Techdirt. Stories filed under "strategy"

EA Labels President: DRM Is A Failed Strategy, But SimCity Didn't Have Any DRM

Timothy Geigner — Thu, 28 Mar 2013 12:03:58 PDT

I must admit that there are times when I become very concerned about whether or not I can actually read. Or, more concerning yet, whether I have the proper capacity to imbibe reality at all. This, friends, is surely one of those times. Barely a week removed from Super Meat Boy developer Tommy Refenes alerting Electronic Arts to the fact that their own DRM hurts their bottom line more than any amount of piracy, still in the midst of what some might call the wind-down curve of the SimCity fiasco, and with examples like Spore and their single-use codes still in my mind, I find a statement made by EA Labels President Frank Gibeau that seeks to unmake all of those thoughts.

At a developers conference, Gibeau revealed his belief that DRM is a completely useless tool for game developers. Then, to make sure that my brain was as confused as possible, he made sure I knew that SimCity didn't have any DRM component to it.

"DRM is a failed dead-end strategy; it's not a viable strategy for the gaming business. So what we tried to do creatively is build an online service in the SimCity universe and that's what we sought to achieve."

I'll wait for your own cerebellums to cease attempting to commit suicide before beginning with the obvious rebuttal: wut? EA, notorious purveyor of DRM, now says that DRM is a failure. They also insist that requiring an always online connection for their SimCity game to function out of the box was never about DRM, it was about making the game an MMO.

"I was involved in all the meetings. DRM was never even brought up once," Gibeau told GI.biz. "You don't build an MMO because you're thinking of DRM—you're building a massively multiplayer experience, that's what you're building. If you play an MMO, you don't demand an offline mode, you just don't. And in fact, SimCity started out and felt like an MMO more than anything else and it plays like an MMO."

Except, of course, when it doesn't. In fact, if the game can be tweaked to play offline and is essentially the same experience, then your game is almost exactly nothing like a massively multiplayer online game. This, particularly from a company that as been caught with its hand in the lying cookie jar already, is an instantly dismissable pile of BS.

But, SimCity aside, I would issue a challenge to Mr. Gibeau. If in fact you and your company believes that DRM is a "failed strategy", then I am sure we shall never see any form of DRM in your games moving forward. Who wants to take bets on that one?

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MPAA: Millions Of DMCA Takedowns Proves That Google Needs To Stop Piracy

Mike Masnick — Mon, 17 Dec 2012 10:39:01 PST

The delusions of the MPAA are really impressive sometimes. For years, they've been pushing to make search engines like Google liable for blocking sites they don't like. That was a key provision in SOPA -- that it would force "information location services" to disappear links to sites deemed "dedicated" to infringement. Of course, as we've noted, it was only after SOPA failed that Hollywood finally started using the tools already available to it to ask Google to remove links to infringing works. At the same time, we noted that the fact that Google is now processing an astounding 2.5 million DMCA takedown notices a week suggests that something is really, really broken. We meant copyright law itself -- but our good friends at the MPAA went in the other direction, and suggested it showed how Google needs to do more, and how artists are overly burdened by the DMCA:

There is a staggering amount of copyright infringement taking place every day online and much of it is facilitated by Google, as their own data shows. According to Google, they receive 2.5 million takedown requests per week – and that data does not even include YouTube, where an enormous amount of infringement takes place. That means that by Google’s own accounting, millions of times each week creators are forced to raise a complaint with Google that the company is facilitating the theft of their work and ask that the infringing work or the link to that work be removed. Often, even when the links are removed, they pop right back up a few hours later. That’s not a reasonable -- or sustainable -- system for anyone....

We couldn’t agree more with Google that this data shows that our current system is not working – for creators, or for Google. But we can’t lose sight of the fact that it also confirms the important role that Google has to play in helping curb the theft of creative works while protecting an Internet that works for everyone. We look forward to continuing to work with them to tackle this urgent challenge.

Now, I agree that it's difficult for copyright holders (often not the actual creators, as the MPAA falsely implies) to have to monitor and track all of this stuff. That's a big burden. But... the MPAA ridiculously implies that there are only two options here: (1) "Creators" keep filing DMCA takedowns or (2) Google has to do more. That ignores reality in multiple ways. First off, the staggering number of bogus takedowns highlights the key point that we've made all along, which is that the only party who actually knows if a work is infringing is the copyright holder -- and even then, they often seem to get confused. Somehow thinking that a third party with no direct knowledge can somehow do more or should be more responsible is a little silly.

But the bigger issue is that this assumes -- as the MPAA always seems to assume -- that the only response to infringement is "more enforcement." What it seems to refuse to consider is that there's another path: it's the path in which the MPAA studios stop focusing so much on beating everyone with a stick, and start fixing the broken parts of their business model. Time and time again the evidence shows that if you offer people what they want, at a reasonable price, and with convenience, they pay -- and the "problem" of copyright infringement shrinks to being minimal (or, in some cases, it actually helps you). So, a rational individual or organization would look at the scale of the "problem" that the MPAA is talking about, along with all of the historical data on how little enforcement does to get people to actually buy -- and realize that perhaps that strategy is a mistake. Even the MPAA admits in this very post that the works often pop back up online.

Maybe -- just maybe -- the problem isn't search engines not doing enough, but rather the strategy that focuses on the stick of enforcement, rather than the carrot of providing consumers more of what they want. I recognize it's a crazy idea, especially at the MPAA -- where they have a whole freaking division of "content protection" VPs who need to justify their giant salaries, rather than a division for helping filmmakers embrace useful business models -- but it seems like a more productive path forward.

Oh, and one other thing. Could the MPAA stop with its bullshit claims that enforcing copyright couldn't possibly have an impact on free speech? This blog post has this in it:

One thing that’s important to make clear in any serious discussion about tackling online theft: absolutely no one is advocating for the restriction of speech on the Internet. Freedom of expression is a cornerstone of the Internet, and a cornerstone of the film community, which has spent the last century advocating for artists to be able to express themselves freely on the screen. Removing infringing works online isn’t limiting access to information or ideas, it's ensuring that the creativity and hard work that went into making a film is encouraged to flourish.

If the only thing taken down due to copyright claims was "infringing works," they'd have a point. But it's not. Copyright claims are used all the time to censor or take down sites or content that people just don't like. That's the concern. The massive expansion of copyright law and broad tools like the DMCA's notice-and-takedown lead to massive amounts of collateral damage that -- absolutely and without question -- infringe on free speech rights. Until the MPAA is willing to acknowledge that simple fact, it's difficult to take the organization seriously.

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Doubling Down On Secrecy: ITU Believes Secret Media Strategy Key To Avoiding SOPA/ACTA Fate

Mike Masnick — Mon, 3 Dec 2012 10:58:39 PST

As the WCIT (World Conference on International Telecommunications) gets under way in Dubai, the ITU is making its play to regulate the internet, potentially to aid authoritarian governments in censoring or limiting the internet, or to divert money from innovative internet companies to stagnant state telcos out of a claim of "fairness." There's obviously been a lot of talk about it, and the ITU keeps claiming that it's just a neutral body to facilitate discussions, even as increasing evidence suggests it's urging many of the crazier proposals forward itself.

