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.”

 

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A Kim Dotcom For All Seasons

Come on, guys, I am a computer nerd. I love Hollywood and movies. My whole life is like a movie.

That’s Kim Dotcom in an “open letter” to Hollywood that he penned last week. Dotcom is the owner and CEO of Megaupload and is currently facing federal criminal charges, along with six other individuals, for allegedly operating a “mega-conspiracy” that made him a very wealthy man using other people’s work without permission.

Since his indictment and arrest, Dotcom has been waging a PR campaign to cast himself, not as an opportunistic hack who exploited thousands of creators through his spammy, scammy website, but as some sort of internet freedom fighter — in his latest “music video”, he portrays himself as no less than Dr. Martin Luther King, Jr. Strangely, in the topsy-turvey world of the internet, Dotcom’s efforts appear to be working.

You can fool some of the people all of the time

The weirdest part of this story is that it is part of Dotcom’s modus operandi. For over two decades, he has portrayed himself as some sort of master hacker, or savvy businessman, or whatever else would garner the most press, no matter how far from the truth.

Here, for example, is his take on his first brush with the law in the early nineties:

By chance in 1993, Schmitz discovered a computer account that included the word “Pentagon”. “I connected to the computer, made myself a super-user on it and after five or six hours had access to 100 computers within the Pentagon. I found the main router and so could ‘sniff’ all the traffic and jump from computer to computer. Some had real-time connections with satellites that were taking photographs of [Saddam] Hussein’s palace – I had no idea that technology even existed. It was like Ali Baba finding the treasure cave.”

If you think this sounds more like Hollywood Hacking than real life, you’d be correct. Dotcom also claimed he “got into Citibank’s system and transferred $20 million (21.4 million euros) by taking tiny amounts from the accounts of 4 million customers and giving it to Greenpeace” around the same time period. This isn’t just like a movie, it is a movie — the 1992 film Sneakers, to be exact.

The truth? Dotcom was convicted in 1998 on multiple counts of computer fraud and data espionage. Court records don’t substantiate any of Dotcom’s amazing claims.

What he did do was steal phone calling card codes and conduct a premium number fraud similar to the recent rash of Filipino phreaking frauds. He bought stolen phone card account information from American hackers. After setting up premium toll chat lines in Hong Kong and in the Caribbean, he used a “war dialer” program to call the lines using the stolen card numbers—ringing up €61,000 in ill-gained profits.

If anything good could be said about Dotcom’s latest media blitz, it’s that he at least is picking better historical figures to compare himself to. From a 2001 interview:

Wasn’t Hitler writing Mein Kampf while being arrested? Not that I like Hitler hehe, it’s just that strange people can have strange ideas while being arrested.

Dotcom would next reinvent himself as a shrewd businessman-slash-entrepreneur. In 2001, he was claiming to the press that his net worth was $100 million, and his investment company would soon be making $553 million a year. Here, again, the reality was far less glamorous than Dotcom suggested.

A German court would hear later that he had pulled a textbook “pump-and-dump” move, borrowing money to buy Letsbuyit shares, and then quickly selling them to those who swallowed his investment story, gaining himself a quick profit of 1.1 million euros ($1.4 million).

But before facing justice, Dotcom was busy writing Act 2.

In the movies, whenever a protagonist gets away with a big heist, we invariably see him passing safely through customs in the Caribbean or southeast Asia as the credits begin to roll.

Perhaps this hackneyed Hollywood device was on Kim Schmitz’s mind when he chose Thailand as his hideout from German authorities curious about his KimVestor Ponzi scheme.

Add “bizarre” to the list of adjectives that could be used to describe Dotcom. As it turns out, prior to his arrest in Thailand, he had changed his website to announce that he would be livestreaming his own suicide. Said the site:

Enough is Enough. Kim Schmitz will die next Monday. See it on this website live and for free. When the countdown is over, Kim steps into a new world and wants you to see it.

But he would be arrested the Friday before. As the Guardian reported:

This proved to be a publicity stunt and visitors to the site are now informed that Schmitz wishes to be known as “King Kimble the First – Ruler of the Kimpire”.

A Kim For All Seasons

Schmitz’s claims follow a pattern. He takes bits of what he has been found guilty of, bits of other hackers’ publicised doings, even tales of hacker movies, and mixes them together to form his “personae”.

A con man par excellence.”

He was trying to make half a buck on every occasion.

On his way up, he fooled them all: judges, journalists, investors and companies.

Everything that entwines itself around Mr. Schmitz is, to say the least, somewhat dubious.

Over the past 20 years, Dotcom has worked hard to portray his life like a movie, seeing himself as, perhaps, a super-hacker from Sneakers, or the innocent man on the run from The Fugitive (Dotcom’s nickname “Kimble” is said to be derived from Dr. Richard Kimble, the lead character in that show/movie).

