On the surface, at least, the “Transparency in Music Licensing Ownership Act,” introduced in the House of Representatives on July 20 by Congressman Jim Sensenbrenner (R-WI), seems like a copyright bill that could help untangle the online music business….but the devil is in the details.
You can’t make this up. Law 360 is reporting that the International Trade Commission (ITC) has been denied authority over digital goods.
The Federal Circuit said Thursday that it wouldn’t reconsider its decision that the International Trade Commission lacks the authority to block the import of digital files, drawing a lengthy dissent from one of its judges.
Keep in mind, the same people now opposed to the ITC having this authority are the same who argued in favor of the the ITC doing so as an alternative to SOPA called the Open Act.
When advocating for the OPEN Act as a good alternative to SOPA and the PROTECT IP Act, the bill’s sponsors touted the ITC as being a great venue for tackling the problems of foreign rogue sites. Among the claimed virtues were its vast experience, transparency, due process protection, consistency, and independence:
For well over 80 years, the independent International Trade Commission (ITC) has been the venue by which U.S. rightsholders have obtained relief from unfair imports, such as those that violate intellectual property rights. Under Section 337 of the Tariff Act of 1930 – which governs how the ITC investigates rightsholders’ request for relief – the agency already employs a transparent process that gives parties to the investigation, and third party interests, a chance to be heard. The ITC’s process and work is highly regarded as independent and free from political influence and the department already has a well recognized expertise in intellectual property and trade law that could be expanded to the import of digital goods.
The Commission already employs important safeguards to ensure that rightsholders do not abuse their right to request a Commission investigation and the Commission may self-initiate investigations. Keeping them in charge of determining whether unfair imports – like those that violate intellectual property rights – [sic] would ensure consistent enforcement of Intellectual Property rights and trade law.
Some of the groups now arguing that the ITC shouldn’t have jurisdiction over digital goods openly supported the OPEN Act. Back in late 2011, the EFF stated that it was “glad to learn that a bipartisan group of congressional representatives has come together to formulate a real alternative, called the OPEN Act.” The EFF liked the bill because the “ITC’s process . . . is transparent, quick, and effective” and “both parties would have the opportunity to participate and the record would be public.” It emphasized how the “process would include many important due process protections, such as effective notice to the site of the complaint and ensuing investigation.”
Google likewise thought that giving the ITC jurisdiction over digital goods was a great idea. In a letter posted to its blog in early 2012, Google claimed that “there are better ways to address piracy than to ask U.S. companies to censor the Internet,” and it explicitly stated that it “supports alternative approaches like the OPEN Act.” Google also signed onto a letter promoting the virtues of the ITC: “This approach targets foreign rogue sites without inflicting collateral damage on legitimate, law-abiding U.S. Internet companies by bringing well-established International trade remedies to bear on this problem.”
You can read the full post here (Strongly Recommended):
Music Business Worldwide is reporting that “GLOBAL MUSIC PIRACY DOWNLOADS GREW BY ALMOST A FIFTH IN 2015″.
The amount of music downloaded on illegal piracy sites grew by 16.5% in the second half of 2015 compared to the year’s opening six months.
That’s according to leading content protection and market analytics company MUSO, which tracked web activity on 576 sites which were ‘wholly dedicated to music piracy or contained significant music content’.
Across these sites, MUSO analysed over 2 billion visitor traffic hits globally.
READ THE FULL STORY AT MUSIC BUSINESS WORLDWIDE:
So many of the issues we’ve been talking about for years are finally becoming part of the larger and more mainstream conversations about artists rights and an ethical internet.
Seems like there is a little bit more than a slight draft blowing on house of cards that Silicon Valley has built. Here’s a quick recap.
FREE, UNLIMTED, AD-SUPPORTED, ON DEMAND STREAMING IS UNSUSTAINABLE.
Pandora CEO Mike McAndrews first started teasing this talking point during an earnings call in October. You can read those comments at Re/Code. But it was the more direct article McAndrew’s authored for Business Insider that really cemented what we’ve been saying all along…
“This gray market is unsustainable. If consumers can legally listen to free on-demand music permanently without converting to paying models, the value of music will continue to spiral downward to the benefit of no one.”
There is no turning back from this admission.
It’s funny how in years past so many in the music and tech communities could not and would not admit to this simple fundamental truth often telling musicians the true value of their platform was “exposure” so artists could “tour and sell t-shirts”. Well it now looks like the wheels have been run off that nonsense for good.
