For many years we've written stories about the TV industry being in complete denial over cord cutting (i.e., getting rid of pay TV). The industry has denied that anyone was doing this, claimed that it was just a minor blip during a recession, suggested that when kids "grew up" they'd go back to subscribing to cable, and used a variety of other means of perpetuating their denial. Instrumental in this has been Nielsen, the TV rankings people, who is closely aligned with the industry in propping up the facade. So it's pretty hilarious to watch Nielsen start to finally acknowledge that cord cutting is real, but to do so (1) so late into the game and (2) in such a condescending manner, that's clearly designed to blast out the message to TV execs (i.e., Nielsen's clients): "DON'T WORRY, EVERYTHING WILL BE FINE. REALLY."

It's true. Most people watch TV in their living rooms using traditional cable or satellite options. In fact, more than 95 percent of Americans get their information and entertainment that way. But as we explored what the other 5 percent are doing, we found some interesting consumer behaviors that we want to keep an eye on.

They treat it like they've discovered a brand new species, Contentus Withoutus, and it exhibits "interesting behaviors" which "we want to keep an eye on." Interesting behaviors like... not paying $100+ per month for pay TV just so they can watch two channels? Perhaps.

This small group of video enthusiasts is tuning out traditional TV — and the trend is growing. This "Zero-TV" group, which makes up less than 5 percent of U.S. households, has bucked tradition by opting to get the information they need and want from non-traditional TV devices and services.

And there, right there, is the actual admission that those of us who have cut the cord and have no intention of going back are not a myth and are actually "growing" in numbers. Still, they describe us as having "bucked the tradition" rather than being part of a larger trend that is accelerating rapidly.

From there, the focus is on how those of us who cut the cord, still watch TV (i.e., "breathe, Mr. TV exec, they don't all just hang out on Reddit talking to each other each day").

According to Nielsen's Fourth-Quarter 2012 Cross-Platform Report, the U.S. had more than five million Zero-TV households in 2013, up from just over 2 million in 2007. These households don't fit Nielsen's traditional definition of a TV household, but they still view video content. The television itself isn't obsolete, however, as more than 75 percent of these homes still have at least one TV set, which they use to watch DVDs, play games or surf the Net. When it comes to video content, a growing amount of these households are using other devices.

All in all it's a small admission, done in a condescending way in which they pretend this is some strange abnormal behavior, which needs to be observed but shouldn't worry TV execs yet. This, by the way, is classic bad advice for those facing disruptive changing markets. "Oh, don't worry about those people who have found something better and who are dropping your service in six figure chunks each quarter. We'll just observe them and be ready to act later."

We at Techdirt are among those constantly calling for a factual analysis of intellectual property and the laws that purport to rule it. I won't sit here and claim that disinformation has never come from people on our side of the argument as well, but we've seen time after time after time how the entertainment industry and their maximalist sympathizers tend to live in the kind of make believe world that puts anything this science fiction author has come up with to shame. The mental gymnastics required to follow along industry studies tend give my brain a sprained frontal lobe. That said, it takes a special kind of malfunction to decry supposed myths about piracy and refute them with a couple of made up myths of your own, as economist Michael Smith of Carnegie Mellon does (via Jeff John Roberts at Paid Content).

We actually start off on solid footing debunking myth numero uno, a common one espoused by the content industries: "You can't compete with free"

This myth is often invoked by content owners to justify heavy-handed enforcement measures against piracy sites and individual consumers. After all, why buy a song or movie when you can simply download it for free at a pirate site?

A quick look at the thriving content markets at Amazon, iTunes and elsewhere shows this notion is bunk. All of these sites are competing with free very successfully. As Smith points out, the lowest cost (including free) is not the only determinant of consumer purchases.

Ah, sweet, wonderful logic, with its simple formula of giving people easy access to what they want at a reasonable price as a method for staving off piracy, a symptom of unfulfilled consumer demand. One would hope that the rest of these myths are similar in nature and equally disavowed.