But it seems to us that the closest one can come to the movie that Dotcom has created of his life is A Burns for All Seasons, the fictional movie created by Mr. Burns in the animated series The Simpsons. In the film, the unapolagetic plutocrat portrays himself, in three separate scenes, as an outsourcing champion, the alien E.T., and Jesus Christ.

That there are those who buy into Dotcom’s latest self-cast role as champion of internet freedom and innovation is sad commentary. Dotcom’s “mega-empire” made him millions of dollars off the work of thousands of creators. There’s nothing innovative about exploiting artists. If this were really a Hollywood movie, the happy ending would see Dotcom finally facing justice.

Everyone Gets a Trophy Day

And the winner of the “most humble” award goes to… me.

Last week, Boing Boing writer Xeni Jardin posted this self-congratulatory story:

Constitutional law expert Marvin Ammori, one of the First Amendment scholars along with Larry Tribe who explained how SOPA would violate the First Amendment, shares a wonderful story with Boing Boing. Snip from his blog post:

When I was quite young, I saw the first Star Wars movie and believed that, if I took part in a great cause, it would end with a medal ceremony and a princess conferring the medal. It has finally happened.

Last night, I received a medal from Princess Tiffiniy Ying Cheng of Fight for the Future, representing the “committee for the Defenders of the Internet.” Bestowed upon me was the Nyan Cat Medal of Internet Awesomeness, the “highest honor known to Internet Defenders.” I could not be more honored.

The “great cause” here was a decade long effort by academics, tech companies, venture capitalists, and the nonprofits who love them to redefine the rights of creators in their own works as tools of oppression that would “break the internet.” To understand why this is self-congratulatory, it helps to understand the players involved. (And note, this is certainly not the first time this group of digital activists have engaged in such circular award ceremonies — see here and here.)

Tiffiniy Cheng is a serial activist who has held a grudge against record labels since 2003, when she helped form Downhill Battle. (To read more about the chilling tactics used by the group, read this series of posts). Next came the Participatory Culture Foundation (whose board includes Boing Boing’s Cory Doctorow), a group whose biggest accomplishments seems to be getting money from the Mozilla Foundation.

Her latest venture is Fight for the Future, a group whose hyperbolic headlines involving Justin Bieber — and a whopping $300,000 grant from the Media Democracy Fund (the organization, which has previously awarded grants to the New America Foundation and Public Knowledge, awarded less than $4 million total in grants for the previous five years) — helped it lead the charge against SOPA last winter. (According to this article, the key meeting between Fight for the Future and the other advocacy groups involved occurred November 9, 2011, at Mozilla headquarters.)

Marvin Ammori is an Affiliate Scholar at the Google-funded Stanford Center for Internet and Society. He’s also a legal fellow at the New America Foundation — a nonprofit group chaired by Google’s Eric Schmidt.  He also, by the way, represents Google. *

You wouldn’t know it by reading Boing Boing or other tech blogs — to them, Ammori is simply “a leading First Amendment scholar.” Perhaps this is because the connections between this subset of the tech world extends to the people who report on them.

For example, the author of this piece, Xeni Jardin, also happens to sit on the board for Global Voices Online, along with New America Foundation fellow Rebecca Mackinnon. In another shocking twist, one of the sponsors of Global Voices Online: Google.

In other words, this story reflects the insular community of tech companies, nonprofits, and lobbyists who contribute to the ongoing erosion of creator’s rights — and award themselves medals for their efforts. In their eyes, they are playing the role of the Rebel Alliance. What’s chilling is that they have cast anyone who disagrees with themselves as the evil Empire in this fantasy.

This isn’t about SOPA, or any other particular law. Rational minds can disagree over proposed legislation, debate it, look for compromise or even shelve it. That’s not what happened here. What happened here was a “win” by a specific, interconnected group with a specific worldview that is hostile to the hard-fought rights of creators. And if you don’t agree with this group, you are part of the dark side, an enemy of free speech, a dinosaur who doesn’t “get it.”

And you certainly don’t get any medals.

* Also among the medal winners: Derek Slater, policy analyst for Google (and formerly a fellow at the Google-funded Berkman Center for Internet and Society and intern at the EFF and Creative Commons).

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

Online Piracy, It’s Different…

A comical exploration of common piracy arguments…

If you enjoyed that video, you may also enjoy this one:
https://thetrichordist.wordpress.com/2012/04/05/mike-lombardo-smackdown/

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

The Sky Is Rising : Magic Beaver Edition

It’s unfortunate that some people are gullible enough to take a tech lobby funded Computer and Communications Industry Association (CCIA) sponsored report “The Sky Is Rising” researched by a tech blogger as fact. As we detailed in our post about the SF Gate blundering the facts (obviously without fact checking!) here are some quick responses to the grossly selective and highly biased reasoning that enables such propaganda, and should have everyone questioning the credibility of such work.