What would be really great is to see Pandora join the fight with artists against Ad-Funded Piracy. Pandora, Spotify, YouTube and every other Ad-Supported music platform must be aware of the fact that the downward pressure from these infringing pirate sites not only diminishes the value of music, but also the value of advertising on legitimate and licensed paltforms.
WINDOWING WORKS. ASK ADELE, TAYLOR SWIFT AND THE MOVIE BUSINESS.
Taylor Swift, Adele, Beyonce, Prince, Coldplay, The Black Keys, Thom Yorke and other artists have proved that Hits Don’t Need Spotify, but rather Spotify Needs Hits. The Wall Street Journal reports that Spotify is caving in on windowing.
Now, the service is caving in, according to people familiar with the matter.
In private talks, Spotify has told music executives that it is considering allowing some artists to start releasing albums only to its 20 million-plus subscribers, who pay $10 a month, while withholding the music temporarily from its 80 million free users. The company is only interested in withholding albums that can be kept off of other free music sites, such as Alphabet Inc.’s YouTube, for the same amount of time, one of these people said.
There is no turning back from this admission.
This means that Spotify has admitted that it is NOT a discovery medium, it is a retail outlet. Spotify is the digital cut-out bin offering the lowest amount of value to artists. The big problem for Spotify now is who decides who is a lessor or greater artist? Who is going to have that conversation with artists and managers that they are a lessor artist and not worthy of Spotify’s stamp of approval to only be streamed to paying subscribers? Ironically, but predictably the new boss is worse than the old boss.
As with Pandora’s admission about unlimited free streaming being unsustainable, Spotify also recognizes that Ad-Funded Piracy, particularly of the YouTube variety (and mentioned by name) must be managed effectively for windowing to work.
YOUTUBER’S GET PIRATED ON FACEBOOK EXACTLY HOW MUSICIANS GET PIRATED ON YOUTUBE, AND THEY DON’T LIKE IT.
Here’s a shocker. YouTuber’s who create original content through their own investment of time, money and resources are outraged when Facebook users “Freeboot” (aka Pirate) those videos depriving the original creator of the revenue. Hank Green writes a post on Medium that breaks it down.
According to a recent report from Ogilvy and Tubular Labs, of the 1000 most popular Facebook videos of Q1 2015, 725 were stolen re-uploads. Just these 725 “freebooted” videos were responsible for around 17 BILLION views last quarter. This is not insignificant, it’s the vast majority of Facebook’s high volume traffic.
There is no turning back from this admission.
Every argument that has been used against musicians, filmmakers and other creators for using the DMCA to protect their work suddenly takes on new dimensions when the tables are turned.
Larry Lessig had convinced a generation that they we’re being criminalized because musicians were “out of touch” with the “sharing economy”. When musicians issued DMCA notices to YouTube they were vilified, taunted and publicly shamed “Sorry that video is no long available due to a copyright claim by the artist.”
THE DMCA IS NOT A “LICENSE” FOR INFRINGEMENT, COX LOSES SAFE HARBOR IN JURY VERDICT.
Perhaps the single greatest ruling of the year involves Cox Communications losing it’s safe harbor under the DMCA. Digital Music News reports on the jury verdict.
Ultimately, the court found the situation to be more complicated than that, with Cox now ruled guilty of both contributory and willful contributory copyright infringement by a federal jury. The jury award is $25 million, though that probably represents a small prelude to damages that could ultimately push into the hundreds of millions.
There is no turning back from this verdict.
For those of you keeping score at home it is the DMCA abuse that has been used as a shield against copyright infringement liability by the internet and web/tech communities. Many businesses including many ISP’s and content hosting platforms such as YouTube have used the DMCA to build massively profitable businesses that are largely comprised of infringing works, otherwise known as User Pirated Content. That may be about to change thanks to this ruling.
THE PIRATE / FREE CULTURE MOVEMENT HAS FAILED.
In a recent interview Peter Sunde, the founder of The Pirate Bay, the flagship of the free culture movement admitted he had failed and was giving up. The most interesting admission by Sunde is at the end of the interview where he echoes what we and other’s have been saying for years.
So, is there like a concrete thing we should focus on? Or do we need to aim for a new way of thinking? A new ideology?
Well, I think the focus needs to be that the internet is exactly the same as society.