Not so much for myth number two: "Piracy Doesn't Harm Sales"

This myth holds that that people who use content-sharing (“stealing” if you prefer) sites will never pay for the content in the first place so what’s the harm? Meanwhile, “honest” consumers will never turn to piracy.

Smith pointed to evidence that piracy sites are not benign. In one prominent example, he said that when NBC removed shows from on-demand site Hulu, piracy spiked not only for NBC shows but for other networks as well. Meanwhile, no one went out and bought DVD’s as a substitute for the shows that were no longer available on Hulu.

If you're anything like me (and millions of single women hope that you are), reading myth two directly after reading myth one causes you to make this face.
  Translated from puppy to human: "What the &!@# are you talking about?" So, in debunking myth one we found that offering an easy legal alternative to piracy negates the harm caused by piracy. Then, for myth two, we decide that refusing to offer what customers want (streaming/digital content) is not to blame for customers not buying what they don't want (shiny plastic discs of content). A large segment of the population does not want the discs anymore and never will, but they do want disc-less content. When that was taken away, from paying customers mind you, they found it elsewhere. Pirate sites didn't hurt sales in that instance; the removal of ways to watch legitimately did. If that is the example Smith wants to use to "debunk" his second "myth", color me unconvinced.

But it's the example for debunking for the next "myth" that wins today's "I think my brain just pooped itself" award. Myth three is: "Anti-piracy initiatives don't work." And you'll never guess what legislation gets to serve as the chief example for why this supposed myth is false.

Smith points to a recent study of France’s HADOPI (a new enforcement regime) to argue that anti-piracy laws do work. He noted that the advent of HADOPI coincided with a big rise in legal online music purchases, particularly in genres like rap and hip-hop that experience high rates of piracy. At the same time, much of this increases took place before the law even went into effect; it appears that news about the law caused people to seek out legal alternatives.

The point is that laws like HADOPI (and presumably America’s impending “6-strikes” initiatives) can provide a clear deterrent to piracy.

This is a perfectly legitimate point, by which I mean it's complete crap that is itself a myth. The truth is that the French government has been so monumentally unimpressed with the performance of Hadopi, which did not show any increased sales, but cost a ton of taxpayer money, that they were seeking to slash its funding. Not exactly the kind of hallmark success you want to trot out as an example of why legislation can stamp out piracy. Separately, reports have shown that Hadopi may have temporarily decreased one kind of file sharing, but appears to have shifted it elsewhere -- which is what seems to happen every time one of these laws come along.

And so we're once again left unsatisfied by this economist, who notes at first that this is a business model issue before diving right back into the fallacies of the entertainment industry. It's bad enough to fall victim to statistics made up by certain industries, but it's even worse to use them to try to debunk supposed "myths."

Crossposted from Computerworld UK where it was originally split into two separate articles.

It's a sign of the European Commission's increasing desperation over ACTA that it has been forced to send out a document entitled "10 Myths About ACTA" [pdf] that purports to debunk misinformation that is being put around. Unsurprisingly, the EC's document is itself full of misinformation. Here are just a few of the more outrageous examples.

1. ACTA will limit the access to the internet and will censor websites.

Read the text of the ACTA Agreement - there is no single paragraph in ACTA that substantiates this claim. ACTA is about tackling large scale illegal activity, often pursued by criminal organizations. It is not about how people use the internet in their everyday lives. Internet users can continue to share non-pirated material and information on the web. ACTA will not limit people's rights on the internet nor will it shut down websites, unlike the proposals discussed in the US (SOPA and PIPA).

There are some convenient half-truths here. Its supporters may claim that ACTA is about tackling large-scale illegal activity but nowhere in the document is there mentioned any minimum level for its operation. That is, potentially, it can apply to the actions of a single person, perhaps even sharing a single file, depending upon the circumstances. The problem is, ACTA's framing is so vague that it's not clear exactly who might be caught by its terms. Whatever the Commission may say now, it's how the text is interpreted later that matters.