And now it's come out that ITU officials recently held a "secret" meeting to figure out how they were going to avoid getting SOPA'd, having the world rise up in protest as it tries to implement its internet regulatory regime. Following some bizarre and paranoid fantasy about how the anti-ITU, anti-WCIT efforts are really just because an unnamed "lobbying group" didn't like one proposal (the one mentioned above about diverting money from internet companies to telcos), the meeting got down to business: how could they use social media to prevent SOPA- or ACTA-like uprisings from the public:

In response to the anti-WCIT “campaign,” according to the September retreat’s preparatory materials, the ITU reluctantly launched a “counter-campaign,” which the agency believes “has been fairly successful outside the US and somewhat successful even in the US,” where “some of the statements made to denigrate ITU and WCIT are so extreme that they were easy to challenge and rebut.”

Going forward, the ITU focused at its meeting on the possibility of an “intensive anti-ratification campaign in OECD countries, based on the so-called lack of openness of the WCIT process, resulting in a significant number of countries refusing to ratify the new ITRs.” The ITU calls this possibility “the so-called ACTA scenario,” referring to sometimes violent protests against the secret ACTA treaty that took place this year.

To develop the next phase of its “counter-campaign,” the ITU hosted speakers from leading PR and advertising agencies to advise them on the use of social media. For example, Matthias Lufkens, Head of Digital Strategy for global public relations firm Burson-Marsteller, gave a presentation on how his agency helped the World Economic Forum leverage tools such as Facebook, Twitter, and Flickr to fend off “occupy”-style protests that occurred both physically in Davos and on the Internet.

“There is a risk that [the ACTA scenario] will happen, but our communication campaign can mitigate this,” the internal document says.

Of course, the campaign doesn't really appear to be going that well -- especially since so much of it revolves around "deflect[ing] media questions from secrecy, taxes and censorship" to the blandly empty (and absolutely silly) statement that "the revised ITRs have the exciting potential to pave the way for a broadband revolution in the 21st century." I'm sure that sounds catchy on a tweet. The problem, of course, is that folks on the internet don't tend to believe that kind of bureaucrat-speak when they know it's not true. As Downes notes:

Here’s the unvarnished truth, which no PR agency can help the agency talk, tweet, or prevaricate their way around: The commercial Internet emerged and matured entirely since the treaty was last reviewed. It developed in spite of the ITRs, not because of them.

There is a familiar pattern here of ambitious regulators who have no expertise and little experience with the Internet proclaiming themselves its benevolent dictators, only to find the peasants revolting before the coup has even started.

The ITU is no different than the sponsors of ACTA, SOPA, PIPA, and other attempts at regulating the Internet, its content, or its users by governments large and small. Like the media lobbyists who continue to see the successful fight to kill SOPA and PIPA as a proxy war waged solely by Google and other Internet companies, the ITU simply can’t accept the reality that Internet users have become their own best advocates.

Once again, these bureaucrats really have no clue what they're doing.

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The DVD Is Dying. Hollywood's Plan? Do Nothing And Cede Ground To File Sharing

Tim Cushing — Thu, 23 Aug 2012 07:06:39 PDT

David Pogue, NY Times columnist and known copyright infringer, has a new post up over at the Scientific American discussing piracy; more specifically, Hollywood's insistence on driving people to piracy with its lack of digital offerings and a distribution system that depends heavily on artificial limitations.

The first issue plaguing Hollywood's thinking? The DVD is dead and no one in control has realized it. The future lies in streaming movies, not plastic discs. It took the recording industry several years to realize the fact that its customers were not nearly as attached to its physical products as it was. Add to that the fact that many people prize convenience over ownership and it's clear that trying to steer people toward purchasing all of their entertainment isn't the way to go.

Netflix's CEO says, “We expect DVD subscribers to decline steadily every quarter, forever.” The latest laptops don't even come with DVD slots. So where are film enthusiasts suppose to rent their flicks? Online, of course.

Streaming movies offers instant gratification: no waiting, no driving—plus great portability: you can watch on gadgets too small for a DVD drive, like phones, tablets and superthin laptops.

The demand is already there and, as the technology catches up, it will only increase. You can take your music anywhere but most DVDs are still relegated to DVD players. Yes, there are workarounds, but when consumers are looking for the least amount of friction, streaming a movie easily trumps burning off a copy or ripping it to the hard drive. If they can't get the films they want in the format they want, they'll either skip it entirely, find a "competing" provider or look for something else readily available through streaming services.

Streaming services or online rentals, if implemented correctly, would give the motion picture industry some steady, if not increasing income well into the future. But it's completely disinterested in implementing these services in a realistic fashion, instead choosing to double-up on artificial scarcity.

For all of the apparent convenience of renting a movie via the Web, there are a surprising number of drawbacks. For example, when you rent the digital version, you often have only 24 hours to finish watching it, which makes no sense. Do these companies really expect us to rent the same movie again tomorrow night if we can't finish it tonight? In the DVD days, a Blockbuster rental was three days. Why should online rentals be any different?

Yeah. Exactly. Why? Why 24 hours? Netflix, your main competition in this arena, will let you keep the DVD(s) all the way up until they actually shut down the DVD service, only this time for real. As for their streaming "rentals?" Whatever's available stays available for repeated viewings all the way up until it's yanked from the lineup, usually by one of you (points accusingly at the Motion Picture Industry).

Speaking of holes in the lineup, when are you (again with the pointing) going to stop doing this sort of thing?

[P]erhaps most important, there's the availability problem. New movies aren't available online until months after they are finished in the theaters, thanks to the “windowing” system—a long-established obligation that makes each movie available, say, first to hotels, then to pay-per-view systems, then to HBO and, only after that, to you for online rental.

Worse, some movies never become available. Star Wars, Raiders of the Lost Ark, Jurassic Park, A Beautiful Mind, Bridget Jones's Diary, Saving Private Ryan, Meet the Fockers, and so on, are not available to rent from the major online distributors.

How's that "plan" working out for you, Hollywood? Keeping those pirates at bay with your sometime/later/still later/possibly never windowing? To be honest, I don't think you really care. Once all the distribution lines have been wrung dry of any cash, it's time to retire back to the boardroom and blame filesharing for any numbers that seem slightly weak. Blame them if you must, but who's screwing who at this point?

Of the 10 most pirated movies of 2011, guess how many of them are available to rent online, as I write this in midsummer 2012? Zero. That's right: Hollywood is actually encouraging the very practice they claim to be fighting (with new laws, for example).

