Techdirt. Stories filed under "assumptions"

Bad Idea: Internet Service Providers Should Assume Most Digital Locker Content Is 'Illegal'

Glyn Moody — Tue, 20 Mar 2012 10:29:34 PDT

In an interesting blog post, James Firth discusses a comment from music industry analyst Mark Mulligan, quoted in a BBC story about the digital locker site Hotfile:

"If the service providers are serious about wanting to heed the industry's concerns then instead of assuming that all of the content is legitimate until found otherwise, they should actually assume that most of the content is illegal and take action.

"Much of the content on these service is very high quality video files -- how many consumers genuinely create large high definition videos of their own and upload them?"

Mulligan clarified his views in an update to Firth's post: Just to be clear I at no stage questioned anyone's right to create digital content (I myself have a recording studio and create lots of my own music). My point was simply that the vast majority of us do not create feature length high definition videos and that the vast majority of the content on Hotfile is not UGC [user-generated content], rather unlicensed professional content. Just run a google advanced search on the hotfile domain and enter the name of any movie and you'll find it there -- normally multiple different versions.
The comment that "the vast majority of us do not create feature length high definition videos" may be true for the moment, but underestimates the power of Moore's Law. The improved quality of cameras built into smartphones, combined with ever-increasing storage capacities, means that producing such videos won't be the preserve of film studios for long.

Once the technology is available, many people will start creating and uploading such things, just as many already create blogs, or post high-quality pictures to Flickr. Nobody predicted any of these things would happen, because it seemed unlikely that "ordinary" people would write hundreds of articles a year, or share thousands of photos.

As the same thing happens with high-quality video, Mulligan's assumptions about what is and what is not "legal" are likely to become more and more dubious. Meanwhile, switching from that quaint "innocent until proven guilty" thing to the contrary is an incredibly dangerous step to take, since it will add to the presumption of online guilt that is already popular in some circles.

Not only is that likely to chill innovation, since fewer people will be willing to take the risk of creating the next YouTube or Facebook if ISPs just assume people are guilty until proven innocent and "take action", it also plays into the hands of governments looking to repress dissent. Attacking the fundamental principle of "innocent until proven guilty", even in this apparently "minor" way, makes it much easier to start branding people who protest as terrorists, for example, because it forces them to prove a negative.

What's particularly disappointing about Mulligan's view is that he is normally a much more thoughtful commentator in this area, as Techdirt has noted before. His "Music Format Bill Of Rights", for example, is closely aligned with many of things that Techdirt has been advocating for years. And a recent post entitled "When the Media Industries Really Need to Start Worrying About Piracy (and it's not yet)" has the following original and provocative idea:

The nightmare scenario for media companies is that the pirates turn their attentions to developing great user experiences rather than just secure means of acquiring content. What if, for example, a series of open source APIs were built on top of some of the more popular file sharing protocols so that developers can create highly interactive, massively social, rich media apps which transform the purely utilitarian practice of file sharing into something fun and engaging? If you though the paid content market was struggling now imagine how it would fare in the face of that sort of competition.

That's a much more insightful and nuanced comment than unhelpful calls to reverse a crucial legal tradition that has been around for centuries.

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Questionable 'Piracy' Study Found; Details Show It's Even More Ridiculous Than Expected

Mike Masnick — Wed, 16 Mar 2011 09:53:00 PDT

Thanks to G Thompson for pointing us to where the BSA has stashed a copy of that mysterious "piracy" research report we were just talking about, which was apparently written by someone named Emilio Ferrer. It's embedded below, and it's even more ridiculous than we had initially expected. First, the entire thing is based on the massively and completely debunked TERA report from last year, that used such outrageous assumptions as to not even pass the most basic sniff test. The researchers here appear to have made no attempt to determine the accuracy of the TERA report, nor to respond to any of the debunked points.

Digging into what little details there are suggests that this study just gets worse and worse and worse. It takes bad assumptions, then piles on more bad assumptions and then extrapolates out to get totally unsubstantiated conclusions. For example, it assumes that the volume of online infringement grows at the same rate as IP traffic and assumes the rate at which the industry will grow. That last one is particularly silly. Since it's making up a number for what the total jobs "should" be, it can just create whatever justification that it wants.. and can claim any job loss number it wants to name. The whole thing is a house of cards built on nothing.