After all, if the Commission had really wanted only to tackle "large-scale illegal activity", it would have added a minimum level to exclude the risk that ordinary Internet users would be affected. The refusal to add that minimum level to the treaty – something that would have been easy to do - can only mean that the Commission does indeed want the option of applying ACTA's rules to ordinary citizens, and that its claims to the contrary are simply whitewashing.

The next half-truth is: "Internet users can continue to share non-pirated material and information on the web". But what exactly is "non-pirated material"? Who decides? Because copyright has become such a complex set of laws that it is rarely clear – even to copyright lawyers – what exactly is or isn't "pirated": often the courts have to decide whether something is covered by "fair dealing/fair use", for example. So how can ordinary citizens possibly know in every case whether what they are sharing is "pirated"?

In particular, there is the situation that the term of copyright varies by country, and what may be in the public domain in one, is still in copyright in another. So what happens when someone in a country where some creation is in the public domain shares it with someone in a country where it isn't? The continuing injustice of the O'Dwyer case shows us that the US tries to applies its laws everywhere in the world: so does that mean its copyright laws apply in Europe?

Finally, while it is true that ACTA will not "shut down websites" directly, there is another clause that is even worse (Article 10):

judicial authorities have the authority to order that materials and implements, the predominant use of which has been in the manufacture or creation of such infringing goods, be, without undue delay and without compensation of any sort, destroyed or disposed of

Now, by definition, a Web site "creates" infringing copies when it sends or streams them to users; so lawyers could – and almost certainly will, knowing lawyers – argue that ACTA provides for the destruction and disposal of any computers whose "predominant use" is copyright infringement. So, no simple censorship, certainly, just the seizure and physical destruction of computers (assuming they are in one of the ACTA signatories), and probably the domain name too.

Not only that, but another section (Article 12) allows for "materials and implements" to be seized without informing the party affected, and even without any guarantee that people can defend themselves afterwards – so much for due process and justice.

3. ACTA is a secret agreement. Negotiations were not transparent and conducted "behind closed doors". The European Parliament was not fully informed, stakeholders were not consulted.

The text of ACTA is publicly available to all. The negotiations for ACTA were not different from negotiations on any other international agreement. It is a fact that such agreements are not negotiated in public, but with the Lisbon Agreement and the revised Framework Agreement there are clear rules on how the European Parliament (EP) should be informed of such trade negotiations. And these have been scrupulously followed.

Trade Commissioner Karel De Gucht has participated in three plenary debates, replied to several dozens of written and oral questions, as well to two Resolutions and one Declaration of the EP, whilst Commission services have provided several dedicated briefings to Members of the European Parliament (MEPs) during the negotiations.

Likewise, the public was informed since the launch of the negotiations about the objectives and general thrust of the negotiations. The Commission released summary reports after every negotiation round and the negotiating text since April 2010. It organised press briefings and four stakeholder conferences on ACTA, one of them even only a few days before the first negotiating round.

This is extraordinarily duplicitous. The text of ACTA may be available to everyone *now*, but that is after the negotiations have been concluded – in other words, as a fait accompli. Even though the ACTA discussions began in 2006, the first formal draft that was officially released was only in 2010. The only reason people knew what was in ACTA was thanks to a document posted in Wikileaks in 2008: in other words, if the ACTA negotiators had got their way, ACTA would have been negotiated behind closed doors for four years before the public was allowed to see anything (and had there not been the Wikileaks leak, it's possible that even the draft would not have been released.)

The Commission claims "the public was informed since the launch of the negotiations about the objectives and general thrust of the negotiations": but what matters, of course, are the details, not the "general thrust". A few press briefings and stakeholder conferences are no substitute for actually allowing the public to give some – any – input to the ACTA process. But in the many years of negotiations, there was no possibility whatsoever to do that.

