RIAA - Really Imaginary Accounting Adventures

Two recent news stories that should give one pause (but probably won't because the subject matter's too esoteric). First, AfterDawn reports that the Government Accounting Office has taken a hard look at the numbers the RIAA and MPAA have quoted for years. Numbers documenting how much they lost to piracy. Numbers showing how file-sharers are destroying their livelihood. Numbers that were totally made up.

In the second story, TorrentFreak shows that -- according to their own numbers -- piracy seems to have little impact on the growing digital download market. According to the numbers, it looks like a simple case of market shift. CDs -- which are very profitable -- are declining in sales, while digital downloads -- low margin items -- are on the rise.

So what do these two stories mean taken together? At the very least, it means that the entertainment industry is not just in deep denial -- it's delusional. Instead of adjusting to a changing market, they're placing the blame on a minor problem by making it a major one.

So the MPAA and the RIAA have gone to war. People have been dragged into court, and hefty fines levied -- based on made-up numbers. Legislators have been stampeded into passing draconian laws that trap the innocent -- based on made-up numbers. Countries are being strong-armed into complying with the Anti-Counterfeiting Trade Agreement (ACTA) -- based on made-up numbers.

As the laws continue to become more severe, more former innocent (and legal) acts are becoming grounds for prosecution. Have you copied a CD to your computer? Used to be legal -- RIAA claims it isn't anymore. Loaned a DVD to a friend? You're doing some unauthorized distribution, friend.

And what happens when everyone becomes a criminal (and liable for arrest, prosecution and fines)  -- based on made-up numbers? What happened to alcohol consumption during Prohibition?

 - Ralph

While We Were Sleeping...

President Bush signed the PRO-IP into law. The Prioritizing Resources and Organzation for Intellectual Property Act beefs up penalties and creates an "Information Czar" to oversee enforcement of intellectual property rights. Any guesses as to which side people fall on this?

The MPAA's happy. The RIAA's happy. They say:

Additional tools for intellectual property enforcement are not just good for the copyright community but for consumers who will enjoy a wider array of legitimate offerings.

But Public Knowledge said:

The Pro-IP bill was not necessary. It simply adds penalties to a copyright regime that already is out of balance.

Whose right? Read the H.R. 4279 for yourself. And think of this - how many times have you inadvertently broken the law recently, thinking that by purchasing a recording or movie you were allowed to use it as you pleased.

Looking over the roll call vote, I see that Rick Boucher, the Representative from my native commonwealth Virginia who "gets" the Internet, voted Nay. As for my representative, Eric Cantor? "Aye."

Aye-yi-yi! Time for another letter to my congresscritters!

- Ralph

Day 119 of the WJMA Web Watch.

The Anthropology of YouTube

If you think YouTube is just goofy videos of skateboarding dogs and silly but painful pratfalls, then you've missed something significant about this site. Michael Wesch, professor of anthropology at Kansas University, has been studying the Internet -- and specifically YouTube -- for some time.

His video, "Web 2.0... The Machine is Us/ing Us" should be required viewing for anyone trying to do anything online (in my opinion).

Wesch recently posted his Library of Congress address, "An Anthropological Introduction to YouTube."

So why should you care what some egghead has to say about videos with kittens playing the piano? Well first, what he talks about is more fundamental than that -- he gets at the underlying social forces that drive the YouTube phenomenon. Second, Wesch is an academic with real-world experience in his field, so his observations and conclusions have been documented and tested. And any business with an online presence -- even if it doesn't post YouTube videos -- needs to understand the core concepts Wesch presents.



His concept of context collapse is probably the thing most traditional businesses stumble upon. Basically (if you haven't watched the video yet), the idea is this: once something's made available on the Internet, other people can take it and use all or parts of it for their own self-expression -- and the original creator has no control over its use.

Now this is the kind of thing that keeps RIAA and MPAA lawyers busy round-the-clock issuing take-down orders and filing lawsuits in a vain attempt to hold back the tsunami with an umbrella.

But it's also the kind of thing that made Jonathan Coulton a star. While Prince goes after a mom for the background music heard in a video of her child dancing, Coulton encouraged people to use his music to create their own videos -- and they have. Each one raises Coulton's profile, and each one represents another way for his music to reach potential fans.

Coulton's embrace of YouTube culture has helped him monetize his music while the major labels continue to spend huge sums of money to wage war on their artists' biggest fans.

Which is the smarter marketing strategy? Which one does your business embrace?

Invest an hour. Watch the video.

- Ralph

Day 52 of the WJMA Web Watch.

The Trouble with Tribler

Yesterday a fascinating concept was proposed by the founders of Tribler, a P2P site based in the Netherlands. They propose to turn bandwidth use into a form of currency for their participants. Since the network doesn't have centralised servers, it depends on each member to not just suck up bandwidth by downloading, but to contribute to the system by allowing uploads as well.

