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<title>Techdirt. Stories filed under &quot;profits&quot;</title>
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<image><title>Techdirt. Stories filed under &quot;profits&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Mon, 4 Mar 2013 03:28:30 PST</pubDate>
<title>Upon Further Review... Judge Realizes The Jury In Apple/Samsung Case Screwed Up</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130301/18133122175/upon-further-review-judge-realizes-jury-applesamsung-case-screwed-up.shtml</link>
<guid>http://www.techdirt.com/articles/20130301/18133122175/upon-further-review-judge-realizes-jury-applesamsung-case-screwed-up.shtml</guid>
<description><![CDATA[ After Judge Lucy Koh's <a href="http://www.techdirt.com/articles/20130130/00544821821/onto-appeal-as-judge-basically-keeps-everything-as-is-applesamsung-patent-dispute.shtml">ruling</a> at the end of January, it appeared that she was <i>not</i> going to delve into the jury's efforts, despite many concerns that the jury clearly <a href="http://www.techdirt.com/articles/20120826/23534320161/applesamsung-jurors-admit-they-finished-quickly-ignoring-prior-art-other-key-factors.shtml">did not read</a> and <a href="http://www.techdirt.com/articles/20120830/02063020214/samsungapple-jury-foremans-explanation-verdict-shows-he-doesnt-understand-prior-art.shtml">did not understand</a> the jury instructions.  However, on Friday, Koh came back and <a href="http://www.groklaw.net/article.php?story=20130301161659602" target="_blank">explicitly called out the jury for not following the rules</a>, and cut the initial award by 45% (or about $450 million).
<br /><br />
The key issue: the jury instructions were explicit that the jury not award Apple based on <i>Samsung's profits</i> for any <i>utility</i> patent infringements.  But, in looking through the awards, it became clear that this was <i>exactly</i> what the jury did.  Note that all of this came about in response to Apple's attempt to <i>increase</i> the award above $1 billion -- and, as a result, the reward has now been massively reduced.
<blockquote><i>
Apple&#8217;s motion for an increase in the jury&#8217;s damages award is DENIED. The Court declines to determine the amount of prejudgment interest or supplemental damages until after the appeals in this case are resolved.
<br /><br />
Because the Court has identified an impermissible legal theory on which the jury based its award, and cannot reasonably calculate the amount of excess while effectuating the intent of the jury, the Court hereby ORDERS a new trial on damages for the following products: Galaxy Prevail, Gem, Indulge, Infuse 4G, Galaxy SII AT&#038;T, Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Tab, Nexus S 4G, Replenish, and Transform. This amounts to $450,514,650 being stricken from the jury&#8217;s award. The parties are encouraged to seek appellate review of this Order before any new trial.
</i></blockquote>
And yes, the judge clearly called out the jury:
<blockquote><i>
... it is apparent that the jury failed to follow the Court&#8217;s instructions on the law, and awarded damages based on a legally impermissible theory. This award cannot stand.
