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The MTP Interview: An Inconvenient Truth: Songwriters Guild President Rick Carnes talks about the effect of piracy on American songwriters

March 10, 2012 5 comments
[Ed: This post originally appeared on MTP on January 30, 2009–how little has changed

American songwriters are one of our greatest sources of culture as well as important contributors to America’s “soft power“–our ability to win hearts and minds around the world by attraction and not by force. As Professor Joseph Nye would say “Lennon trumped Lenin.” (See Center for Strategic & International Studies Smart Powerfavored by the Obama Administration in the “change” direction for U.S. foreign policy.)But Internet analysts, self-appointed futurists as well as self-annointed consumer advocates almost always misunderstand the role of songwriters and the negative effects that rampant piracy has had on them. People who just write songs don’t sell t-shirts, don’t play shows, don’t have all the other income streams available to them that the EFFluviati point to as subsititute revenues for the cruel theft of labor value by companies like Kazaa, Morpheus, Limewire and the Pirate Bay.You hear a lot of talk about “follow on” artists or “remix culture”? Songwriters are the ones who are most often “followed upon” and “remixed out of culture”. And as noted in this interview, there are fewer and fewer original professional songwriters around every year.Rick Carnes is the President of the Songwriters Guild of America, and is a tireless advocate for American songwriters on Captiol Hill. He lives in Nashville, the songwriting capitol of the world.

[Interview for MTP by Chris Castle]

MTP: There is a popular image of a songwriter sitting in front of a piano in a little cubicle at the Brill Building or Music Row and grinding out the hits.What kind of business relationships do songwriters have today?

Carnes: Most songwriters today are independent operators. Music piracy was the death knell for the day of music publishers having staffs of songwriters. The Brill Building is still there but the last time I visited it was to talk to the folks at Saturday Night Live. There wasn’t a songwriter in sight. Business relationships now are with lawyers and managers. They put together the deals and venture capitalists put up the money. The deals are done to get
the next big recording artist signed to a label and then everyone gets a piece of the action in some 360 deal.Used to be you found a great singer then you looked for a great song.

Now you find a great deal maker then look for someone with deep pockets.

MTP: Are there more or fewer songwriters working today than there were 10 years ago?If there’s a change, what forces in the business are causing that change?

Carnes: The days of music publishers who have large staffs of professional songwriters seem to be over. Music publishers used to have both established writers and their ‘farm team’ of new talent. Now they have neither. The people they sign today (if any at all) are either working recording artists or ‘future’ recording artists. The days of the ‘stand alone’ songwriter appear to be over.

There are multiple causes for this situation but most of the damage was wrought by two specific problems. The first being that the internet has turned into a Cyber-Somalia.

Professional songwriters used to live on advances from their music publisher. These advances were to be recouped from record sales only (“mechanicals” is the industry term for these revenues). Music piracy killed record sales so that made it impossible for music publishers to recoup the advances they paid songwriters so they stopped signing writers and let go of the ones they had when their contracts ran out.For example, the music publisher I was writing for in 1998 had twelve great songwriters on staff. By 2008 they had no songwriters on staff. For the math impaired that is a reduction of 100%.

The second major problem was/is a practice by the record labels of putting “controlled composition” clauses in their artists recording contracts. For the non-lawyers reading this,
these clauses are a very complicated system established by the record labels to insure that they don’t have to pay the full statutory rate imposed by the US Copyright office for the songs recorded by the artist that the artist either writes or “controls”. [Editor's note: this includes songs co-written with a producer or other writer who is not the artist or a member of a group artist. It started right about the time that another SGA member, Hoyt Axton, helped to spearhead indexing the mechanical royalty rate to the Consumer Price Index in 1976.]