Eventually there will a complete break down of the fallacy’s presented by a real economist but until then here are five quick standouts of absurdity:

#1 :  This is not an academic study or serious scientific study. It is a tech / internet industry commissioned (CCIA) lobby report.

#2   : The report falsely claims that the value of global music business grew from 130 billion to 160 billion. They do this by including iPod and music instrument sales. We are not joking about this!!

#3:  To claim that the entertainment business grew 50%  they include revenues from computer and video games.  Video gaming has exploded over the decade. And global gaming revenues are about 5x the size of global recorded music revenues. Console Gaming also has very robust DRM booting users off console networks if pirated or cracked copies are detected (Xbox, Playstation, Wii).

#4 :  Instead of showing the fact that gross recorded music revenues which have fallen over 50%,  the report uses the number of transactions.  Of course there are more transactions since a single album is now available by tracks which can contribute 10-15 times more “transactions.” Clearly the use of this metric is intended to deceive. This chart from The New York Times represents the actual facts.

#5  : Number of tracks cataloged?  Pointless.  This is mostly hobbyists using Tunecore and CD baby to “release” their tracks.   How do we know this?  Of 75,000 albums released in 2010, 60K sold less than 100 copies. Here’s more info spelled out by Ted Cohen and Tom Silverman from a Midem Presentation.

This all really begs the question, if the internet is really working for musicians than why are there less musicians working professionally?  Salon reports a decrease of over 45% less working “Musical groups and artists” from 2002 – 2011 according to the Bureau Of Labor Statistics. The tech / internet community it seems has confused  the democratization of distribution with the democratization of talent.

Of course coming from people who insist that “the internet is different,” (different from what?) and “old economic laws do not apply to the cyber economy,” (despite Google’s Chief Economist disagreeing with them) it’s not hard to take the leap to such absurd and nonsensical beliefs that a magic beaver lives in a space ship under the googleplex, which could also lead to the distorted magical thinking that produced The Sky Is Rising.

It’s also important to understand the near religious devotion some in the tech and internet community have taken to these issues. There is a fanaticism that is blind to all logic and reason that can only be described in the cult like obsession of “The Singularity,” as Jaron Lanier comments.

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

The Paradox of Pirate Logic : Music Versus Music Software – Part 1

by Chris Whitten
(Copyright in the Author, Posted with Permission)

The bottom line for many in the often heated piracy debate is this: “Give us a good product at a fair price, make it convenient and easy to obtain and we’ll buy it”.

There is a digital product that ticks most of those boxes. So by comparing two products I wonder if we can learn anything about the chances of reducing music and movie piracy by making it better quality, more affordable and easy to download?

I’m of course talking about music production software.

About 7 years ago I was involved in creating a virtual drum instrument in collaboration with a Swedish music software producer Toontrack. Our product has been critically acclaimed, is a best seller, but is also unfortunately a favourite with software pirates. The pirate’s ‘advice’ to “adapt or die” appears then to ring hollow. As a performance musician I added music software creation to my resume by adapting to new technology, but all that happened was the pirates followed me.

With a foot in each camp, music technology and music performance, I’d like to take a look at the claim that “if you build it they will come.” Let’s see if the available evidence supports that idea.

Straight away we need to acknowledge two things: firstly, no one has ever suggested music software has gone backwards in quality over the last few years. It’s also pretty easy to obtain, including plenty of free alternatives, often offered by new companies trying to build a customer base, or by hobbyist’s happy with the kudos of creating a popular plug-in. Secondly, music software is heavily pirated.

So the signs don’t look good, and the more you look at music software piracy, the more the excuses and arguments made by movie and music pirates seem questionable. Let’s look at a couple of them:

Entertainment pirates claim they are fighting corporate greed. Movies and music need to be liberated from the clutches of billionaires who remain powerful by buying political influence.

This rhetoric may sound compelling, but the reality is that most music software companies are small privately owned businesses, and/or collectives of young innovators and entrepreneurs. Most were founded no earlier than the late 1990’s and still retain the same management and design teams that started the business in the first place. In fact, many music software producers comprise one or two people working from home.

The biggest and longest established names like Spectrasonics and Native Instruments employ between 50 and 270 staff, but those are the exceptions. Even so, we are hardly talking ‘megacorps’ here. For example, one of the hottest names in computer sequencing and recording software, Cockos (producers of Reaper), has a staff of three. Cockos has an instant download demo of Reaper available. They also offer a discounted purchase price of $60 for Reaper, if you declare earnings of less than $20,000 from its commercial use each year. So you could be Donald Trump and buy Reaper for $60 as long as music is your hobby. And yet Reaper appears prominently for free download on piracy sites.