</i></blockquote>
Either way, this is far, far, far from over.  There needs to be a new trial just on damages and there are the various appeals.  Stay tuned, because unless the two companies settle (and they've shown little inclination on that front), we've still got a few more years of this mess.<br /><br /><a href="http://www.techdirt.com/articles/20130301/18133122175/upon-further-review-judge-realizes-jury-applesamsung-case-screwed-up.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130301/18133122175/upon-further-review-judge-realizes-jury-applesamsung-case-screwed-up.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130301/18133122175/upon-further-review-judge-realizes-jury-applesamsung-case-screwed-up.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>and-so-this-continues</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130301/18133122175</wfw:commentRss>
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<item>
<pubDate>Wed, 6 Feb 2013 13:30:00 PST</pubDate>
<title>UK Judge: Giving Hollywood Money From Newzbin2 Would Create Chilling Effects On Innovation</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130206/12161121896/uk-judge-giving-hollywood-money-newzbin2-would-create-chilling-effects-innovation.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130206/12161121896/uk-judge-giving-hollywood-money-newzbin2-would-create-chilling-effects-innovation.shtml</guid>
<description><![CDATA[ Hollywood already succeeded in getting UK courts to force ISPs to <a href="http://www.techdirt.com/articles/20111026/04022516521/uk-court-upholds-its-first-web-censorship-order-bt-has-14-days-to-block-access-to-newzbin2-gets-to-pay-privelege.shtml">block access</a> to Newzbin2, a Usenet service that the industry insists could only have been used for infringement.  And that led Newzbin2 to eventually shut down.  But, the Hollywood studios want more.  They've been trying to get money from the operator of Newzbin2, demanding any and all proceeds.  But, surprisingly, <a href="http://www.hollywoodreporter.com/thr-esq/uk-judge-denies-hollywoods-demand-418225" target="_blank">that effort failed yesterday</a> as the judge noted they had no rights to such profits and, importantly that just handing over the proceeds from a business like that <a href="http://www.bailii.org/ew/cases/EWHC/Ch/2013/159.html" target="_blank">might create chilling effects and stifle innovation</a>:
<blockquote><i>
On [Hollywood's] case, a copyright owner's claim would not even be limited to the infringer's profits: in principle, the entire proceeds of sale would be held on trust for the copyright owner. <b>That might both be unfair and stultify enterprise</b>. The proceeds of an infringement might be out of all proportion to the profits generated (e.g. because of the cost of raw materials used in the infringing product). It might not seem just for even a deliberate wrongdoer to have to pay the copyright owner the amount of his gross receipts, and an infringer need not have known that he was breaching copyright. Further, were Mr Spearman's [lawyer for the studios] submissions correct, <b>a person might be deterred from pursuing an activity if he perceived there to be even a small risk that the activity would involve a breach of copyright or other intellectual property rights</b>. As was submitted by Miss Lambert, that could <b>have a chilling effect on innovation and creativity</b>. 
</i></blockquote>
Basically, the judge is recognizing that the entertainment industry is completely overvaluing the content, and arguing that any and all money made is 100% due to the content, and not due to any other factors.  And that's ridiculous.  The judge used some analogies:
<blockquote><i>
Suppose, say, that a market trader sells infringing DVDs, among other goods, from a stall he has set up on someone else's land without consent. The owner of the land could not, as I see it, make any proprietary claim to the proceeds of the trading or even the profit from it. There is no evident reason why the owner of the copyright in the DVDs should be in a better position in this respect. 
</i></blockquote>
The Motion Picture Association responded to this loss by saying that this is just "one particular point" in the case, and that it is planning to appeal.  And, either way, they point out, what really matters is that Hollywood shut down Newzbin2.  Yes, Hollywood killed another service that had figured out how to distribute content better than Hollywood.  And, in the end, isn't that all that really matters?  So long as Hollywood can keep killing services who do things better than Hollywood, the rest is just gravy.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130206/12161121896/uk-judge-giving-hollywood-money-newzbin2-would-create-chilling-effects-innovation.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130206/12161121896/uk-judge-giving-hollywood-money-newzbin2-would-create-chilling-effects-innovation.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130206/12161121896/uk-judge-giving-hollywood-money-newzbin2-would-create-chilling-effects-innovation.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>oops</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130206/12161121896</wfw:commentRss>
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<pubDate>Fri, 19 Oct 2012 08:44:14 PDT</pubDate>
<title>Hollywood Accounting: How A $19 Million Movie Makes $150 Million... And Still Isn't Profitable</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml</link>
<guid>http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml</guid>
<description><![CDATA[ We've written about the wonders of <a href="http://www.techdirt.com/articles/20100708/02510310122.shtml">Hollywood accounting</a> before.  It's a series of tricks pulled by Hollywood studios to make most of their movies look unprofitable, even when they're making a ton of money.  The details can be complex, but a simplified version is that every studio sets up a new "shell" company for each movie -- and that company is specifically designed to lose money.  The studio gives that company the production budget (the number you usually see) and then also agrees to pay for marketing and related expenses above and beyond that.  Both of those numbers represent (mostly) actual cash outlays from the studio and are reasonable to count as expenses.  Then comes the sneaky part: <i>on top</i> of all that, the studios charge the "movie company" a series of fees for other questionable things. Many of these fees involve no <i>real</i> direct expense for the studio, but basically pile a huge expense onto the income statement and ensure that the studio keeps getting all of the movie income -- rather than having to share the profits with key participants -- long after the movie would be considered profitable under regular accounting rules.