There is no turning back from this admission.
There is an excellent open letter in response to Sunde by David Newhoff at The Illusion of More that is well worth reading with a detailed look at why Sunde has failed. But it is Sunde himself who makes the most profound admission.
We have centuries of rule of law for civilized societies that respect and protect individual creators rights in the authorship of their work. The United Nations Universal Declaration of Human Rights, Article 27, part 2 states “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”
The greatest irony here is that Sunde set up The Pirate Bay as an attack on capitalism, but he started by attacking artist’s and creator’s moral rights firsts. The paradox of “pirate logic” expands when one recognizes that The Pirate Bay was said to be making over four million dollars year. Yeah, that’s the way to fight capitalism, attack the ability for artists to survive and pocket four million a year. We couldn’t make this up if we tried.
SO LETS CHECK THE MATH HERE AT THE END OF 2015
- Pandora attacks Spotify stating the Unlimited, Ad-Supported, On Demand, Free Streaming is Unsustainble.
- Spotify attacks YouTube stating that Windowing Can Only Work If Windows Can Be Enforced.
- YouTuber’s attack Facebook stating that Stealing and Monetizing their work Without Permission is bad.
- Cox Communications attacked the DMCA stating “F*ck The DMCA” and lost.
- Peter Sunde attacks Capitalism stating that… oh well, forget it… it’s nonsense.
There is a lot of work to be done, however these admissions set the framework for the future of these conversations going forward.
[NOTE : THIS ARTICLE WAS UPDATED ON SATURDAY DEC 19 TO ADD THE PARAGRAPH ABOUT COX COMMUNICATIONS]
The Pirate Bay’s Peter Sunde has recently stated he’s given up. His interview can be read here. David Newhoff at the Illusion Of More responds to Sunde in a brilliant open letter that is required reading.
This is what comes of evangelizing the idea that it’s okay to exploit other people’s investment of real labor and real capital in goods and services that would otherwise have regenerative value. And exploiting these types of investments is precisely what you and your colleagues did with The Pirate Bay.
At least part of the Internet you don’t like is what comes of preaching to a whole generation that they can have whatever they want, free of charge, as long as it’s just a mouse click away. And indeed, we are lately seeing the wheels come off that naive (and frankly predatory) idea. As the leaders of Pandora and Spotify begin to see that “freemium” isn’t a business model; as Facebook’s video service “freeboots” the promised ad-share value out of the pockets of YouTube creators; and as the global network of pirate sites is revealed to be a malware-infested and sophisticated black market that preys on individual consumers, you seem to have missed the point, Peter. The “fight” you lost is not with the MPAA and the principles of real capitalism—but with the unfettered greed you helped foster on the Internet you asked for.
READ THE ENTIRE POST AT THE ILLUSION OF MORE:
Required reading regarding Larry Lessig’s pitch to help Kim Dotcom…
The second thing about Lessig’s declaration that jumps out is an apparent contradiction between Lessig and Dotcom’s defense team regarding the applicability of the DMCA safe harbors to Megaupload.
In the white paper, Dotcom’s defense team says
Even if the U.S. government’s wishful expansion of the criminal copyright law into the realm of secondary infringement were tenable (which it is not), Megaupload is shielded from criminal liability by specific “safe harbor” provisions in the Digital Millennium Copyright Act (DMCA), included in the law to protect companies like Megaupload that make efforts to remove infringing material in response to “take-down” notices issued by copyright holders
But in his declaration, Lessig asserts “The DMCA is only a defense in the civil context”. The reversal is notable.
READ THE FULL POST AT COPYHYPE:
Lenz is best thought of as a tactic in a larger strategy. Another victim-shaming tactic, used to confuse and intimidate individuals so they don’t claim their rights, is a Google-funded project called Chilling Effects. We can define “victim shaming” as where the process of seeking justice punishes the victim more than it hurts the perpetrator, and it relies on the fear of unknown reprisals.
Both Lenz and Chilling Effects have the same goal: to make you think twice about asserting your ownership of your own digital stuff. The Utopia envisaged by Silicon Valley’s current oligarchs does not have individual ownership of bits in it.
READ THE FULL STORY AT THE REGISTER UK:
Advertising is killing internet. Soon most online advertising will be forced pre-rolls of TV commercials. You finally have a DVR to skip commercials, and soon there will be no way to avoid them. Do you really think this is what what the internet’s founding founders had envisioned? One great big inescapable advertising machine? No, we didn’t think so either.
