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YouTube’s Shakedown Cruise Continues

August 30, 2007 Comments off

Google apparently fed a story to the press that it’s made a deal with the MCPS/PRS, Britain’s combined mechanical royalty collection society and performance rights organization. The MCPS/PRS also announced the deal, so it’s true. The deal as announced is a flat fee for the use of (a) MCPS/PRS members’ works (b) in the UK.

That also means–and this is going to get way, way lost in the sloppy journalism on this topic, not to mention the non-existent accounting systems on YouTube–it DOESN’T cover (a) works of non-MCPS/PRS members (b) in the UK or anywhere else (such as That’s Life), OR (c) MCPS/PRS members’ works (d) outside of the UK (such as in France).

I have seen this reported as a “license” of a “library” from MCPS/PRS. Not quite right. Of course, you want to be careful what you call a “library” around Google, because they’ll start exploiting it, so if it were me, I would choose a different word, such as “repertoire”. That’s a good one, as they likely don’t know what “repertoire” means on campus so they’re less likely to think they own it.

Then again, I suppose authors’ heirs in the UK should feel fortunate that anyone respects them at all, particularly given the way they’ve been treated lately on sound-recordings.

It was also interesting that NO ONE from Google was part of the press release. We’re not distancing ourselves, are we?

Now consider whether both these statements can be true:

1. YouTube doesn’t filter (as they claim); and

2. YouTube will account to MCPS/PRS for song usage on a territory basis—not video usage, but song usage.

In order to do that, they will need a sophisticated filtering system that can tell one thing from another and also the third dimension of where.

I asked these questions of Dr. Eric Twit, CEO of Goggle (that hot Internet startup that filters all advertising) and he had this to say: “Not bloody likely.”

New No-Ad Serving Technology Innovation: Code Name Goggle

August 27, 2007 Comments off

Here’s a newsflash for all you tech investors out there. There’s an innovative new stealth company we heard about that’s developing a supercool freculture product innovation that serves no ads, and blocks all innovative advertising you encounter in your life. Not only will this innovative product block all advertising on the Internet, but it innovatively blocks all advertising you encounter–period.

I had an email exchange with the company’s innovative CEO, Eric Twit and learned the following:

Dr. Twit wrote: “We lived through the last advertising crash, and we look around and see the potential for another one.”

“What? Me worry?” I said. “How can you possibly think that there’s going to be an advertising crash in the innovative advertising economy? Won’t we just innovate our way out of any downturn?”

“It has something to do with subprime debt, hedge fund crashes, the war in Iraq, increases in the national debt and a field of zombies for president,” said Twit. “Plus, Google is going to Washington.”

“You think any of that stuff is important?” I said. “It’s not very innovative.”

“No more important than before the last stock market crash,” said Twit. “But let me tell you about the product. We offer a service that blocks all advertising in your life. Just think. If you use our product, you’d never see or hear another ad. Not online, not on billboards, not TV, not radio.”

“How would you do that?” I said, intrigued.

“Eyeware”, said Dr. Twit.

“Eyeware? What do you mean, eyeware?” I said, flummoxed.

“I mean you wear our product and it blocks all advertising from your visual and audio capacities.”

“Brilliant!” I said. “How innovative!”

“Thank you. We call it “Goggle”,” Twit smiled.

“You mean Google. That’s taken”, I said assertively.

“No. It’s called Goggle. One “O” two “Gs”. Theirs is different.” Twit was patient.

“Ingenius! So transformative and yet descriptive! But how do you innovate money?” I cried.

“We charge an innovative monthly fee.”

I scratched my head. “You mean…you charge cold hard cash for a product? At a fixed rate? What’s that called again? A price, right? What is that, Web 3.0?” I said, puzzled.

“No, I think it’s more like Business 101.”

So there you have it, folks. The latest and greatest from The Valley. We’ll be keeping an eye on this hot little startup.

Goggle.

Cold hard cash.

I like it. Put in the earplugs, put on your eyeshades, you know where to put the cork.

Very innovative.