<br /><br />
Here's a hypothetical example of how this could work in practice, using round numbers just to make the point (these aren't directly accurate numbers, but the concept is).  A studio funds <i>A Movie</i> with a production budget of $100 million.  It sets up AMovieCo Inc. and gives it the production budget money.  The studio then spends another $50 million on marketing and puts that down as an expense as well -- though, with some of the big studios, some of this money involves paying <i>itself</i> for advertising on its own properties.  Still, even if we assume that's real money spent, you might think that AMovieCo now needs to make back $150 million to be profitable.  But... the studio (which, again, controls AMovieCo completely) then tacks onto all of that, say, a $250 million "distribution fee."  Now, while there may be some money spent on actually distributing the film, the number is almost completely bogus, and much higher than the actual expense for the studio.  Very little actual money needs to change hands here -- it's just a fee on the books (a fee they are effectively charging <i>to themselves</i>).  And it's not just "distribution" but a variety of additional charges. On top of that, the studio may then charge "interest" on that money, even though it's really just lending money to itself.  What it all means is that rather than becoming profitable at ~$150 million (the actual money spent), AMovieCo now needs to earn over $400 million before anyone with a cut of the profits sees an additional dime from the movie, thanks to completely imaginary accounting entries on the books.
<br /><br />
Over on Kevin Smith's (really, really, fascinating) Smoviemakers podcast, Smith recently interviewed filmmaker <a href="http://www.imdb.com/name/nm0220600/" target="_blank">Scott Derrickson</a>, who has made a name for himself in the horror film world.  The whole interview is fantastic and well worth listening to, starting with <a href="http://smodcast.com/episodes/scott-derrickson-the-sinister-exorcism-of-the-day-the-earth-stood-still/" target="_blank">part one</a>.  However, right at the beginning of <a href="http://smodcast.com/episodes/scott-derrickson-pt-2-the-sinister-exorcism-of-the-day-the-earth-stood-still/" target="_blank">part two</a>, Derrickson reveals how he effectively got shafted on one of his most well known films, <a href="http://www.imdb.com/title/tt0404032/" target="_blank"><i>The Exorcism of Emily Rose</i></a>.
<blockquote><i>
Scott Derrickson (SD): It made $75 [million] domestic and $150 [million] worldwide... 
<br /><br />
Kevin Smith (KS): Nice.  You're a true filmmaker, you know exactly what your movies made everywhere...
<br /><br />
SD: Hellllll yeah.
<br /><br />
KS: It's a badge of honor.
<br /><br />
SD: And to all the young filmmakers listening, I had 5% of the net of that movie.  That was in my contract.  And it cost $19 million.  And it made $150 million worldwide.  There's no net.  That's how movie math works.
<br /><br />
KS: So even you were not above being screwed by the system.
<br /><br />
SD: I told my attorney, the next time you're negotiating my net profit for a movie, ask for a ham sandwich instead.
<br /><br />
KS: 'Cause you'll get something.
<br /><br />
SD: 'Cause I'll get something [laughter]
</i></blockquote>
Basically, it's the same story as always.  The net doesn't exist... but because of the extra massive "fees" the studio tacks on, it makes back many times its money before it even has to go anywhere near paying the writer and director to whom it promised 5%.
<br /><br />
Related to this, it comes as no surprise that later in the podcast, Derrickson talks about his recognition that the real future in movies is being able to make them much more cheaply, and outside of studio control.  He talks about being influenced by the movie <a href="http://www.imdb.com/title/tt1470827/" target="_blank"><i>Monsters</i></a>, which was made for a few hundred thousand dollars, but which he notes would have probably cost a studio $50 million to make.  At that point, he realized that to survive in this business, he had to be able to learn to make movies much more cheaply:
<blockquote><i>
SD: The other thing that was happening at that time, was I was watching the business change dramatically.... The movie that was a paradigm shift for me was the sci-fi movie Monsters.  Have you seen that movie?
