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<title>Techdirt. Stories filed under &quot;business&quot;</title>
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<pubDate>Fri, 14 Jun 2013 12:57:52 PDT</pubDate>
<title>Why The Tech Industry Should Be Furious About NSA's Over Surveillance</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130614/12173323472/why-tech-industry-should-be-furious-about-nsas-over-surveillance.shtml</link>
<guid>http://www.techdirt.com/articles/20130614/12173323472/why-tech-industry-should-be-furious-about-nsas-over-surveillance.shtml</guid>
<description><![CDATA[ We've already pointed out how some tech companies, including Yahoo!, Google and Twitter have <a href="http://www.techdirt.com/articles/20130614/10341723470/yahoo-fought-back-against-prism-lost-secret-ruling.shtml">fought back</a> against overly intrusive attempts at government surveillance (though, they often lose), and there's been some discussion about how these companies are fighting to protect their users' privacy.  There's a further reason why <i>all</i> of the tech industry should be speaking out against NSA surveillance.  Beyond just being <i>the right thing to do</i> to protect your users' privacy, it's likely that it also <b>improves their bottom line</b>.  We're already starting to see the fallout from the revelations of the NSA being able to scoop up data from various tech companies, and it's going to be harmful to their revenue.
<br /><br />
Right after the initial NSA leaks came out, David Kirkpatrick quickly wrote about how the Obama administration appeared to be <a href="http://www.linkedin.com/today/post/article/20130609225334-16549-did-obama-just-destroy-the-u-s-internet-industry" target="_blank">sacrificing the US internet industry</a> in a weak attempt at trying to increase security (despite no evidence that it's actually done that).  The global implications of the NSA spying aren't hard to figure out -- especially when looking at how many people around the globe use these services:
<blockquote><i>
It's quite possible that Obama has undermined the effectiveness and attractiveness for political speech and protest of what have been the most potent communications tools for activism in history. Political and commercial opponents of the U.S. in every country as well as governments themselves will likely alert citizens to the potential that U.S. companies could pass their info back to US authorities. This will seriously conflict with these companies' aim to maintain their platforms as neutral global environments. It could dramatically slow their global growth.
<br /><br />
[....] Do we really want to impair such powerful tools for spreading dialogue, political discourse, and U.S. values? Is it worthwhile to impair the extraordinary financial and commercial success of these great flagships for the American economy? Does Obama want Facebook et al just to be seen as tools of American power? That is certainly not the way the average user in Bolivia sees it. They see it as a tool of their own personal power, and they don't want governments interfering with that.
</i></blockquote>
Further, he points out, this will likely drive users to foreign corporations, rather than American ones, as they strive to protect their privacy:
<blockquote><i>
Don't believe there are not alternatives to the U.S. Net collossi. Companies worldwide are already relentlessly working on alternatives. The second largest search service worldwide is China's Baidu, with more than 8% of searches globally at the end of last year according to ComScore. Russia's Yandex is at close to 3%, more than Microsoft's own search product. In social networking, China's Tencent has had a stunning recent success with its WeChat product, which by some counts has over 450 million users worldwide, including many tens of millions outside China. Most major Chinese Internet companies have global ambitions.
</i></blockquote>
Kirkpatrick was focusing more on the consumer side, and the importance of using these tools for open and free communication.  But the same issues clearly impact the business side as well.  As CFO.com recently, noted, companies are gong to be <a href="http://www3.cfo.com/article/2013/6/data-security_prism-national-security-agency-edward-snowden-cloud-implications-vendor-management?currpage=0" target="_blank">a lot less trusting of US-based cloud computing companies</a> because of these leaks.  Exposing the key info to governments is a real risk:
<blockquote><i>
At the end of the day, if you have mission critical data and information in the possession of a third party service provider - Cloud or otherwise &#8211; the assumption that your provider will be in full control over their environments may be drawn unto doubt. As a CFO, it is prudent to consider your next steps very carefully to ensure that your intellectual property and trade secrets do not become the assets of others.
</i></blockquote>
Given the suggestions that the US government has used this surveillance as a form of <a href="http://www.techdirt.com/articles/20130611/10014923405/is-us-using-prism-to-engage-commercial-espionage-against-germany-others.shtml">economic espionage</a>, these fears seem quite well grounded.  Foreign companies are now going to be a lot less interested in using the services of American companies.
<br /><br />
And this isn't a theoretical problem either.  Sweden just issued a ruling that <a href="http://www.privacysurgeon.org/blog/incision/swedens-data-protection-authority-bans-google-apps/" target="_blank">bars the public sector</a> from using Google's cloud services.  Meanwhile, India is already telling companies that they need to <a href="http://www.nextbigwhat.com/post-prism-indias-isp-association-wants-google-facebook-to-setup-local-servers-297/" target="_blank">setup local servers</a> rather than make use of US servers if they want to do business in India.
<br /><br />
This issue is important on a number of levels, but technology companies, who rely on a global audience, should be standing up and loudly protesting the NSA's broad surveillance, because it's going to hit their bottom lines hard.  The administration and the NSA are directly making it difficult for US internet companies to be global enterprises, at a time when that's exactly what we need.  Is it really worth sacrificing one of the few growing and dynamic industries that the US has these days, based on some vague and unproven claims that the government "needs" all of this info?  It seems like a massive cost for almost no benefit.<br /><br /><a href="http://www.techdirt.com/articles/20130614/12173323472/why-tech-industry-should-be-furious-about-nsas-over-surveillance.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130614/12173323472/why-tech-industry-should-be-furious-about-nsas-over-surveillance.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130614/12173323472/why-tech-industry-should-be-furious-about-nsas-over-surveillance.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>it'll-hit-their-bottom-lines</slash:department>
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<pubDate>Wed, 15 May 2013 20:04:00 PDT</pubDate>
<title>Center For Copyright Information Loses Company Status, Not Supposed To Conduct Business In The US</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130515/14114123098/center-copyright-information-loses-company-status-not-supposed-to-conduct-business-us.shtml</link>
<guid>http://www.techdirt.com/articles/20130515/14114123098/center-copyright-information-loses-company-status-not-supposed-to-conduct-business-us.shtml</guid>
<description><![CDATA[ TorrentFreak has discovered that the Center for Copyright Information (CCI), better known as the company running the whole "six strikes" scheme in the US, <a href="http://torrentfreak.com/six-strikes-anti-piracy-outfit-loses-company-status-faces-penalties-130515/?utm_source=dlvr.it&#038;utm_medium=twitter" target="_blank">somehow had its company status revoked last year</a> for reasons unknown.  However, this could have serious consequences:
<blockquote><i>
&#8220;If entity&#8217;s status is revoked then articles of incorporation / organization shall be void and all powers conferred upon such entity are declared inoperative, and, in the case of a foreign entity, the certificate of foreign registration shall be revoked and all powers conferred hereunder shall be inoperative,&#8221; the DCRA explains. 
</i></blockquote>
It also may face penalties and fines.  It appears that this may have just been a paperwork screwup, which does happen, but given the organization's overall mission, you would think that they would have been a lot more careful dotting their i's and crossing their t's.<br /><br /><a href="http://www.techdirt.com/articles/20130515/14114123098/center-copyright-information-loses-company-status-not-supposed-to-conduct-business-us.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130515/14114123098/center-copyright-information-loses-company-status-not-supposed-to-conduct-business-us.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130515/14114123098/center-copyright-information-loses-company-status-not-supposed-to-conduct-business-us.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>strike-one?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130515/14114123098</wfw:commentRss>
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<pubDate>Wed, 27 Mar 2013 13:25:08 PDT</pubDate>
<title>Shockingly Unshocking: 'Cybersecurity' FUD Has Been Big Big Business For Contractors</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130325/03144322452/shockingly-unshocking-cybersecurity-fud-has-been-big-big-business-contractors.shtml</link>
<guid>http://www.techdirt.com/articles/20130325/03144322452/shockingly-unshocking-cybersecurity-fud-has-been-big-big-business-contractors.shtml</guid>
<description><![CDATA[ Back when this hype about "cybersecurity" and "cyberwar" first started to hit the mainstream (early on, "cyberwar" was more common, but lately people focus on "cybersecurity"), we had an article which suggested that much of this really seemed to be about scaring up a panic for the sake of <a href="http://www.techdirt.com/articles/20100302/1024048361.shtml">throwing money</a> at defense contractors who wanted to charge crazy huge sums for "helping" with cybersecurity.  And, as we noted, that push was leading to <a href="http://www.techdirt.com/articles/20100517/1141179445.shtml">hundreds of millions of dollars</a> in government contracts.  It appears that, with cybersecurity FUD only getting bigger and bigger, the folks who are making out like bandits <a href="https://www.commondreams.org/headline/2013/03/13-9" target="_blank">are all those defense contractors who are jumping in</a> to fan the flames of FUD... and then taking our taxpayer money to "fix" the problem.
<br /><br />
In that link above, they talk about Lockheed and Raytheon signing agreements with Homeland Security in which they get to "help" the government out by <a href="http://www.nbcnews.com/technology/technolog/us-plan-calls-more-scanning-private-web-traffic-email-1C9001922" target="_blank">scanning email and other info</a> collected by the NSA.
<blockquote><i>
Under the program, critical infrastructure companies will pay the providers, which will use the classified information to block attacks before they reach the customers. The classified information involves suspect Web addresses, strings of characters, email sender names and the like.
