Signs and portends of The Internet Bubble 2.0: Is digital chicken feed the stuff of public companies?
Once when discussing music-related Internet companies in 1999, I was told in a very condescending manner by a Silicon Valley corporate partner that such these “were not public companies.”
You know what’s the stuff of public companies? Digital chicken feed.
MTP’s Chris Castle interviews Jason Stall, producer of the documentary Blood Into Wine discusses making of the documentary about Maynard James Keenan’s Arizona vinyard as well as the effects of piracy on film financing and production. (Maynard is in Tool, A Perfect Circle and Puscifer.)
The Sal Giunta Story directed by Sebastian Junger and Tim Hetherington.
Staff Sergeant Giunta told 60 Minutes that he was just an average soldier, “So imagine what the great ones are like.”
I don’t think we need to imagine anything.
Tim Hetherington talks about the day Staff Sergeant Giunta was recommended to receive the CMOH.
Tim Heatherington co-directed with Sebastian Junger the documentary film Restrepo about action seen in the Korengal Valley, NE Afghanistan by Second Platoon, Battle Company, 2nd Battalion (Airborne), 503rd Infantry Regiment, 173rd Airborne Brigade Combat Team of the U.S. Army. The picture is outstanding.
Hetherington was killed on 20 April 2011 near Misrata, Libya while embedded with forces opposed to the dictator and war criminal Gaddafi. Heatherington died alongside photographer Chris Hondros, also killed that day. Photographer Guy Martin was wounded in the same attack.
“For this offering of their lives, made in common by them all, they each of them, individually received that renown which never grows old, and for a sepulchre, not so much that in which their bones have been deposited, but that noblest of shrines wherein their glory is laid up to be eternally remembered upon every occasion on which deed or story shall call for its commemoration.
For heroes have the whole earth for their tomb.”
Thucydides, “The Funeral Oration of Pericles,” History of the Peloponnesian War
Google’s Eric Schmidt was recently quoted in The Guardian saying that Google would continue serving search results to the Pirate Bay because they made too much money to do otherwise…no wait, what he said was “[Seizing DNS addresses] seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.”
This is not the first time we have heard the domino theory from Google and its Amen Chorus–the narrative tells us that if the U.S. passes the Protect IP Act (S. 968) that was voted out by the Senate Judiciary Committee today (or had passed COICA last year), dictators around the world will look to America’s example and do even more repressive things to their people. So therefore, Google must carry the torch of freedom and continue to sell advertising for illegal drugs indiscriminately (i.e., to kids) and must continue to serve search results for the Pirate Bay, Isohunt, Lime Wire, Rapidshare, Hotfile, Megaupload, Megavideo…etc…to preserve human rights. (See coverage on Google’s drug problem in the Financial Times, the Wall Street Journal and Forbes and our piece “Where is Harry Lime When You Need Him?”)
No real explanation is given other than a zeal for defending freedom. That is, everyone’s freedom except the creators. For creators, Google has to infringe creators’ human rights in order to protect creators’ human rights.
But could Google possibly be motivated by…money? Or is it that Google actually believes that Robert Mugabe is telling his henchmen to hold off shooting the protesters until he sees what Leahy does.
Artist Rights Are Human Rights
As we noted in “No Money For Old Pirates: Working People Unite In Support for Sens. Hatch and Leahy S.3804”, the headline for 2010 was the unification of working people and their unions in fighting piracy. The Songwriters Guild of America, the American Association of Independent Music, and the AFL-CIO, AFTRA, DGA, SAG, IATSE and the AFM all have stepped forward and brought their advocacy to bear on legislation that protects workers rights.
This was true of the last rogue sites bill and it is true of the Protect IP Act as well. (See AFL-CIO blog “Bill Targets ‘Rogue Sites’ that Steal Jobs, Steal Wages“.)
This should not come as a surprise—artist rights are widely recognized as human rights. In Artist Rights are Human Rights we said:“These human rights are transcendent and timeless expressions of fundamental entitlements of humanity that safeguards the personal link between authors and their creations as well as their basic material interests. These rights are personal to the authors and artists concerned and are arguably of broader scope than the rights that can be enforced under particular national intellectual property regimes.”
