We love Google. We really do. However it’s these kinds of practices that harm artists and creators that are very, very disappointing.

Music Technology Policy

Written by Chris Castle

[Editor Charlie sez: It was recently reported that Google has now received notices for over 10 million infringing links in search results–actually a low number given that Google receives 3 million notices a week for search alone–i.e., not counting Blogger or YouTube.  Before the anti-copyright crowd goes spinning into the ether that the volume of notices is somehow evidence of the orphan cause of action “copyright misuse”–Google acknowledges that 97% of these notices are properly sent.  “One Bad Apple” was first posted on 9/2/2011 after the COICA legislation caught Google’s attention and the company announced it was taking steps to protect the interests of artists because they really do care.  It was reposted on January 13, 2012–no change.  And as we all know–purity is a prophylactic against scrutiny.  Let’s see how much–if anything–has changed since January 13, 2012.  The answer?  Nothing.]

This post is a compilation…

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Music Streaming Math, Can It All Add Up?

Music streaming is clearly a challenge for the recording industry and even more so for the new generation of artists hoping to build professional careers in music like Zoë Keating. This new report from the New York Times, “As Music Streaming Grows, Royalties Slow to a Trickle” is the latest to reignite controversies about music streaming royalties.

We’ve leveled our own criticism of streaming sites in the past perhaps focusing unfairly on Spotify. But as we reported in the, Music Streaming Price Index : Pay Rates as of 12/31/11 our complaint is more with the revenue models and royalty payments than with the services themselves.

To be clear, we like Spotify and the people we’ve met that work there. We’d just like to see better royalty rates and the kind of transparency requested by Zoë Keating, and/or the kind we get from Apple’s Itunes.

We also like that Spotify and other music streaming services are legal and licensed. Spotify (Rhapsody, Zune and Napster) are far more ethical businesses than YouTube and Grooveshark. There are no unauthorized copies of an artists material on Spotify and no massive DMCA issues. We’d love to see more brands spending their money with legitimate services than the shady ad networks that feed advertising to pirate sites.

It’s now clear that the brands themselves are a big part of the problem by supporting piracy when they could be supporting the legally licensed sites. Brands, advertising networks and payment processors are driving the race to the bottom in the “optional payment” and “Illegally free” world of exploiting musicians through online piracy.

In a recent interview for Hypebot, music and technology veteran Ted Cohen sums it up well,

Do you still favor subscription over advertising-based music services?

Yes, I do. I don’t think that the advertising model so far has proved to be sustainable. I think that we have undervalued subscription. I am paying $150 a month for cable. I watch 20 or 30 hours of TV a week. I probably listen to 50 to 60 hours of music a week. I’d argue with you that music is worth more than $10 a month subscription service.

The labels were so concerned about (piracy)—and I was there at the time—that we had to come up with a price that was just a little bit more than free to convince people that they should pay. So far, we have not been able to raise the price. I think that music is worth at least $20 or $25 a month.

In the chart below calculations are created in tables to illustrate the simple math required to determine the revenue opportunities in different streaming models. For example, lines 5, 6, and 7 detail how much revenue Spotify can generate to artists, songwriters and rights holders paying out 70% of their gross at 1m, 30m and 90m paid subscribers.

If Spotify can capture what most believe is an optimistic amount of paid subscribers in the USA (30m) that would only generate $2.5b in revenue for rights holders. Line 2 represents the revenues of the record industry in the USA between 1999 when it was $14.6b through 2009 when it had plummeted to $6.3b leaving a loss of $8.3b annually since that time.

Maybe we’re missing something. If streaming is the future how does $2.5b in revenue from a massively successful Spotify replace the loss of $8.3b in annual earnings?

streamingmath

So in 2012 when Spotify has claimed 1 million paid subscribers in the US, that’s a payout to artists and rights holders of only about $84m. In simple math, this is about 12m albums at $7 wholesale each (what iTunes pays on a $9.99 album).

Additional food for thought is that Spotify is currently valued at 3 billion dollars. That’s just a little less then half of the entire earnings of the entire US record industry in 2012 at an estimated 7 billion dollars. This means that if the same valuation method is used for both Spotify as a single company, and the domestic record industry as a whole, than either Spotify is overvalued or the record industry is undervalued.

But there are larger problems here than Spotify. As you can see in the chart above YouTube also represents a challenge for artists and rights holders. The site was born of infringement as a business model, and despite policy changes at Google (YouTube’s parent company) the situation is still completely unacceptable for artists as East Bay Ray of The Dead Kennedy’s explains to NPR.

YouTube really deserves it’s own post, and there will be several forthcoming.  In the new “exploitation economy” artists seem to be willing to trip over transactional dollars attempting to pick up streaming pennies. Again, one of the most important distinctions between Spotify and YouTube is that Spotify does not have a massive DMCA and rights management issues that cheats artists of their due. Additionally, YouTube is paying a fraction of what Spotify is, so if this is the future, everyone is really in trouble.

…it will henceforth be very difficult to dislodge Smith and Telang’s conclusion that piracy does economic harm to content creators…

Copyright and Technology

Back in 2010, the Government Accountability Office (GAO) published a meta-study of the economic effects of intellectual property infringement (including counterfeit goods as well as copyrighted works).  The GAO concluded that IP infringement is a problem for the economy, but it’s not possible to quantify the extent of the damage — and may never be.  It looked at many existing studies and found bias or methodological problems in every one.

More recently, Michael Smith and Rahul Telang, two professors at Carnegie-Mellon University, published another meta-study that serves as a sort of rejoinder to the GAO study.  This was the subject of Prof. Smith’s talk at the recent Digital Book World (DBW) conference in NYC.

Assessing the Academic Literature Regarding the Impact of Media Piracy on Sales summarizes what has been a growing body of studies on the economic effects of so-called media piracy.  Their conclusion is that piracy does have…

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Artists Rights Watch – Sunday Feb 3, 2013

Grab the coffee!