</i></blockquote>
None of this necessarily means that online attacks aren't a real threat... but I'd feel a lot more comfortable about where things were heading if there weren't a whole bunch of defense contractors gleefully rubbing their hands together as they scoop up more and more contracts while the FUD keeps spreading.<br /><br /><a href="http://www.techdirt.com/articles/20130325/03144322452/shockingly-unshocking-cybersecurity-fud-has-been-big-big-business-contractors.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130325/03144322452/shockingly-unshocking-cybersecurity-fud-has-been-big-big-business-contractors.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130325/03144322452/shockingly-unshocking-cybersecurity-fud-has-been-big-big-business-contractors.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>well,-look-at-that</slash:department>
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<pubDate>Mon, 22 Oct 2012 14:36:00 PDT</pubDate>
<title>George McGovern On Why Politicians Who Haven't Built A Business Are Bad At Regulating</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20121022/13153120790/george-mcgovern-why-politicians-who-havent-built-business-are-bad-regulating.shtml</link>
<guid>http://www.techdirt.com/articles/20121022/13153120790/george-mcgovern-why-politicians-who-havent-built-business-are-bad-regulating.shtml</guid>
<description><![CDATA[ With the passing of former Senator and Presidential candidate George McGovern this weekend, the Wall Street Journal <a href="http://online.wsj.com/article/SB10001424052970203406404578070543545022704.html" target="_blank">reran a 1992 column he wrote</a> about how much he learned from trying to start a business after he'd left politics.  TheMoneyIllusion <a href="http://www.themoneyillusion.com/?p=17208" target="_blank">has an excerpt as well</a>:
<blockquote><i>
In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on Connecticut&#8217;s Stratford Inn. Hotels, inns and restaurants have always held a special fascination for me. The Stratford Inn promised the realization of a longtime dream to own a combination hotel, restaurant and public conference facility &#8212; complete with an experienced manager and staff.
<br /><br />
In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn&#8217;s 43-year leasehold. <b>I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender.</b>
</i></blockquote>
He goes on to talk about how all sorts of crazy regulations, that may have appeared to make sense to the politicians passing them, were actually serving to create a huge headache for businesses -- often because whoever is writing the laws has no idea what they're talking about:
<blockquote><i>
In short, &#8220;one-size-fits-all&#8221; rules for business ignore the reality of the marketplace. And setting thresholds for regulatory guidelines at artificial levels &#8212; e.g., 50 employees or more, $500,000 in sales &#8212; takes no account of other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics.
<br /><br />
The problem we face as legislators is: Where do we set the bar so that it is not too high to clear? I don&#8217;t have the answer. I do know that we need to start raising these questions more often.
</i></blockquote>
When we talk about Washington DC (and other governments) passing regulations that impact how entrepreneurs and innovators build great new companies, this is the kind of thing that we're worried about.  The vast majority of elected officials really have no idea.  They pass rules and regulations that <i>sound good</i> and are meant to serve a good purpose, but they rarely take into account the consequences of the regulations they pass or how they'll impact how companies act.  This is not to say that there shouldn't be regulations, but that regulators need (a) a much better understanding of business and (b) they need to be aware that the impact of regulations can be stifling.  I've never understood why every piece of legislation that will impact companies doesn't come with specific metrics to determine if it's a success and a mandatory review period / sunset provision, in which an independent board is tasked with determining if the law accomplished what it set out to do, and if there were any costly side effects or unintended consequences.
<br /><br />
McGovern seemed to discover all that after his political career was over, but with his passing, perhaps we can encourage current politicians to recognize just how big an issue this is today.  Especially when we rely on so many new technologies, innovations and services on a daily basis.<br /><br /><a href="http://www.techdirt.com/articles/20121022/13153120790/george-mcgovern-why-politicians-who-havent-built-business-are-bad-regulating.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20121022/13153120790/george-mcgovern-why-politicians-who-havent-built-business-are-bad-regulating.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20121022/13153120790/george-mcgovern-why-politicians-who-havent-built-business-are-bad-regulating.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>good-points</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20121022/13153120790</wfw:commentRss>
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<pubDate>Fri, 17 Feb 2012 04:04:35 PST</pubDate>
<title>DMCA Takedown Service Tells Copyright Companies: 'Adapt Your Business To The New Digital World'</title>
<dc:creator>Glyn Moody</dc:creator>
<link>http://www.techdirt.com/articles/20120213/12340217748/dmca-takedown-service-tells-copyright-companies-adapt-your-business-to-new-digital-world.shtml</link>
<guid>http://www.techdirt.com/articles/20120213/12340217748/dmca-takedown-service-tells-copyright-companies-adapt-your-business-to-new-digital-world.shtml</guid>
<description><![CDATA[ <p>Although DMCA takedown notices figure quite frequently here on Techdirt -- especially abusive ones that use the system to remove material covered by fair use or even in the <a href="http://www.techdirt.com/articles/20110421/10280813987/uk-music-publishers-issue-dmca-takedown-public-domain-sheet-music.shtml">public domain</a> -- the industry that has grown up around them remains somewhat in the shadows. That's what makes the site with the self-explanatory name "<a href="http://takedownpiracy.com/">Takedown Piracy</a>", found via the <a href="http://the1709blog.blogspot.com/2012/02/takedown-piracy-reader-asks.html">1709 Blog</a>, so fascinating: it offers a glimpse of the world of DMCA takedowns as seen from the other side.
</p><p>
As you might expect, Takedown Piracy sends DMCA notices to sites that it believes are holding copyrighted material belonging to its clients.  But what's surprising is the scale of the takedown: one recent post on the site talks of "<a href="http://takedownpiracy.com/2012/01/another-one-bites-the-dust/">hammering these sites with DMCAs</a>", and later goes on to give an idea of what that entails:

<i><blockquote>Once word got around that [the #3 adult torrent site] Cheggit was complying, myself and at least one other removal company began monitoring the site daily resulting in 100s if not 1000s of torrents were being reported every day.</blockquote></i>

Since the site was "complying", that presumably meant 1000s of torrents were also being taken down every day.  Making extra work in this way lies at the heart of the company's service, as this helpful <a href="http://takedownpiracy.com/faq/">FAQ</a> explains:

<i><blockquote>Piracy is rampant and can often seem like you&#8217;re playing Whack-A-Mole. However, in this case you&#8217;re not just hitting the moles with rubber mallets but we&#8217;re dropping napalm bombs on the whole field. Part of the success of piracy sites can be attributed to them offering a superior surfing experience for users. As long as copyright owners do nothing, that experience will continue to be superior. We interfere with that experience by introducing frustration to the mix. Whether it&#8217;s the site owner frustrated at the amount of time he/she spends on removing content or the frustration the downloader feels at not being able to find free content, frustration is a very valuable tool to use in combating piracy, and we excel at that.</blockquote></i>

What's fascinating here is the recognition that piracy sites offer a "superior experience for users" &#8211; compared to the official offerings. That confirms other evidence that what people who use unauthorized sources are really seeking is not free content -- because often they must pay to access them -- but the extra convenience those sites offer.  
</p><p>
Which means, of course, that it is the copyright industries themselves, with their failure to provide that convenience, that are helping to drive potential customers to alternatives.  It also implies that if the content companies managed to make their offerings competitive with pirate sites -- that is, even more convenient -- they would win back much of that lost business.
</p><p>
Significantly, that is what the Takedown Piracy service seems to advocate:

<i><blockquote>While we&#8217;re doing our thing, you&#8217;re able to adapt your business to the new digital world and have a chance for your new distribution models to flourish.</blockquote></i>

If even an avowed enemy of pirates can see what's needed, why can't the copyright companies themselves?
</p><p>
Follow me @glynmoody on <a href="http://twitter.com/glynmoody">Twitter</a> or <a href="http://identi.ca/glynmoody">identi.ca</a>, and on <a href="https://plus.google.com/100647702320088380533">Google+</a></p><br /><br /><a href="http://www.techdirt.com/articles/20120213/12340217748/dmca-takedown-service-tells-copyright-companies-adapt-your-business-to-new-digital-world.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20120213/12340217748/dmca-takedown-service-tells-copyright-companies-adapt-your-business-to-new-digital-world.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20120213/12340217748/dmca-takedown-service-tells-copyright-companies-adapt-your-business-to-new-digital-world.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>they-really-get-it</slash:department>
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<pubDate>Mon, 30 Jan 2012 11:07:00 PST</pubDate>
<title>Apparently Veoh Isn't Dead Enough For Universal Music; Asks For Rehearing Of Its Bogus Copyright Lawsuit</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20120126/02350517545/apparently-veoh-isnt-dead-enough-universal-music-asks-rehearing-its-bogus-copyright-lawsuit.shtml</link>
<guid>http://www.techdirt.com/articles/20120126/02350517545/apparently-veoh-isnt-dead-enough-universal-music-asks-rehearing-its-bogus-copyright-lawsuit.shtml</guid>
<description><![CDATA[ One of the key examples of what happens when you have bad, overly draconian copyright laws that burden companies falsely accused of infringement is Veoh.  We've talked about them a bunch in the past, but Dmitry Shapiro, who had been CEO of the company, has written up a <a href="http://minglewing.com/w/sopa-pipa/4f15f882e2c68903d2000004/uncensored-a-personal-experience-with-dmca-umg" target="_blank">great (though depressing) first-hand explanation</a> of how bad copyright law kills good companies.  He talks about having the vision for an online video service (which he came up with before YouTube existed, though both happened at about the same time), how he built up the product, raised a bunch of money (including from former Disney CEO Michael Eisner), and put together a really good product.  On top of that, to help the big entertainment companies feel comfortable, they installed audio filtering technologies -- even though such things are not (yet) required by law.  And yet, the company was still sued by Universal Music, who insisted that Veoh was a "pirate site."