Entertainment pirates claim movies and music are overpriced.

Music software users though have many free options. Apart from the new producers and hobbyists mentioned above, many established software producers offer free products.

For example, Elysia’s Niveau Filter:
https://www.plugin-alliance.com/en/plugins/detail/elysia_niveau_filter.html

And Sonimus’ SonEQ:
http://sonimus.com/site/page/downloads/

One of my own offerings, a sample pack for Toontrack’s EZdrummer, has a retail price of $89.00, but regularly sells for $39.99 from certain online retailers.

To use these software plug-ins you need a computer audio workstation, known as a ‘DAW’. Technology giant Apple give you one free with every computer; Garageband.  Audacity is a multi-track audio recorder and editor that is also free. And as mentioned above Reaper is $60.  Even the more expensive DAW’s like Logic Studio (Apple) and Live (Ableton) come bundled with a host of free software instruments, fx plug-ins and audio loops – something not dreamed of 10 years ago.

So can we still claim music software is over priced? No, not reasonably so.

____________________

End Part 1.

Coming Up Part 2.

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SF Gate Blunders Facts about Recording Industry and Piracy

It is with great disappointment that we see such a respected publication as the SF Gate (website for the venerable San Francisco Chronicle) would run a post sourced from Investopedia and ValueClick (an internet advertising sales company) that could have been paid for by the tech lobby.

The entire premise of the post is the kind of highly selective reasoning that can only be explained by bias so extreme as to overlook the obvious. And it looks suspiciously like the disinformation lead sheet cooked up by the “don’t be evil” Computer and Communications Industry Association (CCIA) earlier this spring. The CCIA is a group that makes the RIAA and the MPAA look like Mary Poppins.

The full link to the SF Gate post,  “3 Reasons Why Piracy Isn’t Crippling The Recording Industry” is below. Let’s get started.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/02/investopedia80867.DTL#ixzz1twlOpchQ

In late March, the International Federation of the Phonographic Industry (IFPI) released its annual estimates on recorded music industry trends. It detailed that global revenues fell 3% to $16.6 billion. For most industries, negative growth would be seen as extremely disappointing, but the demise of recorded music from stores through the sale of compact discs (CDs) has been on a decline that has lasted the better part of a decade. Overall, the annual declines continue to be less severe and indicate that piracy is no longer crippling the industry as a whole.

Well, they’re actually stating the opposite of the post’s headline.  Sales are in fact actually still down. But somehow being down only 3% from the prior year is not “crippling” despite the fact that recorded music sales in the USA have declined by nearly 60% since 1999.  As the New York Times correctly points out, the decline is due to the completely obvious proliferation of illegal online piracy.

Back to Investopedia’s lead sheet:

Online Music Continues to Grow

The saving grace in recent years has been the growth in online music revenue from legitimate sources. Pirated music from the Internet has steadily declined as appealing offerings from reputable (and legal) companies have become available. IFPI estimated that global digital revenues grew 8% to $5.23 billion, or nearly a third of total industry revenues. Apple’s iTunes has been a huge driver to online music, but new sources including streaming sites such as Pandora and subscription models including Spotify continue to burst onto the scene.

First, online piracy has continued to grow and there’s no attribution to where this contrary claim has come from, so the SF Gate’s assertion appears to be complete fiction.  See this chart by The New York Times from February 4, 2012.

This is followed by yet another fascinating and intentionally misleading claim. Digital music sales may be increasing, but not enough to off set the overall decline in the pie year over year, much less a decade of losses. Further more, Pandora and Spotify represent a fractional percentage of revenue. The overall revenues have been dropping steadily for over a decade dropping from $14.6 Billion in 1999 to $6.3 Billion in 2009, a net loss of $8.3 billion dollars a year in a decade as reported by CNN.

It’s interesting how the tech industry loves to move the goal posts of the argument. There are now so many varied and interesting ways to consume music legally, and yet piracy is still increasing. The argument of “no options” for consumption simply falls flat in the face of Itunes, Amazon Mp3, Spotify, Rhapsody, Pandora and many, many others.

Now comes the miscounting part of the shell game:

Concert Revenue Increased

Though not officially a part of the recorded music industry pie [but they’re going to count it anyway], bands have learned [shocker–who knew?] that hitting the road can be quite lucrative and goes a long way in replacing lost CD sales. Industry trade firm [isn’t an industry firm and a trade firm kind of the same thing?] Pollstar estimated that the 100 largest tours in North America reported $2.3 billion in ticket revenues during 2011, up 6.3% from the previous year. The concert space had a tumultuous couple of years following the credit crisis, but has been a relatively steady and growing source of income for leading bands. The statistics detailed 3.7% international growth of the top 50 acts to just over $3 billion.