Recent Posts:
* Over 50 Major Brands Supporting Music Piracy, It’s Big Business!
* @pepsi and @beyonce @superbowl Ads Supporting Pirate Lyrics Site That Exploits Adele and Skyfall
* Derek Khanna is Wrong: Copyleft Mystery Man’s Misleading Memo Creates its Own Myths…
* It’s Not Whack A Mole if You Own the Mole: New York Times Coverage of Brand Sponsored Piracy
* Zero Dark Thirty, Best Picture Academy Award Nominee, Exploited by AT&T, Verizon, MetroPCS, Nissan, H&R Block, British Airways, Progresso, and more…
* #StopArtistExploitation – Tweet Daily for Artists Rights!
* Underreporting and No Accountability: Another Reason Streaming Royalties are So Small
* Internet Pay To Play: Payola’s Revenge – Guest Post by Robert Rial of Bakelite78

From Around The Web

LA WEEKLY:
* YouTube Stars Fight Back

“I woke up today hoping to make a video, but I went into a call with Machinima this evening and they said that my contract is completely enforceable. I can’t get out of it,” Vacas tells the camera. “They said I am with them for the rest of my life — that I am with them forever.

“If I’m locked down to Machinima for the rest of my life and I’ve got no freedom, then I don’t want to make videos anymore,” he says quietly.

The screen fades to black.

NEW YORK TIMES:
* Playing Whac-a-Mole With Piracy Sites
* As Music Streaming Grows, Royalties Slow to a Trickle

Spotify, Pandora and others like them pay fractions of a cent to record companies and publishers each time a song is played, some portion of which goes to performers and songwriters as royalties. Unlike the royalties from a sale, these payments accrue every time a listener clicks on a song, year after year.

The question dogging the music industry is whether these micropayments can add up to anything substantial.

“No artist will be able to survive to be professionals except those who have a significant live business, and that’s very few,” said Hartwig Masuch, chief executive of BMG Rights Management.

ADLAND:
* Online pirating: sponsored by many brands, and now, one government.

BUSINESS INSIDER:
* How Jobs In The Media Industry Got Demolished In The Last 10 Years [Charts]

The Bureau of Labor Statistics has put together a presentation on the recent history and direction of media jobs. It’s not pretty.

THE LEFT ROOM:
* Piracy, Free Books, etc

DIGITAL BOOK WORLD:
* Does Piracy Hurt Digital Content Sales? Yes

BRITISH JOURNAL OF PHOTOGRAPHY:
* Photographers find support in House of Lords in copyright fight

THE HOLLYWOOD REPORTER:
* Ray Charles’ Children Win Lawsuit Over Song Rights Termination

BLABBERMOUTH:
* TOOL Frontman Sounds Off On Illegal Downloading, Music Industry And Digital Distribution

“There’s a disconnect between people not buying music and not understanding why [bands] go away. There are people who are like monkeys in a cage just hitting the coke button. They don’t really get that for [musicians and artists] to do these things, they have to fund them. They have to have something to pay the rent.”

VOX INDIE:
* New Spotlight on Piracy Profitmongers

THE ILLUSION OF MORE:
* Think File Sharing is Sticking it to The Man? Really?
* On Being a Luddite

COPYRIGHT AND TECHNOLOGY:
* Yes, Piracy Does Cause Economic Harm

Decisions about business and policy have to be made based on the best information we have available. After a certain point, simply poking holes in studies — particularly those whose results you don’t happen to like — isn’t sufficient.

It may indeed, as the GAO suggested, be impossible to measure the economic effects of piracy with a large amount of accuracy. But if dozens of researchers have tried, all using different methodologies, then their conclusions in the aggregate are the best we’re going to do. Put another way, it will henceforth be very difficult to dislodge Smith and Telang’s conclusion that piracy does economic harm to content creators.

RAPIDTV NEWS:
* LATAM pay-TV operators unite against piracy

CIOL:
* Kamal Haasan fans help curb Vishwaroopam online piracy

BILLBOARD:
* Worldwide Independent Network Announces ‘Independent Manifesto’
* Blink-182’s Mark Hoppus Talks Piracy, Pros and Cons of Digital at MIDEM

“I believe that artists should be paid for their creativity. There’s no other industry where people can come in and take what you create for free and give it away for free and that’s acceptable.”

MUSIC ALLEY:
* U2 manager Paul McGuinness: ‘I don’t want to engage in Google-bashing, but…’
* Irving Azoff sticks it to Pandora and StubHub
* Midem 2013: How the Music Industry Manages Innovation

“We are the last fortress against this YouTube situation, and we are fighting hard on that,” he said. “The problem is the fair price, getting statements and getting all the business plans… The biggest problem to solve the YouTube deal is they want a non-disclosure deal, and we are not allowed by Germany law to do with any partners a non-disclosure [deal]. We have to do it open.”

DIGITAL MUSIC NEWS:
* Pandora Executives Cash Another $3 Million In January…
* Hey Advertisers: You Might Want to Ask VEVO for a Refund…

HYPEBOT:
* Myspace Allegedly Hosting Unlicensed Indie Music, Merlin Prepares Legal Response
* The Most Honest Interview About the Music Industry Ever, Featuring Jacke Conte of Pomplamoose

“YouTube seemed like a really incredible opportunity, but it’s not repeatable. I don’t know how to make it in the music industry. I don’t think anybody really knows how, and I’m unable to repeat what happened to Pomplamoose.”

PLAGIARISM TODAY:
* 4 New-ish Pro-Copyright Sites To Read

THE FEDERALIST SOCIETY:
* Laws of Creation: An Examination of Intellectual Property Rights

INSTITUTE FOR POLICY INNOVATION:
* Copyright and Innovation? No. Copyright IS innovation.

YAHOO:
* New Order’s Peter Hook: Musicians, Journalists Only People Who Don’t Get Paid for Work

Hook expressed astonishment that in the internet economy, consumers act aggrieved if musicians ask to be compensated for their music or if reporters object to having their stories re-purposed by other news organizations without getting credit or cash.

“If you love and respect music, you should pay for it,” Hook said.

