Techdirt. Stories filed under "content"

Aussie Court Realizes That Google Is Not Responsible For Content In Google Ads

Mike Masnick — Tue, 12 Feb 2013 00:14:07 PST

Back in 2007, we wrote about a ridiculous lawsuit down in Australia, in which the Australian Consumer and Competition Commission (ACCC) was suing Google because other companies had purchased ads deemed to be "misleading" on Google. As we noted at the time, the ACCC seemed really confused about how Google worked, and the difference between being a self-service platform/tool and being a full-service advertising media company. While the ACCC ran into some trouble early on (its arguments were deemed "incomprehensible" by the first court) they actually won on appeal. The good news, however, is that the case moved up another level, and the High Court has overturned that decision with a pretty clear statement (pdf) on the basic issue:

Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations. Accordingly, Google did not engage in conduct that was misleading or deceptive.

This may not seem like a big deal, but as Ali Sternburg rightly explains, having strong protections for secondary liability is a huge part of why the internet is so useful and innovative. In simple terms, we don't blame third party service providers for misuses by their users, because that takes away massive incentives for the service providers to innovate in the first place. It chills innovation in a major way.

Safe harbors from secondary liability are essential for Internet platforms and businesses, and it is encouraging when other countries affirm these principles.

Unfortunately, some of these safe harbors have come under increasing attack over the past few years, as people who feel wronged go the Steve Dallas route, and assume that if they've been wronged, it makes sense to sue the company with the deepest pockets, rather than those actually responsible. But, when you do that, you create incredible incentives to effectively shut down any open platforms, because the threat of liability is just too risky. The stifling effects are enormous, whereas the benefit from protecting platform providers from liability for users' actions is tremendous. And, no, this doesn't mean that illegal activity is allowed. It just means that liability is properly focused on those who actually break the law.

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One Year Later, SOPA/PIPA Supporters Still Completely Ignore The Public

Mike Masnick — Fri, 18 Jan 2013 11:12:22 PST

On this Internet Freedom Day, Declan McCullagh has a great post in which he reached out to the key politicians and lobbyists who supported SOPA and PIPA last year to see what they had to say one year later. The quotes are really incredible in their tone deafness to what happened. All of them -- smartly -- are about looking forward, rather than looking back, but none of them mention the public or doing what's best for the public. A bunch of them set up the false dichotomy of "Hollywood" vs. "Silicon Valley" as if this was all a giant commercial dispute. The others all speak of it in commercial terms. Incredibly, despite millions of individuals speaking up for our rights, not a single person interviewed by McCullagh seems to even think it's worth mentioning.

Let's take a look at some of the statements.

The problem of Internet piracy and the sale of counterfeit products online has not gone away. Senator Leahy continues to monitor law enforcement actions, significant developments in the courts and voluntary industry practices, and all those pieces will help determine what next steps are appropriate.
— spokeswoman for Sen. Patrick Leahy (D-Vermont), chairman of the Senate Judiciary committee and author of the Protect IP Act

Well, first problem: the continued conflation of internet copyright infringement with the sale of counterfeit products. These are two very, very different issues with very different causes that require very different approaches to dealing with them. Yet, Leahy and others have used this conflation to dangerous ends with bills like PIPA. What they do is take the widespread nature of copyright infringement and mix it with the very very very small, but still real, possibility of serious harm from some very specific cases of product counterfeiting (i.e., drugs and military equipment) -- and then try to create broad "solutions" that have massive unintended consequences impacting individual freedoms like freedom of speech. If both of those things are "problems" then lets have real discussions about them individually. The second you mix them together, you know that something bad will come out of it.

We can all agree about the importance of protecting American innovation from foreign thieves, but I think it is critical that all parties have a seat at the table and work together to solve important policy issues. As chairman of the Judiciary committee, I look forward to working with both the technology and content communities to find ways to protect America's competitive advantage while promoting internet freedom and growth.
— Rep. Bob Goodlatte (R-Virginia), chairman of the House Judiciary committee and original sponsor of SOPA

First of all, you don't "steal" innovation. Innovation is a process. But, even beyond that, when he talks about "all parties" having "a seat at the table" and working together, notice that he doesn't mention the public at all. It's just "technology and content communities." That was a big part of the problem in the first place and it's disappointing that Goodlatte is still pushing this silly line. This was never "tech vs. content." This was about the public and forward-looking organizations who want to keep the internet free and open -- and legacy players (in both the content and tech industries, by the way) who were looking to lock down and control new systems in a weak attempt to protect increasingly obsolete business models. Bringing "tech" and "content" to the table and thinking those are the two sides in this fight isn't just mistaken, it gets the whole basis of this dispute wrong and will inevitably lead to more problems. Out of that comes bogus "solutions" like the six strikes agreements, which again completely left the public out in the cold.

Goodlatte is now the head of the House Judiciary Committee. He's always presented himself as a friend to Silicon Valley (and reminds us over and over and over again that his son works at Facebook). If he wants to do a better job than his predecessor, he needs to get past the artificial divides like "tech" vs. "content" and start looking at the real issues: the public and innovators vs. legacy players. Those cut across both lines. There are legacy tech players looking to hold back innovation, just as there are innovative, public-embracing content players.

Hollywood and Silicon Valley have more in common than most people realize. We share a commitment to innovation, to our consumers, and are working together to develop new platforms to make that content easily and legally accessible. Like the tech industry, the well-being of the film community is dependent on a vibrant First Amendment and we would never support any legislation that limits this fundamental right. We can all agree no one wins if everyone loses. Preserving freedom of speech and protecting intellectual property rights are not mutually exclusive efforts. Intellectual property protection is essential to creators and makers in both industries and we need to discuss it rationally. Let's use this anniversary to forge a path toward the future where the creative content and technology industries work together to develop meaningful solutions that ensure an Internet that works for everyone.
— Michael O'Leary, senior executive vice president for global policy and external affairs at the Motion Picture Association of America

We agree on the first half, but as is so often the case, O'Leary states the first half to basically try to avoid the obvious criticism of the second half. He states that the MPAA would never support legislation that limits the First Amendment, but he's done exactly that. Preserving freedom of speech and protecting "intellectual property" may not be mutually exclusive, but they absolutely can conflict, and frequently do conflict. The MPAA has refused to even acknowledge this possibility.

From there, the statement gets more and more problematic. We've seen over and over again that, while many creators and tech companies do use copyright, patents and trademarks, they are hardly "essential". Again, by simplifying this to "tech" vs. "content" it's easy for O'Leary to point to legacy tech companies who lean hard on copyright or patents, and then suggest that both "sides" want greater protectionism. But that's misleading. As discussed above, much of this is really about legacy players trying to block innovators who are looking to benefit the public. You can easily line up a bunch of legacy players on both the tech and content sides who will agree until the end of time about the values of protectionism -- just as you could line up true innovators in both areas who say that patents, copyright and trademark are of little value and are mostly a distraction.

It's a new day for a new music business and for the RIAA. For the better part of the last year, we have focused on being an evangelist for the dynamic, exciting legal online marketplace that now exists for fans. That will continue to be our priority in 2013. We earn more than half of our revenues from digital services and platforms. Not many creative industries can say that. Music helps drive social media trends and device sales. In fact, in 2012, the two top Google searches were music-related. Currently, 19 of the top 20 YouTube videos are music videos. And according to Twitter, seven of the top 10 Twitter accounts are held by artists.

What does this all tell us? Music is at the center of cultural and commercial phenomena. We are not stuck in the past but looking ahead at a promising, bright future teeming with new music options. Which is why we created, along with our online retailer partner NARM, WhyMusicMatters.com, a one-stop educational guide for digital music so fans can know where to get their favorite music in a variety of different ways. And we expect that this bright future will offer access to music in ways currently unimaginable but will perhaps seem commonplace a year from now.

Yes, piracy still continues to plague us and is a continuing threat to our business. But instead of looking to Congress for help, we are tuned in to the marketplace and actively seeking out voluntary partnerships with intermediaries like ISPs and advertisers to help curtail illegal downloading. Moving forward, we want to simplify music licensing to make it easier to develop music business models. We know that music models continue to evolve - access and listening models are becoming more prevalent and it's imperative we derive a fair market return for the music that is the foundation of those businesses. And as always, we'll continue to find new ways to promote the dynamic music marketplace.
— Mitch Glazier, senior executive vice president at the Recording Industry Association of America.