Creators are now forced labor* on the digital fields of the AdvertNet, where the Borg like overlords of internet advertising have forced us into being unwilling participants on their digital plantations against our will. We have no defense against the advertising funded, illegal exploitation of our labor.
Now we want to be clear, we’re not opposed to advertising in general, the advertising industry overall or the many highly talented creatives who work in advertising. We all love those Superbowl ads, right? And let’s not forget that many a band in recent history has found fortune from a well placed song in a high profile commercial (Hello, Phoenix).
No, we’re talking about the highly invasive, privacy invading, personal data tracking, internet advertising slathered on pirate sites that illegally distribute copyrighted works and destroy the livelihoods of professional artists and creators against their will.
Digital Advertising Agencies are on the wrong side of artists rights. They have sold us out.
Here’s the elephant in the room. The internet as a business has a math problem and it goes something like this. There are only a few ways to make money on the online. First is transactional sales where the company can take a margin on each transaction (Amazon, Itunes, Etc). Second is a transactional service where the company can take a margin on each transaction (Uber, AirBnB, etc). Third is subscription based access to content and software (Netflix and Adobe respectively). Fourth is advertising for pretty much everything else including the big categories of Software As Service or SAAS. SAAS models including everything from Google, Facebook, Twitter and Instagram to newspapers, blogs and community based bulletin boards like Reddit, etc.
The fundamental problem here is attempting to transform all businesses to advertising supported models. This is because the largest most successful internet company ever (Google) just happens to work under that model. But the economics at large don’t generate enough revenue to pay for the cost of labor for the production of art, photography, music, movies, book, etc being distributed.
Think about it. How could it be possible that everything that once required transactional revenues to be sustainable can now be paid for with just advertising revenue? It can’t. Not under current models that do not allow for scarcity and exclusivity.
Scarcity and exclusivity are what make broadcasting models work. Television networks invest in creating exclusive content that is scarce. The scarcity and exclusivity allows for maximum monetization of that asset. The Superbowl and the Academy Awards are two of the highest grossing advertising based products specifically because they are scarce.
Take the above one step further. Imagine that everything on the internet, every single site that is not selling merchandise, a service or a subscription has to be self supporting on advertising revenue alone. Do you really think that’s possible? No, it is not. This is simply because to the cost of production of professional content can not be created at the cost that internet advertising provides.
The work around this math problem is to steal the labor of professional creators and monetize it against their will.
No budgets to pay for production, no problem. Steal It.
Just make the margin on the cost of running the business without paying for content production. A business that does not have to pay for its inventory or cost of goods is far more profitable than one that does pay those costs. This is exactly how pirate sites and Google’s YouTube operate.
The creators of YouTube admitted as much in private emails that were exposed during the lawsuit with Viacom:
• A July 29 email conversation about competing video sites laid out the importance to YouTube of continuing to use the copyrighted material. “Steal it!” Chen said , and got a reply from Hurley, “hmmm, steal the movies?” Chen’s answer: “we have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason our traffic surged was due to a video of this type.”
* Forced Labor? Hyperbole? With no ability to opt out, without being granted choice, consent or the ability to negotiate our wages, what else is it?
If we strip away some of the color and simply look at the assertions being made, then the basic structure of the article reveals an important fallacy. First Johnson states that most of the evidence of harm done to creators in the digital age is anecdotal, and this is partly true — although anecdotes from professionals should not be misconstrued as mere random complaining. So, to get beyond the anecdotal, Johnson then cites macroeconomic data, compiled by the Labor Department, most of which suggests a big-picture view that creative people in all media are doing better than they were a decade ago. But, having previously scorned the anecdotal negative, Johnson then cherrypicks bits and pieces of the anecdotal positive — some of which he misrepresents — in order to support his interpretation of the economic data he cites.
READ THE FULL POST AT THE ILLUSION OF MORE:
This week’s apology episode from Johnson is entitled The Creative Apocalypse That Wasn’t — and its one of the most brain dead pieces that the New York Times Magazine has ever published. I’m shocked the Public Editor has not already taken Johnson to task. I won’t go into all the details because David Newhoff has already destroyed most of Johnson’s argument that the Internet monopolies have actually been a boon to the average artist. This is total nonsense as this chart shows.
READ THE FULL POST AT MEDIUM: