Silicon Valley Is Not a Force for Good | The Atlantic

We don’t need to throw the baby out with the bath water, what we need is fair and ethical businesses.

It’s been a long journey from Google to Snapchat—or to apps that enable drivers to auction off the public street-parking spot they’re about to leave in San Francisco. With a few exceptions, the Valley’s innovations have become smaller, and smaller-minded. Many turn on concepts (network effects, regulatory arbitrage, price discrimination) that economists would say are double-edged, if not pernicious. And while the Web was touted as a great democratizing force, recent tech innovations have created lots of profits at the top of the ladder and lots of job losses lower down. The tech sector itself has proved disappointing as a jobs engine and at times hostile to women.


The Crowdsourcing Scam | The Baffler

It’s all the same Silicon Valley scam. Whether you are a musician or a cab driver, this about labor, and you could be next…

Silicon Valley calls this arrangement “crowdsourcing,” a label that’s been extended to include contests, online volunteerism, fundraising, and more. Crowdsourced work is supposed to be a new, more casual, and more liberating form of work, but it is anything but. When companies use the word “crowdsourcing”—a coinage that suggests voluntary democratic participation—they are performing a neat ideological inversion.

The kind of tentative employment that we might have scoffed at a decade or two ago, in which individuals provide intellectual labor to a corporation for free or for sub-market wages, has been gussied up with the trappings of technological sophistication, populist appeal, and, in rare cases, the possibility of viral fame.

But in reality, this labor regime is just another variation on the age-old practice of exploiting ordinary workers and restructuring industrial relations to benefit large corporations and owners of the platforms serving them. The lies and rhetorical obfuscations of crowdsourcing have helped tech companies devalue work, and a long-term, reasonably secure, decently paying job has increasingly become a MacGuffin—something we ardently chase after but will likely never capture, since it’s there only to distract us from the main action of the script.


California’s Other Drought: The Coming Ad Revenue Crisis

Guest Post By Alan Graham

Last month I published this piece over on LinkedIn, but I felt it might need a second viewing (with updates) over here based on recent news on ad blocking and other developments. 


Silicon Valley has a drought problem. But it isn’t the lack of water I’m concerned about. It is the over reliance on ad revenue and venture capital that is sustaining both tech and media. Now there’s a debate raging about whether or not we’re in another bubble (I was in the last one). The pro-bubble argument is often about overvaluations and spending. The anti-bubble argument shows charts on how VC investments and IPOs are much lower than the last one. Both sides completely miss the mark which is that since Google (er…Alphabet) and others began building empires on “freemium” type services, we’ve become accustomed to not having to pay for things, and what began with a tool here and there and some “free” content has actually become the predominant method of generating revenue across the web.

A possible disaster.

For the past two years I’ve been working on a project called OCL. One thing it does is it is the world’s first true microlicensing platform for apps that allows the merging of any creative asset with any other creative asset with all of the rights cleared “faster than instantly.” Yes…that’s possible. And it is actually built upon the idea of paying for things (a novel idea these days I know). I’ve run into a lot of resistance over this model to the point where I recently had an argument with a music journalist who saw no problem with the idea that advertising was a viable long term model of revenue and my predictions/concerns over a non-sustainable ad market (for everything) was silly.

I’ve also had many a meeting with executives who told me countless times that the punter won’t pay for anything. Their business model is to license large platforms and take a cut of ad revenue. During this time I’ve pointed out that with a finite amount of ad revenue that must be shared across all creative industries and tech platforms (all vying for attention), it simply is not possible to sustain a vibrant creative marketplace that requires ad revenue to keep it chugging along. And if those platforms have their revenue somewhat interrupted, that trickles down.

The reasons for being concerned are clear:

-ContentID was a anomaly born out of necessity to bring some order to a chaotic system of copyright infringement and push the biggest piracy site into some form of legitimacy.

-YouTube went from a method of promotion, to a method of generating much needed revenue, to cannibalizing sales of media, as there was no reason to purchase what you were already viewing/listening to.

-Ad revenue (CPCs) have been dropping year over year for the past 5 or so years, while volume continues to increase.

-Volume is increasing because there are simply more and more locations to place ads in an increasingly competitive market with a finite amount of ad dollars that simply shift from one point to another depending on popularity. Companies with ad budgets don’t suddenly spend more money because there are more locations to spend it. And quite frankly…volume is practically infinite.

-Increase in volume means a competitive marketplace that can drive CPC and other ad rates down further because we’re witnessing something happening to ads that happened to media, commoditization. All about numbers at this point, not quality of creative.

-We’re just getting started. Estimated reach/penetration of iOS/Android/FB is anywhere from 5M to 9M apps/platforms with 40k apps being added to iTunes each month alone. Reports show that the range of “free” apps is somewhere around 90%, both ad supported and in-app purchases. As that tail grows, so does volume.

-86%+ of our time accessing the web is now done through apps.

-Ad networks and other ad-based companies are going to get squeezed out of existence because of this, causing a collapse of an entire segment of tech which means thousands of high paying jobs are gonna go bye-bye and never come back. This is already starting to happen.

-Ad revenue is currently 80%+ of all revenue generated by Facebook and Google, two of the most important platforms for media distribution. It keeps their lights on and it is this revenue creators hitched their wagons to.