In typical Glazier fashion, those first two paragraphs are simply misdirection. Yes, of course music is important and a part of the cultural fabric. Duh. But notice that he's not actually concerned about ways to increase that through the better spreading of music, the ability to share and experience culture. No, he's solely focused on one thing: getting paid directly for each use of the song. And that's because the companies he represents -- the music labels -- were mostly built on that as a sole revenue stream. He's not talking about neat things like Kickstarter or Bandcamp that have allowed artists to "go direct" to fans, because that kind of stuff gets in the way.

It's good to see him committed to fixing licensing, because it's a massive problem, but I'll note that the RIAA was heavily involved in trying to block a bill last year that would have made music licensing more reasonable and affordable so that there would be new ways to distribute music legally.

Finally, the whole "voluntary" agreements thing is a bit of a red herring as well, as it seems as though the MPAA and RIAA are really focused on using these "voluntary" agreements to more or less get what they wanted in SOPA in the first place -- and that often means less due process and fewer fundamental rights and abilities for the public.

Protection of intellectual property and Internet freedom are critically important. The Chamber will work with members on both sides of the aisle to find an effective and commercially reasonable solution to address this ongoing problem.
— U.S. Chamber of Commerce spokeswoman

Not much to say on that, other than the US Chamber of Commerce was the leading lobbyist pushing for SOPA/PIPA last year. Their interpretation of "commercially reasonable solution" is highly suspect. Oh yeah, as is their interpretation of the "ongoing problem." The last time we looked, the US Chamber of Commerce was using flat-out bogus numbers and claims to support their description of "the problem." If you define "the problem" incorrectly, the "solution" is probably going to be an even bigger problem.

If you had asked me how I felt on January 18, 2012, about the prospects for protecting the creative work of artists and innovative businesses in the wake of the internet revolt against the Stop Online Piracy Act and the Protect IP Act, my response might have involved some muttering under my breath and a request for a stiff drink. In the coming week, many who seek to exploit the work of creators without their consent will be looking backwards and celebrating last year's defeat of those bills. So one might expect advocates for artists and creators to be in a dour mood again, but there is ample cause for optimism among members of the creative community...

At least some of the goals of the legislation have been achieved through increased private and government action since the introduction of the first version of the bills in 2010:

More credit card companies are engaging in best practices. In June 2011, major credit card companies and online payment processors (American Express, Discover, MasterCard, PayPal and Visa) reached an agreement on voluntary best practices to reduce sales of counterfeit and pirated goods by cutting off sites that distribute infringing goods from conducting financial transactions through these processors.
More advertisers are engaging in best practices. On May 3, 2012, the Association of National Advertisers and the American Association of Advertising Agencies issued a statement of best practices to address online piracy and counterfeiting.
Internet service providers, movie studios and record labels are collaborating on a Copyright Alert System. Under this system ISPs have agreed to notify users when their accounts appear to be used for illegal downloading activity and to impose real consequences on users who refuse to stop after receiving multiple notices.
Google finally started considering whether sites are rogue websites when doing search rankings. In August 2012, Google announced a change in its search algorithm that takes into account the number of "valid copyright removal notices" when determining the ranking of search results. In its announcement, Google indicated the goal was to help its users find legitimate sources of content more easily...
As more artists and creators stand with their peers and highlight what is really happening on the Internet, more people will listen and think twice. If there is a silver lining to the blackout, it has been the people who we have met this year: artists, reformed 'pirates' academics and lawmakers who want to begin meaningful conversations about promoting creativity and ensuring it finds a place in all of our lives.
— Sandra Aistars, executive director of the Copyright Alliance

This picks up on Mitch Glazier and Senator Leahy's comments on "voluntary" solutions and shows something important. Note that all of those bullet points in the "voluntary" category are the kinds of things that SOPA/PIPA sought to make mandatory. As incredibly vital as the fight against SOPA/PIPA was last year, it's also important to see that the industry (sometimes with government help) has continued to browbeat companies into more or less implementing the rules anyway. When those "voluntary" rules conflict with individual freedoms -- as is the case with certain gatekeepers (e.g., limited number of payment processors) -- we should be worried.

All in all, these comments show a consistent pattern. SOPA and PIPA might not come back as new legislation... but the issues are still very much with us. Those in power still don't understand the core issues, believing it's a commercial dispute between two mis-defined industries, while the focus on "voluntary" solutions seems to be attacking individual rights without people noticing.

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Learning From Aaron Swartz: Content Must Not Be The End Game For Knowledge

Glyn Moody — Thu, 17 Jan 2013 05:07:00 PST

In the wake of the suicide of Aaron Swartz, there have been many fine tributes to the man and his work. Another growing class of posts that have flowed from this unhappy event are people reflecting on the important lessons he taught them. Here, for instance, is Jeff Jarvis recounting his journey from a fairly traditional position on copyright to one that recognized how the Internet had reshaped that landscape.

Ten years ago, Jarvis appended this "mock copyright notice" to his blog posts:

It's mine, I tell you, mine! All mine! You can't have it because it's mine! You can read it (please); you can quote it (thanks); but I still own it because its mine! I own it and you don't. Nya-nya-nya. So there. COPYRIGHT ... by Jeff Jarvis.

But gradually, under the influence of key thinkers in this area, he came to see things differently: Lessig and company have taught me that content's value can lie in what it spawns and inspires. Locked away, unseen, unused, not discussed, not linked, it might as well not exist.

...

And Aaron Swartz has taught me that content must not be the end game for knowledge. Why does knowledge become an article in a journal -- or that which fills a book or a publication -- except for people to use it? And only when they use it does content become the tool it should be. Not using knowledge is an offense to it. If it cannot fly free beyond the confines of content, knowledge cannot reach its full value through collaboration, correction, inspiration, and use.
The tension between knowledge and content is no mere abstraction. As well as lying behind some of the most problematic sections of SOPA, ACTA and TPP, and the larger war on digital sharing they are part of, it was almost certainly a contributory factor in the death of Aaron Swartz too.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

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France Telecom Accused Of Holding YouTube Videos Hostage Unless It Gets More Money

Mike Masnick — Fri, 4 Jan 2013 09:36:08 PST

An interesting post from broadband news reporter Dave Burstein argues that anti-trust regulators in France may have basically enabled France Telecom to hold YouTube videos hostage unless Google backbone partner, Cogent, pays more money:

Millions of French netizens discover their YouTube streams sputter and die or never begin in the first place. Other video services, including TF1, are also struggling. The effect varies, sometimes randomly and sometimes by time of day. Respected consumer organization UFC-Que Choisir found between 20% and 50% of users surveyed online had problems.

Again, the existing connection remains and much of the traffic gets through. But Net traffic always grows and without regularly adding additional capacity many - not all - streams are blocked. French networks, with France Telecom in the lead, are refusing to accept growing traffic from Cogent, a major backbone carrier that services Google. They demand payment to accept all the streams their customers request. The independent French competition authority (Autorite de la concurrence) on September 20 approved the charging plan, leaving no doubt this is neutrality dispute.

The details suggest that this isn't so much a "neutrality" issue as a peering dispute. In fact, it actually sounds somewhat similar to the Level 3 / Comcast dispute from a few years back. In that case, Level 3 was providing service to Netflix, and Comcast worried about the big influx of traffic. Comcast (like France Telecom) demanded that Level 3 pay up for delivering it extra traffic. The bit that's interesting here is that French regulators got involved and said that this was legal in this case, though they're worried about the lack of transparency.

Of course all this does is show, yet again, how the internet's interconnectivity through peering arrangements is increasingly under pressure as certain broadband players become more powerful. And, unfortunately, the public (and their YouTube videos) may be at risk.

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Copyright Holders Still Sending DMCA Takedowns On Content That's Been Gone For Months

Mike Masnick — Fri, 7 Sep 2012 17:29:00 PDT

We keep seeing various DMCA takedown failures, and the folks over at TorrentFreak have discovered another common error while going through Google's Copyright Transparency Report and found that big copyright holders are still filing DMCA takedown notices on content hosted on sites like Megaupload and BTJunkie, despite the former being shut down in January and the latter shutting itself down in February.

If you look, you can see a bunch of takedown requests for Megaupload links in the past month. Some of these are by smaller players, whom you might expect to be confused, but there are some big guys as well. In the screenshot above you can see both BPI and the IFPI (on behalf of Sony Music). There are also DMCA requests from Universal Music, EMI, the Publishers Association and others. All for content that clearly doesn't exist and hasn't existed in months. Kinda makes you wonder if they even check this stuff. Considering that all of these copyright holders seem to think that Google and others can just magically "know" when there's infringing content around, it's pretty telling that even they don't seem to know how to tell if content exists, let alone if it's infringing.