<br /><br />
KS: Yeah, yeah, yeah.
<br /><br />
SD: It's this great sci-fi movie where this guy, for $800,000 and his little barebones crew, with a small digital camera, made a movie that would have cost Warner Bros. $50 million to make.... He was one of the first of this new generation who grew up with his laptop.  He did like 250 visual effects in the movie on his own laptop.  And he made a $50 million movie for $800,000.  I saw that happening.  I saw what Jason Blum was doing with the </i>Paranormal Activity<i> movies and I said, you know what, the business is changing and you gotta evolve or die.  And so part of my interest in doing a movie so small is that I want to be a part of what's happening right now.  And I want to be a front runner.  I want to be good at it.</i>
</blockquote>
They then discuss his new movie, <a href="http://www.imdb.com/title/tt1922777/" target="_blank"><i>Sinister</i></a>, which had a $3 million budget (which shocks Smith, who insists it looks like a movie that's much more expensive).  Of course, in many ways, this goes back to the discussion we've been having here for many, many years -- responding to the old school movie studio guys, who demand that we answer how could they possibly continue to <a href="http://www.techdirt.com/articles/20060515/0321220.shtml">make $200 million movies</a>.  One answer, which we've pointed out time and time again, is that the question is the wrong one.  Any business should be asking how it can make its product <i>profitably</i> -- not how it can keep its costs high.  No one in the tech industry asks "how can we continue to make $5,000 computers?"  They ask "how can we make profitable computers" and one answer is to <i>make the product more efficiently.</i>  It's great to see filmmakers like Derrickson not just get that, but then celebrate what that means for him artistically and financially as well.
<blockquote><i>
SD: I want what <u>matters</u> to matter to me.... Knowing that I had final cut in the movie, knowing that's what it was about, I've never had more fun or been more relaxed while making a movie, because I just wasn't worried about how it would do.  I'm making this movie because when it's done I'm gonna see it.... I think a lot of filmmakers go through the experience.... you have that difficult studio experience.... you come out of that experience, and it's not just that 'if you die on a swords, it's gonna be my sword,' it's that thing that 'I'm going to make something that's <b>100% pure</b>.  I'm just going to make something 100% pure...'
</i></blockquote>
In the last few years we've been hearing and seeing similar things from a number of filmmakers, recognizing that perhaps the challenges that the movie industry has faced have been self-imposed in large degrees.  The industry got used to doing things one way and have had trouble adapting.  But, of course, the actual artists and creators figure this stuff out and they adapt... even while the big studios still play their accounting tricks.  And have no fear, with a movie this cheaply made, Derrickson notes that if the movie does okay, it could make him "rich" based on the way he structured the deal this time around.  He teamed up with Blumhouse Productions (who backed Paranormal Activity) and while they're using a traditional distributor (which anyone still has to do for a real theatrical release), the economics this time around are quite different than for a film where a major MPAA studio is playing the usual accounting tricks.<br /><br /><a href="http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>a-ham-sandwidch</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20121018/01054720744</wfw:commentRss>
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<item>
<pubDate>Tue, 13 Sep 2011 19:07:00 PDT</pubDate>
<title>Are Entertainment Industry Profits More Important Than Civil Rights?</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20110912/02551715904/are-entertainment-industry-profits-more-important-than-civil-rights.shtml</link>
<guid>http://www.techdirt.com/articles/20110912/02551715904/are-entertainment-industry-profits-more-important-than-civil-rights.shtml</guid>
<description><![CDATA[ <a href="http://www.techdirt.com/profile.php?u=fzzr">Fzzr</a> points us to Rick Falkvinge's recent writeup explaining why the argument that newer, more draconian copyright laws need to be passed to protect the profits of the legacy industry players <a href="https://torrentfreak.com/i-dont-care-about-your-profits-and-it-enrages-me-that-you-think-i-should-110911/" target="_blank">is no excuse for trampling on civil rights</a>.  He compares the situation to Blackwater in Iraq:
<blockquote><i>
When Blackwater Security was playing Grand Theft Auto among civilians in Iraq in retaliation for the 9/11 attacks, with which Iraq had nothing to do, how would you react if they had issued the following statement?