<br /><br />
Of course, as we've noted, Veoh has won every bit of their lawsuits.  The latest ruling came in December, where an appeals court, once again, said that Veoh <a href="http://www.techdirt.com/articles/20111220/11021717143/veoh-still-perfectly-legal-also-still-dead-due-to-bogus-copyright-lawsuit.shtml">was perfectly legal</a>.  It complied with the DMCA and actually went above and beyond what the law required (such as by using those filters).  Of course, <i>Veoh is also dead</i>.  The costs of the lawsuit really were too much for a young company struggling to build a good product and compete in the marketplace.
<blockquote><i>
As you can imagine the lawsuit dramatically impacted our ability to operate the company. The financial drain of millions of dollars going to litigation took away our power to compete, countless hours of executive's time was spent in dealing with various responsibilities of litigation, and employee morale was deeply impacted with a constant threat of shutdown. Trying to convince new employees to join the company in spite of this was extremely challenging. To make sure that our money supply was cut off, in an unprecedented move, UMG sued not only the company, but our investors (Michael Eisner, Art Bilger, and Spark Capital) personally. This move raised lot of eyebrows in the legal community, and at one point was thrown out by a judge, only to continue to be appealed and litigated by UMG. This completely choked off all of our financial oxygen, as trying to convince investors to invest with the threat of them personally being sued is insurmountable.
</i></blockquote>
Even after winning the initial lawsuit, UMG just piled on the appeals, and it made it impossible for the company to survive:
<blockquote><i>
With the appeal looming, financing continued to be choked off for us, and in April 2010 we had to sell the company in a fire sale to a small startup. The company that we had built, that was once valued at over $130 Million was gone. Along with it went the livelihoods of over 120 people and their families, $70 million of money entrusted to us by investors, and a big part of me. I had sacrificed so much to live the life of an entrepreneur. My marriage couldn't stand the strain of this lifestyle and ended in 2009, and while all of this was going on, my father was dying. Instead of spending time with him at his bedside, I was sitting in depositions with lawyers, and stressing over the lawsuit. He died July 13 2009, two months before we won the original judgement on the lawsuit. He would have been proud of me for following through with the fight. I felt so beaten down after this experience, that I couldn't imagine going back to being an entrepreneur. I was disenchanted, disgusted by the system that would allow these kinds of behaviors to go on, and it is not until recently that I have been able to come up to bat again.
</i></blockquote>
Shapiro posted this to explain why he's against SOPA/PIPA, but the amazing thing is that the lawsuit is <i>still</i> going on.  Even after that ruling in December that totally eviscerated UMG's arguments and made it abundantly clear that Veoh had been a perfectly legal operation destroyed by a bogus lawsuit, UMG is trying again.  Embedded below is the petition that UMG recently filed in the appeals court, asking for an en banc rehearing (appeals courts usually hear cases with a three-judge panel, but parties can later ask for a rehearing with <i>all</i> of the judges in the court -- which is an en banc rehearing).  
<br /><br />
I'm not going to go through the filing in detail.  It's more of the same from UMG.  Basically, UMG wants to pretend that the DMCA requires certain actions that it clearly does not.  Every judge so far has told UMG this, but it won't give up.  And, more importantly, it won't give up <b>even though Veoh is long since dead</b>.  Considering that UMG and the rest of the legacy recording business keep complaining that they're not making any money any more, the fact that they're choosing to keep suing a company they already killed years ago really says something, doesn't it?
<br /><br />
The truth is that UMG is continuing the lawsuit for one reason: because it's hoping and praying that some court will magically believe UMG's made up interpretation of copyright law.  If that happens, it will make it much easier for UMG to kill other legit sites that it doesn't like.  It will also allow UMG to pretend that Veoh was a "rogue" site that needed to be killed, rather than a successful legitimate business that was killed via a bogus lawsuit.<br /><br /><a href="http://www.techdirt.com/articles/20120126/02350517545/apparently-veoh-isnt-dead-enough-universal-music-asks-rehearing-its-bogus-copyright-lawsuit.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20120126/02350517545/apparently-veoh-isnt-dead-enough-universal-music-asks-rehearing-its-bogus-copyright-lawsuit.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20120126/02350517545/apparently-veoh-isnt-dead-enough-universal-music-asks-rehearing-its-bogus-copyright-lawsuit.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>but,-of-course</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20120126/02350517545</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 9 Jan 2012 08:35:31 PST</pubDate>
<title>Did Mitt Romney Just Come Out Against SOPA/PIPA?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20120108/00322817330/did-mitt-romney-just-come-out-against-sopapipa.shtml</link>
<guid>http://www.techdirt.com/articles/20120108/00322817330/did-mitt-romney-just-come-out-against-sopapipa.shtml</guid>
<description><![CDATA[ At a recent campaign stop, a small business owner asked Mitt Romney for his opinion on SOPA, noting that it would likely kill her business.  Romney responded without discussing the bills specifically, but said that <a href="http://merrimack.patch.com/articles/video-mitt-romney-slams-sopa#video-8809832" target="_blank">he's totally against bills <i>like this</i></a> that just focus on "stopping bad acts," and that he wants politicians to focus on encouraging businesses to do good things.
<center>
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</center>
I don't know if that's an unqualified rejection of SOPA/PIPA, but it sure comes close.  He's talking about out-of-touch regulators who've spent their lives in DC, rather than in business, and "all they think about is how to stop business and stop the bad guys," (which does, in fact, describe SOPA/PIPA) but, Romney says, this is just a sign that "they don't like business very much."  Indeed.  SOPA/PIPA are very much bills that focus solely on trying to "stop bad guys," without taking into account the massive amount of harm that will be done to the good guys -- the companies who are innovating and are creating jobs.  Given that he doesn't really discuss specifics, and just talks in generalities about bad regulations and harming business, it's <i>possible</i> that he has no idea what SOPA/PIPA are about, and gave a Generic Politicians'(tm) answer to a question.  But hopefully more people will hold him to this, and get him to confirm that he's against these bills.
<br /><br />
Either way, with more people asking about SOPA/PIPA, it's definitely starting to become a campaign issue...<br /><br /><a href="http://www.techdirt.com/articles/20120108/00322817330/did-mitt-romney-just-come-out-against-sopapipa.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20120108/00322817330/did-mitt-romney-just-come-out-against-sopapipa.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20120108/00322817330/did-mitt-romney-just-come-out-against-sopapipa.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>maybe?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20120108/00322817330</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 13 Dec 2011 05:11:26 PST</pubDate>
<title>A Problem Worse Than Piracy? The Ridiculous Structure Of Online Music Licensing Deals</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20111212/02441617038/problem-worse-than-piracy-ridiculous-structure-online-music-licensing-deals.shtml</link>
<guid>http://www.techdirt.com/articles/20111212/02441617038/problem-worse-than-piracy-ridiculous-structure-online-music-licensing-deals.shtml</guid>
<description><![CDATA[ We've pointed out many, many times in the past that the absolute best (and perhaps only) way to really get people to move away from infringing is to offer better, cheaper, more convenient and feature-filled legitimate services.  But those are pretty difficult to come by -- in part because of the insane demands by the legacy entertainment industry players.  Why do you think it took over two years for Spotify to finally come to the US?  Because the labels demands were crazy and unsustainable.  Michael Robertson is now <a href="http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/" target="_blank">revealing some of those demands</a>, but sums it up best in his first paragraph:
<blockquote><i>
Imagine a new hot-dog selling venture. Let&rsquo;s also say there&rsquo;s only one supplier to purchase hot dogs from. Instead of simply charging a fixed price for hot dogs, that supplier demands the HIGHER of the following: $1 per hot dog sold OR $2 for every customer served OR 50 percent of all revenues for anything sold in the store.  In addition, the supplier requires a two-year minimum order of 300 hot dogs per day, payable all in advance. If fewer hot dogs are sold, there is no refund. If more than 300 hot dogs are sold each day, payments to the supplier are generated by calculating $2 per customer or 50 percent of total revenues, so an additional payment is due to the supplier. After the first two years, the supplier can unilaterally adjust any of the pricing terms and the shop can never switch suppliers.
</i></blockquote>
Doesn't seem like a particularly good business.  When you hear of deals like that, it's kind of amazing that any of these businesses exist at all.<br /><br /><a href="http://www.techdirt.com/articles/20111212/02441617038/problem-worse-than-piracy-ridiculous-structure-online-music-licensing-deals.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20111212/02441617038/problem-worse-than-piracy-ridiculous-structure-online-music-licensing-deals.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20111212/02441617038/problem-worse-than-piracy-ridiculous-structure-online-music-licensing-deals.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>can't-make-money-this-way</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20111212/02441617038</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 12 Dec 2011 12:12:00 PST</pubDate>
<title>Congressional Research Service Shows Hollywood Is Thriving</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml</link>
<guid>http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml</guid>
<description><![CDATA[ The Congressional Research Service is the research arm of Congress that is widely respected as presenting (non-partisan) high quality, extremely credible research for folks in Congress.  In fact, the quality is so good, that many are annoyed that the output of their research, despite being public domain, <a href="http://www.techdirt.com/articles/20110226/18203513291/ask-congress-to-make-public-domain-congressional-research-services-reports-public.shtml">is rarely made available to the public</a>.  The only way that information is released is if the elected official who requested it decides to release it.  Thankfully, some of our elected officials do just that.