Investopedia states, concert revenue is not the recording industry–but don’t let that stop them. This like saying autosales are doing fine because cable subscriptions are up. But it doesn’t really matter because this selective use of stats overlooks the larger picture that concert ticket sales are dropping and have been for at least five years according Digital Music News who reports a 10.4% drop in global attendance since 2007.

And this brings us to the “greedy musician” meme–pretty brassy from venture capitalist wannabes at Investopedia:

Greed Isn’t Good

The growth of revenue-based online music sources could end up leveling the playing field for the industry, which could help boost total competitiveness [when?  2050?]. Last year, U2 reported nearly $232 million in revenue from touring across the world. Clearly, no one single band really needs to make that much, and the top bands garner a larger proportion of touring and recorded music sales.

Online music makes it possible for smaller bands to reach a wider audience, and also puts into play more obscure or older music that retail stores and concert promoters used to ignore. The concept also applies to movies, books and other media.

This is really funny, “Clearly no single band really needs to make that much.” Really? Does Google really need to have $50 billion in cash reserves? Aren’t venture capitalists in the 1% of the 1%?  The hypocrisy of the double standard is amazing.

So Greed isn’t Good unless you are Google or a tech company illegally exploiting artists for profit? Welcome to the “Exploitation Economy.” So it’s greed if artists are successful despite all odds, even when 95% of their work is being consumed illegally, as facilitated by the tech industry and Google?Furthermore, let’s remember Google’s YouTube was built on an a model of intentional and deliberate illegal exploitation of artists work.

As for the benefits to smaller artists, they might want to double check that as well, according to Ted Cohen and Tom Silverman from a talk at Midem, the benefits to unsigned and DIY artists are nearly negligible on an individual basis.

The Bottom Line

Several years ago, the music industry aggressively pursued consumers that downloaded pirated and other illegal music to their computers. It has finally discovered that creating legitimate, more competitive and appealing services, may have incentivized consumers to again start paying for their music. However, it will never be possible to replicate seeing a band live and in person. Finally, growing emerging markets are creating a new class of consumer that should continue to help the recorded industry climb out of its multi-year funk.

What in the world is he talking about?   “Finally, growing emerging markets are creating a new class of consumer that should continue to help the recorded industry climb out of its multi-year funk.”  What does that even mean?

The real bottom line is the desperation of the tech industry to continue to rationalize and justify its 13 year war on artists as it gets harder and harder to do so in the face of more and more empirical data that the livelihoods of artists have been catastrophically affected. In fact just this month Salon reported a 45.3% drop in “Musical groups and Arists” from Aug 2002 through Aug 2011 according to The Bureau Of Labor Statistics. This sounds actually pretty crippling to us.

One final thought is that as Investopedia states, “it will never be possible to replicate seeing a band live and in person.”   This very statement is an admission by these tech industry advocates that they have failed to innovate any substantive revenue streams for artists online. Touring and merchandise throw musicians back at least seventy years, prior to the ability to sell sound recordings.

There is nothing innovative by illegally exploiting artists to profit corporate interest–an income transfer program at best. The SF Gate, Investopedia and ValueClick only show the shocking arrogance and ignorance of those collaborating in the destruction of professional creatives’ careers.

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see also: Musicians For An Ethical Internet
https://thetrichordist.wordpress.com/2012/05/03/roll-call-musicians-for-an-ethical-internet/

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

Full Post: You Can’t Have A Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?

By David Lowery

Can you imagine the outrage if leading voices in Corporate America started advocating that we abolish all individual private property rights? Citizens could no longer own any property. All property would be collectivized. Citizens could no longer profit by creating and owning things. Further what if these same corporate voices used the justification that private property rights were hindering their ability to innovate?

We’d all laugh. Or man the barricades. This would never happen, right?

Well it is happening. This is exactly what many in the tech blogosphere are arguing we should do in the cyber-economy. These faux revolutionaries are arguing that Intellectual Property and the Internet are incompatible so in the name of “freedom” Intellectual Property must go. In the cyber economy ALL property is intellectual property. This means these folks are advocating for no private property in cyberspace. What does that sound like? Depending on your political leanings this is either some sort of corporate feudalism or a radical form of socialism.

Humans have had a lot of experience with both systems. Feudalism and radical forms of socialism have been practiced in many countries all over the world. Neither of these systems fostered democracy, free speech or anything anyone would regard as freedom. But more importantly these two systems stifled innovation and crippled the economies of the countries that were subjected to these political systems. Generally in order to encourage innovation and wealth creation an economic system must reward and incentivize everyone involved in the process. For example you can’t just reward the distributors of a product and neglect to reward the manufacturer of the product. You would not build a system that incentivized and rewarded innovation in the distribution and servicing of cars but refused to allocate any revenue to the manufacturer of cars.* There would be nothing for the distributors to sell. The only way the system might work is if the distributors managed to steal cars from the innovative neighboring economy that incentivizes and rewards the car creators. BTW this is exactly how YouTube and File-sharing sites manage to survive.