-Media companies (music, news, video, images) are scrambling to get a cut of that same ad revenue and finding they not only are competing for that money, they often have to spend money towards making that money back. Welcome to the world of paid non-organic reach. You now work for the company, live in company housing, and shop at the company store.

-Ad blocking is starting to take off in popularity and in court cases the judges in two instances sided with the ad blocking company stating that the user gets to decide what they want to do with their devices. 

What does this mean for rights owners?:

“Online ad blocking costs sites nearly $22 billion
The study, by software group Adobe and Ireland-based consultancy PageFair, found that the number of Internet users employing ad-blocking software has jumped 41 percent in the past 12 months to 198 million.”

 “Those losses are expected to grow to more than $41 billion in 2016, the study said.”

But that’s not all, there is also fraud:

“Last year, Google reported that 56.1 percent of all ads served were not measured viewable by humans.”

“Last December, the Association of National Advertisers and security firm WhiteOps estimated that up to a quarter of video ad views were fraudulent and resulting from software bots. It also said that as much as half of publisher traffic is from bots. This represents a projected $6 billion-plus in wasted ad spend this year.”

“Some industry observers go further than that, arguing that the digital ad industry is beset by traffic and other fraud because there’s a sort of arbitrage going on. Some exchanges, publishers, and ad networks are looking the other way, this argument goes, because they can make money on fraudulent traffic and fake ads.”

“The main losers are the advertisers themselves. But the publishers are getting shafted as well, Spanfeller said, since advertisers are paying $10 per thousand impressions while some publishers ‘get a buck.'”


-Mobile carriers in Europe are hinting that they also may begin to block ads at the carrier level citing increased performance and reduced bandwidth. How soon until we start to see ISPs offer the same services?

-It is estimated that Google is seeing as much as $6B in ad blocking occurring, and their total revenue in 2014 was $66B. That’s no laughing matter for a company making 90% of revenue from ads. Their response was to essentially say that the reason people are blocking ads is because we’re simply not making good enough ads. Yeah…that’s the reason. That type of flippant response to a $6B loss is why you should be very worried, because it means they are worried and don’t yet have an answer.

-For smaller publishers the problem is more pronounced. ProSiebenSat, one of the companies that sued Ad Blocker Plus and lost, stated that ad blocking was costing them upwards of 1/5 of their revenue or €9.2M

-Ad blocking users have grown to an army of nearly 200M people. That’s a word of mouth marketplace that any company would kill to have, except they are evangelizing the death of your business. Think about it as 200M people who have decided what you provide is interesting enough, just not interesting enough to pay for it via your #1 monetization plan. What’s your backup plan for monetization? What that says to me is that there are likely millions of content platforms overvalued and poised to collapse.

-With Apple’s recent announcement that they would allow third party developers to create ad blocking extensions for mobile Safari, the attention brought to this might take it mainstream, considering there are hundreds of millions of iOS devices and mobile Safari represents 25% of browsing. Welcome to the next viral technology success that you can’t actually afford to have take off.

-Facebook’s Instant Articles strategy could possibly be where advertising lives on, meaning that online publishers will have to become even more reliant on the tech giant for revenue, although it is likely both Apple and Google will follow suit. Meaning more of the open web gets sucked into the app environment where walls and AI decide what we will see and hear.

-My own tests with ad blocking has removed every ad from YouTube, one of the primary revenue sources for music labels and artists. Consider that most videos using music on YouTube (likely 60-70%) never generate any ad revenue at all, not to mention that YouTube is still not profitable (really?), this is one basket of eggs I’d be thinking of taking some eggs out of…

-Ad blocking is getting more and more sophisticated with ad block plug ins for Safari, Android, Chrome, and even Spotify. Not only can you block Spotify ads (the freemium model they defend to the death – no freemium no paid), but you can rip tracks from Spotify with all the metadata intact.

PopcornTime. Free movies and tv shows playing direct to your device with a gorgeous interface, high quality resolution, built-in VPN, and zero ads…need I say more? Expect more solutions like this to pop up, including alternative music platforms. IMAGINE: Playlists created in Spotify exported to a BitTorrent decentralized music player…this will happen.

The next 12-24 months are going to be a watershed where we see just how much of this shakes out. The problems are numerous, but the biggest issue I see is that we’ve spent so much time investing in ad-based technologies and their revenue streams, we’ve not built a single alternative solution which can cover any losses if this all goes belly up. There is a massive consolidation of power occurring at the top of tech where we may only be left with 4-5 companies that control most of the web/Internet as we use to know it, and the creative class is left with no real technology of its own and very few options of how to reach their customers without being at the mercy of another giant tech company.

Years ago I use to drive between California and Oregon quite often and I began to see a trend happening. The boats on the reservoir began to leave the docks as the water receded from the shore. They began to huddle together in the center of the lake as there was less and less water. Essentially they became the last holdouts hoping a great rain would restore everything to the way it was. But it won’t.

Part of the problem California is facing with its shortage of water is due to the fact that they never planned for the possibility of drought, although they certainly talked a lot about it. They are shortsighted. They saw an endless supply of water and all the riches it brought. As humans we very rarely ever prepare for the worst, because we’re always so caught up in the moment and at the moment we’re still feeling the best of times: toilets are still flushing and faucets are still flowing.

The situation with ad revenue and VC backed advances and payments is no different, and if we don’t start working on a fundamental shift on how we as a society pay for things we value, we’re going to see a lot more than just water dry up.