Look, I don't want to tell you how to do your jobs, but sweet something of somewhere, someone needs to be offering a little guidance. You don't offer rentals of movies people actually want. You do offer rentals of movies that everyone's sick of after their multiple appearances in various windows. Other movies you just flat out don't offer at all. And yet, it's piracy that's keeping you from "breaking even." I would assume someone has put a bit a thought into this self-inflicted predicament. Pogue finds something akin to an explanation browsing around Disney's website:

“Unfortunately, it is not possible to release or have all our titles in the market at once.” Oh, okay. So they're not available because they're not available.

"Not possible" being PR code for "not until we're absolutely forced to, but we will fight this every step of the way." But why all the fighting? It didn't work for the recording industry. It won't work for the movie industry. The television industry seems to have weathered the disruption slightly better, but still expends a lot of effort locking up currently running shows and shutting down live streams that would actually GAIN them additional viewers to sell to advertisers.

Pogue has appended a list entitled "5 Ways Hollywood Can Stop Digging Its Own Grave" to his post and they're all common sense (at least to the "layperson"). The largest Hollywood-wielded shovel should have disappeared long ago: the release window. Related: "When it's buyable, it should be rentable."

This is the way things work these days and it's not just something that went into effect over the last 72 hours. If pirates have your stuff several months before you're planning on releasing it to paying customers, how many paying customers do you expect to have left once you deign them worthy of throwing money at your product?

Final word from Pogue:

Listen up, Hollywood: Nobody ever went out of business offering a good product for sale at a reasonable price with an eye toward pleasing the customer. You should try it some time.

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If Your Business Strategy Relies On Suing Others, You're Not A Business, You're A Leech On The System

Mike Masnick — Fri, 9 Sep 2011 18:44:48 PDT

Canadian patent troll Wi-LAN has a long history as trying to tax any and all wireless innovation with patent threats. With the news that it's suing a bunch more companies -- including Apple, HTC, HP, Dell, Sierra Wireless and others, the company is merely cementing its reputation as a taxer of innovation, rather than a builder of anything useful. The company doesn't seem shy about this. As the link above notes, the company seems to brag about this "business" strategy:

What's more, Skippen said he believes "that our past investment in litigation could generate a significant return in the future. Our record revenues and earnings in the first quarter signal the beginning of that return to WiLAN and its shareholders."

It's hard to read such a comment and not feel sickened by the pure net loss on the economy and innovation from such leeches. Any company whose business model focuses on litigation is not contributing positively to society and innovation. There are times to file a lawsuit, but when that becomes central to your business model, something is broken.

The very core of a functioning capitalist system is that companies make transactions in which there's a buyer and a seller, and both sides come away from the transaction feeling better off. The buyer values the product or service more than the money paid, and the seller values the money more. That's good business. Any time you involve a lawsuit to force someone to pay, you're doing exactly the opposite of that and you're setting up a system that is not working to benefit everyone, but is actively using the force of the courts to try to force a company to "buy" something it has no interest in buying. It's not good for the economy and it's not good for innovation.

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Former LVRJ Publisher Admits He Was Behind Righthaven Lawsuit

Mike Masnick — Thu, 21 Jul 2011 14:06:00 PDT

Stephens Media and Righthaven have been involved in an important legal battle (mainly in the case involving the Democratic Underground, but it's popping up in other Righthaven cases) concerning who really are the parties of interest in the Righthaven lawsuits. Plenty of the defendants (and now three different judges) have said that Righthaven is really just a Wizard of Oz style front for a legal campaign by Stephens Media and its key publication, the Las Vegas Review-Journal. In fact, the basic argument is that the whole setup of Righthaven was simply a sham to try to isolate Stephens Media from potential liability. In the Democratic Underground case, the judge has even dismissed Righthaven from the case, but is allowing DU's counterclaims against Stephens Media to move forward (Righthaven is trying to beg its way back into the lawsuit).

One of the more entertainingly clueless players in this whole charade has been Sherman Frederick, the former publisher of the LVRJ, who was a major public supporter of Righthaven from the beginning, whose own words keep coming back to haunt both Stephens Media and Righthaven. Frederick appears to have a bit of a reckless overly-confident cowboy attitude, which is the kind of thing that gets people like him into a lot of trouble. We've already noted the rather blatant hypocrisy of Frederick multiple times. Originally he insisted that copying content from the LVRJ -- even small amounts -- was no different than stealing a corvette out of his driveway. And, yet, he's been caught posting infringing content, copying content from Techdirt and other blogs -- sometimes failing to even make it clear that he was quoting someone else.

But Frederick's biggest problem with his big mouth concerning Righthaven has been his habit of occasionally talking about Righthaven as if he controls it... because that's kind of the whole key issue here. Is Righthaven really a separate company... or is it merely a pawn for Stephens Media (or, worse, a law firm that is not licensed to practice law in Nevada)? You would think that sooner or later someone higher up in the ranks of Stephens Media (who demoted Frederick from publisher to mere columnist late last year right after the election) would tell Frederick to close his trap on these things, because he's only making it worse.

No luck. Frederick wrote a blog post on July 14th, blasting critics of the failed Nevada Senate candidate Sharron Angle, of whom Frederick had been a big booster during the election. In the comments to that blog post, some commenters challenged Frederick on certain points. And in a comment at 1:30 pm, Frederick directly noted, with regard to Angle: "I even sued her for lifting our material." He is, of course, referring to the fact that Righthaven sued Angle. We actually found it amusing that Frederick's "little friend," Righthaven would sue Angle at the same time that he, as publisher, endorsed her as a candidate. Would Frederick endorse a candidate who stole the corvette out of his driveway? Apparently.

Still... in that comment he directly claims that he was the one who sued Angle. That's a pretty big problem for Stephens Media when it's trying to claim that it's not the one suing, but it's Frederick's "little friend," Righthaven. And, indeed, it took all of about a day for at least one of the defendants in a Righthaven lawsuit to point this comment out to a court. I would imagine it does not look good for Stephens Media, in these cases where it's claiming that it's not the one suing, for its former publisher, who was intimately involved in the Righthaven plan, to come out and state publicly that, yes, in fact he was responsible for one of Righthaven's most high profile cases.

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Righthaven's Biggest Fan Copies Content As Part Of His Argument Against Copying Content

Mike Masnick — Mon, 20 Jun 2011 12:35:21 PDT

Last year, we wrote about how Sherman Frederick, the former publisher (since demoted to columnist) of the Las Vegas Review Journal was caught posting an infringing video on his blog. This was particularly funny, because Frederick was the key supporter of the LVRJ's "deal" with Righthaven, and regularly mocked-by-bad-analogy anyone who disagreed with him.

A few folks had sent in Frederick's latest column -- which, of course, we won't link to, since he's made it clear he doesn't want any traffic -- in which he once again defends Righthaven, despite the fact that a court basically killed off most Righthaven lawsuits due to its sham copyright transfer from LVRJ parent Stephens Media. Frederick's post is barely comprehensible, calling those who disagree with him "the unthinking blogger" and claiming that people who disagree with him "mischaracterize reality." He also seems to ignore the fact that Righthaven lost massively, and claims instead that "they're here to stay and they intend to win the battles they've started." I hope I haven't overstepped the legal boundaries of Frederick's bizarre definition of "content theft" with those quotes.