COPYRIGHT ALLIANCE:
* Creators and Consumers Should Cut the Strings

TORRENT FREAK:
* Russia Wants To Fine Websites For Poor Copyright Takedowns
* University of Illinois Disconnects Pirating Students, Staffer Asked To Leave
* Pirate Bay Founder Could Be Prosecuted For Hacking “Within a Month”

VARIETY:
* Music retail giant puts tunes online (Amoeba Archives Project)

THE SCOTSMAN:
* New look at copyright key to digital boom

THE CALGARY HERALD:
* Your content is Freely Shared; their Profit is Closely Held

There’s enormous potential in this ‘Your Content, Their Profit’ crowd-sourcing business model, and it’s turned companies like YouTube, Google and Twitter into multi-billion-dollar corporations.

Whether you realize it not, what you post online (your words, your pictures, your pictures of other people, you name it) becomes someone else’s revenue generating opportunity as soon as you post it.

Top social networking sites build into their user agreements and conditions of use the automatic rights to profit from the content that’s posted (or stored or indexed).

JOHN BOSTOCK @ TED CONVERSATIONS:
* Meet the new Boss, Worse than the Old Boss

THE MAUI NEWS:
* Creators v. Consumers : Restating the Obvious

SAD RED EARTH:
* Aaron Swartz and “Hactivision”

DiCola Study : Read the paper before getting caught up with the pretty pictures, people.

Guest Post by Sebastian Förström, you can check out his website [here]. Copyright in the Author.

Please read the 77 page paper before getting caught up with the pretty pictures, people.

The graphs show “the average musician”, the one guy that doesn’t exist.

The survey includes a lot of different musicians, many of which don’t have any recordings (41.5% answered N/A on the “sound recordings” question and 56.2% answered N/A on the “money from songwriting/composition question”).

It’s heavily skewed towards classical and jazz musicians (50.9%) and those two genres together make up about 4% of the record business. It’s also made in 2011, after music sales have dropped by 50%. It would be interesting to compare it to some kind of similar survey from pre-Napster times, but there probably hasn’t been any made using the same criteria.

That said, it seemed pretty balanced to me and worth a read if someone is interested.

I’ll point out that for those calling themselves “composers” copyright-related income on average was around 45%.

For those musicians who made the most money, copyright-related income was a larger part of the pie than for the average musician. Just goes to show that it’s as everybody has always said, the real money in the music business is in writing songs.
( As long as people buy the records 🙂 )

I’ll copy-paste some bits for those who don’t want to read the whole paper:

34/77
“There are subgroups of musicians who make a much more substantial portion of their revenue from compositions, especially, and also recordings. These relatively copyright­‐reliant subgroups include composers and musicians in the highest brackets for music­‐related income, as described below.”

35/77
“This suggests that sound recordings have greater relative importance for lower-income, part-time, and younger musicians. Selling recordings might be a way to get started in the industry. But for higher-income musicians accumulating revenue streams, composition royalties have a much larger role in earning revenue..”

41/77
“Figure 8 also shows how some of the negative trends in the industry are affecting musicians’ revenue. Twice as many respondents who compose reported a decrease in mechanical royalties as reported an increase: 50 percent to 24 percent. Unsurprisingly, sales of recordings in traditional retail stores showed a distinctly negative trend, with 50 percent of respondents who record music reporting a decrease. Financial support from record labels is also in decline; 41 percent of those recording artists with record­‐label contracts reported a decrease in financial support against only 9 percent who reported an increase. This accords with my colleagues’ findings in the separate, qualitative­‐interview phase of the larger project.”

46/77
“But merchandising, branding, and licensing of one’s persona make up only a tiny fraction of musicians’ revenue, despite the increased prevalence of social networking. Merchandising revenue is a tiny sliver of musicians’ revenue “pie.””

48/77
“In sum, some musicians are more dependent on revenue streams that are directly related to copyright than others. The variation in musicians’ sources of revenue is important; it shows that musicians have a wider range of roles and revenue sources that go beyond composing and recording. Musical creativity takes a number of forms, not just the kinds that copyright law protects. This broader perspective should not, however, obscure the reliance on copyright for many musicians in particular subgroups. To return to a key example, those who focus their activity on composing rely on composition revenue and are much more vulnerable to harm from copyright infringement. The same goes for recording artists who rely on sales of sound recordings.”

Pretty much, yeah.

[EDITORS NOTE: It is the Dicola study that had made headlines declaring only 6% of musicians benefit from Copyright]

#StopArtistExploitation – Tweet Daily for Artists Rights!

As we suggested on our post, Over 50 Major Brands Supporting Music Piracy, It’s Big Business! the best way to start to effect positive change is to simply encourage like minded people to send a daily tweet to one of the brands on the list. A tweet a day to just one of these brands will create enough awareness to bring this issue to the attention of the brands themselves. There are over 50 brands, so that’s nearly two months of tweets just by doing one simple tweet a day.

By using the hashtag #StopArtistExploitation we can also easily help others find out about this problem and build support for artists rights online.

Thanks to everyone who participates, you really can make a difference. We’re also tweeting a brand a day, so feel free to retweet us if you like – which is even easier.

Here’s a directory of the brands on Twitter. Please feel free to copy/paste this simple suggested tweet to them:

@Brand Stop Supporting Online Music Piracy #StopArtistExploitation http://wp.me/p2hvgt-1xH