Alan Graham is the co-founder of OCL

Uber and the Lawlessness of ‘Sharing Economy’ Corporates | The Guardian

It’s not only about musicians and creators, we are just the first to be effected.  The same Silicon Valley scam is going to exploit more and more people. Read on…

“Nullification is a wilful flouting of regulation, based on some nebulous idea of a higher good only scofflaws can deliver. It can be an invitation to escalate a conflict, of course, as Arkansas governor Orville Faubus did in 1957 when he refused to desegregate public schools and president Eisenhower sent federal troops to enforce the law. But when companies such as Uber, Airbnb, and Google engage in a nullification effort, it’s a libertarian-inspired attempt to establish their services as popular well before regulators can get around to confronting them. Then, when officials push back, they can appeal to their consumer-following to push regulators to surrender.”


Disruption And The Death Of The Creative Class : Part 1 of 2

Guest post by Alan Graham

This is a long piece. I’m warning you in advance, because these days our short attention spans generally peter out after…well about now. But if you are a professional creator, emerging artist, or rights owner on this planet, you should read this, and the piece that will follow it. It is not simply a call to action, but hopefully an opportunity to open minds to what the creative class is truly facing. 


Disruptthrow into confusionthrow intodisorderthrow into disarray, 
cause confusion/turmoil inplay havoc with; disturbinterfere with

upset, unsettle; obstructimpedehold updelayinterruptsuspend; 
informal throw a (monkey) wrench into the works of.


The word disruption is often worn as a merit badge amongst tech circles. The negative connotations have been twisted into a positive. This arose from the obstruction of progress that tech often faced from legacy businesses, who generally held all the keys to all the doors and often refused to share. I have personally experienced this myself, and still see it happening to this day. In the past I use to use “disruptive” quite often in a positive context, up until I began a project in the music industry. Beginning from the ground up, you see the industry for what it actually is, passionate creative people, not just some amorphous entity encapsulated by the words “music industry”.

I realized that any more technological “disruption” will equal death. And not just the death of old inefficient systems, but the actual freedom that this age of technology had promised to deliver the creative class if you just came along for the ride. You believe you have freedom of choice, but as I’ll point out a bit later, it is an illusion. What good are a thousand different choices that are owned by the same handful of people? 

We need something better than disruption. We need something that belongs to you. 

I don’t need to tell you your very livelihood is at stake, but based on those I meet in the music industry, you are ill equipped and not ready for what is coming. I know you think you know what is happening, but you don’t. These days there is a lot of talk about things like “transparency” which are general abstractions that point towards a lack of clarity and openness between record labels, the deals they make, and royalties. It has become the subject du jour. I cannot speak to those issues. However, what I want to call attention to is that while you and the media are all focusing on those issues, which are of course important, it also serves as a bit of misdirection for issues on the horizon which are much larger problems.

Technology is about to take away your power to enforce your rights. While it joins your chorus and lauds the need for more transparency, it will simultaneously make things more opaque, obfuscating how your creations are used, where they are used, etc. Infringement and piracy is about to get worse than ever before, moral rights will soon disappear, and the DMCA provisions that gave you some semblance of control, will lose all their teeth. While your tech friends get you to focus on the lack of openness from within your own industry and work towards making it more accountable, they are already making that issue moot. You just don’t see it yet. This is exactly what they want. And if you think copyright is going to save you, it already may be too late for that, unless we solve these issues rapidly. The new flag flying in tech is “privacy,” and while it is easy to get everyone on board with that idea, it will render copyright unenforceable.

Privacy always trumps copyright. 

I’m going to look into this in detail in the second part of this piece (although I’ll hint at it here), but in order to get there, we need to start by understanding how we got where we are right now.   


You May Ask Yourself – Well How Did I Get Here?
“Media companies are running scared these days. Their failure to embrace technology has put them in a delicate position. For the first time in history, the bread and butter of the media enterprises like music, film, and television are faced with the fact that they may no longer be in control of their business.”
Hard to believe I wrote those words 12 years ago, since it feels like I could have written those same words today. 
Back then, I was furious at the heavy handed tactics of the RIAA and the political clout they seemed to wield on Capital Hill. It was clear that their all out onslaught against file sharing was taking a scorched earth approach towards everything that only made the music industry look petty, while clearly trying to deny that the pace of technology would eclipse them in a very short time. Turned out to be very short indeed. Last time I checked, torrents, downloads, and streaming are thriving as the preferred methods of media delivery these days. And yet here we are, trying the same old strategies
For many years I was fully on the side of tech, whose intentions back then seemed pure in its desire to truly improve the lives of people through the democratization of information. Who couldn’t get behind the idea of “don’t be evil?” The entire technology sector is marketed to us every day with positive affirmations of change and hope. Who wouldn’t love a company that names its OS releases after candy? 
In that piece I was essentially writing a call to action of sorts as well, that if technology didn’t want to find itself at the mercy of big media, it needed to start getting savvy when it came to political influence. We needed to even the playing field.
Letting The Days Go By
Wow, that was fast. We see today’s youth idolizing tech giants more than rock stars, with teens even building startups from their bedrooms. There are major motion pictures with both protagonists and antagonists from tech. “Silicon Valley”, a show that is a remarkably accurate parody of the delusional echo chamber that is Silicon Valley, is somehow adored by those in Silicon Valley who obviously don’t seem to see the absurdity.
Since I wrote my original technology call to action, Google’s lobbying fees have gone from $80k a year to a yearly peak of $18M in 2012, with cumulative lobbying expenditures projected out just five years from now looking to top well over $100M. From just one company! In political influence, the tech industry has eclipsed media and is on track to surpass Oil and Gas.
This doesn’t even begin to count all the astroturfing that goes on in the guise of “grassroots” campaigns. That’s not to say that big media doesn’t employ the same tactics, but as you can see, the tech sector is a quick study, and in fact, they build all the grassroots tools. Deploying a hundred “cause sites” (as I call them) that garner 100k signatures over a weekend is trivial.
“Legalize sharing,” urge press releases issued by Peers, another tech astroturfing outfit launched in 2013. Peers is the “grassroots” organization launched by “sharing economy” companies like the transportation app Lyft and the home subletting site Airbnb, the latter of which paid a PR group to create Peers.