<br /><br />
Recently, Senator Ron Wyden asked CRS if it could explore the state of the movie industry today as compared to 1995 on a variety of different criteria.  You can read the full report embedded below, but here are a few key points.  First off, despite the industry's regular attempt to play up its contribution to GDP and employment, the report found that the <b>combined GDP contribution of both the "motion picture and sound recording" industries was a whopping 0.4% in 2009.  Back in 1995... it was also 0.4%.  
<center>
<a href="http://imgur.com/cc8cW"><img src="http://i.imgur.com/cc8cW.png" width=560 /></a>
</center>
As for employment, Hollywood loves to claim that it employs millions of people.  One popular number is that <a href="http://www.techdirt.com/articles/20111130/02093116930/step-step-debunking-us-chamber-commerces-dishonest-stats-about-rogue-sites.shtml">19 million people</a> have jobs in "IP-intensive industries."  Of course, we've discussed how misleading a term that is, as they lump in all sorts of jobs that have absolutely nothing whatsoever to do with copyright.  So, how many people are actually employed in the movie industry?  Not that many.  374,000 in 2010 -- and that includes both full </b><b>and</b> part time workers.  And that's really not much different from the 392,000 in 1998.  So it's not like the industry has been losing employees in droves as they imply.  Furthermore, that's only slightly more than the number of jobs that Facebook's app platform alone is estimated to have created.  Hell, we've seen reports that have said eBay alone created 750,000 small business jobs.  Perhaps Hollywood isn't as big a part of the economy as it likes to claim.
<br /><br />
Similarly exaggerated?  Its dire straits.  Let's take a look at box office revenue:
<center>
<a href="http://imgur.com/vzgkj"><img src="http://i.imgur.com/vzgkj.png" width=560 /></a>
</center>
Also interesting is the look at CEO pay at the major movie studios, then and now.  It seems that Disney's CEO (Robert Iger) made $29,617,964 in 2010, compared to Michael Eisner's mere $10 million back in 1994.  Time Warner?  CEO Jeffrey Bewkes made $26,303,071 in 2010, while his predecessor Gerald Levin made $5 million in 1994.  CRS apparently couldn't find past data on the other studios, but in the present, it looks like their execs are all cashing in.  News Corps' Rupert Murdoch made $33,292,753.  Viacom's Chairman, Sumner Redstone, made $15,033,630, while its CEO Philippe Dauman famously made $84,515,308.  NBC Universal was still under GE in 2010, whose CEO, Jeffrey Immelt, brought in $21,428,765.  Then there's Sony, whose CEO was the pauper of the bunch, having his salary and bonus cut to a mere $4.3 million due to "financial problems stemming from the Japanese earthquake and tsunami."
<br /><br />
It doesn't sound like things are that bad these days in Hollywood.  So why do we need massive legal changes again?<br /><br /><a href="http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20111212/02244817037/congressional-research-service-shows-hollywood-is-thriving.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>shouldn't-congress-wonder-why-they-need-sopa/pipa?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20111212/02244817037</wfw:commentRss>
</item>
<item>
<pubDate>Wed, 14 Sep 2011 13:59:39 PDT</pubDate>
<title>It's Only A Miracle If You're Not In The Business Of Selling Loaves &#038; Fishes</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110911/22155815895/its-only-miracle-if-youre-not-business-selling-loaves-fishes.shtml</link>
<guid>http://www.techdirt.com/articles/20110911/22155815895/its-only-miracle-if-youre-not-business-selling-loaves-fishes.shtml</guid>
<description><![CDATA[ Aaron DeOliveira was the first of a few of you to send over Kevin Carson's amusing <a href="http://c4ss.org/content/8238"> re-imagining of a few Biblical stories</a> if they were written in a world with similar laws to what we have today.  Creating food and wine out of nothing?  Infringement!
<blockquote><i>
After reportedly feeding a crowd of five thousand with five loaves and two fishes, Jesus Christ of Nazareth was recently served with formal legal notice from industry trade associations, demanding that he cease and desist from what they charge is an illegal food-sharing operation under the terms of the Miracle Millennium Anti-Replication Act (MMAA).
<br /><br />
Miracle-working rabbis like Mr. Christ, and their alleged property rights infringements, have been the center of controversy in recent years.  They&rsquo;re the subject of a public education campaign by the Foodstuffs Producers Association of Galilee and Judea.  Loaves and fishes producers argue that unauthorized replication of food, since it deprives them of revenues to which they are entitled, amounts to stealing. Sympathetic rabbis in synagogues throughout Palestine are reading FPAGJ public service announcements, aimed at countering public perceptions that &ldquo;everybody does it&rdquo; and &ldquo;it&rsquo;s just a little thing,&rdquo; to their flocks:  &ldquo;Don&rsquo;t bakers and fishermen deserve to be paid?&rdquo;  Many Torah schools have adopted FPAGJ &ldquo;anti-foodlifting&rdquo; curricula.
</i></blockquote>
There are some more such examples, including concerns about turning water into wine and healing people without a physician's license.  Good stuff.  Of course, as was pointed out in the comments to that post, others have come up with similar ideas, including <a href="http://www.nerfnow.com/comic/532" target="_blank">this Nerfnow comic</a>, in which a bread seller complains that "bread piracy will kill the bread industry."
<br /><br />
The thing is, there is a flipside to all of this.  Just as people talk about the ability to create new things out of nothing or through some sort of magic replication as being "a miracle," it does seem worth noting that the digital era, and the fact that we've turned a ton of goods from scarce goods into abundant goods, is something of a miracle for society.  It's really still quite stunning to think that so many people don't recognize how abundance is a good thing for the economy.  The only people it hurts are those who continue to rely on business models that believe the abundant good is still scarce.  Everyone else is better off.<br /><br /><a href="http://www.techdirt.com/articles/20110911/22155815895/its-only-miracle-if-youre-not-business-selling-loaves-fishes.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110911/22155815895/its-only-miracle-if-youre-not-business-selling-loaves-fishes.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110911/22155815895/its-only-miracle-if-youre-not-business-selling-loaves-fishes.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>unauthorized-reproduction-of-food</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110911/22155815895</wfw:commentRss>
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<item>
<pubDate>Fri, 9 Sep 2011 18:44:48 PDT</pubDate>
<title>If Your Business Strategy Relies On Suing Others, You're Not A Business, You're A Leech On The System</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110906/19274615832/if-your-business-strategy-relies-suing-others-youre-not-business-youre-leech-system.shtml</link>
<guid>http://www.techdirt.com/articles/20110906/19274615832/if-your-business-strategy-relies-suing-others-youre-not-business-youre-leech-system.shtml</guid>
<description><![CDATA[ Canadian patent troll Wi-LAN has a <a href="http://www.techdirt.com/search.php?q=wi-lan&#038;eid=&#038;tid=&#038;aid=&#038;searchin=stories">long history</a> as trying to tax any and all wireless innovation with patent threats.  With the news that it's <a href="http://news.cnet.com/8301-13506_3-20100888-17/wilan-sues-apple-others-over-wireless-patents/" target="_blank">suing a bunch more companies</a> -- including Apple, HTC, HP, Dell, Sierra Wireless and others, the company is merely cementing its reputation as a taxer of innovation, rather than a builder of anything useful.  The company doesn't seem shy about this.  As the link above notes, the company seems to brag about this "business" strategy:
<blockquote><i>
What's more, Skippen said he believes "that our past investment in litigation could generate a significant return in the future. Our record revenues and earnings in the first quarter signal the beginning of that return to WiLAN and its shareholders."
</i></blockquote>
It's hard to read such a comment and not feel sickened by the pure net loss on the economy and innovation from such leeches.  Any company whose <i>business model</i> focuses on litigation is not contributing positively to society and innovation.  There are times to file a lawsuit, but when that becomes central to your <i>business</i> model, something is broken.