Once an artist signs a recording contract containing one of these clauses (and since all the major labels have them they have little choice) the [beginning] artist will receive, at most, 75% of the statutory rate for recording any song they write or co-write. It is the co-writing that causes problems for the professional songwriters. The record labels, because they can pay a lesser rate for any song written or co-written by the recording artist, insist that the artists now write or co-write all their songs. This has lead to a tremendous drop in the number of professional songwriters and, in most cases, the quality of the songs. The public is constantly complaining about having to pay US$12 to US$18 dollars for an album with only one or two goods songs on it. You can trace the cause of this problem back to the early eighties when all the record labels began implementing control compositions clauses in their contracts. Since then the norm on an album is one or two professionally written (or co-written) songs and a lot of filler songs that the artist wrotein order to satisfy the record label’s demand for cheap music.

MTP: Tell me about what you do at the Songwriters Guild and the untold riches you are being paid for the job?

Carnes: I am President of the Songwriters Guild of America and if I am supposed to be getting “untold riches” someone forgot to tell me!The mission statement of the SGA is two words “Protect Songwriters”. That lack of specificity has forced me to show up in all kinds of places I never thought I would be! I was the lead witness in the latest Copyright Rate Board hearing. I have testified on behalf of songwriters in both the Senate and the House of Representatives on many issues concerning song writers rights, and I have spent the last ten years flying all over the country talking to people about the harm that is being done to American music by the widespread theft of songs on the internet by a mob of anonymous looters.

MTP: What is the most common question you get from your membership?

Carnes: How do I get a song cut by Beyonce?

MTP: What are your top three legislative issues for this Congress?

Carnes: The performance right in an Audio Visual download;

Controlled Compositions;

Fighting Music Piracy (as always)

(If I could add a fourth it would be a ‘bail-out’ for all the songwriters who lost their jobsbecause their intellectual property was not protected by the US Government on the Iternet)

MTP: Who are you listening to at the moment, and what new music interests you the most?

Carnes: Luca Mundaca. A fabulous new Brazilian jazz artist who plays great guitar, sings like an angel, and writes amazing melodies. I have no idea what she is singing about since I don’t speak Portuguese. But the songs knock me out anyway. That’s what I call great songwriting.

MTP: Where do you think that songwriters are going to end up in the next 5-10 years?Meaning what role do you think they have in the music business?

Carnes:Songwriters were the number one loser of income in the US economy in 2004 (Music piracy taking its toll). So we are used to tough times. I hope to see a bottom form somewhere in the steep drop in record sales and a rebound sometime in the next ten years. If that doesn’t happen I guess we will all end up sleeping in the subway!

The real role of songwriters in the music business is to add meaning to people’s lives.

That is not a job you want to leave to amateurs. It is a job for professionals.

MTP: Do you find that members of Congress do not have a clear idea about the role of songwriters as a general rule?

Carnes: I think they understand the role of songwriters better than the typical major record label executive. At least the Members I have talked to understand that the Constitution includes provisions for royalties for creators because without them the quality of life suffers. While it is true that the Copyright laws are very difficult to understand in great detail, the general principle that creators have a right to control the copying of their work is understood by all except the most radical of the ‘Free Culture’ advocates. There are a couple of people on the Hill who think that ‘Fair Use’ extends to sharing a copyrighted song with the entire world for free.

MTP: Who do you view as the greatest commercial opponents of songwriters?

Carnes: The Major record labels are our biggest ‘commercial’ opponents. They have wreaked havoc on the songwriting community by forcing controlled composition clauses into their artist recording contracts. After them it would be all those companies out there that want to use our songs to sell something else (like advertising) and not pay us a dime. Anytime you go on a website that is offering free music they have no license to use and selling your visits to that site to advertisers you are looking at one of the ‘greatest commercial opponent of songwriters’. I wish I could offer you a list but it would be too long to type in one sitting. Besides,didn’t Richard Nixon get in trouble for having an Enemies List?

I hear a lot of talk from Google and the big online companies about their “partnerships” with the “music industry”.I find more often than not when you drill down on what that means is deals with major labels.

MTP: Do you ever have any of these companies come to you to ask you what you think or try to make a deal with your members?

Carnes: Yes we have had companies come to us about deals. But that is because our catalog administration program has some hit songs that you have to have in order to compete
in the market. So in terms of whether these services are ‘reaching out’ to smaller labels
and music publishers the SGA is not a good gauge.

MTP: If you had to rank the top five online companies as the “best” meaning most friendly to songwriters, who would they be and why?

Carnes: Songwritersguild.com would be number one *grin* (a shout out here to our webmaster)

After that I am not a fan of any particular online company since I have had to spend the last three years of my life fighting them in rate court to try to get a decent interactive streaming rate. (Which we finally won!) But I am a subscriber to Rhapsody and I check out MySpace a lot since I have so many friends that are artists and in bands. MySpace, at least, has exposed a lot of indie music.

MTP: And the five “worst”?

Carnes: Whoever the top 5 p2p sites are today. And just for the record, I am not a fan of Google because I believe their search algorithm reduces all art to the lowest common denominator. That’s a real culture-killer if I ever saw one.

MTP: Anti-copyright organizations often try to tell musicians and the music industry that they have their eye on the wrong ball, that they can offset the decline in CD sales by selling another T-shirt to fans who it would be easy to find because they were all on email.

Carnes: Songwriters don’t sell T-shirts. We’re too ugly and we dress funny. Songwriter fan clubs meet in phone booths so the email lists are too small to monetize effectively.

But seriously folks, songwriters don’t sell concert tickets, or ancillary merchandise. We make our money on record sales and radio airplay. Or, we USED to make our money on record sales. Illegal downloading ended that. Now we are looking for new jobs.

The most infuriating thing about being lectured to by anti-copyright groups about how songwriters need to get a new ‘business plan’ is who gave them the right to tell us how to make a living? Who are they to say we shouldn’t fight to defend our rights? In truth, I find their suggestions are unbelievably arrogant and self-serving.

MTP: Do you find that there are a lot of self-appointed music industry experts who have never sold a record?I’m thinking of a specific event at which I was sneered at by Eben Moglun at Future of Music Policy Summit II in 2001 for questioning the affect of piracy on independent artists and I was told more or less that I was a primitive thinker because I didn’t see that declines in CD sales would be made up by merch.I’m also thinking of a panel I was on with Corynne McSherry of the EFF at which she wedged the audience by asking the crowd if “Silicon Valley” was going to let “Hollywood” push it around. Thankfully the “Silicon Valley” fans and the “Hollywood” fans hadn’t been tailgaiting or painting themselves funny colors. [Editor’s note: And if “Silicon Valley” wouldn’t listen to “Hollywood,” would “they” listen to musicians in Bollywood, Miami, Seattle, Austin, New Orleans, London, Harlem, in no particular order. Do you have similar experiences?

Carnes: There do seem to be a lot of people trying to make the rules who never played the game.

I have had some interesting back and forth on some panels but I must say that the most interesting panel I have ever witnessed was at the Leadership Music Digital Summit a couple of years back. The subject was how the music biz could ‘compete with free’.

For some reason there was an actual economist on the panel who was totally silent for the entire panel until the very last when he spoke up and said that anyone who thinks there is a business model that competes with free is out of his mind. In any Capitalist society consumers are taught from cradle to grave to always get the best ‘deal’ they can, and NO DEAL beats free. I mention his comment only because it was the first time that I ever saw these ‘self-appointed music industry experts’ ever called on any of their malarkey by a real expert and the discussion was concluded in one sentence.

Castle: If you had to pick the most important issue of 2009 for songwriters, could you and if you could, what would it be?

Carnes: Same as every year for the last 10….Illegal downloading.If I may quote a real economist, “Nothing competes with free”.

Add the question I missed:Is Rock and Roll dead?

Yes, Rock and Roll is dead. The genre’ was played out by the mid-seventies but it has survived in a zombie-like fashion for thirty years past its expiration date.