All of these organizations have one common link: venture capitalist Ron Conway. Conway’s invested in Peers member companies like Airbnb and the online course web site Skillshare, and he’s a founding member of and, whose Affordable Housing Committee is headed up by none other than SPUR’s Gabriel Metcalf. as you might recall is led by Mark Zuckerberg, and in case you are curious of the type of power you are up against and all of the connections and ties to tools and services you use every day, look no further. Even the creative industries much lauded Patreon has ties to Facebook, not to mention it also has investment from the above mentioned Ron Conway, AKA The Godfather, who has made over 650 investments over the years. These include BuzzFeed, Digg, Facebook, Google, Napster, PayPal, Pinterest, Reddit, Square, and Twitter. There isn’t likely a single creative industry tool or service that you use that doesn’t likely have some direct investment connection to Silicon Valley. Somehow, whether you like it or not, you are always going to be paying part of your earnings to someone in northern California. Meet the new boss…
We always think of monopolies as corporate entities, but what about investors? This isn’t a many headed hydra, this is an all encompassing blob. As I mentioned at the beginning of this piece, with a little misdirection, we are focusing our discussions on only one area where transparency is desired, yet where we need it most is unlocking and questioning all these connections within investment circles and their impact on your lives.
While I support the general idea of investment, this isn’t the Internet I signed up for, where power is consolidated into a small group of people residing in a 25 square mile area in California. Not to mention there are many like me who never believed that the mantra adopted (and misunderstood by many) that information should be free meant that it had no cost. For many of us, the intent was that information should be able to move freely, with little friction, but somewhere along the line, wires got crossed and the message was corrupted.
While there are many people, like Robert Levine, who have done much more research on how we got here, I have plenty of anecdotal evidence having lived through the deluge of “free” as a writer, and it is clear that the monetization of free media through advertising, venture capital, and acquisitions has left professional creators in a precarious state, reducing the value of creative content to what you can get it for with an upfront advance or the lowest bid for it on a Cost Per Click (CPC) basis. Considering how much of tech is funded and subsidized by the previous, we are simply one economic hiccup away from a serious problem. So if you put a lot of eggs in those baskets…you are one mixed metaphor from a house of cards. CPC’s have been dropping year after year, while volume continues to increase. Essentially, we just keep moving the same money around from platform to platform. Moving music or videos to Facebook doesn’t magically create new money, it just takes it from someone else.
Into The Blue Again, After The Money’s Gone 
Tech has done a remarkable job of rebranding itself into the victim, but the victim of what exactly? Success? Practically everything driving the internet economy falls under copyright, all of it provided and fed into their platforms by creators of all kinds (professionals and regular citizens). All of it serves the purpose of providing immense value to tech platforms by which many established companies are generating massive revenue. Take two of the top platforms out there and you’ll find revenues that far surpass those of the entire global music business. Even market valuations of newly minted startups are almost impossible to fathom. Snapchat’s current valuation is higher than the entire music industries revenue. Now compare that with an indie record label with a 20+ year catalogue of respected works that can no longer sell them, because you can get them for free on some web platform that’s literally minutes old. A life’s work disrupted by companies whose existence in months can be counted on fingers and toes.
WTF is going on? Have we collectively lost our goddamn minds?
Same As It Ever Was…Same As It Ever Was
PastedGraphic 1
If we look back at the turbulent start of YouTube, it was clear that the modus operandi was Superius Augmentum Omnia or “growth above everything”, something for startups that is still true to this day (maybe more so), generally driven by hopes of acquisition or IPO. Due to the Viacom lawsuit, we got some insight into just how serious they took copyright infringement with internal missives from YouTube employees like:
“technically we shouldn’t allow it . . . but we’re not going to take it off until the person that holds the copyright. . . is lìke . . . you shouldnt have that. . . then we’ll take it off .” 
“…but we can leave this up until someone bitches.    
The latter of which has actually become Silicon Valley’s legal position and business model, one backed up by Safe Harbor provisions. This is a model that is supported voraciously by organizations like the once laudable EFF, whose constant push to erode copyright laws ultimately benefits those who they get most of their funding from, at the expense of the citizens they strive to protect. Their boards are tech and law heavy, creator light. In fact, between boards and staff, I count over 30 lawyers.
Forget commercial media copyright issues for a second. In an age where information is more valuable than gold or oil, can you think of a civil right more important to citizens than their own copyright? Yet these groups want you to voluntarily work on their behalf, while donating money, to take those rights away while they fight on to protect your “privacy”. The same organization that has tutorial after tutorial on opting-out of things, by default signs you up to their mailings when you sign a petition.