Of course, it's worth pointing out that there was another report, this time from AFACT (the Australian anti-piracy group) just a few weeks before that some have confused this report with. The AFACT report can be seen here (pdf). It's even worse than the other study in some cases. Check out some of the assumptions in that report: including the laughable claim that "just under half of all pirate consumers would have paid." There have been various attempts to quantify that number, and I've never seen any unbiased source come anywhere close to 50%. At best, I've seen 10% claims. The only concession the report makes is that maybe some people use unauthorized copies to "sample," and make a legit purchase later. But they only count this if the person says they would pay for that legit product, not if it resulted in them buying other authorized products or services.

It also does a laughable job with "ripple effects." It's pretty sad. We've debunked "ripple effects" reports over and over and over again. They all seem to make the same mistakes. First, it ignores that ripple effects are really ways to count the same dollar over and over and over again. Second, they only count the ripple effects in one direction. So, for example, they say movie industry people lose their jobs, and that means less taxes. But what they don't say is that any money not being spent on the movies doesn't disappear from the economy, but is spent on something else -- and that something else might actually be even more productive or value generating. In fact, looking at this report, it appears they don't even consider this point, and assume that all the money "not" spent on movies disappears from the economy.

So there you have it. Two separate reports released within weeks of each other in Australia by the entertainment industry. Each one seems to be trying to outdo the other one in questionable assumptions and extrapolations.

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Bad Assumptions Made By American Press Institute Will Stop It From Helping Newspapers

Mike Masnick — Tue, 7 Jul 2009 00:27:49 PDT

Last month, we wrote about the problems with the American Press Institute's "plan" to help save newspapers, which seemed really misguided. Steve Yelvington has now gone through the report and does a great job explaining why the report is so far off: it's basic assumptions are all wrong. He lists out each assumption and explains why it's wrong:

Consumers perceive that content produced by news organizations is valuable to them. This myth persists primarily in organizations that are dangerously out of touch with their markets. Public opinion of journalism, and of newspapers, has gone into a nosedive. Decades ago, people might trash-talk "the media" but generally would make an exception for their local paper. No more. Newspaper managers should know this, but many of them have fired their research people to save money, preferring to stumble through the fog without eyes and ears.

Consumers will actually make content purchases when they are confronted with many free options. Over the last 15 years, this assumption has been demonstrated to be false in digital paid-content experiments by newspapers all over the world. The numbers of consumers so inclined aren't great enough to sustain a business of significant scale. This idea persists primarily because so many newspaper people are deeply ignorant of what's been going on in their own companies, and because digital people generally lose power struggles with print people. Almost everyone I know who ran a paid-content online media experiment no longer works for the company where they tried it. Those companies are now largely ignorant of their own histories.

Publishers can exert their influence in the marketplace through laws and public policy, both of which could change. Newspapers have been trying without success to get rid of FCC's cross-ownership ban for decades. Newspapers, which are deeply despised by many politicians and sweeping sectors of their own customer bases, aren't going to persuade the government to outlaw Google.

Publishers will invest in emerging technologies that establish new work rules, new systems for organizing content and new designs for packaging editorial and commercial content. These would be the same newspapers that underinvested in the Internet for the last 15 years, while pouring cash into glitzy corporate headquarters, printing presses, and more newspaper acquisitions? The ones who now can't pay back the capital they've already borrowed?

News organizations can make the leap from an advertising-centered to an audience-centered enterprise. News organizations -- OK, let's be specific: newspapers -- are deeply addicted to high-volume revenue streams and huge profit margins that have enabled them to gobble up other newspapers and create huge, dangerously leveraged media chains. Such organizations require growth to survive and will fail in spectacular ways when asked to cope with shrinkage. And make no mistake, the scale of any news business that asks its readers to take primary responsibility for underwriting the costs of journalism will be tiny when compared with the fat times at the end of the last century.

The rest of the post is worth reading, as well. Yelvington notes that many of these myths were already debunked for the API, so it's not clear why they've been brought back up. Instead, Yelvington notes that no business model based on "attempts to reverse 15 years of social and technological change" simply won't go very far.

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