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The Content Industry Keeps Penalizing The People Who Actually Pay

Mike Masnick — Thu, 6 Sep 2012 10:11:07 PDT

I've pointed out before that, contrary to the smug insistence of many people who dislike this site, I don't download any unauthorized content. At all. In 1999 I had Napster on my computer, but I was stuck on a dialup connection, so I never had a chance to test it out before it got shut down (and, at the time I had no real desire to listen to music via my computer). Since that time, I've always legally obtained the various content I consume, preferably directly from artists themselves, but otherwise through buying the CD or via Amazon or CD Baby (and now I use Spotify a lot too, though I still like to directly support artists when I can). Despite people insisting that I must be "pirate Mike," as I've said repeatedly, I'm simply not comfortable with going against the wishes of copyright holders. My arguments concerning the economics of free and why I think many artists should embrace these markets has a lot to do with what I think would be best for them, but I've never tried to use that to justify copyright infringement (again, contrary to what some insist).

During the SOPA fight, I explained this to someone who was heavily involved on the other side of the debate, and he simply couldn't believe it, and made comments to the effect that even he would download unauthorized content, even if he felt it was wrong and he felt morally obligated to pass an internet-harming law to try to prevent himself from continuing to do so. Of course, for what it's worth, I'm sure that I accidentally and incidentally infringe all of the time. Someone sends me a YouTube video? Could be infringing. These days it's impossible not to accidentally infringe all the time. But when it comes to actually getting copies of content, I feel a personal obligation to do so in an authorized manner.

So, I identify quite closely with Brian Barrett's recent article at Gizmodo, where he basically explains that he's just like me: he pays for all the content he consumes. And he follows it up by noting that, even as he knows this is the "right" thing to do, it makes him "feel like a sucker," because the experience he gets is much worse than what those who download unauthorized copies get.

I waited nearly a full year to watch Game of Thrones, because that's how long it took to get from HBO to iTunes. If I had any interest in purchasing a Avatar 3D Blu-ray, I would have either had to buy a Panasonic 3DTV or wait three years just for the right to spend thirty bucks on FernGully with giant blue cat-people having tail sex.

Even content that's accessible doesn't often make much financial sense. Amazon's the most reasonably priced e-retailer in the world (seriously, it's got 1,000 albums for five bucks each right now), but even it can be fraught with peril and annoyance. Ebooks that cost more than their paperback equivalents. The specter of DRM haunting every click. A layout so unnavigable you feel like you're being punished.

Want to comparison shop? Forget about it. Ecosystems aren't just apps and software anymore, they're movies and TV shows and everything you'd ever want to watch, read, or listen to. On any given day the best price might be on Amazon or iTunes or Google Play or Xbox, but if you want the simple comfort of knowing everything you paid for with your own American dollars lives in one place? Expect to pay full freight for most of it.

This is why I've always been arguing from the position of copyright holders and the content creators for why they shouldn't just scream about how awful piracy is, but rather learn from it, and note that many people who are infringing are getting a better user experience. When they don't do that, the end result may not be "infringement," but it may just be people dropping out of the market entirely. Lately, that's what I've done with movies. Despite being a movie buff, the limitations and controls on movie efforts has just made the whole thing not worth it. Combined with less time than I used to have (yay, family life), it's made me pretty much stop watching movies or TV shows over the past two years. These days, the market is so fragmented, and the offerings still all seem so half-baked, that I'd rather spend my time reading or writing or just spending time with friends and family. I don't necessarily feel like a "sucker" as Brian does, but I find that it's just not worth the hassle.

Eventually, I figure the market will catch up, and perhaps I'll go back to it at that point. But if the industry has lost some of my spending dollars it's not because of infringement -- but because they've failed to deliver a compelling customer experience for me.

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The Stupidity Of The 'Just Go Without' Argument

Tim Cushing — Wed, 22 Aug 2012 09:33:00 PDT

Every time a major player in the content industry does something obtuse or flat-out malevolent in an effort to preserve whatever "market share" or "positioning" it feels is more important than actually serving customers the way they prefer to be served, the discussion turns to the benefits of piracy. Pirated content is usually free of DRM, regional restrictions, limited installs, etc. Why is it free of this? Because piracy is efficient. Not needing to serve hundreds of masters with licensing/royalty fiefdoms, pirated goods are streamlined to deliver what potential customers actually want: content. The price is just icing on the cake.

Whenever this pro-piracy argument is broached, usually in the form of "This is why I pirate," or "Pirated x doesn't have this problem," it is responded to with shocked gasps of "I can't believe you feel entitled to just take something if it's not available/at the right price point/otherwise nonexistent." The person pushing this take generally starts telling those talking up piracy that they could "just go without." To do otherwise means the commenter (or post author) is nothing more than a child with an outsized sense of entitlement.

Here's a stellar example, as provided by TD resident sideshow, bob:

Let me get this straight. I can write an open letter asking the food companies to do better on calories/taste/freshness/whatever and until they do, I'll feel free to just shoplift whatever I want. They need to earn my money.

Maybe the editors of Maxim or Playboy could write an open letter asking the women to "do better" at satisfying them and until then, they'll act like rakes or cads.

Or maybe I can just write an open letter to cancer and ask cancer to do better or else I'll refuse to die. Yeah. That will work.

So I can just write my own open letter and ask Bobbi Smith to "do better" and cough up more cash for my work. After all, that's the mechanism that's supposed to work. It's like a magic wand, only with text.

What is fascinating is that there's little acknowledgement that there are living, breathing humans on the other side of the transaction. There's no acknowledgement that the creators need to eat, pay the rent, and purchase health insurance. Nope. It's all a focus on the consumer who is supposedly allowed to simply stamp his/her feet and if the hard working creators don't snap to it, the consumer will feel free to simply take it. Wow, that's a model of one spoiled brat.

Well, of course they could "go without." Everyone has that option. Do without. That's the "honorable" way.

But let's look at this in a more realistic way. What exactly does "doing without" do for the content creator? How does "not purchasing" (or not having the option to purchase) the disputed content do anything for the creators? Because the bottom line in both scenarios is that $0 has made its way from the potential customers to the people desiring the income.

If everyone just "does without," how does this improve the situation for either the content creator or the customers? Once you've taken the piracy out of it, all you've got left is a set of lousy options that do nothing for everyone involved. If rights holders are happier merely saddling up their high horse and riding to the nearest moral peak, so be it. Riding that horse won't make you any richer, though. All it does is further separate you from your potential income.

A bit of the old infringement, on the other hand, gets your work into the eyes, ears, brains, etc. of potential customers. Sure, not all of them would buy if they had the chance, but at least in this scenario, you're building a bit of a fanbase that may decide to reward you whenever the distributor finally pulls their head out of their legacy and starts meeting customers, at minimum, halfway.

Then there's the infringement itself. It takes many forms. Some of it is just watching uploads on YouTube. I've caught some BBC series I can't purchase here in the US via the 'Tube. Or there are shadier streaming sites that serve a ton of ads along with even rarer uploaded video or stuff YouTube has content-matched right off its servers.

Streaming video is infringement? (Or was, pre-Posner.) Or somehow morally wrong? That's a position I can't even fathom. I realize that ad revenue or DVD sales are "lost" when this happens but I have a hard time believing a temporary video stream represents a true loss to the creators. It's not as though it's residing on my hard drive and being transported to and fro by portable devices. It's not a replacement for an actual product I can use in a more versatile fashion.

To me, streaming video is about as "infringing" as going over to a friend's house to watch their TV. True, the internet gives me a bigger selection of "friends" and a bottomless DVD selection. Other than that, when I'm done with the stream I "leave my friend's house" and the "DVD" stays with "him." If I want to watch it again, I can't do it from my TV. I have to visit him again.

Even if it does somehow do "irreparable damage" to the rights holders, what's stopping them from just erecting a streaming site of their own? Or at least something much better than what exists now in various crippled forms? The attempts to shut these sites down seem to indicate that massive amounts of potential earnings are being siphoned away. If so, why put up with it? Build your own and collect the ad revenue, just like the operators of these sites do.

Oh, now you say ad revenue is minimal and unsustainable? If the content industries do it, it has to be gated and pre-paid because no one can make a living on ad revenue. If the helpful pirates do it, they need to be shut down because they're profiting off the backs of the creative industry. Which is it? No money or plenty of money? My guess is: not enough money. Ad-supported streaming sites can't match the licensing fees these companies can extract from other services. So we're right back where we started: money being left on the table.