In the same article, Frederick, hilariously, suggests that everyone should have to pay to link to one of his articles. He references a decision by Radley Balko a few months ago to remove a post that linked to an LVRJ article once someone pointed out LVRJ's Righthaven association, and rather than realize how this makes Frederick and LVRJ look clueless, he claims that Balko did the right thing, and that every blogger can decide if such linking is "worth the price."

But what makes all of this extra funny is that the meat of Frederick's post is all copied content from another blog which is not properly attributed at all. Seriously. ken points us to his own analysis of Frederick's hypocrisy:

Frederick's article contains content from three paragraphs of posts from the blog GametimeIP.com. Frederick fails to even use basic netiquette for citing other sources. The parts taken are not attributed to the author except for a link and not even set in quotation marks which could leave the reader to assume those are Frederick's words and not those of GametimeIP.

It's hilarious. Yes, Frederick links to the articles, but frankly I had no idea he was actually quoting them. From the way he wrote it, it very much looks like they're Frederick's words, defending Righthaven. So, here we have Sherman Frederick, in an article decrying "copying" of content, in which he blatantly copies someone else's content, and even worse, does not properly credit it, or quote it. I also do wonder, if he "paid the price" to GametimeIP for his use of their content. After all, it's the proper way to do things, right?

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Why Chris Dodd Is Doing Everything Wrong With The MPAA

Mike Masnick — Wed, 6 Apr 2011 09:20:29 PDT

We've certainly suggested that Chris Dodd was making a big mistake by focusing on the MPAA's old talking points in his new role as chief of that lobbying organization. Rather than leading Hollywood to a future of new business models and smarter embrace of what consumers want, he's kicked things off by being anti-consumer, anti-technology and a supporter of previous policies that have failed massively. It's not exactly a recipe for success. Marty Kaplan, a professor at USC, is pointing all this out in a wonderful opinion piece, explaining to Chris Dodd why he's focused on the wrong things. He uses the recent SSRC Report to explain why Dodd is barking up the wrong tree in claiming that the two things to focus on are "education" and "enforcement," a two-pronged strategy that has failed to do anything useful for the industry for over a decade:

The problem with this is that there's no evidence that education works. There have been hundreds of vigorous anti-piracy educational campaigns all over the world -- more than 333 in developed countries alone as of 2009 -- and they've failed. It's not that consumers don't get that media piracy is wrong. They know what they're doing. They're weighing moral considerations against price and availability, and they're deciding to go with cheap (or free), and now.

[...] Not only is there no evidence that education has been building a stronger "culture of intellectual property." There's also little evidence that enforcement works. Splashy raids haven't reduced piracy. Two weeks ago the judge in a lawsuit by 13 record companies against LimeWire called their demand for $75 trillion in damages "absurd," and the infringement judgments that have actually been handed down also haven't stemmed the tide of illicit file sharing. In the SSRC report's words, "Strengthening police powers, streamlining judicial procedures, increasing criminal penalties, and extending surveillance and punitive measures to the Internet": to date, none of them "have had any impact whatsoever on the overall supply of pirated goods."

Of course, we've pointed this all out as well, and the response has been for people to yell about how we're "defending piracy." Yeah, or trying to prevent Hollywood from continuing down a strategy that has been proven not to work. Instead, we agree with Kaplan that this is a business model issue, and if Dodd were a real leader, he'd actually help move Hollywood into new territory of embracing new business models and new technology:

Sooner or later -- and judging by Chairman Dodd's speech, it'll be later -- the industry will have to move from moralism to pragmatism. Their business model has been digitally disrupted, irrevocably, and they are already vulnerable to the kind of game-changing innovation, and carnage, that Apple's iTunes visited on the music industry. If the studios are lucky, before a Netflix or a Facebook does that to them they'll figure out that neither education nor enforcement will rescue them from creative destruction. Pivoting from Moses to merchant will be an awkward adjustment, but they will eventually be forced to conclude that their other options just aren't working. It won't matter that they have righteousness on their side. If they have to spend less on producing and distributing content, distraught fans won't repent of their downloading ways. If jobs are jeopardized, it will be just as wrenching, and just as stoppable, as the transformation that globalization and rising productivity are wreaking on the rest of the economy.

What will the new business model look like? It's hard to imagine that the sequenced distribution of product over a controllable period of time through an orderly series of "windows" -- venues and platforms and formats and pipes and territories, each with their own license deals and consumer prices -- will survive unbroken. In that future, a practical agenda for handling piracy is suggested by this 2009 comment from Robert Bauer, then director of special projects for the MPAA, as quoted in the SSRC report: "to isolate the forms of piracy that compete with legitimate sales, treat those as a proxy for unmet consumer demand, and then find a way to meet that demand."

Wow. Suggesting smarter business models that involve actually delivering customers what they want? Why that's just someone who is a piracy apologist, I guess...

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What Have We Learned: Greater IP Enforcement Doesn't Work... Yet That's What Governments Want To Give

Mike Masnick — Mon, 28 Mar 2011 11:28:46 PDT

It's been an interesting few weeks on the research side of things, and it seemed like a recap was in order. Kicking it off, we had two separate research reports from two highly regarded organizations, both of which came to the same basic conclusions concerning strategies for dealing with copyright infringement online. First was the, rather epic, research report from the Social Science Research Council, which concluded that greater enforcement wouldn't work and wouldn't stop infringement in various countries around the world. Instead, it argued that the solution was better business models by the entertainment industry. Just a few days later, some research from the London School of Economics concluded basically the same thing, specifically in looking at the Digital Economy Act in the UK. It came up with three basic conclusions: the decrease in sales is due to many factors; providing legal, innovative and consumer friendly services is a much better strategy than enforcement; and focusing on enforcement that suppresses new technologies will not do much good. And, then, finally, late last week, we came across a study that also highlighted that the supposed "damage" done by file sharing appears to be exaggerated.

So... what does this tell us? It seems to support what many people have been saying for over a decade. Fighting what technology allows and what consumers want is not an effective strategy. File sharing, if combined with smarter business models, can allow music to flourish just fine, and (most importantly) focusing on greater enforcement strategies won't solve any of the industry's problems, but could actually harm new businesses and new opportunities.

So, given all of that... shouldn't we be rather alarmed that the key strategic effort by the entertainment industry these days, which is now the official policy of the White House is to focus almost entirely on "greater enforcement"? Of course, part of the problem is that the last time we ramped up our IP laws, with the ProIP Act (driven by the entertainment industry, of course), part of the law was to create an "IP Enforcement Coordinator." Note how short-sighted this is. It wasn't about creating an "IP Effective Coordinator." It wasn't about creating a role to determine the best or most appropriate levels of IP. It wasn't even to help content creators understand the economics of the markets they dealt with or to suggest new and innovative business models.