<br /><br />
The very core of a functioning capitalist system is that companies make transactions in which there's a buyer and a seller, and both sides come away from the transaction feeling better off.  The buyer values the product or service more than the money paid, and the seller values the money more.  That's good business.  Any time you involve a lawsuit to force someone to pay, you're doing exactly the opposite of that and you're setting up a system that is not working to benefit everyone, but is actively using the force of the courts to try to force a company to "buy" something it has no interest in buying.  It's not good for the economy and it's not good for innovation.<br /><br /><a href="http://www.techdirt.com/articles/20110906/19274615832/if-your-business-strategy-relies-suing-others-youre-not-business-youre-leech-system.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110906/19274615832/if-your-business-strategy-relies-suing-others-youre-not-business-youre-leech-system.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110906/19274615832/if-your-business-strategy-relies-suing-others-youre-not-business-youre-leech-system.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>face-facts</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110906/19274615832</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 15 Mar 2010 16:06:00 PDT</pubDate>
<title>Selling 1,000 Portraits And Building A Ton Of Goodwill Not Good Business?</title>
<dc:creator>Dennis Yang</dc:creator>
<link>http://www.techdirt.com/articles/20100314/1627368549.shtml</link>
<guid>http://www.techdirt.com/articles/20100314/1627368549.shtml</guid>
<description><![CDATA[ Michel Gondry spoke at SXSW to a packed house; it was fantastic to see one of my favorite directors speak about his creative process.  During the talk, he mentioned a project he did where fans could buy portraits of themselves, sketched by Gondry himself, for only $20.  He did about 1,000 of these portraits before he ended <a href="http://www.psfk.com/2009/04/get-your-portrait-drawn-by-michel-gondry.html">the deal</a>, saying that while some portraits took only 2 minutes, he started getting fancier and fancier as time progressed, and eventually he didn't think that was a good business to continue it.  When he said that, a collective, sad sigh was felt across the conference room, since I'm sure I was not the only one in the room who wanted a hand-drawn Michel Gondry portrait -- and if $20 wasn't the right price to make sense, business-wise, surely there was an appropriate price point that <em>would</em> make sense (and, in looking at his site, it appears that he <a href="http://www.michelgondry.com/ProductDetails.asp?ProductCode=Portrait">raised the price</a> to $99.95 with a copy of his DVD).  Now, while it is true that Gondry is a famous movie director, surely a few hundred dollars for minutes of work is enough to get him interested, especially when he considers that this portrait further serves to endear him more to his most passionate fans, who are incredibly appreciative that he would ever even think to offer such a deal:

<blockquote><i>
It's amazing enough that Michel has the time to draw thousands of portraits a week amidst his incredibly busy schedule and his "Green Hornet" workload. Hopefully this commitment will urge other filmmakers to devote similar generosity towards their fanbases...
</i></blockquote>

So, contrary to what Gondry thought, his portrait offer most certainly made good business sense and was a great example of an RtB deal, since it was soaked in his charmingly quirky artistic personality.  Then again, perhaps another example of Gondry's unique understanding of the business world is with this <a href="http://walpaper.tumblr.com/post/138651975/i-purchased-a-michel-gondry-sketch-months-ago-and">strange notice</a> that he sent out to the purchasers of the portraits, sometimes well after they had purchased the image, telling them they <b>could not resell the image ever</b>.

<blockquote><i>
"By placing your sketch order, you hereby acknowledge... that the sketch is for your personal use only and you shall not have the right to sell the sketch for any commercial purpose whatsoever."
</i></blockquote>

To ask this of his truest fans (especially <em>after</em> they have commissioned a sketch) is not only <a href="http://www.techdirt.com/articles/20080522/0016171201.shtml">most likely unenforceable legally</a> (case law here is still a bit messy, but courts have said that you can't just give up your right of first sale based on one side's declaration), it also serves to sour the goodwill and affection that Gondry's true fans have bestowed upon him.  Now, <em>that's</em> bad business.<br /><br /><a href="http://www.techdirt.com/articles/20100314/1627368549.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100314/1627368549.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100314/1627368549.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>seems-fine-to-me</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100314/1627368549</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 28 Jan 2010 18:00:00 PST</pubDate>
<title>Dear Recording Industry: Three Strikes Won't Save Your Business</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20100127/0622237940.shtml</link>
<guid>http://www.techdirt.com/articles/20100127/0622237940.shtml</guid>
<description><![CDATA[ At this year's Midem, there was still a fair bit of talk about the various "three strikes" proposals around the world that get ISPs to kick people accused (not convicted) of file sharing offline.  To hear supporters tell it, the concept of "three strikes" is gaining widespread support and is really going to save the industry.  Of course, the reality is quite different.  Michael Geist details <a href="http://www.thestar.com/business/article/755443--geist-three-strikes-and-you-re-out-system-draw-cries-of-foul-from-governments" target="_blank">the state of such proposals around the globe</a>, noting that while a few countries have implemented them, many others are rejecting them.  At the same time, he highlights the <a href="http://www.techdirt.com/articles/20100120/1937547848.shtml">high costs</a> of implementing such proposals -- without any evidence that they will actually <a href="http://www.techdirt.com/articles/20091104/1017496795.shtml">get people to buy more music</a>.  While supporters of such proposals may think that there's momentum behind them, if you look at the details, it seems like pretty limited support, and the plans that are in place don't seem likely to do much other than frustrate and annoy people.<br /><br /><a href="http://www.techdirt.com/articles/20100127/0622237940.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20100127/0622237940.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20100127/0622237940.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>please-stop-thinking-it-will</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100127/0622237940</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 21 Jan 2010 17:30:00 PST</pubDate>
<title>Should IT Be Run As A Business?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20100120/0236307829.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20100120/0236307829.shtml</guid>
<description><![CDATA[ <a href="http://slashdot.org/story/10/01/19/2029259/Why-Running-IT-As-a-Business-Is-a-Bad-Idea" target="_blank">Slashdot</a> points us to an article trying to <a href="http://infoworld.com/print/108477" target="_blank">debunk the concept that "IT should be run as a business,"</a> with "employees" as customers.  Of course, like many catchy phrases, I don't think that many IT departments <i>really</i> followed this concept to the ridiculous logical conclusions.  It <i>does</i> have some useful concepts -- such as giving IT folks more reason to actually listen to what employees have to say.  But it misses the larger point, that IT is there to serve the business as a whole, and that means making the overall business more efficient, while keeping it secure, and that can sometimes conflict with the views of individual employees.
<br /><br />
The argument made in the article, and it makes sense, is that IT really needs to be much more tightly integrated with the overall business, to really understand how to help.  When it's viewed as a separate silo or even "business," then the solutions that come out of IT really aren't as helpful as can be.  Separately, it also increases the likelihood of outsourcing the IT function, since it can be easily "separated."  But by more closely integrating the IT function into actual business processes, not only does IT make itself more indispensable, it can focus on creating actual process improvements and solutions, rather than just taking a list from someone of what they think they need (perhaps without understanding what the technology enables) and delivering it to spec.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20100120/0236307829.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20100120/0236307829.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20100120/0236307829.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>yes-and-no</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20100120/0236307829</wfw:commentRss>
</item>
<item>
<pubDate>Fri, 11 Dec 2009 19:39:00 PST</pubDate>
<title>Understanding The Decline And Fall Of The Major Record Labels</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091210/0529417288.shtml</link>
<guid>http://www.techdirt.com/articles/20091210/0529417288.shtml</guid>
<description><![CDATA[ There's a fascinating, and well sourced, editorial over at Hypebot by Kyle Bylin, suggesting <a href="http://www.hypebot.com/hypebot/2009/12/music-as-commerce-understanding-a-mindset.html?utm_source=twitterfeed&#038;utm_medium=twitter&#038;utm_campaign=Feed%3A typepad%2FDqMf %28hypebot%29" target="_blank">why the major record labels have had so much trouble adapting to these changing times</a>.  Bylin argues, convincingly, that a big part of the problem was that as the record labels got bigger and bigger, they focused solely on the "music as commerce" side of things, ignoring the role of "music as culture."  Obviously, music as commerce is an important part of the music business, but if you ignore the cultural importance of music (except, of course, when lobbying the government for more protections) you miss what's actually happening in the marketplace: how people are connecting with the music, and what they're doing (and want to do) with the music.  Here's a snippet:
<blockquote><i>
As the record industry moved through this stage there was a decline in learning orientation -- in learning what fans actually wanted -- both in terms of how they consumed music and what they were willing to pay for.  So to, they began to discount the role that luck played in their success, to assume that the mass-marketing successes that occurred near the end the CD boom, which sold 3-4 million copies, applied to the natural laws of the universe, rather than that of a relatively short-lived phenomenon.  This addiction to blockbuster artists is what characterizes the second stage of decline, which Collin's deemed <b>The Undisciplined Pursuit of More</b>.  Here, the record industry started out on an unsustainable quest, and, because of their huge successes, they were pressured to grow.

<br /><br />
Having reached the peak of the CD boom in 1999, the record industry had become a nearly $15-billion-a-year juggernaut, but under the pressure for more growth they collapsed, and, in the process, a vicious cycle of expectations had been set that strained the artists, the fans, the culture, and their systems to the point of breaking.  Since record industry was unable to deliver new music with "consistent tactical excellence," they began to fray at the edges.  Disruptive technologies were released, an epidemic of file-sharing proceeded, and, at this critical juncture, vested interests of music executives struggled and competed to achieve repetitive consumption through obsolescence.  But these executives were too late, as the record industry, by externalizing the blame for their decline in sales, had already started to show symptoms of stage three, <b>Denial of Risk and Peril</b>. 
<br /><br />
Music executives began discounting negative data, amplifying positive data, and putting a positive spin on ambiguous data.  In stage three, Collin's argues that those in power start to blame external factors for setbacks -- "or otherwise explain away the data" -- rather than accepting responsibility and confronting "the frightening reality that their enterprise may be in serious trouble."  Right away, the Internet and file-sharing became easy scapegoats for the decline in sales that the record industry faced.