How about all these file lockers that are such a threat to the American Way of Life™ that we need to send the combined forces of the local SWAT team and FBI in order to show that We Are Indeed Serious About Pirates? Aren't they making a killing? Christ, look at Dotcom. Virtually swimming in opulence and personal tanks. He's a multi-millionaire. Do what he does. Throw all your stuff onto some servers, get the links passed around the internet, sell faster access for monthly rates and start re-living the life you always thought you'd be living.

Can't figure out how to do any of the above without dealing with a nightmarish tangle of royalties, licensing and release windows? Don't look at me. I never thought any of those things were good ideas. Here's a suggestion: create a blanket licensing group for this new venture a la ASCAP. Dump it all into a big pool and trickle the monies down on the usual suspects. Or, you know, go one better and use all this precise info you'll be gathering to actually pay the creators appropriately.

I don't know what's more annoying: the moral ground cowboys who would rather the creators made no money than fix their broken delivery systems or the industry "titans" who are constantly being outdone by any techie who can set up a decent file locker.

Bottom line: the real entitlement belongs to industries that feel the public should be grateful for whatever half-assed digital "services" they throw our way. Honestly, if you'd rather get piracy shut down completely (will never happen) just so the only other option is "do without," you'll have accomplished nothing more than swapping out your high horseshoes for platform boots. $0 is still $0, no matter how "honestly" this big pile of nothing is "acquired."

P.S. This argument also bugs me: "X is an asshole so I'm going to pirate the shit out him." Really? I don't know how someone can argue "piracy's effect is overstated" or "piracy is a convenient scapegoat for the content industries" and then make a grand statement that you're going to punish someone by doing something ineffectual, only ANGRIER. Vindictive piracy makes absolutely no sense.

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Content Is Advertising, Advertising Is Content: Media Company Buys Ad Firm That Makes Good Content

Mike Masnick — Thu, 19 Jul 2012 22:11:00 PDT

There's an interesting Technology Review article about a new YouTube video campaign called ThinkR, which is trying to create videos of smart people talking about interesting things (think sort of TED-like, but a little flashier. and at least of the ones I've seen, with less substance). However, the Tech Review article highlights the oddity of an ad firm owned by a media firm making interesting content:

Here's how Radical Media describes its "entertainment" division:

AS THE LINE BETWEEN advertising and entertainment blurs, our Entertainment division is a solution to a changing media landscape. In conjunction with our Design + Digital Group and Integrated Marketing team, we work closely with our agency, network, and brand partners to integrate their visions into the DNA of the content we create.

In addition to films and music videos, Radical Media also makes television commercials and, well, "transmedia."

Here's where it gets really confusing: While Radical Media is essentially an advertising firm, it was purchased in 2010 by the RTL Group, which owns 46 television channels and 9 radio stations and is Europe's largest mass media company. In other words, a media company owns an advertising firm that moonlights as a media company. Huzzah!

It goes on to note that some of their videos... have advertisements before them, and it's possible that "Radical Media produced both the "advertisement" and the "content"!" Of course, I'm not so sure why or if that's all that surprising. As we've been pointing out for years, it's not just that advertising is content, but that content is advertising as well. Good content always advertises something. Bad content doesn't advertise anything, even if it's designed as an "advertisement."

Having an "ad agency" that knows how to make good content, first and foremost, is a lot more important than having a firm that knows how to make a "good advertisement." If you can make good content, you can figure out how it advertises something and act accordingly. If you're just focused on making a good advertisement, you'll often make bad content. So I actually think it's a good thing that ad companies and media companies are focusing on content first. I recognize the risk that many people worry about: that this makes "content" into something that's more "advertorial," but that's not what we're discussing here. It's the exact opposite. Purely "advertorial" content isn't good content. It's deceptive and annoying. When the mix of content and advertising works, it's because people want the content and actively seek it out (think Old Spice Man) rather than "hiding" an ad in the content -- which is more likely to turn people off.

Somehow, these two ideas too often get conflated. But if everyone's focused on creating good content first and foremost, that seems like a good thing -- even if that content comes from "an advertising" firm.

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Because We All Know What Skype Was Missing Was Intrusive Advertising, Microsoft Has Decided To Add It

Mike Masnick — Tue, 19 Jun 2012 10:41:00 PDT

It appears that Microsoft's first big contribution to Skype... is to put giant-ass ads in the middle of your call that look kinda like another caller has joined your call... except that caller is some company wanting you to buy stuff: I actually don't really have that much of a problem with Skype trying to figure out how to monetize with ads -- in general. I do tend to think that intrusive advertising is not a particularly good way to go about it. However, what really gets me about this is the way Skype wants to pretend that these ads are something consumers want:

While on a 1:1 audio call, users will see content that could spark additional topics of conversation that are relevant to Skype users and highlight unique and local brand experiences. So, you should think of Conversation Ads as a way for Skype to generate fun interactivity between your circle of friends and family and the brands you care about. Ultimately, we believe this will help make Skype a more engaging and useful place to have your conversations each and every day.

Now, I've been a big believer that good advertising is relevant content, and not just intrusive content. So I can understand the basics of what they're saying. But there's almost nothing in the execution that suggests that the folks at Skype actually understand why "advertising is content" works. It's because it provides useful or compelling content in a manner such that people want to seek it out, not have it suddenly jump up in the middle of their conversation.

As Jon Brodkin, over at Ars Technica notes (sarcastically), positioning this as a user enhancement is just silly:

Skype has provided a great service for years, keeping us connected with friends and family. But there's always been one thing missing—marketers interrupting calls with giant display ads.

This stinks of an idea that some committee came up with, where no one on that committee actually uses Skype.

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MPAA Ok With Allowing Users To Get Back Their Megaupload Files If 0% Infringement Can Be Guaranteed

Mike Masnick — Thu, 7 Jun 2012 09:25:00 PDT

We've been covering the ongoing series of fights concerning what happens to to all the data that was stored on the Megaupload servers. The government has wanted it destroyed. Some users have wanted access to their legitimate content. Megaupload wants access for its own defense. The MPAA has wanted it preserved in case it can be used to sue others. Megaupload wants access for the sake of its defense. Carpathia -- the hosting company -- just wants to stop paying $9,000 per day to maintain the servers and data.

However, as TorrentFreak notes, the MPAA's latest filing in this debate offers a very, very, very slight backtrack, in which it says that it kinda sorta would be okay with letting users have access to download their own content... but if and only if there can be a guarantee that not a single bit of infringement occurs as a part of that process. Oh yeah, and also so long as the Megaupload defendants don't get access either (though, it says that's a separate discussion for a separate legal filing).

...the MPAA Members’ position continues to be that if the Court is willing to consider allowing access for users such as Mr. Goodwin to allow retrieval of files, it is essential that the mechanism include a procedure that ensures that any materials the users access and copy or download are not files that have been illegally uploaded to their accounts, given that MPAA Members and other rights holders are certain to own the copyrights in many of the files stored on the servers. In addition, in no event should any Megaupload defendants or their representatives—who have not generally appeared in this proceeding, and who are not subject to the control and supervision of the Court—be allowed to access the Mega Servers under such a mechanism designed for the benefit of third party Megaupload users. Whether and under what conditions the Mega defendants should have access to the servers (again, assuming they are subject to the control of the Court) is a separate issue.

Of course, this assumes it's even possible to prevent 100% of infringement. Which it's not. And that's probably the point. The MPAA gets to pretend that it's being "reasonable" by saying some access is okay... but immediately including an impossible caveat on top of that. It's a neat way to pretend to be open to compromise, while really sticking to an extreme position.

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Content Creators: Control Is An Illusion And That's A Good Thing

Mike Masnick — Mon, 26 Mar 2012 13:25:00 PDT

Folks who hang out on HackerNews may have seen an interesting little debate flare up recently in a couple of threads. It started when a guy named Dustin Curtis announced a new simple blogging tool which he called Svbtle. He originally designed it for himself, then decided to make it into a wider offering, but is only letting "vetted" bloggers use it, rather than opening it up. This rubbed some folks the wrong way, and another guy, Nate Weinert, decided to build his own open source version that looks similar and has the same basic functionality, and released it to the world under the name Obtvse.

Then the debate raged in the two HN threads over the basic ethics of the decisions by both individuals -- Dustin for locking up his system and Nathan for copying Dustin's idea. It won't surprise many where I come down on this. History has shown that copying often leads to useful innovation and can help expand a market. I find arguments to the contrary somewhat frustrating, because they seem to argue that there's some sort of moral right in an idea -- something that just doesn't make that much sense to me. If others can do more with your idea, why should we stop them? Now, some argue that Nate didn't do more with the idea, but I disagree. He made it open and usable -- by definition doing more with it. Furthermore, in doing that, he made it much easier for others to build on it as well.