The role was to focus solely on enforcement.

Yet now, as we learn that focusing on enforcement is a mistake, rather than backing off, it seems like those who created the role are simply doubling down. It's as if they don't realize how much harm they're doing to their own markets. It's really quite unfortunate. These are industries that should be thriving right now. After all, the expenses involved in almost everything they do has gone down. It's become cheaper to create professional content. It's become cheaper to package professional content. It's become cheaper to distribute professional content. It's become cheaper to promote professional content. It's even become cheaper to sell the content and ancillary products around the content. Every aspect of the business has become cheaper, and a much more massive audience has been opened up to these content creators. And rather than embrace it, they've whined and complained... and the US government's response is to support them in this? What a shame.

If the current content industries have been unable to take advantage of an amazing new world of content creation, promotion and distribution, it's their own fault. Having governments get in the game of cracking down on new and innovative technologies, just to protect a few legacy companies too slow and too confused to adapt is not a solution. It's the same story all over again. The political system is focused on bailing out the companies who failed to change with the market. We've seen it time and time again in other industries, and it always comes back to haunt us. We shouldn't be bailing out the movie industry and the recording industry right now. Both have had plenty of opportunities to embrace new business models. Plenty of content creators outside of the traditional system have done so, successfully. Governments around the world should stop focusing on protecting these players who are too resistant to change.

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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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US Gov't Strategy To Prevent Leaks Is Leaked

Mike Masnick — Wed, 5 Jan 2011 08:03:29 PST

There's something rather ironic that the US government's document on how to get various US government agencies to prevent future leaks (a la Wikileaks) was quickly leaked to the press. But, it's not really that surprising, is it?

Of course, the main thrust of the document isn't to question whether or not so much secrecy is really necessary, but to send out a memo to various government agencies suggesting they use psychiatrists and sociologists to sniff out workers who might be disgruntled (full memo embedded below). Among a variety of (pretty unsurprising) suggestions for keeping confidential information confidential, the checklist of things that organizations are supposed to do includes:

Do you use psychiatrist and sociologist to measure:

Relative happiness as a means to gauge trustworthiness?
Despondence and grumpiness as a means to gauge waning trustworthiness?
I didn't realize that you needed to use such professional help to figure out if you had a disgruntled worker on your hands. Isn't it the role of managers themselves to have a sense as to whether or not their employees are disgruntled? Though, I'm somewhat amused by the idea that the US government thinks that a psychiatrist or sociologist can accurately pick out who's likely to leak documents.

Not that it's a bad thing to try to figure out if there are disgruntled workers or to make sure secure systems really are secure. I'm all for that. I just think it's a bit naive to think any of this will actually prevent future leaks. You just need one person to get the info out, and there's always someone and always a way to do so -- as demonstrated by the fact that this document itself "leaked" so quickly. It seems a better situation would be to focus on making sure that any damage from such leaks is minimal.

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There's Always A Way To Compete: Competing With Google By Being Human

Mike Masnick — Fri, 22 Oct 2010 17:38:42 PDT

All too often, we hear people complain that it's "impossible" to compete in some manner. "You can't compete with free." "Big companies will steal your ideas and you can't compete with big companies." And yet, time and time again, we've seen that this isn't actually true. Every company has its weaknesses, and there are always ways to compete. This doesn't mean, of course, that every competitor will succeed. It doesn't mean that competition is easy. But there are always ways to compete, no matter how many advantages you believe another player has.

We've talked in the past, for example, how Google's closed nature could be its Achilles heel. But another area in which Google has a clear weakness, as we've documented over and over and over and over again, is that it's horrible at customer service. From the outside, to the average user, Google often appears as a big white monolith, with little hope of getting a human response to issues. This is not universally true, of course. I've seen many Google employees personally reach out and respond to problems, but it often feels sort of ad hoc, and the number of stories of problems falling through the cracks is certainly noticeable.

So it doesn't surprise me that others are beginning to recognize this as well. JJ sent over a blog post by Jesse Noller, picking up on this point and suggesting that the way to compete with Google is by being more human, friendly and personable. That is, building up brand loyalty by actually being nice, rather than technically efficient but cold (as Google often appears). It's a good read for anyone in a space where they may end up competing with Google (actually, it's a good read for anyone who thinks that there's any company that is competition proof). Here's just a snippet, but I recommend reading the whole thing:

You can only do these things -- building a brand -- and building a "cult" by doing the things Google -- given its robotic failings -- cannot do. Love your users, infect them with your passion -- not just your technical prowess or ability to scale or release new web codecs, or give them the right search results, or giving away source -- infect them with your passion for what you do. Support them, respond to them -- even if you're giving it away for free -- after all, nothing is free.

Passion, compassion -- connecting with other humans, people are always looking for a place that accepts them and makes them feel welcome. They want to get real support instead of emails that get sent to unknown voids and are never answered. Making things warm, inviting both in language and in the feel.

Of course, there was a time that Google created such passion, but mainly from the quality of its products, not from its human touch. But that's the point. Every company has its weaknesses, and no company is competition proof.

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LVRJ Defends Righthaven Suits; Mocks Competitor For Highlighting Problems With Them

Mike Masnick — Thu, 2 Sep 2010 16:55:37 PDT

With the Las Vegas Review Journal continuing to massively abuse copyright law with its Righthaven lawsuits, the absolute best source for covering the story has been the competing Las Vegas Sun -- leading some to claim that its coverage was to spite its local competitor. However, the Sun put together a good editorial explaining why the story is so newsworthy. Now, Sherman Frederick, the publisher of the LVRJ has hit back with an editorial slamming the Sun and insisting that the Righthaven strategy is the right one.

I'd link to the story, but since the LVRJ has made it clear it doesn't like links, I figured it's best not to do so.

Also, I would normally quote Frederick's article to debunk it -- a clear case of fair use -- but since the LVRJ has made it clear it doesn't want anyone quoting its articles (despite the fact it still has 19 separate "share" buttons on each article), I won't bother. Instead, I'll just make some general statements about Frederick's column.

First, Frederick suggests that there are only two options for dealing with people copying your words online: you sue or you go out of business. He predicts that the competing paper, The Sun, is going to go out of business because it's not suing others. I will note, of course, that he doesn't point out the slight conflict of interest in the fact that he helped fund Righthaven, and thus has incentives to try to get other newspapers to make the same mistake he's making. But, of course, there are plenty of other options, such as putting in place a smarter business model. The idea that the cat blogger in Boston is taking any revenue away from the LVRJ is beyond laughable. No one reads the story on the cat blog post and says "gee, now I don't have to go to the LVRJ ever again."