Voila Capture2015 08 04 10 19 02 AM

Say what you will about the complexities or unfair exploitation of copyright by media corporations, the moment you actually kill copyright, is the moment that technology companies will take the exploitation of your ideas, thoughts, feelings, and creative works to entirely new heights. These plans are already being devised in the seedy dungeons where EULAs are crafted by legal minds trained in the darkest of arts. Don’t believe me? It has already begun. And what’s the EFF doing about it? 
…while the Electronic Frontier Foundation’s intellectual property director Corynne McSherry confirmed that “it doesn’t appear that Flickr is doing anything wrong”.
So in the end, just how useful is that Creative Commons license?

Flickr’s latest business model – selling wall-art prints of more than 50m imagesshot by its community of photographers – has sparked a debate around Creative Commons licensing.

The Yahoo-owned site will keep all the revenues from sales of prints based on photos shared to Flickr using a Creative Commons “commercial attribution” licence, which allows commercial use.

But I digress.
YouTube’s post acquisition solution to the problem of infringement was to create ContentID, an anomalous band-aid built to appease rights owners. It was a Faustian deal created out of the need to bring some sense of control (even if it were the illusion of control) to the Wild West of infringement. I don’t blame the music industry for making this deal, because they had very few options at the time. But due to a lack of technical solutions, instead of building direct relationships with citizens, the music industry was forced to choose platforms over people, thus putting a middle man in-between them. Guess who actually has the meaningful relationship with the customer? The result being that ContentID and ad sharing revenue essentially created a system by which people are rewarded for bad behavior, and there are really no repercussions. I doubt even YouTube knows the full scale of rights violations on their platform, and possibly why after all these years, they still refuse to disclose how much money in revenue they generate. 
Because if artists only knew just how much money is made and yet missing…
However, the promise of YouTube being a phenomenal tool of promotion for selling music, has in fact had the opposite effect in that it actually created the most popular “free” music platform on earth. While I was busy buying music like a dumbass (plus a paid Rhapsody user since 2006), I failed to see that coming. But it turns out I may be stupidly paying Netflix as well, as YouTube is a great unmonetized free tv and movie platform as well. If the MPAA and others think they’ve got this under control… 
Many videos on YouTube today are simply the title of a popular piece of media, but to avoid a piracy takedown or to sidestep ContentID, are in fact several minutes of silence plus a link to an outside site where the pirated media sits, making it nearly impossible to find or remove. Due to the scale of postings to YouTube, managing this and other copyright issues is a near impossibility. Here’s an example of this on YouTube right now. Just search for a popular TV show.
Voila Capture2015 08 03 01 33 30 PM
If you follow the link in the description you can get to the external site and even read their laughable DMCA notice which is as follows:
“It should be noted that is a simple search engine of videos available at a wide variety of third party websites.
Any videos shown on third party websites are the responsibility of those sites and not . We have no knowledge of whether content shown on third party websites is or is not authorized by the content owner as that is a matter between the host site and the content owner. does not host any content on its servers or network.”
Ah, Safe Harbor in action. Hey startups, here’s how to maximize its use:
1. We’re just simply a search engine/web platform. Check
2. We have no responsibility for infringing material of others. Check
3. Hosted in a foreign country. Bonus Check
Good luck suing us!
Half-assed English legalese, with most of its traffic coming from the US, no information on the domain registrant. Seems legit.
Am I Right? Am I Wrong?
Irony of ironies, now YouTube stars, who often found themselves at the other end of a music takedown (for improperly using music) and decried the heavy handed tactics used against them (we’re giving you free promotion!), have now found themselves in their own piracy hell. Via a practice known as “freebooting,” they are now finding their works essentially stolen and reposted on other platforms that either make the infringer money or simply are diluting the value of the views these stars need to keep their fledgling stars shining. One “victim” of this is Grant Thompson, of the YouTube channel, The King of Random. Grant sometimes repurposes ideas he finds around the web into videos which may include Creative Commons music, that he then monetizes. He’s understandably frustrated (careful not to drink any beverages while reading this):
“The worst thing is just the shock of how viral they go on Facebook compared to the ones I post on YouTube,” Thompson said of his videos. “Some of these videos I’ve been working on for years. It makes me wonder why I want to keep doing this.
Guys…can you imagine? What must that be like, I wonder, slaving on something for years, only to have it stolen and enjoyed for free again and again? Somebody should do something. Anyone?
Hank Green, a self-described Internetainerpreneur (seriously?), recently wrote a piece on the seriousness of freebooting and how Facebook is essentially a liar. Again, you might want to take precautions to avoid a spit take.
“I’m a professional YouTube creator. Some people think that this is some kind of joke but I have 30 employees. All of them work in the online video industry, about half of them work directly on producing videos for our educational YouTube channels. We’re a small, profitable business.
Re: Facebook “But there are a few things that make me wary, not of their ability to grow my business, but of whether they give a shit about creators, which is actually pretty important to me.
and my favorite:
“What to do? Well, the lack of searchability on Facebook makes it impossible for creators to discover when their content is being freebooted, so if you see suspect content, please reach out to the creator so they can take action. If you have any legal or technical solutions you think might work, please post those as responses to this. And above all, just know that this is an issue and share what you can with who you can. Facebook won’t hold itself accountable, but maybe they will if we make them.
Citizens, can you please help them? We need to make Facebook accountable for the seriousness that is freebooting. Theft of intellectual property is a big deal and….god I just can’t believe the fucking balls of these guys! Is this really happening, YouTubers complaining their content is being stolen after all the shit they gave music rights owners for trying to enforce the exact same rules? Don’t worry about these guys though, they’ve got over 6,000 patrons on Patreon paying a total of $31k a month. They’ll manage.
And yeah…it’s the same guy who said about using a Calvin Harris song illegally in his video:
“this was a blatant violation of copyright, I just stole it, but somehow, that’s okay”
Do you find this delivery charming or smug?
His explanation in August 2014 is essentially that it is okay to take something…wait, let me just use his word…it is okay to steal something, as long as there is some monetization engine in place in which the rights owner can get paid. Now things like asking permission or paying for an actual sync license or just using music that is in the Creative Commons, is for idiots, because stealing is okay when it is your stuff (music artists), but when it is my stuff (YouTube star):