Part of the charm of Rock music is that practically anyone can play it.It can be written by amateurs and performed by teenagers without those difficult and expensive years of training that other forms of music require. Unfortunately that also makes it the perfect ‘corporate’ music. You can get kids who don’t need money to support families or pay house notes to sign contracts that no thinking adult would sign. This allows a record label to exploit ‘this year’s model’ for all they are worth until they reach the end of their contract and want to renegotiate for decent terms. Then they simply replace them with another teen idol. The simplicity of the music has allowed the major labels to treat recording artists like ‘temp workers’.

Hopefully with the decline and fall of the major label system we might finally get to see where the music really wants to go once it is released from this corporate death-grip.

[Editors note: There's still great music being made every day, some of it is listed in our "New Music Weekend" recommendations posted (pretty much) every Friday and reposted the following Monday on MTP and on Twitter.]

Update: Should there be a rating system for “red flag” knowledge: Are Five Million DMCA notices too many?

December 27, 2011 3 comments

[3/31/13 Update by Editor Charlie:  We now know courtesy of Google's DMCA Transparency Report that Google processes roughly 10,000,000 DMCA notices a month for search alone which Google acknowledges to be 97% accurate.  It also seems likely that the Google lobbyist had some idea or actually knew of this level of infringement in Google search at the time she testified.  And Google sends traffic to pirate sites where it also sells advertising on a CPM basis--profiting from the theft.  When will someone call this out for what it is--a criminal agreement to profit from massive infringement?

12/27/11 Update by Chris Castle:  In written testimony before the House Judiciary Committee on November 16, Google's lobbyist acknowledged that "During 2010, we processed DMCA takedown notices for approximately three million items across all of our products. Already in 2011 we have processed takedown notices for nearly five million items, and we have done so more quickly and efficiently than ever before." 

Interesting, because of a couple things:  First, that's a 166% increase year over year.  Second, in her oral testimony, she left out the 3 million in 2010 part.  Maybe that was just an editorial decision, but if the members had not read her written testimony (highly likely) and didn't focus on that part, they probably would not--and didn't--raise the rather startling growth of DMCA notices "processed".  And finally that word "processed"--how many of you reading that statement thought she meant "taken down"?  If you have had any experience with Google (see www.popuppirates.com) you would know that there is a very, very long way between "processed" and "taken down".

We were also treated to many recitations about how much money the tech companies make off of the Internet and the DMCA.  The implication is that's all magically new money.  How much of it is more income transfer than profit from innovation?

The following piece written by Chris Castle first appeared in MTP in 2006.]

In a recent conversation I had with an attorney who has represented YouTube, I asked him a question that I now feel very safe in asking—does a million notice and takedowns sent to one service in 12-18 months constitute “red flag” knowledge? This isn’t speculation anymore–YouTube must have received at least a million DMCA notices by now.  Even if the site has a repeat infringer policy, should they still get a safe harbor if they seem to attract significant numbers of repeat infringers?

Realize that if a million notices constitutes “red flag” knowledge of infringing activity, the recipient infringer may be denied the protection of the safe harbors in the Digital Millennium Copyright Act.

His reply? Well, you see, it depends on how large the service is.

Ah, I see. So if the “service” does a really good job of creating lots and lots of infringement but only gets caught a small percentage of the time, then that doesn’t mean that they “knew or should have known” that infringing activity was going on. Even if that small percentage was over a million copyright owners who decided to send notices. (Realize that at least 10% of that hypothetical million was the Viacom lawsuit alone, and another 5% was JASRAC alone, etc.)

So if your average “citizen of the 21st century” happens to run across their work on YouTube but doesn’t know what to do to take it down, phrases their notice incorrectly–what then?

Or what if the artist “citizen of the 21st century” can’t afford a lawyer “citizen of the 21st century” to tell them whether the use involved is “fair use” or whether the artist’s unschooled consideration of whether the infringer’s use is subject to a “fair use” affirmative defense was accomplished with sufficient “good faith”, yet another new wrinkle courtesy of The Leland Stanford Junior Google Law School lecturer and U.S. District Judge Jeremy Fogel (who essentially codified what we understand to be the DMCA practice of Stanford benefactor Google in his ruling in the Lenz case)?