<br /><br />
&ndash; &ldquo;Our profits are being hampered by the civilians&rsquo; rights. It is not fair. In all fairness, we demand that torture should be allowed preemptively to find suspects or people that we find interesting, or because it can boost our profit. Also, we demand the right to detain civilians at will and indefinitely, because we could charge Uncle Sam for that too, boosting our profits even further.&rdquo;
<br /><br />
How would you react to that?
<br /><br />
Let&rsquo;s take another scenario from Blackwater in Iraq:
<br /><br />
&ndash; &ldquo;Our profits are being hampered by the rights of the people. It is not fair. Our profits are falling. In all fairness, we demand the introduction of wanton censorship, allowing us to discover and prevent people from talking about subjects we don&rsquo;t like. Also, we demand to hold messengers responsible to some amount of punishment we determine if they carry sealed letters containing something we don&rsquo;t like. That way, our profits could perhaps be restored to their former glory. After all, it&rsquo;s only fair.&rdquo;
</i></blockquote>
And then he notes that this is, effectively, what the copyright industry is doing.
<br /><br />
Of course, I already know the responses.  The first will be that infringement is not a civil right.  And, the second is that comparing the copyright players to Blackwater is unfair and a low blow.  And both of those points may be true, but are not addressing the key point.  The problem with these new laws being passed are not that they're designed to stop infringement, but that they're stopping all sorts of legitimate forms of speech as well.  And that is something to be seriously concerned about.  And, yes, it is all in the name of trying to keep profits up for some legacy players, even as those players resist every attempt to adapt to a changing market.<br /><br /><a href="http://www.techdirt.com/articles/20110912/02551715904/are-entertainment-industry-profits-more-important-than-civil-rights.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20110912/02551715904/are-entertainment-industry-profits-more-important-than-civil-rights.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20110912/02551715904/are-entertainment-industry-profits-more-important-than-civil-rights.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>questions-worth-asking</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20110912/02551715904</wfw:commentRss>
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<item>
<pubDate>Mon, 20 Dec 2010 16:20:03 PST</pubDate>
<title>Myth Debunking: ISPs Are Profiting From 'Piracy'</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20101214/00242412264/myth-debunking-isps-are-profiting-piracy.shtml</link>
<guid>http://www.techdirt.com/articles/20101214/00242412264/myth-debunking-isps-are-profiting-piracy.shtml</guid>
<description><![CDATA[ One of the popular claims from entertainment industry supporters, who somehow want ISPs to be liable for file sharing, is that "ISPs profit from file sharing."  We hear this <a href="http://www.techdirt.com/articles/20080701/0241361562.shtml">over</a> and <a href="http://www.techdirt.com/articles/20080129/014416102.shtml">over</a> again.  But there's little evidence that's true.  It's not like most internet users wouldn't have internet access if they couldn't file share (that's another myth, where the industry overvalues its own content, without realizing there are other reasons to have an internet connection).  However, even more evidence can be found in the fact that various ISPs continue to work so hard to <a href="http://torrentfreak.com/rogers-bittorrent-throttling-experiment-goes-horribly-wrong-101213/?utm_source=feedburner&#038;utm_medium=feed&#038;utm_campaign=Feed%3A Torrentfreak %28Torrentfreak%29" target="_blank">throttle file sharing traffic</a> because it actually costs them a lot in terms of bandwidth.  The ISPs already have some incentives to minimize traffic hogging (even if their methods are crude and lame right now).<br /><br /><a href="http://www.techdirt.com/articles/20101214/00242412264/myth-debunking-isps-are-profiting-piracy.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20101214/00242412264/myth-debunking-isps-are-profiting-piracy.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20101214/00242412264/myth-debunking-isps-are-profiting-piracy.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>uh,-no</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20101214/00242412264</wfw:commentRss>
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<pubDate>Fri, 10 Dec 2010 07:28:48 PST</pubDate>
<title>Abbott Labs VP Suggests Having Mob Beat Up Columnist Who Exposed Shady Dealings</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20101208/01063412179/abbott-labs-vp-suggests-having-mob-beat-up-columnist-who-exposed-shady-dealings.shtml</link>
<guid>http://www.techdirt.com/articles/20101208/01063412179/abbott-labs-vp-suggests-having-mob-beat-up-columnist-who-exposed-shady-dealings.shtml</guid>
<description><![CDATA[ There's a rather incredible story over in the Baltimore Sun about the extent Abbott Laboratories' execs went to in their effort to <a href="http://www.baltimoresun.com/health/bs-bz-hancock-stents-abbott-20101206,0,5226901.column" target="_blank">sell more of their heart stents</a>.  This is not a unique story, but every time I see a similar story, it serves as a reminder of the problems of putting "healthcare" in the hands of companies who have every incentive to sell you snake oil -- especially when that snake oil is patented and they can charge ridiculous monopoly rents for it.