But, really, the reason I'm writing this post is a fascinating must-read comment by a guy named Frank Chimero, responding to a blog post by Daniel Howells about this whole back and forth. The comment is a really excellent and succinct explanation of how creativity works and the fact that once you've created something and released it to the world, you've lost control over it -- and pining over that lost control is a fool's errand:

I think once you publish something, you lose control of it. At worst, you inspire mockery and parody. At best, you become material for future work, because what you’ve made is successful, interesting, or relevant. Usually, it is both.

All work produces spill-over repercussions that usually go against the will of the work’s creator. The creator wishes to retain authorship and control the work, while those in the culture wish to use, transform, and remix it. If the work is truly successful, it will defy authorship and turn into a shared experience for everyone. Those works are the hardest to control, because they diffuse, and spread wide by permeating into the air. The become a shorthand for those who make or enjoy similar work, becoming a shared vocabulary.

The situation requires things from both those who create the work, and those who wish to use it.

For the initial creator, they must resign most control upon publication, especially on the internet. Their work will be used to say and do things they don’t intend. Ideas, in truth, go further when others carry them, and this usually means they will go in directions the original author did not intend or imagine. For instance, I’ve had a quote of mine (“People ignore design that ignores people.”) taken out of context and used to justify two completely contradictory design methods. So it goes.

For those that use the things made by others, they should credit where possible, and have their work be transformative in some way. They can carry the ideas of others, but they must to take it further or a new direction. Then, they are obliged share alike. To not do both is to go against the goodwill initiated by the work’s creator.

And for both, we should recognize that all creative processes use materials from those who came before us, and respect the meaningful influence of others. We’re part of a long line of people who make things. It is a privilege to get to use the work of others in our own.

So many excellent points in such a short comment. In fact, economic studies have actually shown, in fairly great detail, that it's exactly these kinds of "spillovers" that lead to economic growth (in fact, they were regularly called spillovers, until the economic language finally clarified a bit further). The fact that you can build on ideas is a natural resource that only expands. It's not limited by scarcity, like many natural resources. It's the nature of an idea to be infinitely copyable at no cost that acts as a resource multiplier that leads to economic growth. That's what's so powerful about it.

It's natural that the originator may get upset about how some of this works out, but contrary to the claims of some, if someone does something with your work, it doesn't do anything to the original. It just expands the overall market. You lose control, but that's not bad. The things that you did are based on the fact that others lost control of things as well.

Oh, and for a bit of irony, I only found this quote because Dustin Curtis highlighted it on his own (Svbtle) blog. Yes, the guy who had his work copied chose to highlight this particular comment... and add "great artists steal" to the end. Seems that he recognizes how all this works and perhaps isn't too upset about how things went down.

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MPAA Exec: Only We Can Make Content That People Want

Mike Masnick — Thu, 15 Mar 2012 09:38:52 PDT

Sometimes I wonder if the execs who run the major copyright-related trade groups ever talk to actual people outside of their little bubbles. Because they say things that are so out of touch with reality that it's stunning. We already discussed the panel where the RIAA's Cary Sherman said that various ISPs will start acting as copyright cops by July, but some of the other statements on that panel are worth discussing as well. It was basically a panel of all the big copyright industry trade group associations -- the MPAA, the RIAA, the BSA (software) and the AAP (book publishers).

What was most stunning is the pure hubris of the MPAA's Fritz Attaway, who flat out claimed that only they can make content that people want:

"Our industries do something that no one else can do," the Motion Picture Association of America's Fritz Attaway said at the Association of American Publishers annual meeting this morning. "We create content that people want to have."

Actually, no, tons of others create content that people want to have, and it's the real reason you're struggling so much today. You're not used to competing with those outside your little club.

The folks on the panel (with the exception of the BSA, who famously flip flopped its views on SOPA) brought out the usual crap about how SOPA was defeated via "disinformation":

"Right doesn't always prevail," Attaway said of SOPA and PIPA. "This time, it didn't, because our opponents were able to energize a grassroots response. In my view, and I think all of us would agree, [the protest against SOPA and PIPA was spread] primarily through disinformation and spinning their interest in a way that captured the attention of a number of consumers."

This is such a load of hogwash. The MPAA has been a master at disinformation campaigns throughout its history. It's why it's been able to continually ratchet up copyright law in its favor for decades. This is the same industry who declared that the VCR would kill it... and now whines that the home video market that wouldn't even exist if it had gotten its way is being decimated by the internet. Did some folks on the anti-SOPA side get some of the facts wrong? Yeah, but it wasn't a disinformation campaign. That's what the MPAA ran. And, the only reason there was some misinformation in the campaign against SOPA was because the MPAA went so far in its initial version of the bill (and make no mistake, the bill came from the MPAA), that people reacted to that. It's true that eventually some of the worst parts were removed and people who didn't realize that still referred to the original text. But it's not like they made things up wholesale. The MPAA, on the other hand, regularly made up claims out of thin air -- such as the supposed 2.2 million people this would effect. The industry employs less than 400,000, and many of them have nothing to do with the copyright/royalties side of the business.

The article by Laura Hazard Owen at PaidContent notes that these association bosses are now finally talking of "engagement" with those who disagreed with them on SOPA, but they still are only thinking about industries -- not internet users. They have no interest in actually talking to the riff-raff they look down upon, but still expect to give them money. Maybe that -- more than anything else -- is their problem.

Also, don't think they're done pushing for bad legislation. The RIAA's Cary Sherman noted that the plan was to push for legislation that was less likely to rally up the grassroots again:

The RIAA's Sherman hopes further copyright discussions will be more "rational" than the debate over SOPA and PIPA. "The digital tsunami we encountered with SOPA and PIPA—we're not going to get the same kind of engagement when we talk about statutory damages or open works," he said. "We'll have the opportunity for a more rational discussion."

You see, in Sherman's mind, any time anyone disagrees with the RIAA's stated position, that's no longer a "rational" discussion. But because "statutory damages" sound so boring, he's hopeful that they can pass even worse laws to make the already insane damages rates even more insane.

The whole thing shows, yet again, that these guys still have no idea what happened, and have no idea how to engage with the internet. It's sad to watch them flail around like this. If they'd only taken the time to actually use the internet and learn about it, perhaps they wouldn't always sound so clueless. But, of course, why would they use the internet? It's not like it even can produce any of the content they want...

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And This Little Piggy Went Viral

Leigh Beadon — Fri, 2 Mar 2012 00:05:48 PST

BoingBoing recently highlighted this entertaining commercial for The Guardian, which neatly captures the state of modern news by having some fun with a fairy tale:

It's a great little production, because not only does it effectively portray the potential of what is variously called open journalism, citizen journalism and participatory journalism, among other things, it also serves as a good example of a common mantra around these parts: advertising is content, and content is advertising.

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Content As Advertising: Making Advertising An Easter Egg For People To Hunt Down

Mike Masnick — Fri, 11 Nov 2011 16:05:11 PST

Over the years, we've talked a lot about how advertising is content (and how content is advertising), and it's always nice to see cool examples that really demonstrate that in practice. Our friends over at NOTCOT are doing a fun little experiment with Bonobos pants, in which they're hiding little Bonobos Easter Eggs throughout the site, and offering prizes for people who find them. The end result? People who are interested are actively hunting for the content, which is clearly "advertising." It's not intrusive. It's not annoying. It's not deceptive. Instead, it's desired and it has users actively seeking it out. That's the quintessential goal, when you do a good job of hitting that point where advertising is good content -- when it has absolutely nothing to do with being intrusive or annoying at all, but rather is actively sought by an audience. It's the holy grail. Unfortunately, it's also something that's still difficult to convey to advertisers, who are too often afraid to try something new and creative. So kudos to NOTCOT and Bonobos for a fun campaign.

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Good Content Doesn't Get Buried By Bad Content

Mike Masnick — Fri, 4 Nov 2011 17:33:00 PDT

We've heard a particular argument a few times about the fact that just about anyone can create content thanks to new tools of creation, distribution and promotion and that all this new content somehow "buries" the good content. We have no doubt that much new content being produced is, in fact, pretty bad. I've never quite understood the argument, though, that bad content harms good content. You just have to ignore the bad content and follow the good content. What that means is that the world just needs good filters, and we keep seeing more and more of those showing up every day. In the music world, there's a ton of new music being produced all the time -- and much of it isn't to my liking. But at the same time I feel like I'm living in renaissance of wonderful music, because I'm able to find fantastic new music all the time via a variety of tools: friends, blogs, Spotify, Turntable.fm, Pandora, and even a few cool (small) record labels who I follow because they release a ton of music I like.