Girlstart

August 26, 2007 Comments off

It’s hard to believe it’s been 10 years, but Girlstart is having its 10 anniversary, and if you ever needed evidence that good ideas come from citizens who are proud of their city, Girlstart is it.

Girlstart is a non-profit organization founded in Austin, Texas in 1997 to empower girls in math, science, engineering and technology. I remember thinking at the time that this is a killer idea that will be emulated everywhere. Not so much, but it’s going strong in Austin.

“Girlstart provides hands-on learning in math, science, technology and engineering concepts to a diverse group of girls and their parents. Girlstart has served over 10,000 girls and families with after-school clubs, free Saturday camps, science nights, family math nights, summer camps and more!
Girlstart has an enviable record as a best-case practices leader in empowering, educating, and motivating girls to enjoy and become more proficient in science, technology, engineering and math (STEM). Consistently close to 90% of participants report that Girlstart made them feel more confident in STEM subjects and courses and made them more interested in pursuing a STEM-related career. Girlstart’s unique programming includes nationally-recognized Saturday camps, summer camps, and after-school programs, where girls become engaged in hands-on STEM activities and meet female role models working in STEM careers.
Girlstart’s success and the hard work of its staff have not gone unnoticed. Recently, Girlstart was named by Child magazine as one of the five top programs for girls across the country. Girlstart’s programs have been featured on the Today show, the Oprah Winfrey Show, CNN, and in Glamour, Texas Monthly, Fast Company, and CosmoGIRL magazines. Girlstart was also selected by the Austin Chronicle as “Best Non-Profit Organization” and “Best Effort for Girls.””
You go, Girlstart, you go.
Check it out here, and donate here.

Digital Myths & Facts #1

August 24, 2007 1 comment

As I go through my day, I frequently encounter folk in the online community who make statements about practices in the music industry as though they were facts, i.e., true. In keeping with the Cult of the Amateur that attempts to persuade by means of “flaming” and other mob activity, no one is too interested in getting the facts right because the lie feels so good to say. To paraphrase Cult of the Amateur, too much Drudge and not enough Dostoyevsky.

When you know what the facts are, it rankles to hear these misstatements repeated as though they were true. These become “myths” after a while, and sometimes even become the cornerstone justification for further actions or further myths. Anyone who questions the myth can be excluded from the conversation in the ad hominem attacks favored by the mob.

More importantly perhaps—opportunists can take advantage of these myths to motivate people who don’t know any better. Certain members of the professoriate would be in this category, for example.

Versions of this propaganda technique come under different names, such as the “Big Lie”. As Adolph Hitler wrote in Mein Kampf:

….[I]n the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously….For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying. These people know only too well how to use falsehood for the basest purposes.

Of course, knowing whether someone is actually lying requires laying bare their soul, which, as they say, doesn’t scale.

So I will assume that there it is possible that the prominent folk who repeat these myths are just as much victims of the falsehood as the faceless originators. In the words of David St. Hubbins, there’s a fine line between stupid and clever.

I thought that it would be worthwhile to write down these “myths” with the corresponding fact debunking the myth. Where I can, I will give the name and place of the myth giver, or if the statement was made in an off-the-record environment, I will honor the off-the-record promise and stick to statements that are obviously attributable to any one of a number of people. If I’m able to carry this on for a while and get enough of these myths and facts, I will aggregate them into a separate posting so that they’re all in one place. These may come in drips and drabs as I encounter them, but I encounter them frequently enough that I think there will be quite a few after 6 months or so.

Since the point of this is to try to provide facts, I will, a la Dr. Strangelove, try my best to force myself to not poke fun at anyone along the way, or at least not in a way that colors the facts.

Myth: Each of the major labels forces entrepreneurs to give up 80% of their company’s stock in order to get a content license. So, entrepreneurs are forced to give up over 100% of their companies in order to get a content license. This creates a situation like “The Producers”, and is yet another reason that Hollywood should be forced to accept a compulsory license. (Andrew Bridges, counsel to Google, at Seattle conference August 16, 2007.)

Fact: Record companies do ask for equity in many instances, but the stock is usually common stock and is well under 10% of the then-current number of outstanding shares. To my knowledge, no record company has ever asked for 80% of the equity of a licensee, and also to my knowledge, few of these stock deals have amounted to a hill of beans.

Fact: Since these licenses are typically granted early in the life of a startup, the shares granted to the labels are typically common stock that are subject to dilution, the liquidation preferences and other rights of the venture capital investors in the startup’s preferred stock. Meaning that if the licensee is sold, the label stockholders are subordinate to the rights of venture investors, meaning that the labels are usually in the same boat as the founders.

Fact: It is not unusual for there to be an equity component of licensing arrangements (other than routine licenses) between technology companies, particularly when the license will “make” the startup company, i.e., confer value that the startup cannot afford to pay for in cash. Now go back and reread the Myth, and see if you think it means the same thing given these facts.

Myth: Content companies have an obsessive desire to control each copy made of a copyright they own, and if they would just give up that restriction, they’d have a much better chance of developing a new business model that might succeed.

Fact: Unlike technology companies that are largely non-union and own all code written by their employees (as a work made for hire or otherwise), distributors of sound recordings (or motion pictures) have contractual obligations to pay royalties for each “unit” that is sold, and may only have a distribution right in these sound recordings. Those payees may be artists, producers, unions, or other record companies in the case of samples or licensed works.

Myth: Artists have no right to control what exploitations are made of their recordings.

Fact: This kind of statement attempts to extrapolate major record label agreements to all artists. Fewer than 10% of all recording artists are signed to major labels.

Fact: Artists are typically able to negotiate marketing restrictions in recording agreements that give them control over certain types of exploitations of their recordings. These are typically approvals over certain types of film and television licenses, advertising and compilations.

Myth: Artists “assign” away all rights in their recordings to record companies.

Fact: While this myth is not entirely untrue, the facts are much more nuanced. In a typical major label deal, the record company owns the recordings made by the artist during the term of the recording agreement.

Fact: Some record companies sign artists whom they record but do not release records, and agree that the artist may buy back their masters in these situations.

Fact: Artists are typically able to negotiate marketing restrictions in recording agreements that give them control over certain types of exploitations of their recordings. These are typically approvals over certain types of film and television licenses, advertising and compilations.

Myth: Only superstars can get marketing restrictions in major label record deals.

Fact: While it is true that superstars get more (because they’ve earned it), new artists are usually easily able to negotiate at least basic marketing restrictions. Advertising is usually the easiest to give on (so when Google sells artist names as keywords, it should be easy to understand why record companies won’t sanction such actions).

Myth: Los Angeles shouldn’t tell San Francisco or Seattle what to do. (Corynne McSherry of the EFF, Seattle, August 16, 2007.)

Fact: I have no idea what “Los Angeles” is trying to say to anyone, dude (aside from “Beat SC”). I think that copyright owners are “telling” anyone who will listen that they would like people to stop using their works without permission. Which is their right.

All the "innovation" we can stand

August 18, 2007 Comments off

I was on a public policy panel in Seattle this week and had an exchange with another panelist that bears repeating. In the context of a discussion of the woes that have befallen the music industry at the hands of technology “innovators” such as Kazaa, Grokster and YouTube, I was admonished that as a matter of policy it was important to protect “innovation”.

My response to that was, no more of that kind of “innovation”, please, we’ve had all the “innovation” we can stand. The kind of “innovation” we get from the technology community by and large involves them getting their hands on our work product for free. I never see any “innovation” that helps artists get paid–anything–for their work aside from SNOCAP. (And SNOCAP’s filtering system could solve the YouTube problem very quickly if YouTube wanted it solved.)

My friend Andrew Bridges was in the audience. Andrew has made something of a career out of defending clients against lawsuits by the RIAA, and I think it is fair to say, hates the music industry, or at least the organized music industry. Andrew seized upon my “no more innovation” line (which, by the way, brought the house down) and said that he was going to hang the statement “No more innovation” around my neck and that he’d already “sent off emails” to start that process, although it didn’t occur to me until it was too late to ask exactly who in the world would be so interested in what I had to say that Andrew would feel the need to send off emails to some unnamed person. (Now, I really like Andrew Bridges and I take strong issue with the characterization of Andrew by some that he is the Roy Cohn of Silicon Valley. Cohn represented convicted criminals, and none of Andrew’s clients have been convicted of any crime yet, so the analogy is inapt.)