Now I’ve read enough mystical pseudo revolutionary garbage about the web to know what the responses will be to what i’ve just said. They generally fall into three categories:

“The Internet is different”

“Old Economic laws do not apply to the cyber-economy”

“A magic beaver lives in a spaceship under the Googleplex”

The Internet is different than what? This is never satisfactorily explained. Seems like a funny point but no one has ever been able to convince me (or themselves ) once I press this point.

Old economic laws do not apply to the cyber-economy? Yes they do. There is nothing different or new about the cyber-economy. Goods with near zero marginal costs? We have those in regular-space. We’ve had them for hundreds of years. The list goes on and on. If it makes any difference Google’s Chief economist Hal Varian also thinks the old economic laws apply.

While it’s entirely possible that a magic beaver lives in a spaceship under the Goggleplex other pseudo religious and mystical properties assigned to the technology industry and in particular the web are just not true. I will bet anyone $1,000 dollars that 5 years from today The Technological Singularity has not occurred.  The Technological Singularity is a Nerd reverse creation myth. Abolishing intellectual property is not gonna turn the web into a super intelligent being and usher in a new age of peace, prosperity and enlightenment.

There are many more quasi religious narratives about the web. Some milder and some stranger. I don’t mean to single out this one. They all need to be debunked and challenged. For all they do is empower demagogues and commence hunts for Apostates.

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I realize that what I am saying about robust property rights and healthy economies is nothing new. It’s a rather elementary and banal critique of the Copyleft’s proposed cyber-economy. What is more interesting is why there are so few other voices out there challenging these wackjobs? Why is it left to the singer of a moderately successful cult rock band to challenge this nonsense? That’s the real story here. Where are the grown-ups?

It think it has something to do with those quasi religious narratives about the web. It encourages fanatics, nut jobs and unreasoned discussion. I mentioned last week that there is a mathematical argument to be made that the internet is making us stupider. Well there is also a very good argument to be made that the web is actually stifling free speech. It is certainly not always the place for reasoned discussion. It’s a land balkanized by ossified opinions and guarded by trolls.

The web is a place where people go to hear their own deeply held opinions parroted by others. There are few places that you may have a fair and balanced discussion. And If you say the wrong thing in the wrong neighborhood you find yourself in trouble. That’s why their are few “grown-ups” on the web. Most are not willing to endure the stream of hate mail, nasty Facebook comments, angry tweets and out-and-out threats that the tech blogosphere DELIGHTS in unleashing on anyone with which they disagree. That is why this rather radical idea of abolishing all intellectual property has taken hold. The grown-ups don’t wanna be called names by generation gimme.

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So why do so many in the tech blogosphere advocate the complete abolition of intellectual property rights?

The short answer is most don’t. Most of those in the tech blogosphere advocating abolition are knowing pawns in a cynical short term strategy to protect the profits of web and technology companies. There are many web and tech companies that have built their businesses on the intellectual property of others. They are afraid they may have to share some of their new found tech wealth with the“dinosaurs” that created the content that drives their traffic. It’s a handy distraction.

I believe most of these bloggers (and many of their readers) know that abolishing all intellectual property would cripple Silicon Valley and the tech industry. For example abolishing all intellectual property would allow Foxconn and others to just make their own identical versions of the iPhone and iPad.

When someone like myself points out the effect this would have on Silicon Valley these same bloggers begin to tie themselves in Gordian knots trying to protect some Intellectual Property rights while abolishing others. These people are fakes. They don’t really believe what they themselves write so I’m not gonna bother with them.

I’m more interested in the true believers. People like John Perry Barlow and Lawrence Lessig. These are not some isolated unknown radicals. These are are two of the most highly regarded voices on the web about the web. Often called visionaries or philosophers by their followers, Lessig is a former Harvard University Law professor and John Perry Barlow is the Co-Founder of the Electronic Frontier Foundation (and former Grateful Dead lyricist).

Barlow is very straightforward. Given the chance he will pound the table and shout “Intellectual Property is Not Property!”. At least he is honest about it. He doesn’t pretend that he is trying to “save” copyright from the “copyright maximalists” (apostates). Nevertheless he is a hypocrite in other ways. Barlow made his fortune from his intellectual property, his co-writes with the the Grateful Dead. If Barlow really believes that Intellectual Property is so terrible he should give away his earnings and relinquish all rights to these songs. This looks like another case of “Do as I say not as I do”.