Frederick also claims that getting others to link to you and to promote your site doesn't help you at all (which is partly why we're not). However, this suggests he's unfamiliar with the concept of "Google," and the fact that it ranks your site's relevance, in part, to how many others link to you and who those others are. But, his bigger problem is that he thinks people are saying that if you let others link to you the money will just roll in. But no one's saying that. They're saying that links in combination with a smarter business model help raise your profile and create lots of opportunities to make more money. Unfortunately, it looks like Frederick is taking the lazy short cut, which is pissing off all sorts of people, and serious hurting his brand.

While he claims that since the lawsuits began they haven't seen any loss of traffic to their website, that's a meaningless stat at this point. First off, it's still quite early. Second, the idea isn't just that the lawsuits directly would lead to a loss of traffic, but the inevitable chain of events following such lawsuits. It's as if Frederick can only think a single step ahead. He must be a hell of a chess player.

From there, he claims that even if he was losing revenue from these lawsuits it would be worth it, because protecting the writing is more important than revenue. Really. That's a paraphrase rather than an exact quote, because I don't want Righthaven to sue me, but it's basically what he says. The reason for that? He insists that it's the writing in the newspaper that is the key value. That's only partially true of course and sort of besides the point. These sites that he's suing are not competing with the LVRJ, so pretending that a random site posting a single story somewhere (with credit and a link back) is somehow damaging the LVRJ is simply wrong.

But, more importantly, he's overvaluing the content and undervaluing the community. He's never been in the business of selling content. He's always been in the business of selling the attention of his readers to advertisers. Forgetting that would be a big mistake. He claims that it's the quality and (artificial) scarcity of the content that drives readership, and that's partially true, but it only goes part of the way to explaining the business. It suggests that he's done little, if anything, to make that content more valuable and useful for that community. In fact, he's doing the opposite, by suing those who try to do something with the content. In the long run, that seems quite likely to backfire.

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Hulu CEO So Careful Not To Upset Cable Companies, He Might Just Destroy His Own Business

Mike Masnick — Wed, 30 Jun 2010 14:42:36 PDT

A year and a half ago we questioned whether or not Hulu could really survive, given the rock and a hard place situation it had put itself in by being owned by the content rights holders, who wanted to limit what Hulu could do in competing against the rest of the online world. This limitation by its owners was quite obvious in the recently released subscription package that felt wanting.

Now, Hulu's CEO, Jason Kilar -- who, it should be noted, has always appeared to fight for consumer interests against the demands of Hulu's owners -- has come out and said, quite clearly, that Hulu is not trying to "kill" cable. In other words, he's signaling to the world quite blatantly: Hulu is unable to do the one thing it needs to do to be a successful business.

If Hulu were a truly independent business, the main focus of that business would be to flat-out disrupt the monopoly cable TV business. That's a huge opportunity. But, of course, Hulu's owners don't want that, because they're in this neat symbiotic relationship with the cable companies, where those cable companies keep paying more and more money to the TV companies just to carry their shows. So they don't want to upset that business model -- even if it's incredibly anti-consumer. So, because of that, Hulu can't do the one thing it needs to do. It's telling, by the way, that the only people in our comments, who thought that Hulu's subscription offering was a good deal, were those who had or were planning to ditch cable. And here comes Hulu admitting that it's not designed to help those people. Yikes.

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Warner Music Shoots Self In Head; Says No More Free Streaming

Mike Masnick — Wed, 10 Feb 2010 12:49:57 PST

A few years back, it seemed like Warner Music actually had a better handle on where the music industry was heading than its 3 major label rivals. In the last two years, however, it seems like WMG has consistently gone further and further in the opposite direction. It may have hit a new low today with the announcement that it will pull out of all free streaming music licensing offers. Yes, Warner Music just told the one thing that was effectively competing with unauthorized downloads to shove off. Brilliant.

"Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.

"The 'get all your music you want for free, and then maybe with a few bells and whistles we can move you to a premium price' strategy is not the kind of approach to business that we will be supporting in the future."

And thus, WMG will go out of business that much more quickly. That is the model that the market is moving to, and Bronfman and WMG appear to have decided to ignore what the market wants, to cover their eyes, stick fingers in their ears and go down with a ship that could easily be righted. Incredible.

Now, Warner may be a bit gun-shy after its investment in iMeem (a free online music streaming service) became a total disaster, but what Warner doesn't seem to realize is that a big part of why it failed was the ridiculous demands Warner put on iMeem in terms of how much it demanded in payment per stream. The problem is that WMG has totally unrealistic expectations of how much money should be paid per stream, and that's because the company's top execs still don't seem to handle basic economic modeling particularly well. And thus, the company will fail.

You don't compete with "free" by taking your ball and going home. You don't compete with "free" by pretending that old artificial scarcities are coming back after the wall has been broken down. You don't compete with "free" by suing customers. You don't compete with "free" by shunning those who have business models that work. You compete with free by offering a better product and a better business model. WMG is choosing to go in the other direction. Best of luck to them...

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UFC Plans To Sue Individuals, Despite The Cost Being More Than Any 'Loss'

Mike Masnick — Wed, 6 Jan 2010 09:58:00 PST

There's something that just drives some executives nuts about the idea that someone might access their content "without paying" directly for it. We saw this last year when music industry execs kept saying they had to stop going to war against consumers, but immediately followed that up by saying that none of that mattered if they couldn't stomp out "piracy." It's as if the second any sort of unauthorized use occurs, the entire "cost-benefit" analysis goes out the window. If it's costing you more to try to stop unauthorized access, and it's not working, and there are ways to embrace it that makes you more money, the solution should be simple: you stop worrying and start embracing.

Apparently that message hasn't gotten through to the folks who own Ultimate Fighting Championship (UFC). Perhaps it's not too surprising that such a group's only reaction is to fight, but when they even admit that fighting unauthorized access will cost more than any "losses," you have to wonder how any executive at the company keeps his job. That's a recipe for getting fired: "Hey, I'm going to undertake an action that will cost us more than not taking this action -- oh, and it's likely to piss off a bunch of our biggest fans as well."

This isn't a huge shock. Last month, a UFC exec was at that Judiciary Committee hearing about unauthorized access to live streaming sporting events, and played the role of the RIAA/MPAA lobbyists claiming "them stealers are destroying our business." Given that, it's no surprise that UFC is gearing up to go after both sites like Justin.tv and the individuals themselves. Apparently, UFC's fight-first, think-later execs haven't noticed how badly similar plans have backfired. Most of the streaming websites have pretty strong DMCA safe harbor protections, and suing users hasn't worked out particularly well for the RIAA. Furthermore, pissing off your fans? Yeah, not such a hot move.

Meanwhile, the Torrentfreak article above does a really nice job breaking down just how many people willingly pay huge sums to watch UFC events on Pay-Per-View, and how that number keeps on growing. There was apparently a dip in a recent fight, but TF notes that it probably had more to do with one of the headlining fighters having to back out. What does become clear is that UFC has no problem convincing huge numbers of people to pay up huge amounts to watch its events. Pissing off a lot of fans with ridiculous lawsuits doesn't make anyone more likely to buy.