</i></blockquote>
There's nothing all that surprising in the essay, but it's nicely written and explained.  Well worth reading the whole thing.<br /><br /><a href="http://www.techdirt.com/articles/20091210/0529417288.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091210/0529417288.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091210/0529417288.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>perhaps-it-was-inevitable</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091210/0529417288</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 8 Dec 2009 16:16:00 PST</pubDate>
<title>Getting The Music Business Over The 'But We Must Sell Music' Hump</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091208/1052477252.shtml</link>
<guid>http://www.techdirt.com/articles/20091208/1052477252.shtml</guid>
<description><![CDATA[ On Monday, I attended and participated in the always excellent twice yearly event, <a href="http://sfmusictech.com/" target="_blank">the SF Music Tech Summit</a>.  As always, it was a fun time, full of interesting people.  While smaller than some of the big music events, pound for pound, I tend to end up in a very high percentage of fascinating chats with people at SF Music Tech.  The panel I was on was the first in the morning, and was officially called "meet the press," even though at least two of the five panelists (myself included) don't consider ourselves press.  I didn't mean to stir up much controversy (never do), but I apparently got a few vocal folks in the audience riled up on a few points.  The one that got some attention on Twitter, was the claim that live music was growing.  A few folks started screaming and no one then let me back that up, but <a href="http://www.techdirt.com/articles/20091114/1835036932.shtml">the numbers don't lie</a>.  A lot of people came up to me afterwards with stories of success by focusing on live music, and I even heard from some folks who are involved in organizing live shows who say that the "complaints" about live shows tend to come from those who focus only on a subset of live venues that have struggled lately -- but that the overall live market is thriving (as the numbers show).
<Br><br>
However, there was a second point that I later tried to make that again I never had a chance to follow through on, and wanted to do so here.  People were asking about what business models are working for musicians, and I started listing out some examples, and a loud gentleman in the front row yelled out that the business model that had to be at the center was selling music.  I responded with what I thought was an important question: "Why?" and again people started yelling.  Of course, no one answered the question, and then the panel shifted gears to another topic.
<br><br>
But, the reaction from the crowd on that question cemented for me one of the biggest reasons why some in the industry have struggled to grasp new business models.  As I discussed in my <a href="http://www.techdirt.com/articles/20090621/1626125300.shtml">NARM presentation</a> a few months ago, <i>selling music is just not a good business model</i>, but <i>it doesn't mean there aren't good, very profitable, music business models</i>.  It's just that selling music isn't a very good one.  Instead, you need to learn to use the music (which still needs to be good, and is still the central reason why these other business models work) to sell something else -- something scarce, which can't easily be copied.  That can be attention, access, time, creative ability, cool physical products, whatever.  All of those things are made more valuable the more popular the music is, and you can build all sorts of powerful and immensely profitable businesses once you recognize that.
<br><Br>
But if you still think that selling the music or making money directly from the music has to be at the "center" of any music business model, you're shutting yourself off to the largest opportunities out there.  But, the thing is, music has <i>always</i> been a product that makes something else more valuable.  While there was some disagreement on the panel from someone about how record stores were profitable in the 70s, that's a case where the music was making the <i>vinyl</i> (and later, plastic) more valuable.  Today, it makes iPods more valuable.  As the big box retailers know, it acts as a loss leader to bring people in to buy higher margin goods.  Music is great at selling other, higher margin things.  If you ignore that in the music business model, you're missing the big opportunity.
<br><br>
This isn't to downplay the importance of music, or say that the quality of music doesn't matter.  It absolutely does.  But the music is not the scarcity, and you don't make money off of selling something that's abundant.  You use the abundance to figure out what other scarce goods it makes more valuable and <i>you sell those</i>.  So, people can complain and shout all they want, but it doesn't change the basic fact that until you recognize that selling music directly just isn't a very good business model, you're limiting your market tremendously.<br /><br /><a href="http://www.techdirt.com/articles/20091208/1052477252.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091208/1052477252.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091208/1052477252.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>it's-not-all-there-is</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091208/1052477252</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 30 Nov 2009 11:37:00 PST</pubDate>
<title>Other Legal Work Slow?  Start A Practice To Help Patent Trolling</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091123/0159047049.shtml</link>
<guid>http://www.techdirt.com/articles/20091123/0159047049.shtml</guid>
<description><![CDATA[ The economy still isn't doing so great, and that impacts everyone -- even lawyers.  So what are they to do in weak times?  <a href="http://blog.ericgoldman.org/" target="_blank">Eric Goldman</a> points out that in the past, they'd become bankruptcy lawyers, but this time around, it looks like <a href="http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202435660403&#038;rss=nlj&#038;slreturn=1&#038;hbxlogin=1&#038;hbxlogin=1" target="_blank">some are realizing a more lucrative strategy is to get involved in patent trolling</a> -- though they prefer to call it "IP monetization."  This is, of course, just a continuation of the whole ridiculous focus on squeezing cash from unused or ignored patents, <a href="http://www.techdirt.com/articles/20080224/162013330.shtml">following</a> the publication of the book <i>Rembrandts in the Attic</i>, which kicked off this effort.
<br /><br />
From an economic standpoint, this activity is a pure dead weight loss on economic activity.  There is nothing good that comes from it.  You basically have companies that have ignored a patent they got for whatever reason, suddenly rediscovering it and using it to go after totally unrelated companies who actually innovated and brought products to market (almost always with no knowledge whatsoever of the questionable patent in the first place).  And suddenly the actual innovators have to pay up to a company that did absolutely nothing with the invention.<br /><br /><a href="http://www.techdirt.com/articles/20091123/0159047049.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091123/0159047049.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091123/0159047049.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>not-good</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091123/0159047049</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 30 Nov 2009 03:57:00 PST</pubDate>
<title>Suing For Patent Infringement No Replacement For Actually Building A Real Business</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091125/1306497092.shtml</link>
<guid>http://www.techdirt.com/articles/20091125/1306497092.shtml</guid>
<description><![CDATA[ TiVo has been spending a lot of effort <a href="http://www.techdirt.com/articles/20090826/1945196009.shtml">suing others for patent infringement</a>, but apparently not very much on actually improving their own services and giving customers a reason to buy them over the competition.  So while it may be winning some of its patent lawsuits, it hasn't helped much for the business, which <a href="http://www.dslreports.com/shownews/105641" target="_blank">is rapidly bleeding customers</a> and losing marketshare.  TiVo basically created this market and owned it for years -- but then got complacent.  Now, since it can't compete, it's gone to a litigation strategy.  Perhaps it should have focused more on providing value and competing rather than suing.<br /><br /><a href="http://www.techdirt.com/articles/20091125/1306497092.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091125/1306497092.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091125/1306497092.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>more-focus-on-executing,-less-on-suing</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091125/1306497092</wfw:commentRss>
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<item>
<pubDate>Wed, 11 Nov 2009 13:18:00 PST</pubDate>
<title>If You Want To Make Money As A Musician You Need To Be A Musical Entrepreneur</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091111/0132426885.shtml</link>
<guid>http://www.techdirt.com/articles/20091111/0132426885.shtml</guid>
<description><![CDATA[ One of the common criticisms we hear around here when we talk about the various business models that are working for more and more musicians these days, is that it's somehow "unfair" or even "wrong" that musicians need to think about business models these days, since they should just be spending all their time creating music.  Of course, this assumes (incorrectly) that the same thing wasn't true in the past as well.  For years, musicians have always teamed up with business managers and music labels for that very reason: to delegate some of the business tasks.  That doesn't change in the modern era.  What does change is that the different opportunities have grown significantly.  Either way, Andrew Dubber (who's always worth paying attention to on these topics) recently put a comment on a blog post on this particular topic that is so good it shouldn't be buried as just a comment, so I'm going to <a href="http://www.musicthinktank.com/blog/9-out-of-10-dentists.html?lastPage=true#comment6204582" target="_blank">highlight some of the key parts here</a>:
<blockquote><i>
Musicians deserve more money than they get. Most train harder and for longer than brain surgeons in order to do what they do, and then they earn less than checkout operators for what they do. I strongly believe that more money should go to more musicians more often than it does....
<br /><br />
Making music is not (usually) a job of work. It is a creative act. You don't have the RIGHT to make money from your music. You only have the opportunity.
<br /><br />
If you make music speculatively - that is, you create it in the hopes of making money from it, then you are a music entrepreneur. As such, entrepreneurship rules apply.
<br /><br />
You may invest a good deal of energy, effort and expense in your creative ideas. You may make a lot of money. You will probably make none. But nobody OWES you money just because you put the work in.
<br /><br />
If your business model is to grow and sell oranges, then it's no good picking the oranges, then leaving them on the footpath outside your house with a price tag on each one. It doesn't matter how great your oranges are, or how hard you've toiled in your garden. Someone WILL take your oranges. Some will get kicked to the side of the road. Some will get stepped on. But it's not because people are immoral and don't understand or appreciate fruit properly.
<br /><br />
If you wish to be reliably rewarded for your music, then get employed to make music as your job. 
</i></blockquote>
Bingo.  That's the point I've been trying to make for years on this, but said much better than I could express it.  He then goes on to make <i>another</i> point I've tried to make in the past, which is that if you compare the situation today to what it was in the past, there are so many more opportunities to make money.  In the past, it was nearly impossible to make money on music because there were so many gatekeepers.
<blockquote><i>
The odds are stacked against you. History is littered with musicians who are disillusioned, embittered and broke. This was true before the internet just as it's true now. The internet is neither your saviour, nor your enemy.
<br /><br />
Let me make that bit clear: prior to the internet, most people spent NO money on music. If they bought a record in a year, it was a gift for a nephew (and it was usually rubbish). Some people spent a lot of money on music, because it was tied up with cultural things like identity that they were really invested in.
<br /><br />
Back when you needed a record label to just be heard, it was a lottery. The odds were bad, the lottery tickets were expensive, and most of the prizes - if you did happen to win - were just awful. Now you don't need to play that game - but you need to be smart and you need to understand what the rules of the new game are.