Nothing will happen. Nothing. And these artists who throw up their hands out of economic desperation will also make their contribution to the $1.65 billion of free rider profits that the YouTubes put in their pocket from the work product of others that they can’t hold a candle to.

So how does the average “citizen of the 21st century” decide how to spend their time monitoring the Internet for infringements of their works? Google and its amen corner continually tell us that was the deal that copyright owners made in the DMCA—catch us if you can. Democracy guided by the hand of the Almighty.  Not true, of course, and bad advice, most certainly, but that’s what a Google might say.

Wouldn’t it be more efficient for an artist “citizen of the 21st century“–who wishes to enjoy all the extraordinary benefits the first decade of the 21st century is bringing to them–if there were some kind of ranking system for the really bad guys? A ranking system for copyright infringers based on DMCA notices sent? (Or at least “potential” copyright infringers, if you want to continue the charade of the wilfully blind.)

What if there were a website that maintained an informal ranking of which online service received the most notices, and also gave time to response, and time to takedown? Kind of like an Alexa.com meets Good Housekeeping for infringers? Which “digital native” amongst us could possibly object to consumer information being made available to “citizens of the 21st century” ? Maybe the site could also post a picture of the DMCA agents who failed to respond, kind of like johns.com? (Maybe conveniently available on Google Street View.)

There’s actually nothing that would stop artists from developing such a service–aside from money, of course, and time taken away from diligently monitoring the Internet for other “citizens of the 21st century” who are infringing their work. You would think that the Copyright Office would want to maintain it, too, so they could see how effectively the DMCA notice and takedown system was working. Or maybe even the Congress might be interested?

In Los Angeles, the city health department gives restaurants a rating card that is posted on the front door of the establishment. If you don’t have an “A” on that card, expect to do some explaining to your customers.

It’s amazing how much of an effect a rating can have on the failure to comply with the law.

PS: Choppy, Directionless and Strident

October 25, 2009 Comments off

There are some books that I have seen frequently in book stores over the years that I know I will never read. Dianetics is one such book. I have no particular reason to read or not to read these books, but if I’m honest about it, I know that I’m not ever going to read them.

These are all books that One Ought To Read, if one wishes to be a Very Well-Rounded Person. I’m sure you could come up with your own list of books in this category. Another category of such books are the ones that are Just Too Absurd. Life of Brian would be one of these. The Companion to Oliver Stone’s “JFK” would be another or Zen and the Art of Black Helicopter Maintenance. A new addition I would make to my version of that list would be the latest by the “most prolific scholar in the history of copyright” (who is, in case you don’t know, Google VIP Patry. I think we can call him The Most Prolific Scholar for short, or perhaps “PS”).

From what I can gather, the upshot of PS’s book is that it is a hierarchical and status driven look at works of authorship and the laws that once protected them. According to PS, creators do not innovate, only innovators innovate, which is kind of a silly con if you remember things like jazz. But then jazz probably doesn’t count, because as we know art doesn’t scale.

Maybe multitrack recording might count? That at least involves a machine that has a carbon footprint, so Googlers should feel right at home. But wait–the innovation of multitrack recording (on which the entire modern recording industry is based, including Protools) is an invention generally attributed to…Les Paul. (For all you Silly Cons out there, and especially you Very Silly Cons, Les Paul was a…guitar player.) As usual with occupants of the Googleplex there are no dogs or actors allowed into the hierarchy so we will just define guitar player innovators out of the definition.

Now some may criticize me for only focusing on “bad” reviews–or as they may say in the Googleplex, “ungood”–and that may be, but PS has Google and all we have are each other.

Others have noticed the new one by PS, too. Tom Sydnor has a second installment of his “Worthless Book” review, an excellent critique of the PS book that is a delicious read, a fantastically 3 star feast for the truth.