That line was clearly the use of irony in an attempt to point out that the only kind of innovation we seem to get most frequently from the tech community involves them getting rich off of not paying us anything.

I’m sure–or I hope–that Andrew won’t stoop to the same kind of ad hominum attack so common with the mob–that is not the Mob, but the mob–but in case he does, the record speaks for itself.

We call these things jokes, people. I’m sorry, I have to laugh occasionally at the situation.

OK, OK…laugh a lot.

Richard Epstein and Real vs. Intellectual Property

August 9, 2007 Comments off

For those of you who find that you are looking for the fourth circle of hell as relief from enduring the “distinctions” between tangible property and intellectual property spewed by the EFFluviati and other fellow travelers of Professor Lester Lawrence Lessig III (affectionately known as “Trip” Lessig in these pages), you “must read” The Structural Unity of Real and Intellectual Property by Professor Richard A. Epstein, James Parker Hall Distinguished Service Professor of Law, University of Chicago and Peter and Kirsten Senior Fellow, The Hoover Institution at Stanford University.

My first encounter with Richard Epstein was when I was in my first year of law school, and my reaction as a budding lawyer was similar to the reaction I had as a budding drummer (then age 7) when I first saw Buddy Rich. (“…I don’t know why I thought I could do this, I’ll never be any good at it, I have to leave and go home and practice right NOW…”) Fortunately, I stuck with it and it goes to show you how far hard work can advance over a lack of talent. I imagine young Trip was in the YAFs right about the time I first saw Epstein, so not sure if he ever had a similar epiphany. Almost surely he got his from a different philosophy.

Epstein is really fantastic, and as much as I enjoy reading him, if you ever get to see him speak you really should go. I swear I never him saw him look at notes once, and you could have transcribed his speech and sold it as a book with little or no editing (footnotes and all).

He also wrote Takings, an exposition on the protections of the takings clause in the U.S. Constitution and the protections it offers against a wilfull government. It’s a book that is as timely today as it was in 1985 when it changed my view of the law profoundly–if not even more important. This, too, is a must read for any American jihadi in the anticopyright crowd (starting with the Berkman Center), particularly those wishing to use the government to destroy the entertainment business.

Of course the U.S. government is doing a pretty good job of destroying the entertainment business all by itself due to the arrogance of its inaction in prosecuting the copyright laws.

Why does the EFF hate artists so much?

August 4, 2007 Comments off

Fred von Lohman of the Electronic Frontier Foundation treats us to the workings of his mind in this post to the Los Angeles Times opinion blog where he claps on one and three regarding the desire of the creative community to extend the digital performance right to terrestrial radio.

He writes:

“Copyright is a tax on the audience. As with taxes generally, it is a necessary evil, to be supported only so long as it can be justified as serving the public good. So the question that should be asked here, and in all copyright contexts, is whether a new exclusive right is necessary. Are we suffering from too little creativity, such that we need to increase the incentives to creators?

Plainly, the problem is not that we have too little music being created. As a result, it makes no sense to have the government grant more exclusive rights to copyright owners at the expense of the public (because that’s who ultimately pays for these royalties, one way or another).

If anything, the “digital performance right” that was created by Congress in 1995 should be repealed, not extended to terrestrial radio. After all, so far the track record for the digital performance right has been pretty dismal, impeding new digital music services without generating meaningful new revenues for artists.”

Wow.

Again with the fallacious reasoning, this time the Faulty Generalization. This is simple: Copyright is not a tax. Copyright is a private property right that allows creators to earn a living.

But, no–copyright, we are told, is a “necessary evil”. Just think about that for a second, for a second of consideration is all that the statement deserves. The rights of a creator are only to be protected if they serve the public good. Ah. The Cultural Revolution has returned. Next he’ll want to get rid of the Four Olds and introduce us to the 16 Points.