Lessig is more complex. I could spend a week blogging about Lessig. He is a member of “The Internet is Different” faction and leader of one of the quasi religious factions (See his “Code is Law”). He’s also the philosophical leader of the Web 2.0 industry. For those of you who don’t know what is meant by Web 2.0 and what I find so sinister about it here’s Lessig’s appearance on The Colbert Report:

http://www.colbertnation.com/the-colbert-report-videos/215454/january-08-2009/lawrence-lessig

Watch from 0:44 to 1:25.

Colbert: Well let’s see (laughing)…so the hybrid economy is where everybody else does the work and Flickr makes all the money?

Lessig: (Mock voice and hand gestures) Don’t tell anybody! Don’t tell anybody!

The great thing about this exchange is that it appears that Lessig is genuinely surprised by Colbert’s one sentence smackdown of Web 2.0 companies. He didn’t have a ready answer to such an obvious observation. Like it has never occurred to him that the Web 2.0 is an “Architecture of Exploitation” as Danish internet theorist Søren Mørk Petersen describes it. Apparently Lessig lives in one of those internet genius bubbles with only occasional visits from Web 2.0 sycophants. No real criticism has ever reached this man. He’s never had to think through the IMMEDIATE moral and ethical consequences of his crackpot theories.

Lessig’s writings in sum total are contradictory and incoherent. He loves to be on both sides of an issue.  At one panel he angrily demanded that a critic name one time he “lauded the appropriation of intellectual property.”  This was after he wrote an essay entitled “In defense of Piracy.”  Like a true lawyer Lessig has a depends-what-the-definition-of-is-is defense at the ready.   Turns out his definition of piracy is different.

Some people point to Lessig’s political flexibility as a sign that he’s operating on a higher level than the rest of us. He was a clerk to Anton “corporations are people” Scalia and he works with Occupy Wall Street. He proposes a second constitutional convention (oh I’m sure that would never get hijacked by pro-corporate interests and oligarchs). When you dig into his pseudo philosophical tomes like “Code is Law” or “The Hybrid Economy” you realize they don’t say anything. They are empty slogans with a book surrounding them. His seemingly complexity is really just political opportunism.

What is absolutely clear is that Lessig wants to specifically screw entertainers and artists. He proposes limiting copyrights to as little as  5 years. Given that a copyright for a song begins when the lyrics are written down or hummed into your iPhone voice memo app, many copyrights would expire before the artist could commercially exploit the song. But that’s not even the worst of it. He would weaken copyright in ways that in practice would not be copyright at all and it would tilt the playing field towards giant internet corporate interests. Artists would not be able to commercially exploit their works anyway in Lessig’s world. So even those 5 years are meaningless. So Lessig is an abolish IP radical he just doesn’t have the balls to come out and say it. At least the cattle rancher Barlow is a man about it.

But the reason Lessig get’s my vote for most likely to be the manchurian candidate 2012?  He  is virtually silent when it comes to a web or tech company abusing the rights of an artist. He is supposedly all for the little guy and endlessly rails about corporate corruption yet strangely silent when it’s an Ellen Siedler vs Google. You’d think someone concerned with copyright AND the internet would have something to say on subjects like this.

I’ve tried with this guy. I’ve tried to read his stuff. I’ve tried to find some decent semi coherent vision here.  I’ve tried to see him as a visionary that stands for something.  This is the best I can muster:

“The internet is cool, Web/Tech corporations are people, Songwriters are serfs and Power to the people.”

I’m not the only one confused by what exactly this web visionary is envisioning. I urge you to check out his wikipedia entry. It seems that even his Web 2.0 biographers are confused by what he is for and against.

And now the rumor is this guy has political aspirations. God help us all.

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While Lessig et al espouse a pseudo-socialistic view towards intellectual property in Cyberspace a lot of the push to collectivize intellectual property is driven by those on the right that claim a fake Libertarian ideology. An ideology I like to distinguish from real Libertarianism by calling it Li-BRAT-arianism.

Li-Brat-arians are those who think that there are absolutely no limits to personal freedom. If you can do it, it is acceptable. To prevent someone from doing something even if it violates other’s rights is a dangerous throttling of “freedom”. They miss the more nuanced perspective of long time Libertarian thinkers who look at everyone’s individual freedoms and measure the kind and net loss of freedoms.

Take for instance industrial-scale-for-profit unlicensed file-sharing by the likes of MegaUpload or Mp3Tunes. Li-Brat-arians argue while it’s not cool to violate the rights of others to control and exploit their songs. While it’s not cool to expropriate and exploit songs without performers and writers permission, any attempts to stop a for-profit corporation from doing this is a dangerous infringement of the right to free speech. This ignores the violations of others private property rights and it is simply a bratty argument. Something I’d expect to hear from my pre-teens not fully grown college educated adults writing for a national Magazine.

