Author: Trichordist Editor

Trichordist Editor

USC Studies How Online Piracy Profits from Advertising Revenues

Some great work has been done this year by Jonathan Taplin and the USC Annenberg Innovation Lab in studying the relationship between online ad networks and media piracy for profit.

Large Pirate sites distribute illegal content and continue to steal trademarked, copyrighted content and siphon millions of dollars away from the creative community, making it much harder for artists to make a living. We do not believe that government regulation alone is the answer to the Piracy problem, but rather that the self-regulation of major sectors like the online advertising industry could make it harder for the “Kim Dotcom’s” of the world to unfairly exploit artists.

A fantastic round up of media coverage from the universities research can be found here:
http://www.annenberglab.com/category/tags/ad-transparency-report

by Trichordist Editor

BitTorrent 99% Infringing, 100% Disinformation… now with Ads.

We’ve reported before on BitTorrent’s claim that they are “not designed for piracy” despite multiple studies and research finding over 99% infringing content being distributed using it.

The latest comes to us from AdLand.tv who are offering commentary on BitTorrent’s recent move into outdoor advertising that first appeared in Gizmodo.

The opening of Gizmodo’s article reads thusly:

“Torrenting” is kind of a dirty word. It makes you think piracy, doesn’t it? Well it shouldn’t. Torrenting isn’t illegal. It’s not even morally ambiguous. It’s just a way to send data, and it’s awesome.

Yes. That’s right. Keep telling yourself that. Guns don’t kill people. People do. It’s not the syringe, it’s the heroin. It’s not the file sharing platform enabling copyright infringement; its the millions of users using the site to infringe.

Baa, baa, baa, Sheeple.

As usual the folks at AdLand have a wonderful way of exploring the ad campaign by BitTorrent.

“The internet should be regulated people-powered.”

What other industry do you know that has near zero regulation except Big Tech? We have Alcohol, Tobacco and Firearms (ATF) the Environmental Protection Agency, the Food And Drug Administration, and the Occupational Safety and Health Administration (OSHA) to name a few of the regulators. Big Tech doesn’t even police itself because if it did, it would be losing money by the truck load. This isn’t even up for debate.

People-powered, my ass. In the immortal words of our dear president, we didn’t build that. Someone else did. They built the internet, the websites, the software. The search engines. The email programs. Just as someone else created the content you’re helping yourself to for free. Don’t fall for this “people-powered” bullshit at all. The artists and musicians (you know– the people) do not make money off torrent sites from the ‘exposure.’ This has been reported on ad nauseam. The only people who have the power are the Big Tech companies getting rich off of content they don’t own.

READ THE FULL POST AT ADLAND.TV:
http://adland.tv/node/156095#sJh2zH6EcHXqaxFB.99

by Trichordist Editor

Why Spotify is not Netflix (But Maybe It Should Be)

If we are to explore the digital marketplace for both streaming and transactional downloads the music business might do well to look at what the film business is actually doing in the same space. We will quickly see that Spotify is not Netflix, but maybe it should be.

Readers will note the film business has not bought into the faulty logic that the only way to combat internet piracy is to make every film ever made, available instantly, on an all you can eat service for $9.99 a month. Some might argue that is what Netflix is, but people making that argument are obviously not current subscribers!

One thing that has struck us in the comparisons between Spotify and Netflix is that Netflix does not have every film, or even every current film, or even a large percentage of popular films. For the vast inventory that Netflix has, you also realize the service has a lot missing. But then again, what do you expect for nine bucks a month?

This is not to say that most in demand films are not available, somewhere (and legally). It’s just not available on Netflix. Other services such as Itunes, Vudu and Cinemanow (to name just a few) offer some films for rental while they are still in the theater, some for streaming rental prior to a home video “dvd” date, and there are constantly new variations and options.

Generally speaking films arrive at Netflix last in the distribution chain, if at all. This is a problem for Netflix in a lot of ways so they have responded to this by 1) offering competitive advances to film producers to get films earlier (generally in the cable window) and 2) they have begun investing in producing original content to differentiate themselves from the competition (this strategy worked particularly well for HBO).

Netflix in responding to their needs in the marketplace is actually investing capital directly into content creation in a meaningful way. Perhaps some artists should charge an advance for high profile new releases that will attract listeners to the service. Likewise, perhaps Spotify should provide funding for the financing and development of new artists.

So here is the question, is the record business really utilizing the new digital platforms correctly to address the current market place? Perhaps by looking at the options available to consumers from movie streaming, rental and download businesses we can find more robust and flexible opportunities for artists.

One thing we’ve noticed absent from the current offerings for example, is say, a $1 a day transactional streaming rental for an album. Why doesn’t this exist?

FILM RELEASE WINDOWING

The movie business releases films in what is known as “windows”. A typical feature length film is generally released in a pattern that looks something like this:

1 Film Released in Theaters
2 Film Released later on Video on Demand (Rental)
3 Film Released later on Cable and/or Broadcast
3 Film Released Later on Home Video (Rental and Purchase)
4 Film Released Later on Netflix (Subscription)

There are variations on the above, but the point being that you can not buy the DVD of a blockbuster film the day it opens in theaters, nor can you view it on TV that night from the usual cable movie channels. Today these windows are being rethought as the film industry explores different release models including how digital platforms are utilized as part of a theatrical release.

RECORD RELEASE WINDOWING

We’ve heard people say that the record business historically has not windowed releases. This is only sorta true. It is true that a record is released to all outlets in all configurations more/less simultaneously on a single release date. There may be some exceptions with the availability of say vinyl, but mostly it is true that labels do not withhold music releases from different markets or distribution channels. But maybe that’s not exactly either right if we look at it closer.

Generally speaking, a historical record release “window” looks like this:

1 Radio Airplay prior to a commercial release of the single
2 Commercial Single Release
3 Album Release at Full List Price, but “Discounted” at Retailers

There’s not much more that is done until the album gets to be a catalog title, which the record industry would refer to as a mid-line title. Some records, drop one more step from midline to budget. Records that generally make the last drop may have been albums by artists who had one hit on the album.

Today, these traditional old physical model windows built around pricing incentives don’t really make sense on digital platforms. New Releases on Itunes are not discounted on release date and then return to their suggested list price a week or two later when the discounting ends. So if record release windowing is not based in pricing incentives, perhaps it should be based in accessibility incentives.

DIGITAL PLATFORM MUSIC RELEASE WINDOWING

What comes next is the starting point for a discussion to break free from much of the current controversy over whether or not Spotify is fair and sustainable. It is an attempt to rethink the digital music distribution landscape in the same way the film business has with varied consumer offerings and options.

We’d love to see some new players in the marketplace for music that function much in the same way that Vudu or Cinemanow do for films. These would be transactional streaming rentals.

1 Single Release Digital Transactional Download 99 cents
2 Single/Song Release Digital Transactional Streaming Rental 10 cents for 24 hours
3 Album Release Digital Transactional Download 9.99
4 Album Release Digital Transactional Streaming Rental $1 for 24 hours
5 Select Songs Released to Subscription Streaming Services, not whole albums.
6 Album Release Subscription Streaming Services

The key to a future where streaming may be the preferred delivery method is dependent upon more variations and flexibility in the the business model than currently offered by Spotify. There are a range of opportunities in exploring business models that allow for streaming rentals, and limited access to different material at different times.

If every decision we make is based upon the extortion of illegally operating and infringing businesses, surely we will pay the price in a race to the bottom where eventually everyone loses except the companies getting our labor for next to nothing.

by Trichordist Editor

Timothy B. Lee’s Epic Fail in the Washington Post on Piracy | CJR

We know there is a lot of bias reported that serves the corporate interests of Silicon Valley corporations but watching this story being reported, and revised, over the course of the day yesterday was truly stunning.

A piracy defense walks the plank at the Post

A blogger gets schooled by the meanies of Big Copyright
By Ryan Chittum

There are many problems with Timothy B. Lee’s Washington Post blog post on Hollywood’s supposed culpability for the theft of its own movies, beginning with the morally unserious jujitsu deployed in arguing that Hollywood is culpable for the theft of its own movies.

The Mercatus- and Cato-connected editor of the Washington Post tech blog that aims “to be indispensable to telecom lobbyists and IT professionals alike, while also being compelling and provocative to the average iPhone-toting commuter” also had a major correction that undermines the entire premise of the piece and reveals its one-sided reporting.

READ THE FULL STORY HERE AT THE COLUMBIA JOURNALISM REVIEW:
http://www.cjr.org/the_audit/a_piracy_defense_walks_the_pla.php

by Trichordist Editor

Spain to make providers of ‘pirated’ Web content walk the plank | Digital Journal

Madrid – Well, not walk the plank exactly, but tough new laws are to be introduced in Spain and were set for approval in Parliament on Friday. The new laws call for six years in prison for linking to “pirated”, copyright-protected material from webpages.

Spain is changing the rules due to what is called “rampant” and “endemic” piracy in the country.

Anyone linking to “pirated” material, such as films or music, from their webpages are likely to see six years behind bars.

End users, who downloaded the content using those links, won’t be punished apparently. Also, according to Reuters, peer-to-peer file-sharing sites and search engines are exempt from the the new laws and will not face legal action.

READ THE FULL STORY HERE:
http://www.digitaljournal.com/article/358787#ixzz2fyo4p1Vj

by Trichordist Editor

Google’s Fallacious Piracy Self-Study (Part 1) | Music Tech Policy

The Context

Even if you discount the moral hazard involved with funding a study of yourself, the Google survey of Google’s involvement with piracy is a breathtaking document. I would suggest that the self-study rests on a number of core principles for Google’s business:

1. Nothing to See Here, Move Along: First and foremost is Google’s deep and abiding desire to deflect criticism in the press, avoid civil lawsuits and settle criminal investigations. It has both succeeded and failed at all three. The fact that a company tries to avoid these things is not special; the degree to which Google tries to manage them is quite special.

The self-study is itself an exercise in all three and supports the most important public perception that Google draws on daily to succeed in its consumer facing business: Sympathetic trust. To paraphrase an old California pol, you know all the bad they’ve done, but you like them anyway.

This magical thinking only lasts for so long. Whether its Eric Schmidt’s New York soundproof man-cave from which no scream can emerge, doing a favor for journalist Tom Brokaw by providing a private jet for a Silicon Valley speaking engagement with jet fuel subsidized by the American taxpayer, siphoning piles of data to the National Security Agency under circumstances the average citizen will probably never learn the details of, or paying a $500,000,000 fine for violating the Controlled Substances Act for indiscriminately promoting the sale of prescription drugs (e.g., to addicts and kids), the press and the public is starting to wake up to the game.

And not just the game, but the magnitude of the game. As a senior chief once said, sorry pal, the BS filter is full.

Read The Full Post At Music Tech Policy:
http://musictechpolicy.wordpress.com/2013/09/21/googles-fallacious-piracy-self-study-part-1/

by Trichordist Editor

The music industry may be streaming towards a cliff | Business Spectator

In August the cellist Zoe Keating published a spreadsheet of her earnings from various streaming sites. In the first half of 2013 she scored 232,000 streams, for which she was paid $906.41.

I used the word “legitimate” above because by far the biggest “publisher” of music is BitTorrent, which is simply the internet protocol for enabling peer to peer sharing of files, and the foundation of Napster’s many successors. Some people I know have zettabytes of music and movies they have downloaded; BitTorrent has been estimated to account for as much as 70 per cent of all global internet traffic.

READ THE FULL POST AT THE BUSINESS SPECTATOR:
http://www.businessspectator.com.au/article/2013/10/9/information-technology/music-industry-may-be-streaming-towards-cliff

by Trichordist Editor

“It’s Madness” Radiohead producer Nigel Godrich on LSE Piracy Report

We’re not sure how The London School Of Economics (LSE) could get something so basic so wrong as to suggest that because a some contemporary major label and heritage artists may be making more money from live shows (arena concert grosses) that somehow basic artists rights are not important for protection.

The New Music Express reports that Radiohead producer Nigel Godrich get’s it right in response the the LSE’s shortsighted misunderstanding about artists revenue streams.

“T-shirts and tickets are nothing to do with ‘copyright and creation’, which is the supposed subject of this document.

I hope the government sees how ridiculous this document seems to people who make records.

The authors are ‘pro piracy’ and they wish to influence the UK government’s upcoming review of digital copyright law.

It’s madness.”

Indeed.

It appears that the LSE report would be suggesting that artists never should have been paid royalties from the distribution of recorded music because there have always been other ways to make money from music.

If one were to truly let this logic sink in, it would appear that the LSE is making a general argument against all copyright because the distribution of copyrighted works is only a loss leader to live performances, synchronization fees or endorsement deals. This is of course absurd on every level.

This lopsided logic from LSE seems to favor illegally operating internet corporations distributing music without consent or licenses. We know that there is a lot of money being made in the illegal distribution of music online and the LSE’s report seems aligned with the economic interests of those who knowingly exploit artists for profit.

We expect better from such a respected institution then to ignore the economic interests by companies and corporations that are profiting illegally from advertising supported music piracy.

Perhaps it’s this report in DigiDay (parent company The Economist) that says it best.

Visit the top torrent search engines, and you’ll find ad calls from Yahoo, Google, Turn, Zedo, RocketFuel, AdRoll, CPX Interactive and others.

According to AppNexus CEO Brian O’Kelley, it’s an easy problem to fix, but ad companies are attracted by the revenue torrent sites can generate for them. Kelley said his company refuses to serve ads to torrent sites and other sites facilitating the distribution of pirated content. It’s easy to do technically, he said, but others refuse to do it.

“We want everyone to technically stop their customers from advertising on these sites, but there’s a financial incentive to keep doing so,” he said. “Companies that aren’t taking a stand against this are making a lot of money.”

Thankfully Jonathan Taplin and the USC Annenberg Innovation Lab did some fantastic work earlier this year researching and studying how Ad Networks profit from piracy.

RELATED:

Over 50 Major Brands Supporting Music Piracy, It’s Big Business!

by Trichordist Editor

8 Reasons Why Pirating Hurts Everyone | ISPs Dot Org

Downloading the latest hit song can be as easy as pressing a button. With no investment necessary, any song or movie or even program can be found on person to person file sharing networks such as Limewire, Frostwire or BitTorrent. But is this downloading of free stuff really free? What does it cost us in the long run?

1. Copyrights – Historically, copyright laws have protected intellectual property, such as music. A copyright is a form of legal protection provided to the authors of original works of authorship, whether books, music, film or other creative works. Its aim is to allow authors, musicians, directors, etc., (and the companies that back them and distribute their work) to profit from their creativity and so encourage them and others to produce other works in future.

READ THE FULL POST HERE:
http://www.internetserviceproviders.org/blog/2011/8-reasons-why-pirating-hurts-everyone/

by Trichordist Editor

Why the LSE’s Piracy Arguments Just Don’t Hold Water | Music Industry Blog

It seems that there are always people who want to argue the sky is green and the grass is blue. Such seems to be the case with the London School Of Economics recent report on the impact of piracy on the creative industries.

The primary argument is that although recorded music sales are down (at least they got that much right) this is compensated for by live concerts and other revenues. As we point out here, over and over again these are all revenue streams that existed prior to the internet and therefore are an admission that the internet has failed to create a new middle class of professional musicians.

– Touring… existed BEFORE the internet
– Merchandise (T-Shirts)… existed BEFORE the internet
– Film/Sync Licensing… existed BEFORE the internet
– Sponsorships/Endorsements… existed BEFORE the internet

The Music Industry Blog makes quick work of debunking this dubious and logically flawed study.

The renowned LSE this week published a paper arguing against implementation of the UK’s Digital Economy Act and calling for policy makers to recognize that piracy is not hurting the music industry but is in fact helping parts of it grow. To these academic researchers the findings probably feel like some dazzling new insight but to anyone with more than a passing understanding of the music industry they are as if somebody just time travelled back to 1999. The piracy-helps-grow-the-pie / help-makes-the-sky-not-fall / actually-helps-the-industry arguments were common currency throughout most of the first decade of the digital music market.

In more recent years though, following perpetual revenue decline and the growing plight of struggling ‘middle-class’ artists and songwriters, most neutral observers recognize that the piracy=prosperity argument just doesn’t hold water anymore.

Though of course that won’t stop the pro-piracy lobby fawning over this ‘research’ as more ‘evidence’ for their case.

PLEASE READ THE FULL POST AT THE MUSIC INDUSTRY BLOG HERE:
http://musicindustryblog.wordpress.com/2013/10/04/why-the-lses-piracy-arguments-just-dont-hold-water/

Additional Reading:

The 1 Percent: Income Inequality Has Never Been Worse Among Touring Musicians…

Note that in 1982 almost 40% of the revenue was divided between the “bottom” 95% of artists, while in 2003 they received only 15% of all revenue.

READ THE FULL STORY AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2013/20130704onepct

Related:

Why Telling Artists To Stop Selling Music & Just Make Money Through Live Shows Is Ridiculous

Give-it-all-awayGiving away all your music for free and trying to make your living via other revenue streams can be a valid approach. Except that I don’t know of any musicians actually doing that.

…

There are a lot of reasons it’s ridiculous for people in the tech world, in particular, to say that you should just give away all your music for free and make a living through live shows.

READ THE FULL STORY AT HYPEBOT:
http://www.hypebot.com/hypebot/2013/08/why-telling-artists-to-stop-selling-music-just-make-money-through-live-shows-is-ridiculous.html

by Trichordist Editor