We were a bit surprised last summer when the major music publishers piled on to the bandwagon and sued Limewire. After all, the major record labels (who own most of the major publishers anyway) were already involved in a lawsuit with Limewire and had won a pretty complete victory over the file sharing system. Having the publishers sue as well seemed like just a way to try to squeeze even more money out of a dead shell. Apparently, the publishers just figured that whatever they got out of this was easy money. What they didn't expect was that Limewire, dead as it is, would fight back pretty hard and during discovery demand actual evidence that the publishers really hold the copyrights they claim to hold (something that isn't always clear once you dig into the details). So it's interesting to see that a settlement has been reached, and the publishers' portion of the lawsuit is effectively over. Many reports seem to be assuming that Limewire gave up here, but there's a good chance that it was the publishers who backed out, realizing they had no interest in opening up a discovery process that might prove a large segment of their business is based on pure fiction. In the meantime, they'll leave it to their parent companies to continue the battle to try to get whatever cash they can out of Limewire.

We've mentioned a few times that the UK is running a big review of copyright laws in the country, with a focus on questions having to do with fair use and other exceptions to copyright law, and how they impact innovation. While we're still a bit skeptical -- in part because the last such review (the infamous Gowers Report) was almost entirely ignored when it argued against extending copyright law (and even hinted that reducing it would be better) -- we were encouraged to find out that some of the most knowledgeable people around on copyright law were included on the team. James Boyle, in particular, has been quite vocal about the need for actual empirical evidence, rather than just buying the claims of "harm" from industry types.

The review panel recently closed their request for comments, and some folks are publishing their own comments. A really fantastic one is from Glyn Moody, who highlighted actual data and research, and pointed out where the industry's claims were flawed. It's a very powerful analysis, and I hope that the people on the review committee will take it seriously.

At the other end of the spectrum, however, is a trade group representing publishers in the UK, The Publishers Association Limited. While (as of this writing) I cannot find anything on the organization's own website concerning their filing, they did send out an email to various folks, and Shane Richmond kindly forwarded it on to me. It's stunning in its backwards thinking -- and for its complete lack of factual evidence to back up its claims. The Publisher's Association merely listed out a bunch of bullet points, and we'll take a look at a few:

radical changes to IP laws would fly in the face of expert opinion -- senior executives across the whole sector emphasise the importance of the current IP framework in driving innovation and delivering growth.

Except almost none of that is accurate. Tons of experts have gone into great detail on the problems of copyright law today. But, of course, the Publishers ignore all of this. They only asked senior execs who receive the bounty of having a strong government monopoly if that monopoly was important. It's like asking a kid if candy is good for them, and then using that answer as the evidence that candy is good for children.

introducing elements of an American style fair use exception would create legal ambiguity and put a chokehold on innovation. There is no evidence that it would have a positive effect on overall levels of innovation and growth.

And this is the guffaw-inducing claim. The US has a long history of case law around fair use, and while there are ambiguities, the idea that it would put a chokehold on innovation to allow people to do more with copyrighted works is simply laughable. The Publishers support this with absolutely no evidence. And, of course, the biggest evidence comes from us right here in the US, where we did implement just such a fair use regime, and it did not lead to any chokehold on innovation.

in ten years of surveying British companies on barriers to innovation, the UK Government has not found evidence that companies believe the IP regime to be a barrier to their growth.

I don't quite know the details of this particular study, but the issue that David Cameron raised when he initiated this review of copyright law remain pretty key: all of the big US tech and media companies rely heavily on fair use. If UK companies don't think they need fair use, they may not realize just what they're missing.

barriers to growth and innovation are not the fault of copyright law, but are caused by copyright infringement, the wider business environment and inefficiencies in the licensing system.

[citation needed] All of the (non-industry) evidence suggests otherwise. That's what Glynn's submission highlighted in many points. So why would the Publishers make a claim that is so easily refuted by the evidence?

proposals to tackle these problems are in train and Government has a critical role to play in speeding up implementation of the Digital Economy Act and in supporting industry efforts to reduce the incidence of copyright infringing weblinks being prominently displayed in search engine results.

Yes, this is the Publishers' big solution for innovation: making linking illegal and kicking people off the internet. So very forward thinking of them. Of course, it's no surprise that a big trade group representing a bunch of legacy players who hate change would argue against change based on nothing more than fear and an unwillingness to adapt. However, one hopes that the review committee will put such comments into their proper context.