Apparently the same sort of argument is going on among elitists in the ebook world. Thankfully, JA Konrath has jumped into the debate and brought some sense to the world, explaining how authors shouldn't complain about all the new ebooks coming out:

First of all, there are billions of paper books on planet earth right now, but there was never any talk about being too many, or worries the paper market was saturated. What a ludicrous concept.

Author: Do you want put publish my new book?

Publisher: I'm sorry, but there are already too many books. We can't print anymore.

Silly, ain't it?

Furthermore, he points out that research has shown that people who have ebook readers actually tend to read more books than those who read paper books -- suggesting that the market for books is expanding. And, he notes that's likely to continue as ebook readers continue to sell quickly (outpacing the number of new ebooks, even). But the key point is that if you produce quality work, there are mechanisms to make those rise to the top via various filters.

As long as websites like Amazon make browsing easy, the cream has the potential to rise to the top. You don't have to be a monster bestseller. A hardcore niche group of 10,000 fans can support a writer quite easily. Write two ebooks per year at $2.99, and three shorts at 99 cents, and you're making $50k a year.

But ebooks don't stop selling after a year. They sell forever. And good books will eventually find more than just 10,000 readers. And every new book you write will find new readers along with old fans.

Going back to the 2031 figures, an author will have a much better chance of finding those career-sustaining 10,000 readers when there are 100 million ereaders out there.

Or, as his final sentence states, just keep making good content:

And for those not there, remember that cream rises. If you made cream, and it hasn't risen yet: make more cream.

I'd argue (and I think he'd agree) that you do have to do a bit more than just make good content. Connecting with fans and doing more with them certainly helps. But no one putting out bad content is going to impact things if you have good content. Just keep producing that good content.

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Why People Pay More For Access To Infringing Content

Mike Masnick — Fri, 29 Jul 2011 11:27:39 PDT

It's kind of funny to see the entertainment industry make totally contradictory statements about cyberlockers and usenet access providers in talking about infringement. On the one hand, they complain about how it's "impossible to compete with free" because "pirates just want everything for free." But, at the same time, they whine about how cyberlockers and usenet services often charge people for access, thus making them commercial enterprises who (according to the industry) "profit from piracy." But those two things seem somewhat contradictory. If people who engage in unauthorized file sharing only want stuff for free, then why do they pay these providers to get access? And if it's impossible to compete with free, then why does it look like these services have successfully done so? Correspondingly, why doesn't the industry open up its own competitors?

All of this comes to mind as Glyn Moody points us to an "open letter" that Mark Goodge wrote to UK Culture Minister Ed Vaizey, in response to Vaizey's statement that the blocking of access to Newzbin2 wasn't a big deal, because users should simply go to services that offer "legal access to movie downloads at reasonable prices."

However, as Goodge points out, he knows people who pay more for access to Usenet than it would cost to pay for a competing legitimate offering. And the reason is because their infringing activity has nothing to do with just "wanting everything for free," but wanting more convenience, more selection and fewer restrictions:

The reason people will pay for Usenet+Newzbin is that they want to be able to obtain movies in a format that suits them, not a format which suits the provider. They want to be able to download them and watch them whenever they want, not have to be online in order to stream them (assuming, of course, they’ve got enough bandwidth to stream movies anyway). They want a download service that gives them the same ownership and flexibility as buying DVDs. And they want to be able to obtain the movies they want to see without artificial geographic restrictions.

So, apart from the fact that it simply isn’t true that services such as Lovefilm are a suitable solution, it’s pretty clear that there’s a whole untapped market here for legitimate online purchase of movies via download. People are willing to pay, and willing to pay a fair amount -- provided that what they get in return is what they want.

At the moment, the only people making any money out of this market are those involved in infringement. As long as the movie industry maintains its outdated business practices and carries on treating its (potential) customers as the enemy, that’s how it will stay. Blocking Newzbin may result in a short-term drop in the number of people getting movies via Usenet, but it won’t lead to an increase in people getting them via legitimate means until there are suitable alternatives which provide the same level of convenience and functionality.

Contrary to popular belief, most people who “pirate” movies are not doing it for financial reasons. They’re doing it simply because nobody is offering them a product that they want to buy.

In other words, they're happy to pay... if only the industry would offer it to them in the manner that customers want. This isn't a surprise. For years, studies have pointed out that those who infringe really tend to be unserved consumers, who aren't getting the offerings in the form that they most want it. Smart companies realize that this is a form of (free) market research, and look for ways to better satisfy their customer base.

Tragically, the entertainment industry instead looks to politicians and the courts to block consumers from doing what they want, and then pretend it's for consumers' own good.

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New Study: Piracy Increases The Quality Of Content

Mike Masnick — Mon, 25 Jul 2011 11:01:06 PDT

Eric Goldman points us to a very, very interesting new research paper by Atanu Lahiri and Debabrata Day, showing all sorts of real examples about how "piracy" appears to increase the quality of the related goods that are being infringed upon. Of course, this counters the "common sense" argument that such infringement inevitably lowers the quality of content, since the creators and distributors of said content can no longer invest as much in the content.

The key explanatory factor here: the best way to compete with piracy is to offer a better product yourself. And one way to do that is to increase the quality. For example:

A case in point is the European unit of the cable TV channel HBO, which is fighting against unauthorized distribution of its content by illegal torrent websites by raising the quality of its offerings. The piracy rate faced by HBO is estimated to be between 30% to 50%. HBO has responded to this high piracy rate by churning out new high quality contents in different European languages (Briel 2010). New contents are available through both HBO’s cable TV channels as well as its new IPTV channels. HBO’s innovative offerings have reduced piracy and brought in new subscribers. Valve, a video game manufacturer, has also adopted a similar strategy. Since releasing its game Team Fortress 2 in 2007, it has made frequent quality enhancements, including addition of new weapons and avatars. This strategy has encouraged enthusiastic gamers, who have a strong preference for the latest version, to switch to legal downloads.

The study doesn't just look at such anecdotal cases. It digs in on some evidence as well, showing how investments in R&D from software companies continues to increase, almost directly in line with claims that "piracy" rates for those companies has increased. The conclusion: less enforcement of copyright laws will likely lead to greater quality in output in many cases, and conversely that greater enforcement likely leads to less social benefit as the quality decreases, in markets facing the same conditions. In fact, they find that content creators (or distributors) are likely to increase profits by focusing on product quality, rather than enforcement.

Most of the paper focuses on creating and testing an economic model that explains this behavior, and highlights when such factors apply and when they don't, for the purpose of trying to optimize policy as well as an individual copyright holder's response to piracy. That is, they do find some conditions under which the traditional "common sense" view holds, but it seems relatively rare. In fact, one part of the study models whether or not there are "ethical" consumers who don't infringe for ethical reasons -- and finds that in such a world, there tends to be even fewer reasons for increasing enforcement.

Of course, when you think about much of this, it makes sense. We've argued from the beginning that there are tons of ways to "compete" with unauthorized access, and providing quality is definitely one such way. It's nice to see this bit of research adding deeply to this debate, both with real world examples of this happening today and a detailed economic model that explains the behavior.

And yet... our policy makers continue to think that the best answer is simply to keep on ratcheting up enforcement.

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Google Ditches Newspaper Archival Effort... To Help Publishers Charge For Online Content

Tim Cushing — Wed, 25 May 2011 00:51:43 PDT

It seems like it was just a few days ago that we were listening to a Disney exec (one Anthony Accardo) droning on and on about how the tech community (Google, in particular) should be doing more (and more, and more) to prop up Big Content and protect its interests. No sooner had our eyes glazed over when along came the news that Google is abandoning its newspaper archival efforts (which would have benefitted all Google's users) in favor of assisting various publishers in monetizing new online content.

Of course, Google's archival efforts had already coaxed various bitchy noises from various Big Content noiseholes, namely Rupert Murdoch (whose son, James Murdoch, was given free rein to lambast the British Library for attempting to do the same thing). So, thanks to incessant complaining and uphill battle after uphill battle to do a "good thing," Google has apparently decided it might be simpler to just do "a thing" and give publishers a hand with their money problems via OnePass, its new online payment platform.

Obviously, projects like a comprehensive archive of 200 years of newspapers are just another example of Google's selfish efforts to improve the flow of information. This kind of computing power and technical know-how is better utilized constructing virtual tollbooths on the information superhighway.

Honestly, Anthony, your industry can't fail fast enough.