@Adobe – https://twitter.com/Adobe

@ADTstaysafe – https://twitter.com/ADTstaysafe

@AlaskaAir – https://twitter.com/AlaskaAir

@amazon – https://twitter.com/amazon

@AmericanExpress – https://twitter.com/AmericanExpress

@ATT – https://twitter.com/ATT

@Audi – https://twitter.com/Audi

@BMWUSA  – https://twitter.com/BMWUSA

@bostonmarket – https://twitter.com/bostonmarket

@boyscouts – https://twitter.com/boyscouts

@British_Airways – https://twitter.com/British_Airways

@CENTURY21 – https://twitter.com/CENTURY21

@CharterCom – https://twitter.com/CharterCom

@Citibank – https://twitter.com/Citibank

@MINIUSA – https://twitter.com/MINIUSA

@CoxComm – https://twitter.com/CoxComm

@CrateandBarrel – https://twitter.com/CrateandBarrel

@DirecttTv – https://twitter.com/DirecttTv

@DishSatellite  – https://twitter.com/DishSatellite

@eBay – https://twitter.com/eBay

@EA – https://twitter.com/EA

@Air_Emirates – https://twitter.com/Air_Emirates

@FergusonShowrms – https://twitter.com/FergusonShowrms

@Ford – https://twitter.com/Ford

@GoPro – https://twitter.com/GoPro

@googlechrome – https://twitter.com/googlechrome

@HertzCWB – https://twitter.com/HertzCWB

@HP – https://twitter.com/HP

@HiltonHotels – https://twitter.com/HiltonHotels

@HyattPR – https://twitter.com/HyattPR

@Hyundai – https://twitter.com/Hyundai

@JetBlueAirlines – https://twitter.com/JetBlueAirlines

@KAYAK – https://twitter.com/KAYAK

@Kohler – https://twitter.com/Kohler

@LegalZoom – https://twitter.com/LegalZoom

@LGUS – https://twitter.com/LGUS

@MyMMscom – https://twitter.com/MyMMscom

@Macys – https://twitter.com/Macys

@_MarvelAvengers – https://twitter.com/_MarvelAvengers

@MazdaUSA – https://twitter.com/MazdaUSA

@musiciansfriend – https://twitter.com/musiciansfriend

@Nationwide – https://twitter.com/Nationwide

@neimanmarcus – https://twitter.com/neimanmarcus

@netflix – https://twitter.com/netflix

@NissanUSA – https://twitter.com/NissanUSA

@priceline – https://twitter.com/priceline

@PrincessCruises – https://twitter.com/PrincessCruises

@Register_com – https://twitter.com/Register_com

@RejuvenationInc – https://twitter.com/RejuvenationInc

@Sheraton_Hotels – https://twitter.com/Sheraton_Hotels

@Skype – https://twitter.com/Skype

@sprint – https://twitter.com/sprint

@StateFarm – https://twitter.com/StateFarm

@SweetwaterSound – https://twitter.com/SweetwaterSound

@Target – https://twitter.com/Target

@TuneCore – https://twitter.com/TuneCore

@UNITED_AlRLINES – https://twitter.com/UNITED_AlRLINES

@UrbanOutfitters – https://twitter.com/UrbanOutfitters

@VirginAtlantic – https://twitter.com/VirginAtlantic

@Visa – https://twitter.com/Visa

@VW – https://twitter.com/VW

@WHotels – https://twitter.com/WHotels

@WeightWatchers – https://twitter.com/WeightWatchers

@Wendys- https://twitter.com/Wendys

@Westin – https://twitter.com/Westin

@WilliamsSonoma – https://twitter.com/WilliamsSonoma

@Yahoo – https://twitter.com/Yahoo

Zero Dark Thirty, Best Picture Academy Award Nominee, Exploited by AT&T, Verizon, MetroPCS, Nissan, H&R Block, British Airways, Progresso, and more…

We spend most of our time here focused on artists rights as it applies to music and musicians. But we wanted to see if the film industry was having the same challenges as music. We believe in the rights of all creators to consent and compensation for their work (ethical internet principles numbers two and four, respectively).

With the upcoming Academy Awards we wondered if it would be possible to find pirated versions of Zero Dark Thirty. It is  the most talked about film of the year which is nominated for five Academy Awards including Best Picture. But it could easily be any of the other nominated films, in any of the categories as well. We just picked Zero Dark Thirty. It’s also been widely reported that most of the nominated films have already been pirated and are online.

We were also curious what major brands might be supporting that piracy, and if any of those same brands might have advertising that appears on the broadcast of  The Academy Awards show itself. We would hope the Academy Of Motion Picture Arts and Sciences would be able to educate the various brands, advertising agencies and online ad networks about the damage they are doing to the creative community.

What makes this even more frustrating in the case of Zero Dark Thirty is that the film is not even out of theaters yet. At least with music, it is usually (usually…) commercially available before it is pirated.

Here’s what we found within a few minutes, on just two sites…

* AT&T on 4Shared
* AT&T on Pastebin
* British Airways on 4Shared
* H&R Block on 4Shared
* MetroPCS on 4Shared
* Nissan on 4Shared
* Progresso on 4Shared
* Turbo Tax on 4Shared
* Verizon on Pastebin

ZDT_ATTT

ZDT_Pastebin

ZDT_BAZDT_H&RBlockZDT_metroPCSZDT_NIssanZDT_ProgressoTTZDT_Verizon

That’s just a couple sites to download the movie for free. What’s more common amongst film piracy are the faux subscription services that charge annual membership fee’s to stream all of their pirated movies (so much for information wants to be free, but movie want to be paid for…).

Here’s just one example where you can pay on a transactional basis of $.75 to stream the film or between $1.43 or $2.18 to download the film of varying quality.

ZDT_movieberry

So much for “Free Culture.” As it turns out there’s probably very little online piracy happening without money changing hands somewhere in the value chain. The money may be in advertising, or it may be in transactional or subscription fees, but one thing is for sure, people are getting paid and not paying the creators.

In the case of the above, and as we also asked did MegaVideo Charge for Streaming Movies the problem here is to address those processing payments such as American Express, Visa, Master Card and the various other banks such as Citi Bank and Wells Fargo (whom have also been seen advertising on pirate sites). At least PayPal is taking responsibility and denying service to pirate sites. That thanks largely to the good work being done by StopFileLockers.

We found a couple of things of interest as well regarding Google’s search. Despite there being (we’re guessing conservatively) literally thousands of DMCA notices to remove the film from search, The Pirate Bay still ranks #3 on the first page of search results! Surely Google as well as everyone else in the world knows the site was found guilty and it’s founders sent to jail. Yet Google has not delisted the site from search in it’s entirety which would be the right thing to do, knowing that the judgement against The Pirate Bay was upheld even by the Supreme Court of Sweden.

ZDT_GoogleSearch

Of course a quick scroll down the page and the delisted link removal notices start to appear as follows:

In response to a complaint we received under the US Digital Millennium Copyright Act, we have removed 1 result(s) from this page. If you wish, you may read the DMCA complaint that caused the removal(s) at ChillingEffects.org.

ZDT_DMCA_GoogleCjill

Now why exactly is there a need, once a link has been delisted to post a notice to a site that then shows that very same link that had been lawfully delisted from Google search by the DMCA? In the screen shot below are shown just the first forty delisted links, but on that one notice alone there are over three hundred delisted links to pirated copies of Zero Dark Thirty in one way or another.