Under the new system, Tribler subscribers would "spend" credits when they downloaded, and "earn" credits when they uploaded, rewarding good netizen behavior. Dutch TV is taking a hard look at Tribler's proposal, believing it to be the way to distribute television over the Internet without overburdening the system.

Now here's the problem. It's a peer-to-peer network. To Hollywood and American television studios, P2P -- especially BitTorrent -- is the Great Satan. P2P equals file sharing equals lost revenue.

Never mind that the equation is flawed -- look for objections and obstructions to start flying fast and furiously. And don't be surprised if our government isn't called in to act. It was the MPAA, after all, behind America's strong arming of Sweden to raid Pirate Bay's servers. The raid was contrary to Swedish law, took many legitimate businesses offline, cost millions in lost revenues from said businesses, and did absolutely nothing to stop Pirate Bay. But it did damage the relationship between Sweden and America.

EFF's proposal (that I discussed last time) makes even more sense now. If we had an Internet licensing fund that proportionally paid content providers for download traffic, studios would be embracing Tribler (and other P2P sites) rather than trying to quash them. The more a program circulated, the larger the royalty payment -- and the end users get to do what they're going to do anyway.

The trouble with Tribler? Rationally speaking, none. But since when have rational decisions been made in Hollywood?

- Ralph

Copyright II - The Orphan and the Manger Dog

Sean Tubbs of the Charlottesville Podcasting Network posted an excellent question to my recent entry on copyright. He wanted to know:

Who would come after you if you decided to use music from the 1930's, say, in a podcast, without permission? Who would you get permission from?

As the law's currently written works copyrighted after 1922 are protected for 95 years (and ones after 1978 even longer). So everything between registered between 1922 and 1978 is off-limits until 2019 at the earliest.

If for example, you wanted to use a recording from 1923 in your podcast, you would have to get permission from the current copyright owner. For an RCA Victor release, for example, you would have to contact Sony/BMG. Okeh Records was independent in the 1920s but was eventually purchased by Columbia, which was bought by Sony and is now part of Sony/BMG -- who you would have to contact to get permission.

But what if it's an "orphan" work? That is, what about works copyrighted by companies that no longer exist, and whose assets were never purchased by another company? Under the current system, these abandoned works do not automatically lapse into public domain. It is incumbent upon the user to make a diligent search for the copyright owners, and even if they cannot be located, the work is still considered to be used without proper clearance.

Does it matter? A record company that went under in 1929 isn't likely to come after a podcaster today. But look at your terms of use agreements you signed with your Internet provider or web hoster. You could technically be considered in violation of the agreement by using a work that isn't cleared.

Legislation has been introduced to force the issue and get orphan works to lapse into public domain -- but it's being fought by the RIAA, MPAA, and other content owners. Why? Because they don't want any of their material that -- through oversight -- may be considered abandoned to automatically become public domain.

And the effect?

Books by publishers long gone molder on library shelves. Archivists don't dare scan them to preserve their content because they're not in the public domain.

Movies from film companies that collapsed in the Great Depression disintegrate in their cans. Preservationists can't reproduce them because they're not in the public domain.

Recordings from defunct labels remain unheard. Sound engineers can't transfer them and present them to the public because they're not in the public domain.

And so a large part of our past disappears into the mist of time while the Big Media dog furiously barks to keep the public at bay. The record labels, publishers and movie studios can't make any money from this material. It isn't useful to them -- but by God no one else is going to use it either!

- Ralph

Traversing the Teapot Tempests

The other day a colleague sent me an MSNBC article about the RIAA's shakedown of college students. He sent it because it was the first he had heard about it. My friend sent the article to several other people, which prompted some discussion. During the conversation I discovered that another colleague, though very knowledgable about the RIAA and MPAA's ongoing like/hate relationship with their customers confessed to have completely missed the Digg revolt.

This made me realise that the universality of the Internet is something of an illusion. The RIAA/College story has been the subject of fierce debate for months -- but my colleague was completely unaware of it, as he doesn't regularly visit the same news sites I do.

As of today, the HD-DVD code shows postings, spurred by the Digg revolt, on over 8 million sites (according to Google) -- yet it completely escaped the attention of someone interested in the subject.

A poor reflection on my colleagues? Hardly. Within every community there are epic battles being fought for the hearts and minds of the members -- struggles that are all-consuming to the participants, yet go completely unremarked by those on the outside.

The Internet is a vast jumble of information that we must each sort out for ourselves. The difference between a political fight in the Orange County Garden Club and several million people revolting against HD-DVD DRM is just matter of scale. As long as the fight remains in the closed system of the community, it's just a tempest in a teapot.

What to do? For those on the inside, spread the word to other communities. When the full fury of Interet radio supporters descended on Congress, a bill to remedy the ruinous new royalty rates was written and sponsored within days. The Internet radio community invaded the congressional community and got results.

And for those on the outside, make it a point to check those rattling teapots and see what's going on. Many things are happening in there that need to be addressed soon -- because by the time the general public finds out about them, it may be too late.

- Ralph