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Groupon... And The Difference Between Idea & Execution

Mike Masnick — Fri, 6 May 2011 18:37:06 PDT

About a month ago, the folks at Planet Money did a nice podcast on the economics of Groupon. There's no doubt that there's a bit of a "coupon" bubble going on these days, with tons of companies crowding into the space, and (as the Podcast notes) a bunch of ex-Wall St. types jumping into the space with talk of creating derivatives on coupons/deals. At the same time, plenty of people have mocked Groupon and insisted that its model isn't sustainable and others can easily come in and kill Groupon. In fact, some of the Wall St. guys who stayed on Wall St. are saying that Groupon's value shouldn't be that high because anyone with a phone can copy them.

Lots of people are discussing Felix Salmon's excellent analysis of the economics of Groupon, which is really more about the fact that Groupon has dominated the space because it executes well. That is, it's not about the idea, it's about the execution. The fact that it has remained dominant despite so many copycats shows that just copying isn't enough. This doesn't mean that Groupon will always be the best at executing (in fact, I doubt it will be). But it's not so simple as just coming in and copying.

This is an issue that comes up all the time when we talk about business and intellectual property. People who haven't built up businesses like this assume that all you need is the idea -- and if an idea can be copied, then the company can't succeed. But that ignores just how important the execution element is. Salmon talks about how hard Groupon works to make sure its advertisers are happy with the results, to a level beyond most of its competitors. However, I think there's another element of Groupon's execution that hasn't received nearly enough attention: how enjoyable it makes the whole thing for consumers.

Groupon employs a bunch of writers who work hard to make sure all of the deals are compelling, enjoyable and fun. It always amazes me how much people underestimate the value of the quality of the writing in Groupon's offers. However, where it really struck me was a few months back, when I was researching some newer competitors to Groupon -- in particular, newspapers that were offering deals directly to compete with Groupon. In theory, newspapers should be able to absolutely destroy Groupon. If you're just standing on the mountain looking down, and seeing who has the advantages here, it's clearly the newspapers. Newspapers already rely on local advertising and deals, and have established long-term relationships in the market. On top of that, newspapers employ a ton of (mostly) high quality writers as well, so they should be able to create similarly compelling content.

And yet, when I was looking at various newspaper Groupon clones, what struck me was how boring and dull their offers were. Even if the deals themselves were comparable (and they often weren't), they just weren't that interesting or compelling to read. And that's because the newspapers -- like the Wall St. analyst above -- are engaging in cargo cult copying, where they think that all that matters is copying the superficial idea -- while missing the secret sauce that goes into the less obvious execution.

As a final aside, the quality of Groupon's content highlights another key point that we've raised many times before: how "infinite goods" like content make scarce goods more valuable. In this case, the "content" created by Groupon's writers (and, yes, this is also an example of how advertising is content) is valuable. But no one's selling the "content." What Groupon is doing is using that good content to make the scarcity of the deals more valuable, making more people willing to buy them.

In the end, I will admit that I have my doubts about the overall sustainability of Groupon itself, but it's not because "the idea" is easily copyable. I'm just not convinced that Groupon can continue to execute as well, and some aspects of what it's offering have some elements of a fad written all over them. But claiming that the company is overvalued because the "idea" is too easy makes little sense.

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If You Can't Understand The Difference Between Money And Content, You Have No Business Commenting On Business Models

Mike Masnick — Mon, 25 Apr 2011 10:06:23 PDT

I've been noticing a really silly trend lately, of copyright maximalists trying to "debunk" people who actually understand the economics of content, by trying to sarcastically equate money to content and then saying, "if it's okay to copy content then isn't it okay to copy money?" It's an argument stemming from pure ignorance, mixed with an unhealthy dose of smugness, and we should try to pop this bubble before it goes much further. In order to do so, let's take a look at a picture perfect specimen of this sort of argument from (of course), an IP lawyer (who else?) named James Gannon, who wrote "How I Learned to Stop Worrying and Love the Copy," all about copying money. It's getting passed around by various copyright maximalists with comments about how "brilliant" it is.

It's brilliant only if you don't understand all of the following: money, economics, copyright, business and value. If you understand any of those things, you might recognize that the analogy makes no sense. Misunderstand all of them... well, then I can see how this argument might make sense. It's also not a very original argument, because we see it all the time and it's been debunked before. But now that it's rising in popularity, let's dig in a little and see if we can explain how utterly ridiculous the comparison is.

Gutenberg did not invent the printing press so that it would be controlled in the hands a few rich and powerful central bankers who desperately cling to outdated business models. With the advent of digital technologies, everyone can and should be free to copy their own money.

I see what you did there. Of course, here's the key thing: money and content are two totally separate things. We write about content frequently, but we also write about money quite a bit, and in fact, have spent an awful lot of time discussing what money is, how it might change and where it's heading. Traditionally and classically, money is defined as three things: a store of value, a medium of exchange and a unit of account. Content is none of those things. You can't compare the two, because they're nothing alike.

And here's the key point that the "har har copy money durrr" crowd doesn't seem to comprehend. Money is a scarcity. They used to go on and on about how content was the same as a car ("you wouldn't steal a car") but the switch to using "money" as the example is because enough people have so debunked that argument by explaining the differences between scarce goods and abundant goods that they (mostly) don't even try any more. But by switching to money, they show that they don't understand what they were being taught. They thought people were only focusing on tangible goods, not scarce goods in explaining the differences. Tangible goods are scarce, but not all scarcities are tangible goods. Money is a perfect example of that.

Money is scarce. It's not scarce because there are a limited number of bills. In fact, most money isn't in bill form at all, so that's clearly not it. Money is scarce because of that first characteristic listed above: it's a store of value, and money, by itself, doesn't create any additional value. The overall value is a scarcity and the money is a representation of that value. You can print more money, but that creates inflation, because the overall value remains the same. That's not the case with content. Contrary to what some claim, getting more content on the market does not take away value. In a culture where shared culture and shared cultural experiences are highly valued, the fact that you can copy content makes it even more valuable. It makes it easier to share that cultural experience.

In other words, content can create new value. Money does not. Money is a store of value. Content is not. Pretending these two things are the same is wrong and will make you look foolish.

Don't get me wrong. I love the bank notes that are created by the Bank of Canada (BoC). In fact, I consider myself to be one of their biggest fans. Even though the BoC will try to stop me if I try to make my own copies of their bills, they should really be flattered.

Imitation is the sincerest form of flattery and I only want to share their work with my friends and family. By allowing me to make copies of their works, my friends might become fans of their currency too. Everyone knows the value of a currency is based on its demand so why not try to get as many fans as possible?

Right, except all of that is simply wrong and shows ignorance of the basic factors of both content and money as described above. When you copy money, you are actually decreasing the value of money. That's not true of content. When you share content with people, you increase the market opportunity for the content providers. That's not true with money. Pretending otherwise is either ignorance or propaganda.

Gannon's piece goes on from there, continuing to pretend that he's sarcastically making a point. It's a really pointless argument, and doesn't make him look particularly intelligent. If he wants to debate actual economics or business models, plenty of us would be happy to do so. Instead, making arguments like this is just silly and doesn't make his point. It just makes him look like he has no real argument, and has to resort to pure sophistry.

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Sometimes It's Better To Just Let People Copy Your Content Than Deal With Licensing

Mike Masnick — Mon, 28 Mar 2011 04:25:46 PDT

For the last few months, we've been going back and forth with a well-known major mainstream news organization about syndicating some Techdirt content. There's no monetary exchange here. They just want to republish some of our content. I'm totally cool with it, as we're perfectly happy to get more people reading what we have to say, and as we've said repeatedly, we've declared everything we do here to be in the public domain so people can do what they want with it. Yet, because of the way things work these days, this company still requires a licensing agreement, and that's meant months and months of back and forth delays as lawyers have to look over stuff. Admittedly, some of this is my fault for being slow to review things, but that's part of the hassle. I'd be perfectly happy if this publication just decided to start reposting posts here with a nice linkback without even having to go through the legal discussion. In fact, the more we've gone back and forth over the agreement, the more I realize that this license agreement only serves to make things worse for me -- because the lawyers want me to "indemnify" and promise that anything I write won't get them in legal hot water. In other words, all this license really does is create increased liability for me.