<br /><br />
You CAN, of course, get signed to a record label (and that lottery is still in play) but you can also be an entrepreneur. I recommend the latter - but not because it guarantees you money.
<br /><br />
But the simple fact is that you don't become a successful entrepreneur by making things that people will not pay for, insisting that they should, and then complaining that their morals are to blame. They may not share your morals, but that's not even the point.
<br /><br />
It's not their job to understand your needs. It's your job to understand theirs.
<br /><br />
You become a successful entrepreneur by meeting people's needs and wants, solving a problem for them and doing it in a way that allows you to make money.
<br /><br />
I've said it before and I'll say it again. Even if it was true that all the people you wish to target with your art are immoral thieves who you would never invite into your home - why would you insist on trying to change their behaviour as part of your business strategy? 
</i></blockquote>
And he concludes by pointing out (as we have in the past as well) where the real "sense of entitlement" comes from:
<blockquote><i>
You may make great and interesting music, and put on an amazing show with amazing costumes.... But decrying a sense of entitlement among those who won't pay you for what you insist on doing is back to front.
<br /><br />
The people with the weird sense of entitlement are the ones who stamp their feet and say 'look at all this hard work I put in - where's my money?'
</i></blockquote><br /><br /><a href="http://www.techdirt.com/articles/20091111/0132426885.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091111/0132426885.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091111/0132426885.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>that's-how-it-works</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091111/0132426885</wfw:commentRss>
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<item>
<pubDate>Fri, 6 Nov 2009 04:10:33 PST</pubDate>
<title>Comcast Exec: We Need To Change Customer Behavior, Not Our Business Model</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091030/1624136747.shtml</link>
<guid>http://www.techdirt.com/articles/20091030/1624136747.shtml</guid>
<description><![CDATA[ <a href="http://www.techdirt.com/profile.php?u=brooks">Brooks</a> writes <i>"Speaking at a cable broadcaster's summit, <a href="http://www.broadcastingcable.com/article/366272-CTAM_Summit_2009_Comcast_s_Burke_Tells_TV_Biz_To_Help_Stop_Cord_Cutting.php" target="_blank">Steve Burke, Comcast's COO, said</a>: "An entire generation is growing up, if we don't figure out how to change that behavior so it respects copyright and subscription revenue on the part of distributors, we're going to wake up and see cord cutting."  How's that for cart before the horse?<br />
<br />
His ultimate goal -- to maintain or increase revenue for Comcast -- makes perfect sense, and is positively what a cable COO should be focused on.  From there on out, though, he's off in the weeds.  How about offering this new generation new and innovative services that are worth paying for?  That's challenging, of course... but how challenging will it be to change the next generation's behavior "to respect subscription revenue."  Yikes.<br />
<br />
How many consumers, in any market, are focused on "respecting" vendors' revenue streams?  How, exactly, does he propose to effect this sea change?  And why not just develop products that consumers will willingly pay for, rather than trying to change consumer behavior in such a fundamental way?"</i>
<br /><br />
The quotes really are quite stunning.  Burke basically seems to be saying the focus needs to be on figuring out ways to get consumers to change, rather than changing to match what customers want.  A business model based on going against what consumers want doesn't seem likely to last that long.<br /><br /><a href="http://www.techdirt.com/articles/20091030/1624136747.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091030/1624136747.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091030/1624136747.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>good-luck,-buddy</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091030/1624136747</wfw:commentRss>
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<item>
<pubDate>Wed, 7 Oct 2009 01:51:50 PDT</pubDate>
<title>Protecting Copyright Often Seems To Fly In The Face Of Good Business</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20091001/0300156383.shtml</link>
<guid>http://www.techdirt.com/articles/20091001/0300156383.shtml</guid>
<description><![CDATA[ Dave Title recently had a post on his My Media Musings blog, where he talks about a <a href="http://mymediamusings.com/2009/09/29/fantastic-student-music-video-to-i-gotta-feeling-gotta-be-banned/" target="_new">student "lip dub" music video</a>, which he notes almost certainly violates copyright law, but that it would be really dumb for the copyright holder (in this case, whoever holds the copyright on music by the Black-Eyed Peas) to enforce.  Then Title busts out a line that should be repeated often:
<blockquote><i>
 Protecting a copyright often seems to fly in the face of good  business. 
</i></blockquote>
Bingo.  This is an argument we've been making for over a decade.  There are many in both business and law who seem to assume that because you <i>can</i> enforce a right, it means that it always <i>makes business sense</i> to enforce that right.  And yet, as we see over and over and over again, it's quite often not the case at all.  In an awful lot of cases, very strong arguments can be made that the reverse is true and that protecting your copyright actually does a lot more damage than good.<br /><br /><a href="http://www.techdirt.com/articles/20091001/0300156383.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20091001/0300156383.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20091001/0300156383.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>bingo</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20091001/0300156383</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 10 Sep 2009 13:53:37 PDT</pubDate>
<title>Navigating The New Business World After This Recession</title>
<dc:creator>Insight Community</dc:creator>
<link>http://www.insightcommunity.com/case.php?iid=1331</link>
<guid>http://www.insightcommunity.com/case.php?iid=1331</guid>
<description><![CDATA[ <p>The usual economic indicators suggest things aren't getting worse as fast as before, and the more cautious forecasters are offering some less-than-optimistic predictions of a long road ahead for recovery.  Several analysts (in reports from McKinsey Quarterly, Harvard Business Review and the like) point out that business has fundamentally changed and that the current downturn is not simply part of a regular business cycle.  On the upside, though, the preceding decades have developed an incredible collection of enabling technologies that businesses may have only scratched the surface of -- which have laid the foundations for future long-term economic growth.</p>
<p>In this environment, employees look for real leadership and direction from their corporate executives. So this case sponsor, HP, is looking to inspire forward-looking discussions with essays aimed at executive level managers.  We're looking for insightful articles that may help guide executives towards success during uncertain times.  What does an executive need to do or need to know to be more effective nowadays?  What does the future of business look like?  How can an organization thrive under pressure?  What innovative technologies or services will help companies stay competitive? What techniques can be used to motivate and promote innovation?  How can workflows be optimized to be smarter, more efficient and productive?  These are just some example starting topics to give you a general sense of what we're looking for -- we're not expecting point-by-point answers. We encourage unique (and even entertaining) submissions on related topics.</p>
<p>The best insights will be used as posts on an HP website that will be announced later.  Please submit essays that are <strong>at least 500 words</strong> in length.</p>
<p><strong>UPDATE:</strong> The sponsor is more accurately "HP Enterprise" -- so the target audience is specifically executives and decision makers (CEOs, CFOs, COOs, etc) at large companies.</p><p><em><img align="left" src="http://www.techdirt.com/images/ic-bauble.png" alt="ic" /> This is a case from the Insight Community, a powerful new marketplace that connects companies with intelligent communities like Techdirt.  <a href="http://www.insightcommunity.com/">Click here</a> to learn more.</em></p>
<ul>
<li>Earn up to <b>$200</b> for Insights on this case.</li>
<li>Insights Due: <b>16 Sep 2009, 11:59PMPT</li></p>
</ul>
<p><a href="http://www.insightcommunity.com/case.php?iid=1331">View Case Details at InsightCommunity.com</a></p>
 ]]></description>
<slash:department></slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20090910/020823</wfw:commentRss>
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<item>
<pubDate>Wed, 26 Aug 2009 05:38:16 PDT</pubDate>
<title>Creating vs. Running A Business</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090824/1457365982.shtml</link>
<guid>http://www.techdirt.com/articles/20090824/1457365982.shtml</guid>
<description><![CDATA[ When we talk about business models here, we often use music as an example, since the music industry is facing many of these issues a bit ahead of the curve from many other industries.  However, some other industries are actually facing many of the same issues, and it's good to see what they have to say as well.  For example, one of the key complaints that many people have when we show and discuss models that involve connecting with fans, is this odd claim that doing so means that the "creators" have to spend all their time "connecting" or "selling" or "running a business," rather than doing more creating.  However, I've never thought that to be the case.  I've said from very early on that the real point is that an artist <i>can</i> do that <i>if they want</i>, but that partners can and have sprung up to fill those roles.  This is why I still think there's a big role for a "record label" to play, in handling much of that for the artists, so they can continue to focus on creating.
<br /><br />
<a href="http://www.examiner.com/x-18671-Seattle-Literary-Scene-Examiner">JLJ</a> points out that a similar debate appears to be happening in the webcomics community, with Scott Kurtz, the author of PvP discussing the <a href="http://www.webcomics.com/home/2009/8/6/finding-safe-harbor.html" target="_new">swinging pendulum</a> between handing over nearly all control to a syndicate or marketing partner to a completely DIY model, and then hopefully back to some happy medium.