A couple months ago, rumors made the rounds that Apple was going to double the length of song previews in iTunes from 30 to 60 seconds. An expected announcement did not appear, however, apparently because the music publishers (who in the past have already claimed -- without success -- that Apple should pay performance fees on those 30 second previews) felt Apple first needed to get permission from them, as well as the labels. So it's interesting to see that, at least with the record labels, Apple appears to be taking an aggressive approach, sending out letters simply telling labels that their deals have changed and song previews will now be 90 seconds: It'll be interesting to see if Apple did the same thing with publishers... because you'd have to imagine that the publishers would quickly file a lawsuit if that's the case. According to Greg Sandoval, over at News.com, Apple is still negotiating with the publishers. That article includes a typically ridiculous quote from Rick Carnes of the Songwriter's Guild:

"It's like giving away ice cream samples--someone has to pay the cost," said Rick Carnes, president of the Songwriters Guild of America. "I think it would be a good thing for consumers to go to 90 seconds. But they're tripling the amount of time, and they want it for free. I think there ought to be compensation. I believe anytime you use music, you ought to reward the people making the music."

Does Rick really believe that? If so, the Songwriters should fire him as their leader. What he should be looking for is what will maximize the revenue overall, not what will maximize the revenue per use. If you get paid per use, and it means shorter previews -- but that means many fewer sales and less overall money for the artists, then Carnes with his "anytime you use, you pay" philosophy is doing serious harm to the songwriters. And, of course, the actual evidence goes against Carnes. Studies have shown that such longer previews increases purchasing, but the publishing folks and the songwriters like Carnes are more interested in licensing than in direct sales anyway (even if that's really short-sighted). It's too bad that the Songwriters Guild would be represented by someone without their best interests in mind.

It's really incredible to watch music industry folks shoot themselves in the foot over and over again with a simple inability to understand that promotions can lead to more sales, and that you don't need to get paid for every promotional effort. We've seen some in the industry gleefully admit that they'd rather have $1 today than $100 tomorrow. But this sort of thinking seems to pervade so much of the music industry at times that it's really quite stunning.

The latest comes from rumors that Apple was going to double song sample lengths in iTunes from 30-seconds to 60-seconds. There's apparently plenty of good reasons for this, as research has shown that 60-second samples lead to more purchases.

And yet, despite the rumors, you'll notice that Steve Jobs did not announce the expected doubling of samples. Why? Apparently Apple had the approval of all four of the major record labels... but he forgot to go groveling and beg for permission from the other side of the coin: the music publishers. Apparently, various music publishers read the rumors of the doubling and were quite upset that Apple hadn't asked for their permission, and even started lawyering up to sue, in case Apple announced such a plan without first getting permission from various music publishers.

And people say we're exaggerating when we show just how ridiculous music licensing is. This isn't about copyright or revenue or anything. This is just childish foot-stomping by a group that demands that everyone ask permission before helping them make more money. Stunning.

For years, we've suggested that the fears of various publishers, that Google's book scanning/book search project was somehow a bad thing, were way overblown. We'd seen reports noting that putting your books into Google's book search often helped increase sales, and some enlightened publishers have started to realize the same thing. Yet, to hear some publishers and Google critics talk about it, you would think that the Google book scanning offering was the worst thing ever -- with some comparing Google to the Taliban. Yet, if you take a step back, and realize just how powerful and useful a universal searchable library of books would be, it's difficult to see how that's a bad thing.

But, now we've got a bit more evidence. Michael Scott points us to a new research paper from law professor Hannibal Travis, that tries to look at the actual economic impact of Google's book scanning on publishers, and finds that the falling sky claims from publishers and critics simply isn't supported by the evidence:

First, it finds little support for the much-discussed hypothesis of the Association of American Publishers and Google's competitors that the mass digitization of major U.S. libraries will reduce the revenues and profits of the most-affected publishers. In fact, the revenues of the publishers who believe themselves to be most aggrieved by GBS, as measured by their willingness to file suit against Google for copyright infringement, increased at a faster rate after the project began, as compared to before its commencement. Their profits also increased significantly more on average from 2005 to 2008 than from 2001 to 2004. The increased rate of growth by publishers most affected by GBS does not disappear when one compares it to the growth of the U.S. economy or to the growth of retail sales. The continued rise in sales is remarkable when one considers the soaring sales and prices of other entertainment products that may compete with books.

Second, this Article finds some support for the view that mass digitization and expanded access to book previews may increase the revenues and profits of the most-affected publishers. The evidence for this proposition takes the form of large increases in revenues and profits for publishers affected by GBS who did not opt out of Google's publishing partner agreement for broader access to previews of works still in copyright.