And yet even though the public was denied any opportunity to comment on a treaty that would have important implications for their lives, certain privileged groups were not just given access but consulted on their views, as Wikipedia explains:

Apart from the participating governments, an advisory committee of large US-based multinational corporations was consulted on the content of the draft treaty, including the Pharmaceutical Research and Manufacturers of America and the International Intellectual Property Alliance (which includes the Business Software Alliance, Motion Picture Association of America, and Recording Industry Association of America). A 2009 Freedom of Information request showed that the following companies also received copies of the draft under a nondisclosure agreement: Google, eBay, Intel, Dell, News Corporation, Sony Pictures, Time Warner, and Verizon.

Given the fact that major US corporations that stand to benefit directly from ACTA's disproportionate enforcement terms were allowed to shape its details from early on, while the 300 million European citizens who will be subject to those same terms had not a single formal opportunity even to express their views, the Commission's attempt to suggest that this was not a secret treaty, and that the public was consulted, is risible and insulting.

6. ACTA favours IP right-holders. ACTA eliminates safeguards and exceptions existing under international law.

Quite to the contrary, ACTA is drafted in very flexible terms and contains the necessary safeguards to allow the participating countries to strike an appropriate balance between all rights and interests involved, in line with their economic, political and social objectives, as well as with their legal traditions. All safeguards and exceptions under EU law or under the TRIPs Agreement remain fully preserved.

Notice how the "myth" has two components, but that the European Commission only answers one of them. The whole treaty is predicated on the assumption that more enforcement is good: there is no consideration of the collateral damage it might inflict, for example on members of the public. That, of course, is because the public was never allowed to present its views; inevitably, the resulting document is incredibly one sided and biased in favour of the copyright industries.

This can be most clearly seen in Article 9, which spells out the damages for infringement (my emphasis added):

1. In determining the amount of damages for infringement of intellectual property rights, a Party’s judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.

2. At least in cases of copyright or related rights infringement and trademark counterfeiting, each Party shall provide that, in civil judicial proceedings, its judicial authorities have the authority to order the infringer to pay the right holder the infringer’s profits that are attributable to the infringement. A Party may presume those profits to be the amount of damages referred to in paragraph 1.

3. At least with respect to infringement of copyright or related rights protecting works, phonograms, and performances, and in cases of trademark counterfeiting, each Party shall also establish or maintain a system that provides for one or more of the following:

(a) pre-established damages

(b) presumptions for determining the amount of damages sufficient to compensate the right holder for the harm caused by the infringement; or

(c) at least for copyright, additional damages.

Consider, now, how this might apply to sharing a few mp3s online. According to ACTA, the copyright holders can demand damages equal to the "lost profits" from those mp3s. And if you want to know how the recording industry calculates those, ask Jammie Thomas-Rasset, who was fined $1,920,000 for sharing 24 songs in the US. When that was later reduced to $54,000, the recording industries demanded a retrial because they felt it was far too low.

ACTA essentially validates this kind of deranged calculus, and permits copyright companies to claim for completely imaginary losses "to compensate the right holder for the harm caused by the infringement", even though it is impossible to quantify that "harm" in any sensible way when you're dealing with digital file sharing. Indeed, arguably there is no harm, since file sharing can actually *boost* sales – just ask Paulo Coelho; but ACTA's tunnel vision naturally cannot contemplate such a possibility.

Given these utterly disproportionate figures, it is extraordinary how the members of the European Commission can claim with any seriousness that ACTA does not "favor" rights-holders. Perhaps they imagine everyone earns the same as they do – 240,000 Euros a year - and can easily find a few million Euros down the back of the sofa if they need to....

8. ACTA leads to "harmonization through the backdoor". A study ordered by the European Parliament's committee for International Trade (INTA) to academics says that ACTA will require changes to EU enforcement legislation and/or to national laws.

ACTA provisions are compatible with existing EU law. ACTA will not require any revision or adaptation of EU law and will not require any Member States to review the measures or instruments by which they implement relevant EU law. ACTA is also in line with international law, in particular with the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The INTA study does not show evidence of any concrete situation where ACTA would contradict, repeal or require the modification of a single provision existing in EU legislation. This has been confirmed in very clear terms by the two above mentioned Opinions of the Legal Service of the European Parliament.