But most creators have responded, thus far, the same way as me. By shrugging our shoulders and saying “What am I gonna do about it…it’s Facebook, they’re massive.”

But that’s exactly what makes it so awful.

This all sounds so very familiar. Where have I heard this argument before?
Regarding their freebooting issue…aren’t freebooters in fact just giving them free promotion?
This Is Not My Beautiful House
Paraphrasing the late great Bill Hicks who once said if you advertised a product you are off the artistic roll call forever, these days you don’t have the luxury anymore of not being a shill for a product. For example, if your music illegally appears on a Hank Green Internetainerpreneur Educational video about how artists can go fuck themselves, perhaps you have to accept that Nespresso will Awaken Your Senses. Yes, artists have simply become products, exploited to sell other products. I’m pretty sure when Bob Dylan was singing “If your time to you, is worth savin’” he clearly was speaking about the importance of keeping my Mac clean with CleanMyMac 3 (the current ad I see on YouTube). The times really are a changin. You know what’s blowin in the wind?  These nifty 3D T-Shirts by Clothing Monster. George Harrison’s Guitar may be gently weeping, but you don’t have to cry if you switch over to Gmail.
Sadly, YouTube has turned even Bill Hicks into a pitch man for a sugary food marketed towards children. If you know his work, this is the irony of ironies.
Voila Capture2015 08 04 07 30 44 AM
I remember an age where we actually lost respect for any artist who was associated with a brand. Now I’m happy to see them able to make any money at all, even if it requires ads loading around their art or them pitching some product. However, I recently began employing ad blocking because my computer is often choking on the resources required to load even a single web page. Seriously, should it require 30+ calls to third party ad trackers and 3GB of RAM to read an article? And the tech industries answer to the upcoming ad blocking explosion of doom (you remember ads, the things musicians now make money from) is that they believe the problem is that they just aren’t creating enough ads people want to see.
Um…yeah…right, that’s the reason.
Should you worry about this?

PageFair, a company that works with publishers to measure the cost of ad blocking and to help them display less intrusive advertising that can be whitelisted by the ad blockers, estimates that Google lost out on $6.6 billion in global revenue to ad blockers last year.

To put that into context, that’s 10% of the total revenue Google reported in 2014.


Spending on digital video advertising increased almost 60 percent in 2014 from the previous year. During the same period, the number of Internet users using ad blockers rose from 54 million to 121 million. Today, almost 150 million people have downloaded ad-blocking software