Third, it seems that GBS may simultaneously vindicate the public interest in expanded access to the world's cultural heritage and the pecuniary interests of authors and publishers in recouping the substantial fixed costs of book and periodical production and distribution. Analyzing this virtuous circle can help us begin to theorize the relationship between the Internet industry, the producers of cultural products, and the wider public. This relationship is also visible with other advanced Internet services such as YouTube or DailyMotion, which may increase viewership of copyrighted works that they may infringe, such as television shows.

Obviously, this seems to go beyond just Google's book search, in showing that greater access can certainly lead to greater revenue and profits for those who embrace it. Definitely another worthwhile paper to read on the subject.

Back in November, we had noted with concern that Germany's Chancellor Angela Merkel was signalling her willingness to approve special new copyright laws that would give new monopolies to newspapers, massively increasing their ability to control any part of their works online. It looks like that process is moving forward. Glyn Moody points us to an analysis of the current proposal that would massively expand copyright monopolies specifically to protect some legacy business models, but with no concern at all for encouraging actual creativity. The proposal would create new rights for scientific publishing, photographs, public performances and more. Where it gets scary is when they talk about giving newspapers the right to control their headlines. Think of this as the "anti-Google News" clause:

It looks as if publishers might really be lobbying for obtaining a new exclusive right conferring the power to monopolise speech e.g. by assigning a right to re-use a particular wording in the headline of a news article anywhere else without the permission of the rights holder. According to the drafts circulating in the internet, permission shall be obtainably exclusively by closing an agreement with a new collecting society which will be founded after the drafts have matured into law. Depending on the particulars, new levies might come up for each and every user of a PC, at least if the computer is used in a company for commercial purposes.

Well, obtaining monopoly protection for sentences and even parts of sentences in a natural language appears to be some kind of very strong meat. This would mean that publishers can control the wording of news messages. This comes crucially close to private control on the dissemination of facts.

Even more incredible? Some are arguing that these proposals don't go nearly far enough:

Mr Castendyk concludes that even if the envisaged auxiliary copyright protection for newspaper language enters into law, the resulting additional revenue streams probably would be insufficient to rescue the publishing companies. He then goes a step further and postulates that publishing companies enjoy a quasi-constitutional guantee due to their role in the society insofar the state has the obligation to maintain the conditions for their existence forever. As I'm not a constitutional lawyer I won't comment this here but, with all due respect, I would not be very much surprised if such sentence turns out to be lobbyist speech. Utilising the leveraging effect of this postulated quasi-constitutional guarantee, Castendyk demands to amend cartel law in order to enable a global 'pooling' of all exclusive rights of all newspaper publishers in Germany in order to block any attempt to defect from the paywall cartell by single competitor as discussed above.

Yes, the recommendation is to not just grant every newspaper publisher copyright on small snippets of words and headlines, but to then also force them all into a cartel that will put up paywalls, with no ability to get around the paywall. Talk about killing the news...

When will they learn? Apparently, one of the hot book series out there is the "Millennium Trilogy" by author Stieg Larsson. Apparently, the first couple of books have become incredibly popular in the US, but the third in the series has been released elsewhere, but not in the US yet. So, not surprisingly, many fans are ordering it from abroad. Most of the article is about the fans' excitement for the book, and their demand for it:

"Once you know you can have it, once you know it exists in English and you can buy it, it would be crazy not to."

But, the US publisher is quoted towards the end threatening those doing so, claiming it's illegal:

"What I would say to readers is, I would encourage them to shop at their local bookseller here in the United States or their online bookseller in the United States, where no laws are being broken and you are supporting the continuing discovery of world literature."

As the anonymous reader who submitted this story notes, rather than just reading this statement, you really should hear the audio version of what Paul Bogaards from publisher Knoph says, because it's not fully conveyed in the written article. First, what he says in the audio version:

"Because it's against the law. It's a violation of copyright law."

But you have to hear the sheer condescension in the tone. He says it as if he's speaking to pre-schoolers, not huge fans of these books. The problem here isn't people violating copyright law, it's Knopf not realizing that we live in a global world, and then failing to satisfy the needs of consumers, who are seeking alternative providers. It was a business model mistake on the part of Knopf, and insulting the biggest fans of the books doesn't seem like the best way to handle the situation.

From the beginning, we've been confused why book publishers were so against Google's Book search. When you realize that it's really a giant (and much, much, much better) card catalog that helps people find and discover more books, it's only a short leap to realize that it should help publishers more than hurt them. And, indeed, a few empirical studies have found that embracing Google Books has helped sales. But, for many publishers this has, apparently, been tough to understand. Thankfully, it looks like some are coming around. Gerd Leonhard points us to a blog post by the CEO of Thomas Nelson Publishers, Michael Hyatt, where he explains why authors, agents, and publishers should embrace Google Book search.