<br /><br />
The story involves a heart stent sold by Abbott.  Apparently, Abbott cultivated a few doctors and plied them with all sorts of... well...  most people would probably refer to them as bribes... to implant more stents.  The article focuses on one Dr. Mark Midei, who "set a record" by implanting 30 stents in one day.  That would be great if those stents saved lives.  Problem is... a study earlier this year showed that stents were no better than drugs for many patients.  Now, in some cases, they can certainly be helpful, but there was little indication that Midei made much of an effort to see if the over 2,000 stents he was implanting per year were really necessary.  Perhaps this is why:
<blockquote><i>
Abbott feted Midei at Ruth's Chris Steak House. It paid $1,235 for an " Alabama Pig Pickin'" barbecue at his Monkton home two days after the 30-stent marathon. A month earlier it paid $690 for beer and crabs served during a meeting at his house to discuss Abbott's "business strategy."
</i></blockquote>
Also, that 30 implants in one day was referred to as "Project Victory" within Abbott, and it was talked about how the company should continue to do more for Midei, such as "VIP trips."  Oh, on top of that, after it came out that many of those stents never should have been installed, Abbott rewarded Midei by hiring him as a "consultant" to tell the world how wonderful Abbott's stents were.
<br /><br />
So when all this started coming out in the press, Abbott responded with some (one hopes, joking) emails about how they should go beat up the Baltimore Sun columnist who was reporting on the issue.
<blockquote><i>
"Don't you have connections in Baltimore?????" Pacitti e-mailed a subordinate regarding a January column I wrote on heart-artery stents. "Someone needs to take this writer outside and kick his ass! Do I need to send in the Philly mob?"
</i></blockquote>
Again, one hopes he's joking, but it again demonstrates the problems with letting these kinds of companies define healthcare in the US.  I'm not against the ability to profit in healthcare, but shouldn't the profit be about <i>actually keeping people healthy</i>?<br /><br /><a href="http://www.techdirt.com/articles/20101208/01063412179/abbott-labs-vp-suggests-having-mob-beat-up-columnist-who-exposed-shady-dealings.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20101208/01063412179/abbott-labs-vp-suggests-having-mob-beat-up-columnist-who-exposed-shady-dealings.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20101208/01063412179/abbott-labs-vp-suggests-having-mob-beat-up-columnist-who-exposed-shady-dealings.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>after-that,-he-might-need-a-heart-stent</slash:department>
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<pubDate>Tue, 26 Oct 2010 07:24:44 PDT</pubDate>
<title>Not Very Biblical: Investor Sues Bible.com For Not Being Profitable Enough</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20101022/11582611548/not-very-biblical-investor-sues-bible-com-for-not-being-profitable-enough.shtml</link>
<guid>http://www.techdirt.com/articles/20101022/11582611548/not-very-biblical-investor-sues-bible-com-for-not-being-profitable-enough.shtml</guid>
<description><![CDATA[ <a href="http://idle.slashdot.org/story/10/10/22/1440231/Biblecom-Investor-Sues-Company-For-Lack-Of-Profit" target="_blank">Slashdot</a> points us to an amusing story about how an investor who owns about 28% of Bible.com <a href="http://news.yahoo.com/s/nm/20101021/od_nm/us_biblecom_lawsuit" target="_blank">has sued the board for not being profitable enough</a>.  Now, it is true that when the owner of the domain put together a corporation to support it, he wrote in the plan "it is the goal of the board of directors of Bible.com to become very, very profitable," but having failed at that hardly seems something that allows you to get sued.  The investor is specifically claiming that a study suggested the domain name itself could be worth over $100 million, and he wants it to be sold.
<br /><br />
I wondered if the Bible, itself, might have something to say on the matter, and thanks to the lovely thing called the internet, there's actually an <a href="http://www.openbible.info/topics/profit" target="_blank">entire page of Bible verses about profit</a>, with a few choice quotes such as:
<blockquote><i>
"Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also." -- Matthew 6:19-21
<br /><br />
"For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs." -- 1 Timothy 6:10
<br /><br />
"No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money." -- Matthew 6:24
</i></blockquote>
Wonder who's going to file the amicus brief on behalf of God?<br /><br /><a href="http://www.techdirt.com/articles/20101022/11582611548/not-very-biblical-investor-sues-bible-com-for-not-being-profitable-enough.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20101022/11582611548/not-very-biblical-investor-sues-bible-com-for-not-being-profitable-enough.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20101022/11582611548/not-very-biblical-investor-sues-bible-com-for-not-being-profitable-enough.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>money-is-the-root-of-all-evil</slash:department>
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<pubDate>Mon, 14 Sep 2009 08:52:00 PDT</pubDate>
<title>Red Light Camera Vendor Not Doing So Well With Public Opposition Driving Down Its Revenue</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090913/1659426171.shtml</link>
<guid>http://www.techdirt.com/articles/20090913/1659426171.shtml</guid>
<description><![CDATA[ There's been significant growing opposition to red light camera programs, which have a long history of showing absolutely <a href="http://www.techdirt.com/articles/20060405/1345216.shtml">no safety benefit</a>, and are often run for-profit by local governments in combination with private companies.  That opposition is leading more and more cities and towns to <a href="http://www.techdirt.com/articles/20090629/0206575395.shtml">dump</a> the red light cameras -- while some operators are getting caught illegally <a href="http://www.techdirt.com/articles/20090701/1842145429.shtml">decreasing</a> the time of the yellow or amber lights to try to issue more fines.
<br /><br />
<a href="http://jeffnolan.com/wp/2009/09/11/redflex-struggles/" target="_blank">Jeff Nolan</a> alerts us to the news that one of the biggest players in the space, Redflex, has <a href="http://www.thenewspaper.com/news/28/2879.asp" target="_new">announced that public opposition to its cameras has created a real drain on revenue</a>, and its profits were down significantly.  This would be the same Redflex that just so happened to <a href="http://www.techdirt.com/articles/20090124/1255283517.shtml">fail</a> to live up to its contract in Denver to deliver data that could be used to determine whether or not the cameras were really effective.<br /><br /><a href="http://www.techdirt.com/articles/20090913/1659426171.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090913/1659426171.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090913/1659426171.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>awww...-too-bad</slash:department>
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<pubDate>Wed, 8 Jul 2009 07:15:00 PDT</pubDate>
<title>The Secret 'Profits' Of YouTube</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090707/0202015463.shtml</link>
<guid>http://www.techdirt.com/articles/20090707/0202015463.shtml</guid>
<description><![CDATA[ It's become quite common for folks who dislike "web 2.0" or the concept of "free" business models to mock YouTube as an absolute disaster.  For example, music industry lawyer (and hater of all things "free") Chris Castle has already <a href="http://www.musictechpolicy.com/2009/07/new-yorker-review-of-chris.html" target="_new">declared the site dead</a> (which is news to, well, just about everyone).  Over in the UK, the Independent is running an odd little article that goes back and forth on <a href="http://www.independent.co.uk/life-style/gadgets-and-tech/features/how-can-youtube-survive-1734267.html" target="_new">whether or not YouTube is a real business proposition</a> and then tries to extrapolate from there whether or not "free" works as a business model.  The whole discussion is a bit off -- since YouTube really doesn't represent a good example of a business model that uses free, since the bandwidth costs of hosting video is so high.  To use that as a proxy for the concept of free would be a mistake, since most other business models don't have that same issue.
<br /><br />
That said, really the only truly worthwhile parts of the article are the ones where analyst Keith McMahon speaks up.  He seems to be one of the few folks out there who actually has bothered to look at YouTube within the larger context of Google itself, and makes a few important points about (a) why YouTube helps Google in many other ways and (b) Google benefits from the widespread belief that YouTube is losing tons of money:
<blockquote><i>
"There are many urban myths surrounding the way that companies extract value from the internet," he says. "Google's spin-off benefits from owning YouTube include the accumulation of our data and strengthening of their network design -- and the more time people spend watching online video, the more advertisers will pour into marketing on the internet as a whole. There's no doubt that Google can afford YouTube."
<br /><br />
McMahon also believes that by keeping quiet about YouTube's hidden benefits and by allowing the misconception of it as a deeply unprofitable business to circulate, things work very nicely in Google's favour when it comes to negotiating with copyright holders in the world of TV, movies and music. Copyright holders can't demand money that isn't there, and it would certainly take no more than a hint of profitability at YouTube for lawyers to descend, threatening court cases and demanding higher royalties. In the new, topsy-turvy world of online economics, it seems astonishing that losses on paper have actually made YouTube a more powerful online force. 
</i></blockquote>
This leaves out another point as well: the more that people believe YouTube is unprofitable, the less likely they are to build serious competitors.  I have no idea whether or not YouTube is actually profitable directly yet (I'd doubt it), but I think those who are insisting that the acquisition by Google was a bad idea, or that YouTube is somehow on its deathbed, haven't taken much time to understand some basic trendlines or the larger picture of how Google views YouTube, and the opportunities it has to make money via YouTube down the road.<br /><br /><a href="http://www.techdirt.com/articles/20090707/0202015463.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090707/0202015463.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090707/0202015463.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>don't-worry,-be-happy</slash:department>
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<pubDate>Tue, 13 Jan 2009 12:01:00 PST</pubDate>
<title>The Ethical (And Mathematical) Dilemma Of Madoff Investors Who Took Some Money Out</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20090109/1602203349.shtml</link>
<guid>http://www.techdirt.com/articles/20090109/1602203349.shtml</guid>
<description><![CDATA[ With respect to the Bernard Madoff <a href="http://www.techdirt.com/articles/20081211/1659153093.shtml">scam</a>, I'd been hearing plenty of people ask "where did the money go?" since there's none left.  The answer has always been pretty straightforward: as a Ponzi scheme, much of the money went back out to the earlier investors who took some money out.  The rest was probably invested in various investments whose value has gone down to almost nothing in the last few months.  However, this is apparently creating something of a quandary for some of those early investors who took money out -- but still had some money (theoretically) still with Madoff.  <a href="http://news.yahoo.com/s/ap/20090109/ap_on_bi_ge/madoff_false_profits" target="_new">Should they apply for aid from the Securities Investor Protection Corp</a>?
<br /><br />
SIPC acts like an FDIC for these types of investments, helping to protect investors in cases of fraud.  But some are realizing that if they took money out from Madoff over the years (and some did so profitably), if they go ask for money from the SIPC, it could alert regulators to the fact that they profited from Madoff's scam -- and they could suddenly <i>owe</i> the "profits" they had taken out in the past.  The Feds can demand that those who profited from Madoff's scam return the money -- but that will involve actually being able to track them down.  For some "victims," it may be better to just keep what they have, keep quiet, and forget what they thought they still had invested with Madoff.  But there are concerns for others who have already admitted to cashing out (sometimes a long time ago), are they suddenly going to be forced to return the money they took out of their accounts?<br /><br /><a href="http://www.techdirt.com/articles/20090109/1602203349.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20090109/1602203349.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20090109/1602203349.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>what-to-do?</slash:department>
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