You see–we protect creators who do not necessarily serve the public good and the public good is in fact served by virtue of that protection. Let’s see–Robert Mapplethorpe’s photographs, Michael Moore’s movies, James Joyce’s Ulysses, Comedy Central’s “Li’l Bush” and so on. Do you really think that these works came into being because of copyright’s economic incentives? Did the Lascaux cave artists demand an extra bone from the tribe before they did their work? Did Homer give us oral history because he wanted money for it? Is all creativity based on economic incentives? I rather doubt it. But what’s left of the copyright laws helps artists to support themselves.

von Lohman of the EFF exhibits the thinking of the philistine here—he seems to be living under the illusion that the creative community only exists because of the economic incentive of the copyright laws he hates so much. (Of course, it’s much easier for him to argue about money than it is about the morality of file “sharing” as he did in the Grokster case, because he loses that argument in any jurisdiction that is founded on the rule of law.)
The issue is not whether society needs copyright to have a creative community, I would suggest that society needs copyright to protect the creative community from von Lohman of the EFF’s fellow travelers at the National Association of Broadcasters and the Consumer Electronics Association who would free ride on our backs. If our rights are not protected, or at least protectable, the clear beneficiaries of the rollback of artist’s rights that von Lohman of the EFF advocates are NAB and CEA members who continue to get music for free.
Because it’s not like the government is actually going to do anything to protect artists or anything crazy like that. Oh, no. Artists are still going to have to protect their rights through private litigation because God forbid a U.S. Attorney should dirty their skirts on something so uninteresting as protecting our culture. I can safely say that I would easily trade a public performance right on terrestrial radio for a robust protection of copyright by the government because I know that the abject and pathetic failure of our government to protect us from theft while they extract our taxes is never going to change.
But why stop with the rather arcane right of public performance on terrestrial radio. Now they want to get rid of the performance right in digital transmissions altogether. Why should von Lohman of the EFF not argue that “we” should get music for free all the time? Let artists work for tips (or make artists work for tips more accurately). That’s certainly the clear direction of the litigation he participates in. It’s not like the broadcasters–or Google–are going to stop charging for advertising or anything.

One would have hoped that the utopian socialist would be aligned with artists against The Man, that they would want to help workers keep the product of their labor. I guess that’s not going to happen with this crew. von Lohman of the EFF aligns himself squarely with The Man–in this case, the National Association of Broadcasters.

Artists simply want to leave the world a more beautiful place than they found it. Copyright allows them to earn a living while doing their work, a right that von Lohman of the EFF wants to destroy as best he can. That desire is clear in this post regarding digital sampling (see, e.g., mashups) by von Lohman of the EFF on a radical anticopyright mailing list (“Pho: RE: Copyright Question – MashUp”, March 22, 2007).

He writes:

“…Fortunately, EFF and the Stanford Fair Use Project [funded in large part by Google] are two resources that *may* be able to help you, assuming yours is the right case to make a precedent for the rest of the world. But you need to engage the enemy early [that is, the creative community], before it erects a ‘licensing market’ and co-opts your new medium into the major label game (see, e.g., sampling in hip hop).”

Filter? What filter?

August 2, 2007 Comments off

Google announced this week that it’s really trying to come up with a filtering solution for YouTube, but, dude, it’s like so hard. And like, you know what, it’s just as hard this year as it was last year when they said they were going to filter. So, dude—that must mean it’s like REALLY hard.

Personally—I think that this is tripe. I don’t think that Google has any intention of filtering out other people’s stuff for one reason and one reason only. They have NO BUSINESS if they successfully filter.

And no one calls them on this while they not only rob us blind, but while they enrich geeky little mall rats on our backs. After the to-do over Clear Channel’s artist development program, one has to wonder why groups like the Future of Music Coalition are willing to burn cycles going off half cocked on seriously attenuated and metaphysical theories of “payola” (that still makes me laugh) and will not lift a finger to go after Google when it is STEALING from the creative community.

Pass the ring dings.

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