And I’ve also read a PS review of interest by Jonathan Handel in the Los Angeles Times who observes: “Patry’s stature makes ‘Moral Panics and the Copyright Wars’ an ‘important’ book. Unfortunately, what the book delivers is a choppy and directionless narrative, sometimes illuminating but too often scattershot, unoriginal and strident.”

I don’t know as I agree that he’s “strident,” I probably would have said “oozing”. That’s what happens when the bile is so full and pungent it can’t quite get out quickly enough, it just kind of oozes into the sunlight like a vomitous marsh. But “directionless” sounds about right. Then again, not only have I not read the book, I know that I’m not going to read the book.

Just like I know I’m not going to read Dianetics.

Dan Clancy withdraws?

October 9, 2009 Comments off

Rumor has it that Dan Clancy has withdrawn from speaking at the Frankfurt Book Fair next week.

See “More Questions Than Answers on Google Books“: “Google’s Dan Clancy had patiently answered question after question regarding Google’s’ Book Search settlement with publishers and authors until late in the afternoon Friday, when he was finally left speechless [when a reporter] asked Clancy what kind of message was sent when Google decided to ‘copy first and answer questions later.'”

A fascinating article.

Sergey Brin, Monopsonist Book Enthusiast

October 8, 2009 Comments off

If you’ve been following the Google Books settlement debacle, you know that there are some serious questions about what are probably inaccurately referred to as orphan works, but what are probably more accurately called “Google Orphans.” Google Orphans are a special class of works for which Google cannot locate the author (for whom Google has no incentive to look very hard).

In a WSJ interview with the very well grounded Sergey Brin (and our favorite PhD, Eric Schmidt, although it appears that Schmidt was just along for the ride), it becomes apparent that he is the very model of the monopsonist book enthusiast.

He emotes with passion for the subject. “’The companies that are making these objections have done nothing for orphan works,’ Mr. Brin added. ‘Nobody was interested in these works at all [aside from 100s of thousands of work hours on the subject in the last 5 years and the orphan works regimes devleoped in Canada and the European Union], and there is no existing market for them [aside from Canada]. So I think these objections that Google will be the only one [presumably meaning that Google will have a monopoly on Google Orphans] are pretty ludicrous given that no one else has done this.”

So I guess there are a couple not so important people he disagrees with, since a company would have to be “pretty ludicrous” to disagree with Google. So presumably he’d disagree with this statement: “Other market competitors who might compete with Google will be disadvantaged by observing the [French intellectual property law] and copyright laws since failing to enjoy the same legal safe harbor from orphan work liability. Such a legal safe harbor would only be available to competitors through legislation or litigation, thus, giving Google a head start that can only lessen competition. In contrast, France doesn’t recognize such a safe harbor. The proposed Settlement, thus, not only contradicts the French [intellectual property law] but will also likely hamper U.S. Congressional efforts to balance these competing interests. In so doing, the orphans, whether from French or U.S. soil, will not receive all of the protections they might otherwise have enjoyed.”

Oh, no wait. That’s not an objection from a company, that’s from the French Republic.

A country.

Maybe countries don’t count?

How about this? “Other market competitors who might compete with Google will not enjoy the same legal safe harbor from orphan work liability. Such legal safe harbor would only be available to competitors through legislation or litigation, thus, giving Google a head start that can only lessen competition. In contrast, Germany only recognizes such a limited safe harbor for certain non-commercial uses of digitized works by virtue of an enactment by the German legislature rather than a private agreement. Similarly, the U.S. Congress has been considering passage of orphan works legislation that would, through a careful balancing of public interests, provide universal access to orphan works while still maintaining some measure of accountability by users. The Settlement, thus, not only contradicts the laws of Germany but will also likely hamper Congressional efforts to balance these competing interests. In so doing, the orphans, whether from German or U.S. soil, will not receive all of the protections they might otherwise have enjoyed.”

Oopsie. Another pesky country, the Federal Republic of Germany. Silly me, I should be looking for ludicrous companies not ludicrous countries.