It was based on someone from Google visiting the company and explaining Google Books. While it's a little depressing that publishers have to wait for a person from Google to show up in person to explain what's been discussed at length for years by Google and many, many others, it's great to see that it worked in this case. Hyatt admits that he went into the meeting quite skeptical, but came out convinced. He notes that the two reasons given by publishers and authors against Google Books (people can just read the books online instead of buy them, or they can print them out) are simply not true. From the meeting he realized four key points (all of which Google made clear when all this launched, but many have simply ignored the facts):

1. Google Book Search creates greater book awareness.
2. The biggest problem authors face today is obscurity not piracy.
3. Most people have no desire to read a book on their computer.
4. Google only allows users to preview 20 percent of a book’s content.

Hyatt concludes with a plea to others to embrace Google Book search, noting that by embracing it, the publishing industry will realize that their content becomes "more relevant than ever." Kudos to Hyatt for changing his mind and explaining his reasons.

We've seen how various book publishers have freaked out about the growing popularity of ebooks, often with a price capped at $10 -- arguing that it's cannibalizing the higher margins found on hardcover books. And yet, at the same time, some of those very same publishers are perfectly happy to offer up free ebooks as promotional items. While some publishers are complaining that this is "devaluing" ebooks, others are recognizing that free can be quite useful in helping an author get past the obscurity barrier. We've already seen how many "top selling" Kindle books are actually free, and it's good to see publishers looking to take advantage of that, even if they haven't quite figured out that similar economic logic can apply to cheap ebooks as well. However, given the success of free ebooks, it seems likely that those publishers who are fighting against the tide will eventually come around to recognize the benefits of such things.

It looks like Germany may be a new front in clueless attacks on Google. With newspapers and magazines admitting that they're too clueless to know what to do with traffic Google sends them, officials in Germany are opening an antitrust investigation into Google based on some of the most ridiculous logic we've heard to date:

Hans-Joachim Fuhrmann, a spokesman for the German Newspaper Publishers Association, said the Web sites of all German newspapers and magazines together made 100 million euros, or $143 million, in ad revenue, while Google generated 1.2 billion euros from search advertising in Germany.

"Google says it brings us traffic, but the problem is that Google earns billions, and we earn nothing," Mr. Fuhrmann said.

Okay. Let's pick apart this apples and oranges comparison. First off, Google earns 1.2 billion euros from search advertising which has almost nothing to do with news. It comes from people searching for cameras or cribs or cars. Google News had no advertising at all for most of its existence and only introduced ads in the US less than a year ago. In other words, no, Google is not making more than newspapers and magazines when it comes to its News site in Germany.

And, even if Google was making more money (which, again, there's no evidence that this is true), that still doesn't excuse Fuhrmann's claims -- which basically amount to him admitting that Google figured out how to make money and the companies he represents did not. Yet the publishers he represents had all of the advantages in the world. They were local. Google was not. They had been around for many more years than Google. They had brand recognition and loyalty that Google did not. Furhmann is basically admitting what a colossal failure the companies he represents have been. They failed to capitalize on a huge opportunity. And now, when Google sends them traffic, they are still failing to use that traffic wisely. And then they blame Google for it? Wow.

The publishers also complained about what they saw as a lack of transparency in the way Google presents search results and news snippets in its Google News service, saying the company was manipulating the results to help maintain its strong position....

"We often feel like Web sites are elevated in Google's search results if they have a strong business relationship with Google, and we think we can prove it," Mr. Fuhrmann said.

So go ahead and prove it. First of all, Google is a private company and can rank sites however it wants. It's an opinion of what Google feels is most relevant. If Google was not doing a good job, then people would go away. So basically, at this point, Fuhrmann hasn't just admitted that the publishers he represents have failed miserably to set up even the most basic business models for adapting to the internet, he's now suggesting that Google is purposely handicapping its own site by not presenting the absolute best results!

It's difficult to see how this makes any sense at all. The publishers are claiming that Google is purposely degrading its results (and they can prove it!) and at the same time complaining that they can't compete against those degraded results. Wow.

On top of all that, the article reminds us, as we discussed last year, that these publishers have convinced German Chancellor Angela Merkel to support a new copyright law that would force aggregators to pay up just to link to stories. It's as if Germany doesn't want the internet at all.