses exist at this moment. To make matters worse, it's not just one license per country, but typically between three to seven licenses, each requiring a separate negotiation, in each territory. Terms need to be agreed with 1) several collecting societies, 2) publishers, 3) record companies and since 2005 – after an interesting EU initiative, which backfired hard – 4) with the big record companies setting up their own collective licensing companies for their publishing divisions. Multiply times 27. And try not to cry.

There is a proposal on the table, which aims to solve this chaos with multi-territorial licenses. However, as we have discussed before, there are many problems with collective rights management and the proposed legislation. It will probably take longer to officially adopt the legislation enabling multi-territorial licenses to be agreed upon than for Amazon to complete the arduous European negotiations.

Companies like Apple, Amazon and Spotify are able to pay lawyers and negotiators for these lengthy negotiations. But could a bunch of guys in a garage who have developed the (potentially) next big thing in digital content distribution accomplish the same? It is highly unlikely, and therefore a huge opportunity cost for innovation due to short sightedness.

As Techdirt observed back in 2007, Brazilian artists were some of the first to recognize that piracy can be a positive force that helps get the word out about their creations. That was part of a larger openness to new ideas about copyright that was symbolized by the appointment of the well-known Brazilian musician Gilberto Gil as Minister of Culture, a post he held from 2003 until 2008. However, more recently, things have gone into reverse on the copyright front. Ana de Hollanda, the Minister of Culture appointed by the current President, ordered the CC license to be removed from the Ministry of Culture's website, and there were indications that harsher copyright laws were coming.

Now, in something of a shock move, de Hollanda has been dismissed according to this report by infojustice.org:

Ana de Hollanda has been on shaky grounds since she appointed. Her first words were to say she would review the Copyright Law Reform in order to "protect the author" from what she saw as an attack on their rights and its exercise. By that she meant the expansion of the limitations, the supervision of the Collective Management Organization and the institutionalization of the equivalent to a Copyright Office with consulting, mediation and possibly arbitration powers.

As the article points out, there are signs that de Hollanda's successor, Marta Suplicy, may return to the more enlightened policies of Gil and the President who appointed him, known popularly as "Lula". Moreover, Lula's successor, President Dilma Rousseff, has also talked about widening access to culture in her country:

It is important to note that, when taking office in 2011, the President Dilma established 13 directives which were priorities for the Government. Among them, the 11th, there is an explicit statement on "democratization of access to cultural goods". One of the most important ways of achieving such goal is strengthening the copyright limitations and exceptions by opening up the system.

It's too early to tell whether the new Minister of Culture will make that happen, but the signs are looking better than they have for a while.

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