Hell, even Joe Rogan, the comedian (and notorious hater of "joke stealers") who also acts as commentator for UFC seems to think this is a bad idea, saying: "I think that kind of stifles innovation. It stifles the direction the internet is going. I like things being out there. I think people are always going to buy UFC pay-per-views. You're going to get a much better experience watching it on your television than all stretched out looking fuzzy and pixilated. They're trying to protect their money, but the internet is a strange animal."

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Understanding The Decline And Fall Of The Major Record Labels

Mike Masnick — Fri, 11 Dec 2009 19:39:00 PST

There's a fascinating, and well sourced, editorial over at Hypebot by Kyle Bylin, suggesting why the major record labels have had so much trouble adapting to these changing times. Bylin argues, convincingly, that a big part of the problem was that as the record labels got bigger and bigger, they focused solely on the "music as commerce" side of things, ignoring the role of "music as culture." Obviously, music as commerce is an important part of the music business, but if you ignore the cultural importance of music (except, of course, when lobbying the government for more protections) you miss what's actually happening in the marketplace: how people are connecting with the music, and what they're doing (and want to do) with the music. Here's a snippet:

As the record industry moved through this stage there was a decline in learning orientation -- in learning what fans actually wanted -- both in terms of how they consumed music and what they were willing to pay for. So to, they began to discount the role that luck played in their success, to assume that the mass-marketing successes that occurred near the end the CD boom, which sold 3-4 million copies, applied to the natural laws of the universe, rather than that of a relatively short-lived phenomenon. This addiction to blockbuster artists is what characterizes the second stage of decline, which Collin's deemed The Undisciplined Pursuit of More. Here, the record industry started out on an unsustainable quest, and, because of their huge successes, they were pressured to grow.

Having reached the peak of the CD boom in 1999, the record industry had become a nearly $15-billion-a-year juggernaut, but under the pressure for more growth they collapsed, and, in the process, a vicious cycle of expectations had been set that strained the artists, the fans, the culture, and their systems to the point of breaking. Since record industry was unable to deliver new music with "consistent tactical excellence," they began to fray at the edges. Disruptive technologies were released, an epidemic of file-sharing proceeded, and, at this critical juncture, vested interests of music executives struggled and competed to achieve repetitive consumption through obsolescence. But these executives were too late, as the record industry, by externalizing the blame for their decline in sales, had already started to show symptoms of stage three, Denial of Risk and Peril.

Music executives began discounting negative data, amplifying positive data, and putting a positive spin on ambiguous data. In stage three, Collin's argues that those in power start to blame external factors for setbacks -- "or otherwise explain away the data" -- rather than accepting responsibility and confronting "the frightening reality that their enterprise may be in serious trouble." Right away, the Internet and file-sharing became easy scapegoats for the decline in sales that the record industry faced.

There's nothing all that surprising in the essay, but it's nicely written and explained. Well worth reading the whole thing.

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Why Is Google Turning Chrome Into An Operating System?

Mike Masnick — Wed, 8 Jul 2009 05:43:57 PDT

There have been rumors for years that Google might someday release its own operating system, but the announcement that it's turning the Chrome browser into an operating system is an odd duck for a variety of reasons (amusingly, the "Google browser" was also rumored for years before Chrome showed up). Why is it odd?

Google already has an operating system in Android. While that was initially focused on mobile devices, it's already being expanded to netbooks, so turning that into a more complete operating system seems like the way to go.
Chrome itself still needs a ton of work. I've tried using it, and it's crazy buggy and so unstable -- I simply gave up and went back to Firefox. Jumping from just browser functionality to a full on OS before the browser code is really stable seems like a big leap.
The idea of turning a browser into an operating system has been around since the days of Netscape (folks there used to talk about how it was making Windows obsolete), but reality has proven otherwise. In fact, it was partly Netscape's desire to take down Windows by making Netscape more OS-like that caused Netscape to get so bloated as to be nearly useless.
Why now? Why an OS? Part of the appeal of the growth of the web itself (and Google with it) is the fact that it's made the whole operating system less and less integral to the computing experience. With the move towards more of a "cloud" based world (which Google has been a big part of driving) there just isn't as much value in the operating system as much as in the past. So why jump on that bandwagon now?
Given all of the above, it just seems like a confused strategy. There will likely be conflicts between Android and Chrome and consumer confusion as well, not to mention worries from folks who just want Chrome to be a simple, competent browser.

Perhaps Google can route around all of these issues, but at a first pass... it just seems like a confusing direction for Google to go in.

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MPAA Matches RIAA In Massive Layoffs

Mike Masnick — Fri, 13 Mar 2009 06:36:00 PDT

I missed this one when it initially happened, but it looks like the MPAA is following in the footsteps of the RIAA -- who recently laid off a bunch of folks. Apparently the MPAA quickly followed suit and drastically scaled back after the studios cut the MPAA's funding by about 15 to 20%. Apparently some of the entertainment companies are finally realizing that the strategies employed by the RIAA and MPAA (lobbying for favorable laws and suing the crap out of anyone who dares to innovate) aren't actually helping them build a stronger business. Of course, it seems likely that they'll keep making the wrong moves, even at a reduced budget -- but maybe, just maybe, they'll finally start to realize that their recent strategy has been a colossal failure.

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Massive Layoffs Hit The RIAA: Maybe Focus On Building Business Rather Than Suing Customers Next Time?

Mike Masnick — Fri, 27 Feb 2009 12:44:00 PST

Details have been spilling out over the last few days that the RIAA has been making pretty massive cuts to staff. We already knew that EMI was cutting back on its support of the RIAA/IFPI, and it seems that with the rest of the RIAA's major label supporters also having economic troubles, the writing is on the wall that the RIAA is about to go through a major transformation. I'm sure some will somehow "blame piracy" for this turn of events, but it's hard to see how that's even remotely the issue. The real issue is that the RIAA has basically managed to run one of the dumbest, most self-defeating strategies over the last decade. Rather than helping major record labels adjust to the changing market, it continually, repeatedly and publicly destroyed its own reputation and the reputation of the labels -- each time shrinking their potential market by blaming the very people they should have been working to turn into customers. They may claim that they "had" to take this strategy because it's what the labels wanted (and, indeed, that was Hilary Rosen's excuse), but that's ridiculous. It was evident to pretty much anyone who took the time to understand the issues back in the mid- to late-90s, that the internet represented an opportunity to those who embraced it. The RIAA's decision to fight progress and its own customers at every turn has been nothing short of a complete disaster. That the group is now being gutted is the inevitable result of a poor strategy that could have easily been avoided.

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Warner Music Sues Again!

Mike Masnick — Fri, 6 Feb 2009 11:57:38 PST

We've discussed in the past Warner Music's penchant for suing pretty much any new web startup that does anything even remotely innovative around music. So, whaddaya know, Warner Music is suing yet again. This time it's German startup Songbeat, who vows to fight the lawsuit, insisting that what it's doing is perfectly legal.