I'm almost wondering if a better strategy isn't to just follow the strategy of the site Universe Today, which was sent in (months ago, actually) by clemahieu, who put up a post telling major media properties to "please 'steal' our content":

I’m not sure if you've noticed, but Universe Today articles are showing up on other websites, including our good friends over at Discovery News, Physorg, and even the Christian Science Monitor. I've had a few people emailing me, warning me that people are stealing our content.
They're not stealing, I'm encouraging them to steal. Here's the deal, and I've actually said this for years and years: feel free to use Universe Today articles for anything you like. You don't need to ask permission. If you find an article that you like, and you'd like to put it on your website, be our guest. Free. You can put it into a website, record it as a podcast, include it your Astronomy Club's newsletter, etc.
All we ask is that you attribute Universe Today as the original source of the article, and that you give credit to the original writer. If it's on the web, please provide a link back to the original article on Universe Today. I think that's fair. Free content for your website in exchange for a link back.

We've had a few other big news organizations approach us about similar deals to the one I mentioned above, and I'm pretty tempted to just point them to this post going forward, and tell them to use whatever they want (which they could already just do) rather than have to go through the whole "license agreement" process again.

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Is The Internet Enabling Bad Content... Or Killing Bad Content?

Mike Masnick — Fri, 4 Mar 2011 19:39:00 PST

One of the common refrains we hear from the modern Luddite is that one of the awful things about today's internet culture is that it's flooded with too much "crap." One of our regular critics in the comments insists that key point and our failure to realize what this means for the world is why he spends so much time attacking everything I post. He's worried about what all that crappy content means for the world. Of course, that always makes me wonder why he bothers spending time paying attention to crappy content. After all, one of the nice things about the internet is that you only have to pay attention to what you like. It's truly an elitist position to complain about the crap that's out there. The thing is, it's really not a problem.

First, what may be crap to you may be wonderful to someone else. The idea that there's some objective measure of what's great and what's crap when it comes to content for everyone is just silly. As someone who likes a few niche areas of music, the ability for me to find out about more artists from around the globe has been amazing. And, yes, even if I discover some of them aren't very good, it's easy to move on and find the next band that's really fantastic.

But the bigger issue is that even if there's a ton of crappy content out there, this is really a filter problem. And, some are realizing that the reality is that the internet actually helps stop crappy content (found via obhi and the infdist panel). The point raised in the link is that, historically, professional content creators were able to deliver bad content all the time -- and just hide it behind a massive marketing campaign. People would go see awful movies because they didn't realize how awful they were.

But today, that's no longer true. Word of mouth travels fast, and is attached to all sorts of content. Haven't heard of the movies playing at the theater? Just look them up quickly online and you'll get an immediate sense of whether or not people liked it. The fact is that the internet acts as a filter to help you avoid crappy content. It still gets created, but it's even less likely to get in the way than it did before. Back before the internet, when I used to go searching for new obscure bands in a particular genre, half the time I'd be making a total guess about the quality of an album (sometimes based on the album artwork). But, today, I no longer have to do that. I can see what others think, I can sample the music via their own websites, etc.

There may be more "crap" online, because now everyone can get their own content out there, but it's easier than ever to avoid that crap and easier than ever to find the good stuff -- and that's true both at the amateur and the professional level. The internet doesn't cause anyone to be overloaded by crap... unless you're bad at using the internet.

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Stop Thinking That Tech & Content Are Fighting Each Other

Martin Th�rnkvist — Thu, 24 Feb 2011 11:17:00 PST

The following is a guest post from Martin Thornkvist, who both runs a Swedish indie record label, and works for Media Evolution -- an organization designed to help its various members learn about and embrace new media innovation opportunities. This is cross-posted from his blog at Media Evolution, and raises a really good point. Too often people talk about technology and content as if the two are at war with each other, rather than recognizing how it's a complementary relationship.

The first quarter 2011 Apple made a profit of ~~$26.74 billion~~ $6 billion. An impressive 17% of that is from their latest product, the iPad. Having followed Apple's reports for some years it struck me just how unimportant content distribution is for them. In economic terms at least.

The iTunes store counts for only 5% of Apple's overall profit. In light of that fact, I have a hard time understanding why they are upsetting content providers by increasing the areas where they take a cut of the revenue.

It's obvious that Apple, and other tech companies, are using content to sell hardware. And damn, they are good at making us buy new products each and every year.

Hook and bait

It's obvious that the main objective of dealing with content for Apple, and tech companies in general, is to boost hardware sales. These days you can't hear a mobile executive talk without mentioning the importance of building an ecosystem for content to sell handsets.

The fisherman needs both a hook and bait to catch a fish. The fish is too smart to go for a hook without bait, like customers with tech products. And the bait without a hook is a fiesta for the fish rather than the fisherman, kind of like being a fish in a bay of pirates.

When looking at the media landscape we can see that everybody wants to be the hook. The hooks are owning the customer and the ecosystem in which they interact. That means they can control price, pace of releases and the right to set the rules of the game.

The media industries were used to being the hooks. That changed many years ago. Now, it's just about creating those alternative hooks of income streams yourself.

To many the question of being a hook or a bait is emotional. Everybody sees their work as the center of the media landscape and wants the rest to obey to their wills.

Stop making life hard for each other

Even though content distribution represents a small percentage of Apple's overall profit, they are making life hard for content producers by changing the rules of the game. Most recently they announced that for publishing companies to sell their subscriptions inside applications, they will take a 30% cut. It's still uncertain whether that counts for music apps like Spotify as well.

The content side is making it equally hard for tech companies that want to develop new media platforms. Music labels, film studios and book publishers can arguably be said to make it a nightmare to license their products. This is instead of acknowledging developers and engineers to be their best buddies to create new ways of providing content to customers, and eventually help them make money they badly need.

Interdependent relationship

We need to understand that technology is nothing without content and content would be nothing without technology. Technology and content for sure has an interdependent relationship.

For a long time the content producers had the upper hand. Right now the technology providers act like they have it. But in the long run they both need to cooperate to keep prospering.

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Once Again, If You Don't Offer Authorized Versions Of Released Content, Don't Be Surprised If People Get Unauthorized Copies

Mike Masnick — Thu, 10 Feb 2011 11:33:04 PST

We just had a post about a guy in the UK who could not buy the version of RosettaStone's language training software that he wanted because the company would not sell it to him. In response, he felt compelled to pirate it, rather than pay lots of money for a lesser version with no promised upgrade. And here's another, similar case, involving venture capitalist Fred Wilson, who could not find a legitimate way to buy The Streets' new album after hearing that it was being released. After searching all over for it, the best he could do was order a CD. Instead, he ended up getting an unauthorized copy.

Then I searched the Internet for the record. It was not even listed in iTunes or emusic. It was listed on Amazon US as an import that would be available on Feb 15th, but only in CD form. I'm not buying plastic just to rip the files and throw it out. Seeing as it was an import, I searched Amazon UK. And there I found the record in mp3 form for 4 pounds. It was going to be released on Feb 4th. I made a mental note to come back and get it when it was released.

I got around to doing that today. I clicked on "buy with one click" and was greeted with this nonsense (click on the image if you want to read it). So then I went to find a VPN or proxy service that would let me grab a UK IP address so I could buy the record. That was an exercise in frustration. All I could find was monthly or daily services that were 2-3x the cost of the record. I could not find a free service that would let me change my IP address for a few minutes so I could download the file. As much as I wanted to pay the 4 pounds and pay for the record, I wasn't going to lay out $10 or more to do that.
So reluctantly, I went to a bit torrent search. I found plenty of torrents for the record and quickly had the record in mp3 form. That took less than a minute compared to the 20+ minutes I wasted trying pretty hard to buy the record legally.

Fred points out that he spends a ton of money on music every year and wanted to spend money on this music. But he was prevented from doing so for no clear reason. As he says at the end of his post:

I don't know whose idea this is of the way to market a record but I'm hoping they read this and never do this to a fan again. Fans love music. They want to support the musicians and they want to pay for music. But if you put enough hurdles in front of them, they will become pirates. As I did this morning.

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Apple Trying To Run All Content Sales Through Its Own Sales System

Mike Masnick — Tue, 1 Feb 2011 16:05:25 PST

Apple continues to make the iPhone/iPad app platform as obsessively controlled as possible. The latest are reports that Apple is starting to block other apps that sell content within their apps -- i.e., no more Kindle purchases on your iPad. The story is that Apple now wants all such purchases to go through Apple's cash register, so it gets a cut. Of course, that just seems like another opportunity for folks to seek out alternative solutions, such as via web apps, which Apple can't block. This seems like the sort of move that could backfire on Apple. It's no secret that the company likes to control such things, and to force everything through its own gateway and payment systems (where it gets to take a cut), but if it keeps doing things like that it's going to piss off an awful lot of potentially useful partners.

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