If ACTA is compatible with existing EU law – and that remains unclear, despite the Commission's assertions to the contrary – that's only so because the whole treaty is so vaguely worded. It is full of options – clauses that signatories "may" implement in certain ways.

But this is the central trick of ACTA: it is not that the treaty itself imposes new laws on participants *now* - the studied vagueness makes that unnecessary. What ACTA does is to create a framework whose assumptions are that laws will be passed in the future to comply with the optional, more stringent parts. In other words, ACTA is not so much about today's legal landscape, but about tomorrow's. It will allow politicians to say: "well, we really have to implement these harsher enforcement laws because it's in ACTA, and all of our partners have done so, and it would look bad if we didn't follow suit."

In fact, European commissioners aren't even waiting for ACTA to be ratified before moving down this path: with the “Proposal for a Revision of the Directive of Intellectual Property Rights” (pdf) they are already planing to bring in harsher copyright enforcement of precisely the kind that ACTA tries to establish as a benchmark.

In other words, it's the usual copyright ratchet, whereby a country's copyright maximalism in one area is used as an excuse to "harmonize" everyone else's. That's precisely what has happened with copyright term, for example, where the varying terms for different kinds of creation – text, music, sound recordings – have gradually been extended around the world in order to bring about "harmonization" (isn't it strange that there's never harmonization *downwards*, and that it's always in favor of the copyright industries and to the detriment of the public?) ACTA seeks to use the same trick to export the worst excesses of copyright enforcement first to all signatories, and later around the world through further treaties, like the Trans-Pacific Partnership.

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Rick Falkvinge recently put together an excellent post debunking ten of the common myths you hear about patents. Here's a taste:

Myth 2: Patents drive innovation.

Fact: Patents do not drive innovation, they ban innovation. A patent is, by its very definition, something that bans the entire world except the patent holder from building and improving on a particular innovative step. If patents are driving innovation, which is claimed, then this outright ban must be shown to have side effects that somehow drive innovation to a larger extent than the extent to which the direct ban destroys it. No such side effects have turned out to exist.

To the contrary, patents are being used by incumbent industries to shut down disruptive competition. Rather than competing with better products and services, the current kings-of-the-hill are finding it more cost efficient competing with more expensive lawyers. This does neither drive innovation nor a healthy competitive market.

Other myths debunked are claims that investors won't invest without patents, that patents are a useful measure of innovation, that the problem is just with patent trolls, that patents disclose innovation, and a few others as well. It's really a fantastic read. It likely won't change the minds of patent system supporters, but for anyone involved in these debates, it's a very straightforward and clear debunking of many of the common myths about the importance of the patent system.

While Wikileaks critics keep claiming that the site has "put lives in danger," it's never been able to back up those statements. Even Defense Secretary Robert Gates has admitted those claims (some of which he made early on) were not true. So it wasn't much of a surprise to see Wikileaks critics jump on the claims that the site had set back democracy in Zimbabwe, and potentially put one of the country's political leaders, Morgan Tsvangirai (an opponent to long-time leader Robert Mugabe, who effectively destroyed the Zimbabwe economy), in danger.

The issue is a US diplomatic cable revealing what Tsvangirai had told the Americans about Mugabe. The country's attorney general, who was appointed by Mugabe, quickly began an "investigation," suggesting that Tsvangirai was guilty of treason, and Mugabe has used the incident to attack Tsvangirai, which could lead to an abandonment of the already shaky coalition government, leading Mugabe to seize back more complete control.

There's no doubt that the situation in Zimbabwe is not great, but the anger towards Wikileaks is quite misplaced. The strongest article on the subject, which many people have been passing around, was published in The Guardian, by James Richardson, and blasts Wikileaks and Julian Assange for all the "damage" done in Zimbabwe.