ZDT_CEpg1

Make no mistake about it, every one of those previously delisted links is still active on the servers where it originated and it can simply be copied and pasted back into any web browser.

Further more, these links have been delisted due to the fact that most if not all of these infringing sites are not based in the United States and do not conform to United States law and therefore do not comply with the DMCA itself.

Is this all just a cat and mouse game for Google to profit from piracy? Draw your own conclusions.

Derek Khanna is Wrong: Copyleft Mystery Man’s Misleading Memo Creates its Own Myths…

There has been a lot of ink spilled on the retracted and disowned “memo” titled Three Myths of Copyright that was posted on the Republican Study Committee (RSC) website. Notwithstanding the fictional revisionist history of the op-ed the usual suspects are insisting on grand conspiracy theories worthy of a tin foil hat.

For those who are unaware the RSC “memo” was authored by one Hill staffer working at RSC named Derek Khanna.  Shortly after the memo was posted on the RSC website, it appeared nearly simultaneously on several locations in the anti-copyright echo chamber (e.g., Ars Technica’s Tim Lee, Techdirt, etc.).  Within hours of its posting, the “memo” was not only removed by the RSC, but also disavowed by the organization itself.

It’s important to note that Mr. Khanna acknowledged (on Reddit) that he was freelancing–no one asked Mr. Khanna to write the memo.  How he was able to post the memo on the RSC’s website–which would tend to give the memo the imprimatur of the RSC to the casual reader–is anyone’s guess (although someone surely must know).

khannareddit

So if the RSC didn’t request it, we wonder where the inspiration came from as the memo appears to repeat many of the same old tired talking points we see repeatedly in the anti-copyright and tech blogosphere echo chamber. Some may suspect that Khanna could be hoping to earn favor in the corporate sector who have the same goals in seeing artists rights in copyright diminished, but who knows. Perhaps a staffer at the end of his run with the committee tried to shoot a three pointer as the clock was running out?

What is clear however, is that Derek (who is what the lobbyists call a “Covered Legislative Branch Official“) is publicly engaged in communication with several executives at Google–who have one lobbyist for every six members of Congress and is a government contractor.  Mr. Khanna’s public LinkedIn profile says he is currently employed as:

  • Professional Staff: Homeland Security, Defense and Technology at Republican Study Committee

  • Cyber-Security Policy Adviser at DoD Defense Science Board on Cyber-Security

These are clearly areas that Google is interested in–particularly as it is widely rumored that Google is the outside contractor for the National Security Agency’s massive data collection facility at Bluffside, Utah (in Rep. Jason Chaffetz’ district).

William Patry currently serves as senior copyright counsel to Google Inc. Vint Cerf has worked for Google as a Vice President and Chief Internet Evangelist since September 2005.

KhannaWillamPatry

DerekKhannaVintCerf

Not withstanding where the inspiration may have come from for the erroneous memo, perhaps the events are best stated by the fantastic analysis written by Thomas Sydnor II & Debbie Rose titled, “Capitalist Copyrights: A Republican Reply to “Three Myths about Copyright.

“Three Myths claimed that US copyright laws violate “nearly every tenet of laissez fair capitalism” and constitute “corporate welfare” that thwart capitalism, hamper science, stifle libraries, penalize journalism, hurt innovation and consumers, and even conceal Nazis.

The next day, the RSC Executive Director firmly disowned Three Myths. He explained that it had been “published without adequate review within the RSC” and that it violated RSC publication standards because it failed “to provide informative analysis of major policy issues… that accounts for the range of perspectives held by RSC Members and among conservatives….” The stated reasons for the RSC disavowal seemed valid, especially since many Republicans consider copyrights to be one of the many private property rights that encourage private production of valuable goods, services, and books.

But Khanna then undermined the RSC by publicly embracing the just-disowned paper and associating himself with the “tech community” at TechDirt: “I am the author of this memo, and I hope the tech community continues to add to these ideas….” Khanna then appended a link to… TechDirt.

Predictably, “copyright skeptics” erupted in outrage. Skeptics then accused the RSC of disowning the typo-ridden Three Myths—not because it actually was uninformative and biased—but because bad copyright-industry lobbyists must have strong-armed the stronger-armed RSC into suppressing Three Myths because it had spoken truth to power. To assess the validity of such accusations, the quality of the analyses in Three Myths can be tested against the RSC’s standards for publication and external realities—a test that Three Myths fails miserably.

But that’s not the end of it. Slate reported later on that Derek Khanna was separated from the RSC. Of course this wouldn’t be the least bit surprising given the information above (but this also doesn’t appear to be verified either). Don’t shed a tear for Derek, we’re sure he’ll land with some good opportunities, perhaps even at Google?

The fairy tales spun by the young Republican are easily debunked as the facts about Copyright haven’t changed so much as he would like to think otherwise. Scott Cleland makes quick work of refuting the so called myths in his post, “The Copyright Education of Mr. Khanna.” Cleland states,

“Mr. Khanna has obviously and grossly mischaracterized Constitutional first principles, property rights, and free markets beyond recognition.”

The so called myths are completely deconstructed by the amazing and always insightful work of Terry Hart at CopyHype. The two part analysis are titled Republican Study Committee Policy Brief on Copyright: Part 1 and Republican Study Committee Policy Brief on Copyright: Part 2 respectively.

“…any debate or dialogue should begin with sound premises. This policy brief doesn’t. Instead, like an unfortunate strand of copyright skepticism, it runs from reality, rewrites history, and hides from logic.”

What the irrational anti-copyright movement had hoped would give them legitimacy in the form of an endorsement from a major political party has instead had the opposite effect of highlighting the desperate attempts to rewrite history in such a shallow and over reaching way as to invalidate an honest debate or dialog based in facts. No doubt, somewhere out there is basis of Khanna’s “memo” and it’s unlikely that he did little more than parrot the existing talking points of those who rallied around him in the wake of the memo’s demise.