Well maybe this one: “The structure of the Proposed Settlement itself, therefore, pits the interests of one part of the class (known rightsholders) against the interests of another part of the class (orphan works rightsholders). Google’s commercial use of orphan works will generate revenues, which will be deposited with the Registry. Any unclaimed revenues, however, will inure to the benefit of the Registry and its registered rightsholders. Thus, the Registry and its registered rightsholders will benefit at the expense of every rightsholder who fails to come forward to claim profits from Google’s commercial use of his or her work. And, as noted above, the broad scope of the Proposed Settlement’s licensing provisions exacerbate this conflict. The greater the economic exploitation of the works of unknown rightsholders by Google and the Registry, the stronger the incentive for known rightsholders to retain the unclaimed revenues for themselves.”

Dang, that’s another country. The ludicrous United States.

Of America.

I just can’t seem to get it right, there are so many objections. Or maybe…do you think he wasn’t told that countries were being ludicrous? Or is he prepared to tell France, Germany and the United States that they are stupid?

But the Monopsonist Book Enthusiast also lays down the law that there’s going to be no funny business with the content owners thinking they can set their own prices. “Content owners will not set the price. ‘Everyone is familiar with this problem in selling your house. We’re not going to use the price you suggest,’ he said.” [Of course, it's a little difficult to steal someone's house if they don't agree to sell it to you for the price you want. But that's another story.]

“In the view of the Department [of Justice]…as a result of the Proposed Settlement, other digital distributors may be effectively precluded from competing with Google in the sale of digital library products and other derivative products to come. These problems are evident on the face of the Proposed Settlement and the concerns they raise have not to this point been convincingly addressed by the parties.”

Oh, well. I’m sure the Monopsonist Book Enthusiast didn’t really mean to imply that Google would dictate the price to content owners using the monopsony power of the books settlement.

How about this one: Taking a question “[o]n Google’s culture (prompted by this week’s New Yorker article, which mentions Mr. Brin’s discomfort with some employees’ feeling of entitlement at a meeting in Phoenix):

Brin: I haven’t finished reading it yet. But I certainly do recall the Phoenix layoffs.

Schmidt: We did not lay them off, we moved the Phoenix people to other sites.

Brin: The vast majority of people did stay with us. [So...what does that mean? Were they laid off or not? Or did they just get googled when the clocks struck 13?] There was a period of time where the culture was misinterpreted. I remember when we would start working in a garage, and Larry would roll in with sandwiches, and that evolved into an expectation of all gourmet food all the time. I think it’s important to reset the culture from time to time. Several years ago, we did that. People had extrapolated from our past practices. We decided to, for example, significantly cut down all the snacks.”

Just cut down the snacks, you’re not in the garage anymore.

Wow. Now that guy is CEO material. There is definitely some bailout money in his future.

Well, it’s just another day through the looking glass. That is not the droid you are looking for.

More YouTube disclosures

October 7, 2009 Comments off

Another excellent piece on CNET regarding the $1.79 billion YouTube/Google history that should be of interest to all the members in the class action as well as those who have yet to see a dime from Google for the past, present or future use of their work. (And for you Veoh fans out there, this case is in the 2nd Circuit, not the Temporary Autonomous Zone.)

In “Did Viacom Find the Smoking Gun In YouTube Case?” we finally see some evidence of what was widely rumored to be happening at YouTube: YouTube—and later Google—employees “seeding” the service with illegal works for the purpose of attracting users to YouTube and enriching YouTubers such as Li’l Chad when they conned Dr. Smarty Pants and the Google board into throwing down big bucks for the company.

This “seeding” idea is nothing new—how else can you start an illegal content distribution hub without having some illegal content to attract yet more?