<br /><br />
I think that's definitely what's happening in the music space -- but the nice thing is that it's not just a <i>pendulum</i>, but a <i>spectrum</i>, so that different artists can pick and choose what <i>makes the most sense for them</i>.  Sometimes you come across artists who really <a href="http://www.techdirt.com/articles/20090803/0308375752.shtml">want</a> to be involved in the marketing and connecting and the selling.  And sometimes, they don't.  But the point is now they <i>have the choice</i>.  And, even beyond that choice, within each aspect of the spectrum, there are many more options in terms of who to partner with and how to structure the deal.  In the old system, you had a very small number of record labels or comic syndicates -- and, as such, they held all the power and could structure deals that were bordering on indentured servitude.  But, with so many more options these days, the creators are actually taking back <i>control</i>.  There's competition in the marketplace, and even if a creator wants nothing to do with the business and marketing side at all, it doesn't mean they have to sign a life sentence over to a business manager.  And that's a very good thing for content creators.<br /><br /><a href="http://www.techdirt.com/articles/20090824/1457365982.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090824/1457365982.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090824/1457365982.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>a-good-discussion</slash:department>
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<pubDate>Fri, 31 Jul 2009 05:46:00 PDT</pubDate>
<title>Explaining Why 'If We Charge, People Will Pay' Thinking Is Misguided</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090730/0237125710.shtml</link>
<guid>http://www.techdirt.com/articles/20090730/0237125710.shtml</guid>
<description><![CDATA[ <a href="http://www.techdirt.com/profile.php?u=rosemwelch">Rose M. Welch</a> points us to a wonderful writeup by King Kaufman at Salon (whose sports column I miss -- but the value of his work about the future of journalism more than makes up for it), concerning the news that <a href="http://open.salon.com/blog/future_of_journalism/2009/07/29/photog_thrilled_to_get_peanuts_from_time" target="_new">Time Magazine used a stock photo it bought from iStockPhoto for a recent cover story</a>.  The photographer whose photograph was used was thrilled (as were some of the other photographers).  However, there was also a group of photographers who went on to berate him (the photographer) for getting screwed over by a "multi-billion dollar company."  Except, of course, they've missed the point.  The photograph had already been taken (it didn't take any more work by the photographer to do this) and he was perfectly happy to get money he wouldn't have received otherwise -- even if it was a small amount.  From there, Kaufman goes into beautiful beat down mode, and explains how the complaining photographers are flat-out wrong... while also comparing the situation to journalists who say the answer is to just put up a paywall and magically people will pay.  It's so good, that I'm quoting a large portion of it, but go read the whole thing as well (and then follow that blog):
<blockquote><i>
Saying that if photographers all refused to do stock photography they'd all get paid more is like saying that if restaurants all refused to give customers napkins without charging they'd all make a bundle on napkin sales. It's like saying that if local bands refused to play for drinks at dive bars, they'd all make good money playing music.
<br /><br />
It's also like saying that if news organizations stopped giving away content on the Web, people would pay for news content online. It's absurd.
<br /><br />
The posters in that forum who are making that argument are failing, or refusing, to understand basic economics, if not human nature. All photographers are not going to refuse to do stock photography. The ones who do refuse will simply be opening up the market for those willing to sell their pictures cheaply, either because they're not in it for the money or because they can make a profit on volume.
<br /><br />
And those arguing that Time should have paid more for this stock photo because it sometimes pays more for other photos, or because it has a lot of money, are forgetting a little thing called supply and demand.
<br /><br />
We should note, though, that because Time prints so many copies, it is likely it had to pay iStockphoto for an unlimited-run license, and that its cost was more like $125 than $30. Still nowhere near thousands, and we should also note that Lam, the photographer, was thrilled with his Time cover at a price of $30, and plenty of his colleagues were thrilled for him.
<br /><br />
The same pricing dynamic is in play in journalism. The price is not set by how much time, effort, talent or experience went into making the product, and it's not set by how much money the customer has. It's set by supply and demand. The supply of stock photography is very large. The supply of general news content is huge.
<br /><br />
If Time hadn't found Lam's stock photo of coins in a jar for $30, or $125, it would have found a similar photo for a similar price. If news consumers can't get their news online for free from their favorite news organization, they'll find it for free somewhere else.
<br /><br />
What happened with Lam's photo is not a failure of the system, not a case of photographers eating their own and not a matter of big, rich Time magazine taking advantage of the little guy. I doubt those photographers would expect Time, because it has such a big budget, to pay $3 for a postage stamp or $20 a pound for the office coffee.
<br /><br />
What happened with Lam's photo is simply the way the industry works. Time paid what it paid for that image because that's about what it was worth.
<br /><br />
When the barrier to entry is low, the supply of goods is large and the alternatives available to the buyer many, the price is going to be low. Wishing it were otherwise, as the photographers are doing in that online forum and as opponents of free content do in Future of Journalism nerdland, will not make it otherwise. 
</i></blockquote>
Indeed.  What Kaufman describes is the same sort of economic illiteracy that we run into in conversations all the time.  People feel that because they don't like the way things work, they need to either blame those who are happy with the way things work or to blame those of us who are simply explaining the economics of supply and demand to them.  It's a blame the messenger sort of thing.  If I could create a world where photographers and journalists could magically make tons of money, I would.  That would be great.  But, that's not the world we live in, and pretending it is (or pretending you can simply start charging high amounts and people will keep paying) doesn't help matters.  Instead, figuring out ways to understand the economics at play, and then looking for <a href="http://www.techdirt.com/rtb.php?tid=400" target="_new">ways to take advantage</a> of those basic economics, seems to make the most sense.  This is not about what "should" happen or what people would "like" to happen.  It's about what is happening, and learning to take advantage of it.<br /><br /><a href="http://www.techdirt.com/articles/20090730/0237125710.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090730/0237125710.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090730/0237125710.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>go-King-go</slash:department>
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<pubDate>Mon, 13 Jul 2009 09:55:00 PDT</pubDate>
<title>Has Google Reached The Perception Tipping Point?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090713/0024375523.shtml</link>
<guid>http://www.techdirt.com/articles/20090713/0024375523.shtml</guid>
<description><![CDATA[ Last week, Anil Dash wrote up a thoughtful post wondering if <a href="http://dashes.com/anil/2009/07/googles-microsoft-moment.html" target="_new">Google had hit its "Microsoft Moment,"</a> which I'll loosely paraphrase as the moment when more people were afraid (or, at least, were marginally distrustful) of the company than that loved the company.  For many years, part of Google's success has been based on its ability to "not be evil."  That mantra -- often misinterpreted -- tried to get the company to focus on putting the user first, which, in turn, led many people to trust Google and its quirkiness.  And yet, the company has grown bigger and bigger and bigger.  And the fear over what that means has only grown -- some of it reasonably, some of it certainly driven by competitors and critics.  While I believe that the folks at Google really do still think of themselves as being totally customer focused and still try to present themselves as that quirky Google, they're reaching a point where they need to do a lot more to support that perception outside the company.  Because it's really <i>not</i> getting through in many cases.
<br /><br />
We've noticed this a bit ourselves, with some of the moves the company has made in the last few years showing a distinct change in <i>tone</i>.  Whereas there was a point that Google seemed to be defending legal battles <a href="http://techdirt.com/articles/20061023/080823.shtml">on principle</a>, when the company capitulated <a href="http://www.techdirt.com/articles/20061030/181219.shtml">with the record labels</a> about YouTube, with <a href="http://www.techdirt.com/articles/20060803/0851258.shtml">the Associated Press</a> and, most recently, in its (still in court) <a href="http://www.techdirt.com/articles/20081028/1218012674.shtml">book settlement</a>, a different story emerged.  In all of those cases, the deals made Google stronger -- while making competitors weaker by not standing up for some key principles.  Google started to use its massive cash coffers not to defend key principles, but to dump the problem off on smaller players.  Of course, I believe this has already started to come back to haunt the company.  The fact that publishers knew they could get a book settlement out of Google was <i>because</i> it had given in on the YouTube and AP deals without standing up for fair use.
<br /><br />
Either way, it became quite clear that Google was <a href="http://www.techdirt.com/articles/20081121/0222022911.shtml">no longer</a> Silicon Valley's defender.  It was Google's defender.  And, of course, some will argue that's exactly as it should be.  Google has no responsibility to stand up for the principles of others.  At the same time, many will claim that Google would be silly not to use its money to harm competitors.  But these all showed a particularly un-Google-like view of the world.  It was that "don't be evil" stand that made people trust them.  It was that belief (real or perceived) that Google was entirely focused on making the world better <i>for everyone</i> that built up that trust.  These moves (and some of the moves Anil discusses in his piece) may make the shareholders happy in the short-term.  But they end up harming reputation in the long-term.
<br /><br />
As Google is fighting accusations of antitrust, the message it keeps trying to spread is that competition is only a click away.  The company would be wise to remember that itself, because sometimes it doesn't actually act that way.
<br /><br />
That said, I don't believe the company is acting "evil" or that it should be accused of any sort of antitrust violations.  But the company has certainly acted a lot less "Googley" lately, and Anil is correct in saying that it appears a lot of folks internal to the company don't really recognize that (or want to believe it).  It's definitely hard to keep that kind of culture and attitude as a company gets bigger (and, as some of its earlier employees sail off).  And, to its credit, Google has certainly been able to keep a "good" reputation for a lot longer than other companies (and longer than many suspected Google could keep it).  But that message has been drifting, and Google would do well to recognize how the external world is perceiving it.
<br /><br />
Longtime Googler Matt Cutts responded to Anil's analysis in what I'd consider to be <a href="http://www.mattcutts.com/blog/taking-google-feedback/" target="_new">an open letter to other Googlers</a> to take Anil's words seriously, rather than angrily (or just dismissing it as idle criticism).  Hopefully that message gets through.<br /><br /><a href="http://www.techdirt.com/articles/20090713/0024375523.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090713/0024375523.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090713/0024375523.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>an-important-question</slash:department>
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