I mean why should you worry, it is only $6B of what might also be your money that was “lost”. 
BTW, while listening to the entire Imogen Heap album, “Sparks,” on YouTube, how about cooking up a batch of Uncle Ben’s rice for dinner? Or how about buying a new Chromecast device from Google, for just £30? Courtesy of an unauthorized upload of Zoe Keating’s song Frozen Angels. Yes, Google is happy to promote its own products on infringing content, from a woman they tried to bully into accepting their “take it or leave it” terms. That’s some fucking hubris right there.
It is likely (judging by YouTube’s own released statistics) that the majority of infringing use on YouTube goes completely unmonetized (between low volume video views and ad blocking). And while music has found a way to carve out some form of payment through ad sharing, other rights owners have been caught with no options for monetization at all. If you are a professional photographer, illustrator, or digital artist, and any of your work is somewhere online, it could be found on some video on YouTube, yet how would you in fact know? Sorry, there’s no ContentID for you. I have easily found videos with upwards of a hundred copyright violations (in just 4 minutes of video), with no remuneration for visual artists. So while the music industry might have found a way to monetize improper use of music online (through audio fingerprinting), many other digital artist whose work appears in those videos, get nothing. Is this not a class action lawsuit waiting to happen? Hello, photographers? Deep pockets over there.
And while everyone knows what I’ve outlined above, all of that pales in comparison to what’s coming very soon, which we’ll explore in more detail in part two of this piece.
Where Does That Highway Go To? 
In a 2013 Billboard interview with Universal Music head Lucian Grainge, he was asked about power, and part of his response was:
“Power is the ability to stop new services. Power is the ability to create new services. That’s power.
While I get the larger point put forward by Mr. Grainge (and we certainly need a tough stance), the problem when it comes to the music industry is the belief that what you have is more valuable than what the other side has. While that might have seemed the case many years ago, if you were to ask people today if they had a choice to give up social media or music, would you really want to know their answer?
Snapchat alone has taught the coming generation that the ephemeral is more important than the past. So what’s the value of deep catalogue? What is more important than the “now”? Snapchat was even able to bypass negotiating with the music industry for music use by simply enabling music recording in snaps via using the speaker and microphone of a smartphone. I mean it is only 10 seconds of your song, so that has like…no value, right? No records, no auditing, no rights, no royalties, no evidence. Hey…it’s Safe Harbor…what are you gonna do about it? Plus, everything on their platform is deleted after 24 hours. How could Snapchat possibly know what people are doing on their platform, because um, privacy!
This idea of “power” is fleeting, because we have entered into a waiting game. Tech has the capital and resources to wait out creative industries, while they build alternate ways to create and deliver media. Tech is beginning to get heavily invested in not simply delivering media, but generating it, monetizing it, and even collecting royalties on it. So ask yourselves…in 5-10 years, what do they need any of you for?
They’ll build their own catalogues.
They will acquire new talent, and when you sign, you will fund your projects via their platforms, create media with their tools and in their studios, then release it with their tools. You will promote it with their tools, “sell/distribute” it with their tools, you’ll even tour using their tools – via their self driving cars, staying in their Air BnB’s. You’ll pay them at every turn for this process and then start all over again. Is this the vibrant creative class we really want to see? Is this freedom? Well look around you, it is happening….right now.
Once In A Lifetime
Are you angry yet? Frustrated? Motivated? You should be.
I wrote the above as a precursor to a second piece. This serves as a framework whereby I want to illustrate what has been happening so I could talk about what is about to happen. I want to delve deeper into actual technologies that will have a profound effect on the livelihood of creators. For the past two years I’ve been warning people in the creative industries of upcoming developments that make these issues of the past look like tinker toys. With all of the efforts put into strengthening copyright laws or protections for rights owners, none of what is currently proposed will do any good whatsoever, unless we find a way to strike a balance between creative and tech, and that means creative needs to start pulling together.
What is needed is a new approach that does not solely rely on solutions provided through legal means. No, what has to happen is that the creative industries need to start building their own technology that belongs to them and serves their greater good and that the tech industry has to use. The politics have got to stop. Majors vs indies, it’s a battle they want you to be fighting, because out of left field will come disruption. Yet working together to solve many of the issues and problems facing creators is no longer something we can just pay lip service to, it is a moral imperative.
Technology doesn’t care about borders, regions, laws, rules, or fairness. It cares about results…and it is time the creative industries started delivering some.
David Byrne once said about the song Once In A Lifetime:
“We’re largely unconscious,” Byrne says. “You know, we operate half awake or on autopilot and end up, whatever, with a house and family and job and everything else, and we haven’t really stopped to ask ourselves, ‘How did I get here?‘ “
More importantly, the question to answer now is, where are we going?
Alan Graham is the co-founder of OCL

The Digital Ad Business Is Broken, Says Former CEO | Venture Beat

No surprises here, right?

“The onion is slowly and surely getting peeled back.”

Last year, Google reported that 56.1 percent of all ads served were not measured viewable by humans.

Last December, the Association of National Advertisers and security firm WhiteOps estimated that up to a quarter of video ad views were fraudulent and resulting from software bots. It also said that as much as half of publisher traffic is from bots. This represents a projected $6 billion-plus in wasted ad spend this year.

Spanfeller sees the current system as a big part of the problem.

No kidding.


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

“User Pirated Content” Is Core Internet Advertising Model


Searching for answers from Google about Google | The Hill | East Bay Ray

In 2001, a journalist named Bethany McLean posed a simple question in Fortune Magazine: “How exactly does Enron make its money?”

Neither company executives nor outside analysts could give her a simple answer. Her one question is now seen as the drip that opened the floodgates that drowned Enron. By 2006, the one-time Wall Street darling was closed, companies that enabled the fraud had failed, and executives were imprisoned. All this happened because Bethany McLean got the chance to ask a question.

The only way we’re going to learn about what Google is doing is through legal challenges like that of AG Hood.  I don’t see any Congressional hearings looking into Google’s practices (especially with Google spending almost $17 million on lobbying this past year). I don’t hear President Obama asking about Google (see previously mentioned $17 million). While there are European leaders and governments pushing Google to be more transparent, I don’t know why we’ve outsourced an investigation we ourselves should be doing.  I worry that if Google can block a state’s top law enforcement officer from even asking questions, then who is there to stand up and search for the answers we clearly should be seeking?


East Bay Ray is the guitarist, co-founder and one of two main songwriters for the band Dead Kennedys. He has been speaking out on issues facing independent artists—on National Public Radio, at Chico State University, and on panels for SXSW, Association of Independent Music Publishers, California Lawyers for the Arts, SF Music Tech conferences, Hastings Law School and Boalt Hall Law School. Ray has also met with members of the U.S. Congress in Washington, D.C. to advocate for artists’ rights.

Apple Announces Itunes One Dollar Albums and Ten Cent Song Downloads | Sillycon Daily News

Satire – but not by much.