One other quick note about “Who is Derek Khanna anyway?” reveals that this is the same guy who jumped in the fray to start a campaign to get “Joe The Plumber” elected to congress, as the Toledo Free Press reports,

Derek Khanna, a junior and executive political director of the Massachusetts Alliance of College Republicans, and his friend Trevor Lair, the organization’s chairman, have launched a Web site to gather signatures to petition Samuel J. Werzulbacher to challenge Rep. Marcy Kaptur, D-Ohio, in 2010.

Not to mention “Derek Khanna Removed from Student Government Association Senate Meeting” in his school daze.

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

Below is a partial list of over 50 major brands who are advertising on pirate sites and therefore supporting not only music piracy, but also the mainstream piracy of films and every other kind of digitally distributed work. As we’ve stated before the content industries may have the ability to address mass scale, enterprise level, commercial infringement without necessarily requiring any new legislation.

What we find frustrating is that the major content companies and corporations must have existing relationships with these brands as the content and media distribution companies own the television networks (at the very least) that these brands are dependent upon for the mass scale and mainstream promotion of their products and services.

The major content companies as well as their well respected institutions such as The Academy Of Motion Picture Arts and Sciences (The Oscar’s), The National Association Of Recording Arts and Sciences (The Grammy’s) and The Hollywood Foreign Press Association (The Golden Globes) all host annual award shows where many of these brands are also advertising. Why isn’t it possible to use that opportunity to educate these brands about the damage they are doing to the creative community? In other words, where are the adults?

What is disappointing is that the same people pushing for new legislative solutions could also be leveraging their relationships with the brands and advertising agencies directly to educate them about the seriousness of this problem. The same goes for the banks and payment processors such as American Express, Master Card, Visa and others. At least one company, Paypal has been very proactive in severing it’s ties and services with illegal and infringing sites, we wish more would to the same.

The US Trade Representative’s list of sites in the Notorious Markets List combined with Google’s transparency report for copyright infringement via legitimate DMCA notices to delist links from its search engine provides a very effective list of sites where no advertising should appear as a simple baseline of “best practices”.  (Of course, the Google list does not include YouTube or Blogger.)

http://www.google.com/transparencyreport/removals/copyright/domains/?r=all-time

GoogleTransparencyReport

Keep in mind the screen shot above only lists the Top 20 sites of the almost 200,000 in total that are receiving DMCA notices for copyright infringement.

Clicking on the name of any of the brands below will take you to a post that contains the screen shot of the ad itself. What is also important to note is what brands are NOT on this list.

Brands like Coke and Pepsi do not seem to appear on pirate sites, and that can’t be an accident anymore than it not being an accident that these other brands do appear on pirate sites. So for that, we applaud Coke and Pepsi for their respect to the creative community.

Who knows, perhaps the content industries should use their might, weight and prestige to create an award for brands who respect the creative community in a public forum that enhances value for the brand by the endorsement of artists, musicians, filmmakers and other creators. Just a thought if anyone is reading…

We might also suggest that the brands on this list think about adopting the Bill of Rights for Online Advertisers by Benjamin Edelman of The Harvard Business School.

Five rights to protect advertisers from increasingly powerful ad networks — avoiding fraudulent charges for services not rendered, guaranteeing data portability so advertisers get the best possible value, and assuring price transparency so advertisers know what they’re buying.

Brand  Pirate Site  Artist
Adobe Files Tube Tom Waits
Adobe Files Tube 30 Seconds To Mars / Jared Leto
Adobe Torrent Reactor Neil Young
Adobe Iso Hunt Neil Young
Adobe Kick Ass Torrents Neil Young
ADT Security 4Shared Tom Waits
Alaska Air Iso Hunt Neil Young
Alaska Air Kick Ass Torrents Neil Young
Alaska Airlines Torrent Reactor U2
Amazon 4Shared U2
American Express 4Shared Adele
American Express Delta Airlines Card Mp3 Twister Black Keys
AT&T Mp3 Twister Black Keys
AT&T 4Shared Smashing Pumpkins / Billy Corgan
AT&T Mp3Skull Smashing Pumpkins / Billy Corgan
AT&T 4Shared Adele
AT&T mp3 Skull U2
AT&T mp3 Skull John Mellencamp
AT&T Kick Ass Torrents Neil Young
Audi Mp3Skull Smashing Pumpkins / Billy Corgan
BMW 4Shared Smashing Pumpkins / Billy Corgan
BMW Kick Ass Torrents Tom Waits
Boston Market 4Shared Smashing Pumpkins / Billy Corgan
Boy Scouts of America Torrent Reactor Neil Young
British Airways Kick Ass Torrents Adele
British Airways Mp3 Crow Adele
Century 21 4Shared U2
Charmin Toilet Paper Iso Hunt Neil Young
Charter Cable mp3 Raid U2
Citi Bank 4Shared Smashing Pumpkins / Billy Corgan
Citi Bank 4shared John Mellencamp
Cooper Mini (BMW) Files Tube Neil Young
Cox Cable 4Shared John Mellencamp
Crate & Barrel Files Tube U2
Direct TV Kick Ass Torrents Neil Young
Dish Network Mp3 Twister Black Keys
Ebay Kick Ass Torrents Neil Young
Electronic Arts Need for Speed Mp3 bear Neko Case
Emirates Airlines Files Tube 30 Seconds To Mars / Jared Leto
Ferguson Kick Ass Torrents Talib Kweli
Ford Files Tube 30 Seconds To Mars / Jared Leto
Ford Files Tube Neil Young
Go Pro Files Tube 30 Seconds To Mars / Jared Leto
Google Chrome Mp3 Juices Talib Kweli
Hertz Rent A Car 4Shared Smashing Pumpkins / Billy Corgan
Hewlett Packard Files Tube Neil Young
Hewlett Packard Mp3 Skull U2
Hewlett Packard Files Tube U2
Hewlett Packard Mp3 Skull U2
Hewlett Packard h33t U2
Hilton 4shared Tom Waits
Hyatt 4Shared Tom Waits
Hyundai Mp3Skull Smashing Pumpkins / Billy Corgan
Jet Blue h33t U2
Kayak h33t U2
Kohler Kick Ass Torrents Talib Kweli
Legal Zoom Iso Hunt Neil Young
Levi’s Mp3 Bear Neko Case
LG Files Tube 30 Seconds To Mars / Jared Leto
LG Files Tube Neil Young
LG Files Tube Tom Waits
M&M’s (Mars) Share Beast Black Keys
Macy’s Mp3 bear Neko Case
Marvel Avengers Alliance Mp3 Bear Neko Case
Mazda Mp3Raid Smashing Pumpkins / Billy Corgan
Mini Cooper (BMW) Files Tube Tom Waits
Mitt Romeny 4Shared Tom Waits
Movie 43 (Relativity Media) Mp3 Boo Black Keys
Musicians Friend 4Shared Smashing Pumpkins / Billy Corgan
Nationwide Insurance MediaFire Mp3 Aimee Mann
Neiman Marcus Mp3Skull Smashing Pumpkins / Billy Corgan
Neiman Marcus Mp3 Juices Talib Kweli
Netflix Mp3 Skull John Mellencamp
Nissan Mp3 Boo Black Keys
Nissan Mp3 Take Adele
Nissan MP3 Ape Adele
Priceline 4Shared Tom Waits
Princess Cruises Files Tube Neil Young
Princess Cruises Mp3 Bear Neko Case
Register.Com Kick Ass Torrents Talib Kweli
Rejuvenation Files Tube U2
Sheraton Hotels mp3 Skull U2
Sheraton Hotels 4Shared U2
Skype Mp3 bear Neko Case
Sprint Torrent Reactor U2
State Farm Insurance Mp3 Crank Tom Waits
State Farm Insurance Torrent Reactor U2
State Farm Insurance Kick Ass Torrents Talib Kweli
State Farm Insurance Torrent Reactor Neil Young
State Farm Insurance Iso Hunt Neil Young
State Farm Insurance Kick Ass Torrents Neil Young
State Farm Insurance Mp3 Skull U2
State Farm Insurance 4Shared John Mellencamp
State Farm Insurance Mp3 Skull U2
Sweetwater 4Shared John Mellencamp
Target Mp3Skull Smashing Pumpkins / Billy Corgan
Target MP3 Ape Adele
Target Kick Ass Torrents Neil Young
Target Mp3 Crank Tom Waits
Target Files Tube 30 Seconds To Mars / Jared Leto
Tunecore 4Shared John Mellencamp
United Airlines mp3 Bear U2
United Airlines Files Tube U2
United Airlines h33t U2
Urban Outfitters 4Shared Smashing Pumpkins / Billy Corgan
Urban Outfitters Files Tube Tom Waits
Urban Outfitters mp3 skull U2
Virgin Atlantic IsoHunt Smashing Pumpkins / Billy Corgan
Visa Mp3 Crank Tom Waits
Volkswagen Files Tube 30 Seconds To Mars / Jared Leto
W Hotels 4Shared John Mellencamp
Weight Watchers 4Shared Tom Waits
Wendy’s Kick Ass Torrents Tom Waits
Westen Hotels Kick Ass Torrents Neil Young
Westin Hotels Kick Ass Torrents Tom Waits
Westin Hotels 4Shared U2
Westin Hotels mp3 Raid U2
Westin Hotels 4Shared John Mellencamp
Williams Sonoma IsoHunt Smashing Pumpkins / Billy Corgan
Yahoo Mp3 Bear Neko Case
Yahoo Dilandau Tom Waits

Remember all change is local, and you vote with dollars. If we don’t take action directly ourselves we can’t really blame others. These brands are paying the pirate sites to give away your music (directly or indirectly). One tweet a day to any of these brands is all it takes to start building awareness.

You, yes you, can make a difference. Which of these brands do you support with your money? Let them know you don’t want your money, that you pay to them, being used to promote online music piracy and artist exploitation.

We’re going to be tweeting a brand a day starting tomorrow. Retweet us if you like.

Here’s a directory of the brands on Twitter. Please feel free to copy/paste this simple suggested tweet to them:

@Brand Stop Supporting Online Music Piracy #StopArtistExploitation http://wp.me/p2hvgt-1xH