Li-BRAT-arians need to go back and read Bastiat, (the father of all Liberalism, Libertarianism and Anarcho-Capitalism.) Bastiat argued clearly and convincingly that the protection of private property rights are a necessary condition of liberty. Even his rival the Left Anarchist Proudhon eventually modified his “Property is Theft” to “Property is Freedom” because he believed that workers had a right to the product of their labor as expressed in private property. Further he believed this was the very expression of freedom. He also made it clear that his “Property is theft” slogan was a little bit of bomb throwing.

In my first memorandum, in a frontal assault upon the established order, I said things like, Property is theft! The intention was to lodge a protest, to highlight, so to speak, the inanity of our institutions. At the time, that was my sole concern.

So Li-Brat-arians are more radical than either Proudhon and Bastiat. Li-Brat-arians are actually arguing the Communist point of view!

(Proudhon and Bastiat are both quite enlightening on the subject of how freedom, liberty and private property interact. Especially Proudhon’s distinction between his views and socialismContrary to the uniformed opinion of Proudhon he is very much in favor of private property.  I don’t do them justice here.  But I urge you to read both of them.)

In an attempt to avoid the whole property issue there is a related and overlapping group of fake legal scholars that make the mentally and morally challenged argument that because copying files leaves the original intact and hence nothing has “gone missing” that in fact no “theft” has occurred. This is a semantic distinction, a narrow technical argument. An argument that you expect to come from someone paid to be morally and ethically flexible like a criminal defense attorney. But not, as it was recently argued, by Rutgers law professor Seth Green in a guest Op Ed for the NY Times.

Okay I’ll take the bait. Let’s pretend this is a semantic argument that needs urgent resolution before we can all start behaving like decent human beings. Let’s pretend this argument is truly a four alarm semantic emergency that it requires New York Times Op Eds and stands in the way of us protecting our fellow citizens rights. Then indeed let’s come up with a new word!

Indeed, let’s re-classify this violation of personal property rights, constitutional rights and human rights (artist copyrights are spelled out in all major international human rights agreements), let’s re-classify these violations as artist rape or if you find this too honest I would also accept artist trafficking.

EFF’s John Perry Barlow is Wrong, says Google’s Chief Economist

What Artificial Scarcity?

John Perry Barlow is the outspoken EFF co-founder who wrote the sophomoric and nonsensical manifesto for the internet. Much of Barlow’s principal talking points regarding his complete disregard for the protection of artists rights in the digital age centers around the idea that “property” especially of the intellectual kind should not exist on the internet.

“Your legal concepts of property, expression, identity, movement, and context do not apply to us. They are all based on matter, and there is no matter here.”- John Perry Barlow

The fact that this is posted on the EFF website should be at the very least alarming, if not completely absurd for a policy group to display publicly as part of its mission.

There is much talk online by freehadist’s that digital bits are worthless and the cost of a copy is zero, therefore all content online has a near zero marginal cost and should be freely available. Of course any rational and reasonable person would know that this is nonsense due to the fixed cost of production on information goods. Hell, even Google’s own Chief Economist Hal A Varian “get’s it” as outlined in his book, Information Rules:

Page 83.

John Perry Barlow asserted that “Intellectual property law cannot be patched, retrofitted, or expanded to contain digitized expression… We will need to develop an entirely new set of methods as befits this entirely new set of circumstances.” Is Barlow right? Is copyright law hopelessly outdated? We think not.

Continued, Page 93.

“Bitlegging” can’t be ignored: there’s no doubt that it can be a significant drag on profits.

Bitleggers have the same problem that any other sellers of contraband material have: they have to pet potential customers know how to find them. But if they advertise their location to potential customers, they also advertise their location to law enforcement authorities. In the contraband business it pays to advertise… but not too much.

This puts a natural limit on the size of for-profit illegal activities: the bigger they get, the more likely they are to get caught. Digital piracy can’t be eliminated, any more than any other kind of illegal activity, but it can be kept under control. All that is required is the political will to enforce intellectual property rights.

Fascinating that Google is so actively involved in exploiting the content that other’s have paid to create in production costs, as Google profits from the marginal costs. Clearly, the value of monetizing content without fixed production costs is not an unknown concept to the company given that their chief economist literally wrote the book on information economies. As a matter of fact, that appears to be a damn good model to build advertising around, who knew?

Also note the emphasis on political will power.  In fact, we’ve seen that Google seems to have plenty of that to oppose the protection of artists rights.

[update] Here’s John Perry Barlow, sparring with Bob Weir at SF Music Tech in Feb of 2012. Barlow repeats the same talking point in trying to dismiss Weir’s concern over compensation for artists online. Jump to 5:10 in the video to hear Barlow say, “I think the answer is there, we just have to, we just have to get the property model out of the picture… “

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see also : Musicians For An Ethical Internet
https://thetrichordist.wordpress.com/2012/05/03/roll-call-musicians-for-an-ethical-internet/

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]