So if Google is so concerned with human rights, then why do they seem unconcerned with the human rights of artists?
The ACLU/EFF Letter
Given the inextricable combination of human rights and artist rights, it’s hard to believe that Google can overlook artists with such applomb. Schmidt’s recent narrative about anti-piracy legislation being the moral equivalent of censorship and oppression was initially floated in a letter from self-described “human rights organizations” addressed to Senators Leahy and Sessions that opposed COICA, the precursor to the Protect IP Act. (The letter is signed by the American Civil Liberties Union, Center for Democracy & Technology, Electronic Frontier Foundation, Freedom House, Human Rights First, Human Rights Watch, Rebecca MacKinnon, Reporters Sans Frontières, World Press Freedom Committee.)
In the few months since the letter surfaced, the complicity of public companies in supporting piracy and illegal drugs has become very apparent. Google, for example, disclosed in a 10Q that it has reserved $500 million for a settlement of some kind with the U.S. Department of Justice over Google’s role in the sale of advertising for illegal drugs–a public company, apparently knowingly, selling advertisements for illegal drugs. One has to wonder what these human rights organizations think about that–paying legal penance without seeking spritual forgiveness–since Google brought up the “evil” thing.
What Would Google Do?
When you look at the list of signers on the “human rights” letter, one name that jumps out is the Center for Democracy and Technology. What do we know about them?
We know that Alan Davidson formerly headed the Center’s “digital copyright project” (which is more likely “no copyright for digital project”). Alan Davidson, formerly of the Center, now is Director of U.S. Public Policy, Americas for Google, Inc. And the Google connection is present with other signers of the letter.
If these bona fide humanitarians were asked again to sign this letter–particularly given the revelations that seem to dribble out of the Googleplex on a weekly basis—I wonder if they would sign the same letter now?
This is not to say that the free speech issues are not important because they are. In his statements to the Congress, noted First Amendment lawyer Floyd Abrams opined that COICA has constitutionally addressed First Amendment issues. Abrams thought the Protect IP Act also could be drafted so that it didn’t violate the Constitution–a concern that is also paramount to the Congress. Mr. Abrams was satisfied–not the least because “[c]opyright violations are not protected by the First Amendment. Entities ‘dedicated to infringing activities’ [i.e., rogue sites] are not engaging in speech that any civilized, let alone freedom-oriented, nation protects.”
So where do these apocalyptic ideas come from?
The Voice of the Prime Mover
Hard to say exactly where these ideas originate, but there is a very interesting talking points memo dated September 28, 2010 from the Center for Democracy and Technology that spells out some of these ideas. Comparing the Center’s memo to the “ACLU Letter”, some interesting language similarities jump out that belie its sanctimony. Compare these excerpts from the Center for Democracy and Technology’s memo (September 28, 2010) and the ACLU letter (dated October 26, 2010):
The Center’s Memo: “If many other countries adopt S. 3804ʼs approach—and there is little doubt that many would—it will worsen the balkanization of the Internet, undermining the right to freedom of expression and association and threatening the potential of the Internet as a powerful tool for promoting human rights.”
ACLU Letter: “If many other countries adopt COICA’s approach—and there is little doubt that they will—it will worsen the balkanization of the Internet, where the information any individual can access will depend entirely on where that individual sits.”
That’s pretty close. How about this one:
The Center: “S. 3804 also would drive many states, including liberal democracies, to adopt similar policies directed at U.S. content, taking it down worldwide. The scope of protection provided by the First Amendment remains the most expansive in the world, and speech protected in the United States remains proscribable in many other democratic countries (for example, hate speech in France). Local access to such speech remains a frustration for governments in those countries, and they would welcome a U.S.-based precedent to justify blocking it.”
ACLU Letter: “COICA could also lead many states, including liberal democracies, to adopt similar policies directed at US content, taking it down worldwide. Content that is fully protected under the First Amendment Remains proscribable in other countries, such as hate speech in France and Germany, and local access to such speech remains a frustration for governments in those countries.”
Proscribable, I think. Here’s another:
The Center: “In countries where rule of law is weak or entirely absent, meanwhile, S. 3804ʼs approach opens the door to serious misuse. As Microsoftʼs recent experiences in Russia have revealed, governments can exploit copyright laws as a pretext for suppression of political speech. Further, once the United States sends the green light, the use of domain locking or ISP domain blocking to silence other kinds of content considered unlawful in a given country—from criticism of the monarchy in Thailand to any speech that “harms the interests of the nation” in China—will surely spread, impacting bloggers, citizen journalists, human rights advocates and ordinary users everywhere.“
ACLU Letter: “COICA’s approach could be misused in countries where the rule of law is weak or entirely absent. As Microsoft’s recent experiences in Russia have revealed, governments can exploit copyright laws as a pretext for suppression of political speech in other parts of the world. Further, once the US sends the green light, the use of domain locking or ISP domain blocking to silence other kinds of content considered unlawful in a given country—from criticism of the monarchy in Thailand to any speech that “harms the interests of the nation” in China—could metastasize, impacting bloggers, citizen journalists, democracy movements, human rights advocates, and ordinary users all over the world.”
That quotation is practically word for word the same as the CDT talking points memo. So I think the argument that the Center (or its benefactors?) are making is that the US can’t protect its artists and innovators from massive online theft, can’t protect the public from Google’s advertising of illegal drugs, and has to permit public companies to sell advertising on pirate websites because the bill might potentially repress some unknown person in some other country at some point maybe.
So here’s the problem: Is Schmidt’s sudden interest in piracy-as-free-speech something he came up with all by himself, or is it a contrivance of a K Street lobby shop? An idea that got little to no traction when it was first floated that Schmidt is now dusting off and re-injecting into the press? And why does either Schmidt or CDT think that anyone will buy it outside of the Google Amen Chorus? Particularly when the bona fide humanitarians who signed the ACLU/CDT letter suddenly find themselves joined at the hip with a company paying a $500 million fine for serving ads for illegal drugs?
Artists Must Bend
What is astonishing to me is that the ACLU—an organization that always has their hand out to the entertainment industry—is yet again siding against us on a matter of existential importance to us.
I feel sorry for the legitimate humanitarian groups that got themselves involved with these people. It should come as no surprise that every time you deal with the consumer electronics industry and their fellows, the answer always is that artists must bend to them. That’s got to change.
Yet Eric Schmidt used much the same argument to tell the world and his stockholders that Tyrell Corporation–I mean…Google—has no intention of following the law. The company has since walked that back–a bit–but which do you think it a clearer statement of Google’s true intentions? Or who their fellow travelers are: Rick Falkvinge, call sign “Hawkman” for example, founder of the Swedish Pirate Party–which has no connection to the Pirate Bay don’t you know, who echos Schmidt–or maybe it’s the other way around.
In an interesting post, a Forbes writer tells the world uncritically that “So important is the principle of free speech to Google, that the search giant is ready to stand up for sites like the Pirate Bay as European governments prepare to launch new laws to block them.”
Unfortunately for Schmidt, the Pirate Bay doesn’t return the favor; Peter Sunde says: “I think Google are a bunch of people trying to be good people but they know they are not – they are a big bunch of liars. Google is too good to be true – they went into China not to help the Chinese people but to make money and gain a big chunk of the search engine market in China. I hate that people [who] have so much influence on the internet don’t actually care about the internet.”
Could Google’s apparently unwelcome interest in “defending the Pirate Bay” possibly be because the Pirate Bay is frequently at the top of Google’s music search results? And makes content available illegally to its Android Market applications that Google can’t manage to negotiate licenses for? And they wonder why the creative community doesn’t trust them.
If you are going to tell the world you want to protect human rights, protect the rights of all the humans.
See Also: Artist Rights are Human Rights
Was the Canadian Bar Association Submission on Copyright Reform Actually Policy Recycling or Merely Plagiarism?
As MTP readers will know, we follow developments in copyright reform in other countries from time to time, but especially in Europe and most particularly in Canada given the proximity to the US border (not to mention that I lived there for a good chunk of time and played for many leading Canadian artists in the studio and on the road). Canada recently held parliamentary elections which produced a majority government for the first time in seven years. This means that the Prime Minister’s Conservative Party controls a majority of the seats in the Canadian Parliament and a minority party (the “NDP”) is the lead opposition party. This means that Stephen Harper continues as prime minister of Canada, but he has a lot more control over the legislative process than he’s had previously.
Unfortunately, even though there has been something of a post-election lull in the copyright reform effort in Canada, sleeping dogs don’t lie. Once again, there’s bad news from Canada, and once again, it involves Michael Geist. This time it concerns a submission that was made earlier this year by the Canadian Bar Association to the Canadian government on the last Canadian copyright modernization act (“Submission on Bill C-32”) that Geist refers to as “a nice job setting out the debate over Bill C-32.” He goes on to say that “I was once a member of the CBA’s Copyright Policy section but was not involved in the drafting of the Bill C-32 document.”
What is strange about that statement is that the CBA submission has many, many unattributed quotations – all from Geist. He shouldn’t be so modest about his contribution. Given the prominence of these unattributed quotations in the Submission, it seems like a real stretch to do anything other than start over with a blank page.
The Telltale Mistake
The first problem with the submission is that it is shot through with what can readily be seen as direct lifts from Geist’s writings and blogs—that are not attributed. As Geist might say, the concepts are “recycled.”
So how did this become apparent? While reading a piece by Geist about Canada’s last shot at copyright reform in 2007 (Bill-C 61), I noticed Geist’s inapt reference to the “Registrar of Copyrights” in the US. This is a common mistake for the uninitiated or for students. The correct title for the head of the U.S. Copyright Office is “Register of Copyrights”—Register, not Registrar. I thought nothing much about it, probably ghosted by a student or something because surely Mr. Geist knows better. Irritating, but it happens.
But then I was skimming the Canadian Bar Association’s submission and ran across this phrase again regarding anticircumvention: “The U.S. Registrar [sic] of Copyrights has included a specific exception that addresses this situation since 2000.” (Submission at p.13)
That rang a bell.
How likely is it that these two exact phrases occur randomly—each with the exact same mistake? A quick search for the phrase showed that it is not random at all—the exact phrase and uncorrected mistake appeared in several posts by Michael Geist. What was it doing in the CBA submission—without quotation marks or attribution? Could this statement be plagiarized? How did these statements make it into the CBA submission?
A closer look at the CBA submission revealed over a dozen different instances where the CBA submission restated previously published writings of Geist without attribution. At least a dozen or so that I saw. That’s an average of almost one every 2 pages.
Here are a couple examples. The first quotation is from the CBA submission with the language from Geist in italics, the second is the source from Geist with a link to Geist’s source materials.
The CBA Submission: “Digital Rights Management (DRM) can be used to limit or eliminate the use of technologies to read text aloud, thereby rendering it inaccessible for those with print disabilities. Proposed s. 41.16(1) provides an exception for those with a perceptual disability who circumvent for the sole purpose of making the copyrighted material perceptible. It thus suffers from the same shortcoming as the privacy exception, as does the similar exception in subsection (2) applying to a person who provides circumvention technical assistance to those with perceptual disabilities. The whole point of circumventing is to provide access to the content for those with perceptual disabilities. The content will obviously be in the clear since that is what is needed to provide the necessary access.” (at p. 11)
Geist: “DRM can be used to limit or eliminate the use of technologies to read text aloud, thereby rendering it inaccessible for a segment of the population.”
“However, the provision suffers from the same shortcoming as the privacy exception. […] the whole point of circumventing is to provide access to the content for those with perceptual disabilities. The content will obviously be in the clear since that is what is needed to provide the necessary access.”
The CBA Submission: “Bill C-32 leaves the issue of obstacles created by DRM to the preservation of digital materials virtually untouched, potentially impeding archives from preserving Canadian history in digital form. The Bill includes a limitation on archives’ liability for circumvention and lists archival interests as a potential factor for new exceptions, yet nothing ensures that digital archiving is not inhibited by the anti-circumvention provisions.” (at p.12)
And Geist: “Earlier this week, the U.S. Library of Congress issued a report on digital archiving in which it expressed concern about the obstacles created by DRM to the preservation of digital materials. This concern – which the Canadian government addressed in a narrow context for the Library and Archives Canada legal deposit program in 2006 – remains a major issues for archives across the country. Incredibly, Bill C-61 leaves the issue virtually untouched, potentially shutting out archives from preserving Canadian history in digital form. The bill includes a limitation on liability for archives for circumvention (Section 41.19) provides that archives that circumvent without awareness of a legal violation do not face financial damages) and lists archival interests as a potential factor for new exceptions, yet there is nothing to ensure that digital archiving is not locked out due to anti-circumvention legislation.”
This chart gives a dozen or so examples with page numbers and links—there is no substitute for the original, of course, and you should definitely read each post as originally published. There may well be more that I did not catch.
Was the CBA Submission Drafting Process Unreliable?
Not only does the submission include these many unattributed references to Geist, it also turns out that the CBA submission itself was the subject of considerable controversy among Canadian intellectual property lawyers. While calling itself a submission by the Canadian Bar Association which would imply it was the work product of the larger professional group, it turns out that the creation of the report was apparently the work product of an ad hoc committee assembled on criteria than have yet to be disclosed. The committee work product has been criticized by a group of Canadian lawyers who were afforded only a limited opportunity at best to comment on the substance of the submission.
Over 50 noted Canadian lawyers of various points of view challenged this ad hoc proceeding in a letter to the CBA IP Section executive that was widely circulated among interested Canadian lawyers:
“[G]iven that the CBA’s mandate is to reflect the views of lawyers across Canada, any CBA submission should reflect the views of the whole Canadian intellectual property bar, and account for all stakeholders…[W]e understand that the working group [who wrote the CBA submission] was established only after a prior copyright policy committee came to an impasse and was disbanded in April 2010. [T]he decision to replace the old committee with an ad hoc working group without providing the intellectual property bar or section members with meaningful notice or an opportunity to participate is alarming.”
“A False Impression of Consensus”
No one seems to know who was on the CBA’s ad hoc working group. According to the complaint letter:
“Despite the complexity of Bill C-32 and the lack of any visible prior notice, [the ad hoc committee] allow[ed] only nine working days for interested parties to deliver commentary on some of the most complicated provisions within Bill C-32, [the submission] gives no background as to the working group’s preliminary conclusions on these provisions, and provides no detail as to how such submissions will be received, considered, and incorporated into any final submissions. Given these inadequacies, we are concerned that the few substantive submissions provided to the working party by the…[comments] deadline will not further the intelligent appraisal of Bill C-32 by the CBA, and will not be reflective of the views of the broader intellectual property bar.”
This distinguished group of lawyers went on to make clearly stated requests of the Canadian Bar Association that the CBA disclose the membership of the ad hoc committee, provide full transparency into the submission and comment process, and give assurances that comments would be seriously considered so that a balanced view of the organization as a whole could be given to the Canadian government.
These requests were largely ignored, which necessitated a second letter by the lawyer group that was written to the head of the CBA calling upon him to take steps to avoid a “false impression of consensus” being foisted on the Canadian public, the Canadian Government, and eventually the IP community.
Was Geist Involved in the Submission?
It does seem a little strange that Geist was quoted extensively without attribution, yet he says he did not participate in the drafting of the CBA submission. More disturbingly, the document has been quoted by Geist in his blog to support positions that HE AUTHORED – without acknowledging his authorship of the passage he cites. For example, Mr. Geist tells us that “The Canadian Bar Association, which represents 37,000 lawyers, law professors, and students from across the country, has released an important submission on Bill C-32.” It sounds more to me like an example of what Mr. Geist describes as policy “recycling”.
In any event, a document rife with policy laundering and plagiarism is not worthy of the Canadian Bar Association. I would suggest that the proper response of the Bar Association was suggested by Geist himself in his response to the Conference Board of Canada’s
Digital Economy report: “Admitting an error is never easy, but I would submit that the Conference Board of Canada has compounded its mistake by standing by its report. In doing so, it has done little more than further undermine its credibility.”
It would appear that Mr. Geist has distanced himself from the process of drafting the submission, but not the submission itself. Yet it is the drafting by the ad hoc committee that requires apology.
Austra (Toronto) “Beat and the Pulse” @austratalks
Rebecca Loebe (Atlanta) “Land and Sea” @rebeccaloebe
Stay the Night (Fullerton) “Falling in Place” @ikkinsnommis
The Antlers (New York) “Bear” @theantlers
Or the Whale (SF) “Datura” @orthewhale
This is an excerpt from the story of Ryan Haight, as told by his mom:
“I found Ryan lifeless in his bed. I tried to resuscitate him, but could not bring him back. Ryan had died. I was in shock. Just the night before, we had dinner together after he came home from work at a near-by retail store. He used my Jacuzzi tub because he said his back bothered him from lifting things at work. At midnight I had kissed him goodnight and he said “I love you, Mom.” Those were the last words I would hear from him. Ryan died from an overdose of Vicodin, a prescription drug. I thought, How? How did he get these drugs? After one of his friends told us he got them off the Internet, we gave our computer to the DEA to investigate. Through their investigation, they found how Ryan had ordered the drugs from a medical doctor he never saw, and an Internet pharmacy delivered them to our home. We also learned of web sites on the Internet that have chat rooms that glorify the use of drugs and where sellers go to encourage our children to try them. Since Ryan’s death we have found there are hundreds of Internet pharmacies selling prescription drugs….Ryan is deeply missed by many. My grief continues and extends beyond the immediate family. Ryan’s grandparents, aunts, uncles, cousins and friends feel Ryan’s death very deeply. Ryan will never see Jeremy play his clarinet, or take him out for ice cream. Ryan will never be here to talk for long hours with his sister and best friend, Natalie. I will not see him graduate from college, attend his wedding, and be grandmother to his children. But we continue to water our white roses, and drink our Sprite with no ice in his memory. Ryan will be forever missed and will remain in our hearts forever.”
Just a kid trying to find his way.
Now you Googlers in the two Gulfstream families think about that when you buy your Rolexes and Jimmy Chus and have your multimillion dollar weddings with your blood money from selling ads for these criminals who prey on children.
You know who else is thinking about it? Senator Diane Feinstein who sponsored the Ryan Haight Bill with former Senator Norm Coleman, known as the Internet Pharmacy Consumer Protection Act.
And I’m thinking about it. So should you.
As readers of MTP will recall, it has become increasingly clear that the only entities big enough to stop Google are countries. And even those better be big countries.
So now the Guardian reports that Google’s erudite boss of bosses, the well-spoken and brilliant Dr. Eric Schmidt (or as he’s known around here “Old Dr. Creepy Pants”), lets the Congress know that they are in for a fight from Google on the Protect IP Act:
“Google’s executive chairman, Eric Schmidt, warned on Wednesday that government plans to block access to illicit filesharing websites could set a “disastrous precedent” for freedom of speech.
Speaking to journalists after his keynote speech at Google’s Big Tent conference in London, Schmidt said the online search giant would challenge attempts to restrict access to the Pirate Bay and other so-called “cyberlocker” sites that encourage illegal downloading – part of government plans to fight online piracy through controversial measures included the Digital Economy Act.
‘If there is a law that requires DNSs [domain name systems, the protocol that allows users to connect to websites], to do X and it’s passed by both houses of congress and signed by the president of the United States and we disagree with it then we would still fight it,’ he added. ‘If it’s a request the answer is we wouldn’t do it, if it’s a discussion we wouldn’t do it.’”
How about if it’s neither a request nor a discussion? What if it’s the law? I guess in context Schmidt thinks of the law as applied to Google as a “request”.
How about this–I’ll believe that Google cares about speech when Google stops selling advertising for illegal products and driving traffic to the advertising they sell on rogue sites.
A Forbes.com article crystallizes the issue: “A disturbingly candid admission by a top Google lawyer in Stephen Levy’s book In The Plex – that “Google’s leadership does not care terribly much about precedent or law” – spotlights exactly why Google is serially under investigation by Federal and state law enforcement.”
So I now have a better understanding of a Tweet from the leader of Google pals Public Knowledge after Google’s general counsel had his lunch eaten before the House IP subcommittee, particularly by Rep. Debbie Wasserman-Schultz:
“Someone might remind [Democratic National Committee] Chair-to-be Debbie Wasserman-Schultz that tech companies contribute to Democrats too”
The New York Times gave a great example of Google’s control over messaging in certain press organs in its coverage about the failed Google Music deals (“Google’s Digital Music Service Falls Short of Ambition“).
Here’s a few tips for writing the news about these things–if anyone is interested in the actual news.
1. The Licensee (Google) has to Demonstrate Value: Google failed to do this. Here’s a hot tip–if creators thought they would make a lot of money and have a good distribution channel for music, they’d be all in like they are on iTunes. They’re not. Tell you anything?
2. The Licensee (Google) Should Not Dare the Licensor to Sue Them When They Launch Their Service Anyway (i.e., without licenses): Which they did.
3. The Licensee (Google) Should Not Gloat About Trial Court Decisions They Like When the Case is On Appeal: Gloating during negotiations is not designed to get you to “yes.” This is not a good negotiation tactic. It’s also not smart. Just ask the Grokster 9th Circuit team. Problem Child No. 1 needs to learn to keep it buttoned.
4. The Licensee (Google) Should Build Trust with the Licensor: Ha. See you in a decade.
5. “High Prices for Licenses” is not the Same As Advances from People Who Will Stiff You: The NYT offers the theory that one reason the Google negotiation team failed to bring home the bacon is that “the labels” wanted “high prices for licenses” because they are “trolls”. This is where the NYT went into opinion land with no warning.
If you say “high prices for licenses” to most people, they will assume that there is a charge for the license itself. The reality is that anyone who earns money from royalties would want those royalties pre-paid if they thought there was a good chance that the royalties would either not be paid at all or that the accountings would be poor.
Meaning–if I charge you $5 for access to my lemonade stand, you’ll never get that $5 back. Then I charge you for the lemonade. If I charge you a $5 advance payment for lemonade, you will not have to pay for the first $5 worth of lemonade you drink because the price of the lemonade was paid in advance.
Getting advances is a very common practice when dealing in places–let’s call them Chinazuala–where you think that you will not only not get a straight count, you probably won’t get a count at all. So you charge a big advance that’s based on what you think you will make during the term of the Chinazuala license. So if I think I will make $1 million for a 5 year license in Chinazuela, I will ask for $1 million up front. And the Chinazualans will wring their hands and say how unfair I am not to trust them just because their national motto is “No Sea Malvado”.
Do I care?
6. Doing Something Poorly For A Long Time Does Not Mean You Win: Much was made about the Google Music negotiation team and how they were going to roll over the music industry. Well, that didn’t seem to work out so great. It may come as a surprise to the instant gratification crowd that just because you take a few months to negotiate a deal and fail doesn’t mean that the other side did something wrong. Particularly when you are changing the product features every few weeks and can’t manage to articulate what you are asking for.
A Google Music representative recently said publicly that if he could just get the big players to agree his deal, the “residual” would follow. As a member of the “residual” I’m not so sure I agree with that arrogance. And the underlying premise is that Google Music will use your life’s work anyway and then after the fact try to make you take the deal the majors agreed to–without payment to you of the advances that incented the majors to do a deal with Chinazuala.
In fact, the only thing positive you can say about doing something poorly is what the guy said about the benefits of having a nail in your head. It feels so good when you pull it out.
Let’s do business with our friends who give us a straight count.