@Adobe – https://twitter.com/Adobe

@ADTstaysafe – https://twitter.com/ADTstaysafe

@AlaskaAir – https://twitter.com/AlaskaAir

@amazon – https://twitter.com/amazon

@AmericanExpress – https://twitter.com/AmericanExpress

@ATT – https://twitter.com/ATT

@Audi – https://twitter.com/Audi

@BMWUSA  – https://twitter.com/BMWUSA

@bostonmarket – https://twitter.com/bostonmarket

@boyscouts – https://twitter.com/boyscouts

@British_Airways – https://twitter.com/British_Airways

@CENTURY21 – https://twitter.com/CENTURY21

@CharterCom – https://twitter.com/CharterCom

@Citibank – https://twitter.com/Citibank

@MINIUSA – https://twitter.com/MINIUSA

@CoxComm – https://twitter.com/CoxComm

@CrateandBarrel – https://twitter.com/CrateandBarrel

@DirecttTv – https://twitter.com/DirecttTv

@DishSatellite  – https://twitter.com/DishSatellite

@eBay – https://twitter.com/eBay

@EA – https://twitter.com/EA

@Air_Emirates – https://twitter.com/Air_Emirates

@FergusonShowrms – https://twitter.com/FergusonShowrms

@Ford – https://twitter.com/Ford

@GoPro – https://twitter.com/GoPro

@googlechrome – https://twitter.com/googlechrome

@HertzCWB – https://twitter.com/HertzCWB

@HP – https://twitter.com/HP

@HiltonHotels – https://twitter.com/HiltonHotels

@HyattPR – https://twitter.com/HyattPR

@Hyundai – https://twitter.com/Hyundai

@JetBlueAirlines – https://twitter.com/JetBlueAirlines

@KAYAK – https://twitter.com/KAYAK

@Kohler – https://twitter.com/Kohler

@LegalZoom – https://twitter.com/LegalZoom

@LGUS – https://twitter.com/LGUS

@MyMMscom – https://twitter.com/MyMMscom

@Macys – https://twitter.com/Macys

@_MarvelAvengers – https://twitter.com/_MarvelAvengers

@MazdaUSA – https://twitter.com/MazdaUSA

@musiciansfriend – https://twitter.com/musiciansfriend

@Nationwide – https://twitter.com/Nationwide

@neimanmarcus – https://twitter.com/neimanmarcus

@netflix – https://twitter.com/netflix

@NissanUSA – https://twitter.com/NissanUSA

@priceline – https://twitter.com/priceline

@PrincessCruises – https://twitter.com/PrincessCruises

@Register_com – https://twitter.com/Register_com

@RejuvenationInc – https://twitter.com/RejuvenationInc

@Sheraton_Hotels – https://twitter.com/Sheraton_Hotels

@Skype – https://twitter.com/Skype

@sprint – https://twitter.com/sprint

@StateFarm – https://twitter.com/StateFarm

@SweetwaterSound – https://twitter.com/SweetwaterSound

@Target – https://twitter.com/Target

@TuneCore – https://twitter.com/TuneCore

@UNITED_AlRLINES – https://twitter.com/UNITED_AlRLINES

@UrbanOutfitters – https://twitter.com/UrbanOutfitters

@VirginAtlantic – https://twitter.com/VirginAtlantic

@Visa – https://twitter.com/Visa

@VW – https://twitter.com/VW

@WHotels – https://twitter.com/WHotels

@WeightWatchers – https://twitter.com/WeightWatchers

@Wendys- https://twitter.com/Wendys

@Westin – https://twitter.com/Westin

@WilliamsSonoma – https://twitter.com/WilliamsSonoma

@Yahoo – https://twitter.com/Yahoo

Artists Rights Watch – Sunday Jan 27, 2013

Grab the coffee!

Recent Posts:
* Two Simple Facts about Technology and Piracy : iTunes Vs. YouTube
* Kim Dotcom’s “End Of Piracy”, that was easy…
* Obama Inauguration and White House IP Policy via IPEC, Victoria Espinel
* UPDATED: The Real Gangnam Style: Was Google Off a Couple Magnitudes on Earnings Call?
* With Friends Like These: Amazon Advertising Against Illegal Camper Van Beethoven Links While Camper Van Beethoven Gives Amazon Exclusive Content.
* Grammy Award Nominated Black Keys Exploited by… American Express Delta Airlines Card, AT&T, Dish Network, M&M’s (Mars), Nissan and others…

From Around The Web…

COPYHYPE:
* Three Reasons Copyright is Not a Monopoly

THE CYNICAL MUSICIAN:
* Commodities, Monopolies, Remixes and Rights – A Symphony

Copyrighted works are not commodities, nor are the distributors and users of such works able to operate completely independently – they depend on the creators to provide them with works to distribute and use. Thus, the restrictions imposed by copyright are not a monopoly – a distributor or user can still ply his business with regards to other works, the only thing he cannot do is use someone’s work without their permission. This law is simply an extension of the natural control a creator enjoys when he is the sole possessor of his work.

STOP FILE LOCKERS:
* Mega Piracy: It’s just the beginning
* Hotfile terminated by Paypal.
* DigiWeb accepting Payments for Kim Dotcom via Paypal and Credit Card

ILLUSION OF MORE:
* What I’d tell my own kids about piracy. Why scarcity is a good thing.

VOX INDIE:
* Content Leeches-The Dark Underbelly of YouTube’s Content Monetization
* Chronic, Ill-Gotten Gains–Google’s Web of Piracy Profit

Over the past two and a half years I’ve written extensively about Google’s ongoing link to ad piracy profits. Earlier this month USC’s Annenberg Innovation Lab released a report documenting the fact that search giant is at the head of the pack when it comes to monetizing (and subsidizing) online piracy via its ad networks. The relationship between Google and online piracy seems clear as day.

DIGITAL MUSIC NEWS:
* Aimee Mann: “My Record Isn’t on Spotify. Artists Don’t Make Money on Spotify.”
* MEGA Declares War on Pirate-Based Google Advertising…
* In the Last Year, Google Takedown Demands Have Increased 1,300%…

BUZZ FEED:
* Why Does Google Still Reward Content Scraping?

THE INDEPENDENT UK:
* Stream-age kicks: Is Spotify a musician’s friend or foe?

POP UP PIRATES:
* YouTube (and Netflix) Monetize Online Piracy

Google/YouTube will, as always, claim that it’s the rights holder’s job to police YouTube and to request that infringing content be removed.  Of course, in the interim, Google’s happy to make money and Netflix is happy to attract new customers (and make money).

THE HOLLYWOOD REPORTER:
* We’re Kind of Terrified to Search After Sundance’s ‘Google and the World Brain’

NPD GROUP:
* Driving Under The Influence (Deconstructing the “Pirates Buy More Music” Myth)

DIGIDAY:
* 10 Bad Apples of Digital Media

The Thought Leader
They write articles that get published in AdExchanger, Digiday, etc. They sit on all the panels at OMMA, Adtech, etc. Here’s a thought: Stop talking, and do what you say. I’m tired of hearing pitch after pitch about how their company is changing the world with proprietary technology, but when it’s time to put their money where their mouth is, nothing works. Then their reply is, “Well, we’re still in the infancy of this business.” It’s all bullshit, and they know it. But if they can get enough clients on the line and generate enough buzz, some stupid company will acquire them with little to no due diligence.

IRISH TIMES:
* A middleman in the great internet copyright debate (Robert Levine)

PAID CONTENT:
* Amazon opens music store for Apple devices, songs start at 69 cents

GQ:
* Kim Dotcom and the decline of HMV are not unrelated

No matter what you think of Kim Dotcom, or upload sites, it’s impossible to deny that people using sites like Megavideo for illegal downloads is a major (though not the only) reason these people are about to be unemployed. Whether that is Dotcom’s fault or that of its users – half a million signed up for Mega in the first 24 hours – is up to the courts to decide. But Dotcom’s assertions that he is opposed to privacy ring false. He claimed that “because of the business model Hollywood has, they are forcing people into piracy,” before arguing that the answer is a flat fee subscription model like Netflix or Spotify. But that isn’t the site that he has launched. He could have done just that but instead, he has intentionally created a new version of Megaupload, the most intricately designed tool for stealing other people’s hard work for free ever made, and simply made it harder for people to blame him.

TORRENT FREAK:
* Hadopi Plans Large File-Sharing Warning Increase For 2013

JONATHAN TAPLIN:
* Aaron Swartz