Apple Computer announced today that for it’s Itunes Music Store to remain competitive in the digital distribution marketplace for music they would be changing their retail pricing of album downloads to one dollar and song downloads to 10 cents each. The pricing change will be effective on black Friday for this holiday season. “Since we purchased Beats music and are competing directly with Spotify we recognized the need for more competitive pricing structures based on what consumers may be willing to pay”, an Apple spokesman said. He continued, “Spotify has proven that as long as we’re paying 70% of gross, the retail pricing is irrelevant, irrelevant! We are even contemplating 10 cent albums and one cent songs to further achieve parity with music streaming services!”

Record label executives rejoiced in the move as one source exclaimed,” I don’t know why we didn’t think of reducing the retail price of downloads by 90% years ago. It’s still money, right? It’s so simple that this is really the only way to grow the business to $100b annually while competing with piracy.”



Jay Frank’s Magical Mystery Streaming Math… Or, Brotha Can Ya Spare A Calculator?

Music industry exec and blogger Jay Frank commented on our post BUT SPOTIFY IS PAYING 70% OF GROSS TO ARTISTS, ISN’T THAT FAIR? NO, AND HERE’S WHY…. Jay’s comment is typical of the thinking that has landed the record industry where it is today (losing money and in trouble).

It’s hard to tell from the comment whether Jay actually believes what he’s saying in the same way someone who bought a million dollar house with no money down, on a zero percent, 5 year ARM convinced themselves there was no housing bubble…

If they [Spotify] go from 10m to 100m free users, they’ll be able to charge much larger premium rates, and may even strike deals with some acts. That could easily result in $1b in artist royalties, given some other media models. This now puts Spotify at $3.5b in artist royalties per year. Pretty good.

To your point, though, that’s still half of the $7b number you put out there.

Right, no kidding “that’s still half of the $7b number”. To be fair to Jay, you should read his whole comment in context at the link above.

However, by his own admission he is still coming up short by $3.5b. If you factor that in with the analysis of the projected revenue losses from YouTube’s Music Key that’s another estimated $2.3b in the hole. But the simple truth is much easier to see, revenue keeps dropping as it has for the past 13 years while piracy apologists and digital music snake oil salesmen have yet to show any increase in actual overall net revenue from recorded music sales.

YouTube’s MusicKey Will Cause $2.3 Billion In Music Industry Losses… | Digital Music News

By Jay’s logic, digital albums would sell for one dollar not ten while digital song downloads would be priced at ten cents and not one dollar. That’s not the case for good reason and illustrates quickly and effectively why Spotify paying 70% of gross is moot. We don’t think labels would agree to getting paid 70% on one dollar album albums and ten cent songs. Of course the labels don’t have 18% equity in Itunes either…

The larger truth and common sense is that Spotify economics don’t work in the same way $1 album downloads and $.10 song downloads don’t work – there’s not enough scale to make the economics sustainable. If Jay truly thinks you can more than double the revenue from transactional downloads by reducing the price by 90% we’ve got a bridge in Brooklyn we’d like to sell him very cheap.

In terms of “highly selective math” Jay continues his comment from above:

To your point, though, that’s still half of the $7b number you put out there. True, but that presumes that Spotify is the only player in town. While they may be a major force, there will also be other internet radio, satellite radio, video streaming, other streaming competitors and probably still physical and digital retail sales. Add to that greater ubiquity in tracking usage with increasing penetration of smart mobile devices combined with declining mobile data cost…and I feel like we’re starting to approach $10b a year.

And that’s just the U.S.

Ok, so let’s see that $10b a year in revenue streams plotted out and lets take a closer look at it. Here’s what subscription based services look like right now. Netflix only has 36m subscribers in the US, no free tier, and massive limitations on available titles of both catalog and new releases. Sirius XM, 26.3m in the US as a non-interactive curated service installed in homes, cars and accessible online. Premium Cable has 56m subscribers in the US paying much more than $10 a month and also with many limitations. Spotify… 3m paid subscribers in the US after four years.

Tell us again about this strategy of “waiting for scale.” Spotify is Three Million PaidThree… Oh, and that’s just the U.S.

* 3m Spotify Subs Screen Shot
* 26.3m Sirius XM Subs Screen Shot
* 36m Netflix Subs Screen Shot
* 56m Premium Cable Subs Screen Shot
* $7b Music Business Screen Shot

Hey, it’s just math… but in the meantime Jay, you may want to look at this:

Streaming Isn’t Saving the Music Industry After All, Data Shows… | Digital Music News

A Detailed Explanation on Why Streaming Has Failed… | Digital Music News

You can email Paul Resnikoff at










Streaming Is the Future, Spotify Is Not. Let’s talk Solutions.

Music Streaming Math, Can It All Add Up?

Who will be the First Fired Label Execs over Spotify Fiasco & Cannibalization?


Merlin on YouTube music payouts: ‘Their figures are by far the worst’ | Music Ally

“The ironic thing is that the service that pays the least is the service that’s the most well funded and run by the biggest company in the world: their figures are by far the worst, whether you measure them on a per-stream basis or a per-user basis. I tend to get myself in trouble when I talk about that company…”

Hence his desire not to name them directly, but quote instead from an interview with Billy Bragg conducted by Music Ally earlier this year. “If we’re pissed off at Spotify, we should be marching to YouTube central with flaming pitchforks,” said Bragg – Caldas read this quote out before delivering his own pointed follow-up. “I can’t say Billy’s right, but I can say that he’s not wrong,” said Caldas.



What YouTube Really Pays… Makes Spotify Look Good!

Streaming Price Index : Now with YouTube pay rates!