The only problem? It wasn't Wikileaks who originally published that cable. It was The Guardian itself, who not only published the document prior to Wikileaks, but also admits that it, not Wikileaks or Assange, chose which cables to publish and when. It did alert Wikileaks to what it was going to publish, but the release and publication of this document was done by The Guardian -- the very same publication that Richardson then used to slam Wikileaks for supposedly being the one to create the problems in Zimbabwe. Oops.

Of course, Richardson is not a reporter. He's a well-connected political operative in the US, with ties to politicians who have been attacking Wikileaks. He ran online communications for the RNC during John McCain's presidential campaign. So it's pretty clear that there are ulterior motives in bashing Wikileaks, but it's quite ironic that he chose The Guardian as his publication of choice to do so, since they're actually the ones that broke the particular story. Will Richardson now write a similar piece suggesting The Guardian has blood on its hands?

Even more to the point is an analysis by Charles Homans, at Foreign Policy magazine, who notes that Mugabe has had it in for Tsvangirai for years anyway -- and that "Tsvangirai has been variously arrested, beaten, tortured, thrown from a 10th-floor window, and involved in a suspicious collision with a truck that claimed his wife's life" in just the last decade or so. The idea that this one leak is what really created problems in Zimbabwe is laughable. Mugabe has been plotting against this guy for ages, and would use any possible excuse to attack him again. The problem here is not Wikileaks. It's not The Guardian. It's an unstable country with a man in Robert Mugabe who likes to crush any political opposition. To try to pin that all on Wikileaks is beyond misleading and desperate. It's just plain deceitful.

As the complaints against the TSA ratchet up, various people are finally starting to point out why the whole concept of security theater is a farce. The entire setup is based on the idea that you can have "perfect security." But, if you wanted perfect security, the only way to do that is to not let anyone fly, ever. As James Fallows notes it doesn't make much sense to "spend limitlessly toward the impossible end of reducing the risk to zero." As he notes:

Every society accepts some risks as part of its overall social contract. People die when they drive cars, they die when they drink, they die from crime, they die when planes go down, they die on bikes. The only way to eliminate the risks would be to eliminate the activities -- no driving, no drinking, no weapons of any kind, no planes or bikes. While risk/reward tradeoffs vary between, say, Sweden and China, no nation accepts the total social controls that would be necessary to eliminate risk altogether.

Yet when it comes to dealing with terrorism, politicians know that they will not be judged on the basis of an "acceptable level of risk." They know that they can't even use that term when discussing the issue. ("Senator Flaccid thinks it's 'acceptable' for terrorists to blow up planes. On Election Day, show him that politicians who give in to terror are 'unacceptable' to us.") And they know for certain that if -- when -- a plane blows up with Americans aboard, then cable news, their political opponents, Congressional investigators, and everyone else will hunt down any person who ever said that any security measure should be relaxed.

This is the political tragedy of "security theater."

Along those lines, the Unqualified Offerings blog (via Julian Sanchez) does a nice job explaining how the incentives line up to create this ridiculous situation. Basically, he notes that a terrorist attack on an airplane will happen. Some day. No matter what we do to try to prevent it. But once that happens, the response is going to be obvious: those who pushed hard for more ridiculous security theater that wasn't implemented will keep their jobs and retain power. Those who pushed for more reasonable solutions will be vilified.

100% success is usually impossible in the real world. Given that eventually, one way or another, a terrorist will almost certainly take down a plane, the only question that management has to ask itself is what position they want to be in when that happens. And that answer is simple: Safe in their jobs, and poised to inherit a bigger budget.

And that's why we get security theater.

The goal isn't so much actual safety. After all, as Jim Harper notes, if you look at the actual "risk" of a terrorist attack on an airplane today, it's pretty close to zero. But the whole process is built around trying to bring it all the way to zero, which is an impossibility, but leads to ridiculous extremes. And, he notes, this is exactly how the terrorists planned it:

This is apostasy in Washington -- where the political imperative is zero risk. But risk is a reality of life. We take risks when we drive, when we walk across a street and when we go to the fridge for that two-day-old slice of pizza.

This illusory quest for zero risk helps terrorism achieve its goals. As news of "Operation Hemorrhage" -- smaller, low-cost attacks aimed to disrupt commerce and stoke fears -- demonstrates clearly, terrorism works by inducing target states to overreact. That's the only mode terrorists have for affecting major powers like the United States.

We've been nothing if not a patsy to their strategy. The element of surprise, central to terrorism, forces us to defend everything against every mode of attack -- a logic that naturally bleeds us.

Someone once told me that Viacom's top lawyer, Michael Fricklas, has been known to read Techdirt on occasion. I have no idea if this is true, but it still is interesting to watch him give a lecture to some Yale law students where he offers a somewhat nuanced position on copyright issues (thanks to JJ for being the first of many to forward the video to us), but which repeatedly seems to leave out certain pertinent facts: He starts out by saying that he's a strong supporter of fair use, and doesn't like the idea of having to get licenses for creating new works -- but is concerned about the "exact copy" problem. So, basically he's in favor of fair use for creating new works, but not direct distribution.

He discusses copyright vs. free speech -- and insists that there's no "tension" between the two (despite many recent studies suggesting the exact opposite). Of course, he does a bit of a twist there, by saying that copyright is pro-free speech because it creates incentive for speech. The problem with this statement is that while that's the theory, the evidence for it is somewhat lacking. However, there is tremendous evidence of cases where copyright is used to stifle speech -- and of all the massive extensions and changes in copyright laws over the past 200 years, almost all have served to stifle more speech than they have encouraged.

He then trots out the industry's own numbers claiming how much copyright contributes to the economy, even though those numbers are based on a variety of questionable assumptions, including the idea that all content covered by copyright is only created because of copyright. Along those lines, he also credits copyright for things like the iPod and the Kindle, saying that no one's buying those devices just to look at them. This is correct -- but note the trick. He did not say that it was content that drove the iPod and the Kindle, but copyright. He's wrong. It's content. Not copyright.

He notes that some say that "unlicensed IP" might drive this innovation, but he favors "sustainable innovation" (as if anyone doesn't). And then he makes this odd statement:

"A more sustainable innovation is one where, if you make an investment, you have the opportunity to make a return."

Now, that's a great (by which we mean, useless) statement, because it's obviously true. Who would ever deny that? But it's a sneaky and disingenuous statement, because it implies something that's simply not true: that without copyright or without restrictive licensing, the investors do not have an opportunity to make a return. As we've shown over and over again, plenty of content creators who "free" their IP have not only made a return, but have made a better return than they did under older models that relied on copyright. But it's a sneaky trick that's often used by folks in this debate. You set up this strawman argument and then knock it down, despite the fact that no one ever made the argument, and you argue that something is fact (that you can't make a return) when it's empirically false. It's frustrating that this argument still gets made and people should really start calling the folks who make it out whenever they state such falsehoods.

Later, he talks about the "losses" from piracy, insisting that the findings come from a "sophisticated" analysis, not just from counting all downloads as lost sales. Of course, these numbers came from the same study process that led to some results that even the MPAA (of which Viacom is a major member) had to later admit were bogus. This is also the same "sophisticated analysis" that includes ripple effects in one direction only, so it's actually double, triple, quadruple, quintuple counting some numbers, while totally ignoring how those numbers actually help the industry in other ways. So, sorry if I don't take those loss numbers seriously, no matter how "sophisticated" he thinks they are. They're not. They're only "sophisticated" in how misleading they are.

He does have a short discussion on RealNetworks' RealDVD offering, which he implies enables piracy -- even as he admits he wants the functionality, where he could move a copy of a legally purchased DVD to his hard drive for backup or other viewing, but says his "concern" is that people would do this with Netflix DVDs. He believes that the problem with this is that RealNetworks had to break the encryption put in place by the studios. Notice, again, what Fricklas conveniently leaves out. First, he leaves out the fact that it is already legal for people to make backup copies of content they legally own -- but, thanks in part to Hollywood lobbying, Hollywood itself can block that right, simply by putting encryption on something and then saying that you can't circumvent it without breaking the law (thank you, DMCA anti-circumvention clause). He also leaves out (conveniently) the fact that RealDVD doesn't actually "break" the encryption and that the resulting copy still includes DRM that prevents copies. The fact that he's "concerned" about the Netflix model is of no consequence whatsoever. McDonalds is "concerned" about Burger King, but that doesn't give them a legal right to block them from being in business.

Then he pulls out the ever popular "$200 million movie" myth, which I thought was a favorite of NBC Universal, but I guess Viacom is going with it now as well. It's not a myth that there are movies that cost $200 million. The myth is that people want movies that cost that much. No one watching a movie cares how much it costs. They want good movies, no matter how much they cost. I'm sure people would like some $1 billion or $100 billion movies as well, but that doesn't mean we need to grant Viacom extra special legal privileges to make sure it can make a $1 billion or $100 billion movie profitably. People like good movies. Viacom wants to make profitable movies. We agree. But the $200 million number is meaningless. There are ways to make good movies for both less and more than $200 million and there are ways to make profitable movies even in the face of piracy. The claim that piracy undermines the $200 million movie, which is some sort of "necessity," is simply not supported.

On top of that, he tosses out the debunked claim that if something is "free" it means it's devalued. That's simply not true, no matter how many times people repeat it. If it were true, and the content had no value, no one would want it. Value and price are two separate things.

Then, he discusses the "Kanye West" MTV Video Awards "Imma let you finish..." example, by talking about how Viacom used various filtering tools to pull that clip off of various "unlicensed" user uploaded video sites. But he also talks about how they drove people to use the official Viacom clip, which allowed them to "participate in the benefit" of the video. Now, that's interesting, and it's great that they put their own clips up and made them embeddable. But, again, it's important to note what he left out. In forcing everyone to view the content through Viacom directly, it also increased Viacom's own cost in terms of bandwidth. The advantage of letting others help host and distribute the content is that it actually eases that cost.

His discussion on kicking people off the internet via a "three strikes" mechanism is getting much of the attention on other sites, because he mentions, totally in passing, that suing users "feels like bullying." This may sound like a big deal -- and certainly some other sites (and industry lawyers) are making it out like a big revelation, but it's not. The movie industry has never sued individuals for such things -- only the recording industry has. And even way back in the Jack Valenti days, he talked about why he didn't like the idea of suing individuals. So, this isn't a shift in positioning at all. Rather, it's a repeat of the new silly strategy of some in the industry to try to pretend that kicking people off the internet is "consumer relief." Not quite. Shooting someone in the leg instead of the head is certainly "better," but I doubt that the person shot in the leg considers it "relief."

Oh yes, he also fails to explain how any of that will make more people buy.

Towards the end of that discussion, though, he makes another interesting statement, saying that: "there's no way to deal with this problem other than to move viewing into licensed contexts." Except, that's not true. There are other ways. It's called setting up a business model where people actually do have a reason to buy things, whether they view the content in a licensed or unlicensed manner. I recognize he's on the legal side, rather than the business side, but the idea that the "only" way to deal with piracy is to attack it, rather than embrace it, is a position that the industry long ago should have learned was a mistake.

His final point is discussing how DRM "enables new business models," and he more or less dismisses criticism of DRM as really just being criticism of "bad" DRM (of which there is plenty). However, what struck me, was how none of the "new business models" he described actually required DRM at all. You could do them all in some way entirely without DRM. All the DRM does is add restrictions. Of course, rather than adding restrictions, why doesn't the industry focus on employing new business models that give users more and make them want to buy, rather than trying to enforce artificial limitations?

On the whole, it is an interesting video, and well worth watching, but it conveniently misstates or leaves out important facts throughout. Unfortunately, the Q&A session that follows the presentation wasn't included, so I have no idea if any of the students challenged some of his assertions or pointed out some of the points that he left out. Anyway, maybe we can hope that Fricklas is, in fact, an occasional reader here and can stop by to address those questions and omissions.