It's fairly amazing that Warner Music -- remember, this was the company that swore it was done fighting its fans -- still thinks that this is a good strategy. Now, before the entertainment industry lawyers who read the site protest "how can you complain about a company defending its rights?" let's think this through a bit. Sure, Warner can defend its rights, but so far, all that's done is pissed off a ton of fans, shut down a bunch of innovative services that fans want to use to support artists, and Warner's sales numbers and stock price reflects this (though, the stock did get a bump yesterday after earnings were less dreadfully awful than expected): Isn't it, maybe, time to try something different? Perhaps treating fans with respect? Actually joining the conversation? Letting musicians actually post their own videos to YouTube? Basically, isn't it time that Warner Music stopped viewing everything and everyone as a threat, and started actually embracing an opportunity or two? That would be a really amazing day.

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RIAA Caught Lying About Stopping Lawsuits

Mike Masnick — Mon, 22 Dec 2008 07:26:49 PST

The RIAA and the record labels who make up its main membership keep asking folks like us to "trust them" when they come up with new plans to force people to hand over money. They say that we shouldn't criticize them until the plan is set, but they haven't yet shown the slightest reason to grant them an ounce of trust. Just last week, we suggested that they stop suing people, if they were so intent on turning over a new leaf. And, while they did finally announce plans to abandon mass lawsuits, the fine print is anything but encouraging (and, it's increasingly clear that it was done more to save money than out of any more reasoned strategy).

However, there was a bit of surprising news that came out of the press barrage after the announcement about giving up on the mass lawsuits: the RIAA claimed that it had stopped filing lawsuits months earlier. That certainly didn't fit with the story we had just seen earlier in the week of new lawsuits, and now Ray Beckerman has put together a list of recently filed lawsuits by the RIAA and its major record label members in the last few weeks.

In other words, the RIAA has been caught lying yet again. Shocking. And, yet, they expect us to "trust them" to come up with a better solution -- one negotiated in backrooms behind closed doors without major stakeholders getting to take part? Forgive us for being skeptical that any such deal will be reasonable. What's really disappointing, though, is to see some major tech publications get taken in by this, insisting that somehow the RIAA really has turned over a new leaf. You would think that reporters covering this space wouldn't be so gullible.

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Newspapers Finally Realizing That Online Ads Shouldn't Be Ignored

Mike Masnick — Tue, 4 Nov 2008 21:09:17 PST

With the Christian Science Monitor going online only, many newspapers are again re-evaluating their online strategies. When you listen to newspaper execs, you usually hear the same line over and over again: even though online page views are up and paper sales are down, the amount of ad revenue coming from online is still tiny compared to print. That's definitely true, but a large part of the problem is that many newspapers don't really concentrate on online sales -- especially among the best targets: local businesses. Many small businesses advertise online, but because newspapers don't court them, they go elsewhere, such as directly to Google.

The NY Times is writing about how at least some newspapers are realizing that, rather than focusing their sales efforts almost entirely on print ads, they need to start focusing on selling online ads as well. Amazingly, many of these newspapers have almost all of their sales commissions for print ads. In those cases, is it any wonder that they don't get more online ads? In fact, many ad sales folks simply "throw in" some online ads as a bonus to get companies to sign the dotted line for print ads, which is exactly the wrong incentive needed if you're trying to grow the online ad business.

What's really amazing is that newspapers are just now catching on to this. They're only about five years too late. The local businesses, which would have been interested five years ago, have figured out that there are other options for online advertising from Google to "local" sites like Yelp and CitySearch.

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Five Years Into Suing Fans, RIAA's 'Sue Everyone' Strategy Has Failed, Miserably

Mike Masnick — Fri, 3 Oct 2008 17:10:00 PDT

The EFF has a long and comprehensive look into the RIAA's five year (and running) legal campaign against file sharing. It's a great overview that not only brings you up to speed if you haven't been following the whole thing, but also puts the entire campaign in perspective. The summary? Almost every move the RIAA has made in its legal campaign has backfired.

It started with suing technology providers. All that did was make more people aware of file sharing. When it succeeded in getting Napster shut down, plenty of others showed up that were much more difficult to shut down. So, then, the RIAA shifted to suing individuals accused of unauthorized sharing, claiming that it was an "education campaign" to teach people that unauthorized file sharing was illegal. All that's done is turn many more people against the RIAA, while continuing to educate them that file sharing exists. In fact, many more people engage in file sharing now than five years ago when the campaign started.

So, effectively, the lawsuits haven't worked (the RIAA has not had a full trial turn out in its favor yet). It's turned public opinion massively against the RIAA and its associated record labels. It hasn't done anything to slow down unauthorized file sharing, and may have actually helped promote it. About the only "success" of the strategy is that it's turned into something of a cash generator for the RIAA, by frightening people, with strong legal language around flimsy evidence, into paying "presettlements" to avoid being sued. It's like a protection racket from organized crime. Oh yeah, it's worth noting that the musicians don't actually see any of that money.

So, by now it should be clear that this strategy has absolutely nothing to do with helping the music industry thrive or to actually deal with unauthorized file sharing. From the beginning it's always been a way to squeeze more money out of people through threats and intimidation. While I strongly disagree with the EFF's proposed "solution" to this issue (a compulsory licensing scheme), the review of the history certainly puts the whole campaign in perspective, and makes you wonder why anyone (especially any politician) actually thinks it's about helping musicians.

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iPhone Shows That Cheaper Phones Are Still Important

Mike Masnick — Mon, 9 Jun 2008 12:20:51 PDT

The iPhone has received plenty of well-deserved (and plenty of not-so-well-deserved) hype and press over the past year or so, but one of the key points that Apple tried to make when it launched was that a premium phone deserved a premium price -- and people would pay for it, even without a massive subsidy from a mobile operator, as is typical of other phones. And, while there definitely was a huge crush of Apple fans who had to buy the iPhone early, the fact that Steve Jobs quickly lopped $200 off the price, just months after it was introduced, suggested that the number of people willing to pay that kind of premium wasn't as much as expected. In today's keynote, as was widely predicted, Jobs launched the new 3G iPhones with another $200 cut off the price, so the base model with 8gigs is now $199 -- down into the range of your typical subsidized smartphone.

While the iPhone has done plenty to get people to rethink mobile interfaces, it seems clear that Apple may have initially misjudged how people would respond to premium-priced phones. Jobs had promised 10 million iPhones sold in the first 18 months, and has reached about 5 million in the first 12 months (nothing to sneeze at, obviously). However, to get up to that 10 million number, he had to drop the price to be competitive with other phones. It's a smart move (though, it's not clear if the $199 is subsidized or not), given the market conditions, but beyond the lessons that everyone will talk about concerning Steve Jobs' strategy in launching the iPhone, the most interesting of all may be how the initial pricing structure backfired -- but was changed so quickly.

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