As expected—emails have surfaced. What’s surprising is not that there were emails, what’s surprising is that somehow they didn’t get deleted in anticipation of litigation. So what’s really surprising is that there’s any emails left. (For those of you who are reading along, that’s often called intentional spoliation of evidence—see RealDVD.) As CNET notes, “[i]f [YouTube or Google] managers possessed “actual knowledge” of copyright infringement on the site and did not quickly remove it, the company may not be entitled to protection under the Digital Millennium Copyright Act’s safe-harbor provision, according to legal experts.”

I would say that is actually the best outcome these “managers” could hope for—the denial of the safe harbor. If it turns out that the “managers” not only had “actual knowledge” but that the reason they had “actual knowledge” is that they actually knew that they were actually placing the infringing content on the service….We are in a whole new area. Yes, the Children of the Lessig God are entering the area of the Viking Pirate Kings. Mind you, that is not quite what the article says, but it would not surprise me in the least. If it goes there—which it probably won’t—but if it did, all kinds of information might surface once a federal prosecuter starts sweating the “managers.” And if the “managers” were themselves lawyers…it’s more interesting still.

CNET notes correctly that “[a]ny questions about what YouTube employees may or may not have uploaded to YouTube must also be asked of Viacom’s employees.” That’s true to be fair, although how much relevance it has remains to be seen.

It is highly unlikely, however, that all of the content at issue was uploaded by Viacom and each and every member of the class (as well as the independent artists, songwriters and film makers who can’t afford to sue or don’t know that they might be able to join the class), however much Google wants to believe it plausible enough to confuse a jury (a/k/a “true”). It still remains to be determined what did Google know and when did they know it? It is simply not credible to believe that Google thought that the reason that millions of people were watching videos on YouTube was because the technology was so dang groovy. An equally interesting question is where was the YouTube board? (Probably counting their money.)

As CNET notes, “YouTube’s counterargument has always been, how is the company supposed to know the difference between pirated and legally uploaded clips when companies like Viacom are among those uploading material?”

Easy.

Ask.

But no, no we can’t do that, now can we? And by the way—I thought that YouTube didn’t know anything. This knowledge thingy, its so tricky to keep the story straight, isn’t it? (Who ate the homework again? Oh, that’s right, the dog ate the homework.)

Now let’s see. There’s usually a chunk of a purchase price put in escrow to deal with indemnity claims. Yes, according to USA Today that’s right, “Google Inc. has set aside more than $200 million in its just-completed takeover of YouTube Inc. as a financial cushion to cover losses or possible legal bills for the frequent copyright violations on YouTube’s video-sharing site…. The reserve could signal that Google is trying to insulate itself from a possible onslaught of lawsuits aimed at the large number of pirated videos posted on YouTube, which will retain its current management and name. Since its website first began to catch on about a year ago, YouTube has relied on a mix of homemade and pirated videos to expand its audience…. Google executives also have repeatedly vowed to protect the rights of copyright holders.” (That’s not a joke–I wonder if that last line would get reported so uncritically after the Google Books disaster?)

Wow. $200 million. That much, eh?

That will probably cover the legal bills.

Oh, no, wait—they said that was for everything. Including the uncompensated rights holders waiting on the sidelines to see how the litigation turns out before they bring their cases—and who don’t think too much of Google’s “vow”? I guess so.

Ah, well. Nothing like some beach volleyball followed by a toasty bidet to take off the chill of prosecution, eh? Yes, life is good in the two Gulfstream family.

For now.

PS The latest rumor I’ve heard as of about 4 weeks ago about the YouTube reserve is that it has been increased and now almost exceeds the purchase price–which is probably still quite low. I mean–if you’re someone who thinks that a billion dollars is a lot of money. Even at the time of the sale, the USA Today story reported that “[t]he legal threats raised by the YouTube deal led to widespread Internet speculation that Google had set aside $500 million of the purchase price to pay copyright settlements.” Seems like chump change–no pun intended.

Google Books: How bad is the metadata? Let me count the ways….

September 29, 2009 Comments off

Professor Nunberg provides some excellent slides illustrating his complaints about the abysmal quality of Google Book search and its metadata. Recall that Jean-Noël Jeanneney, former president of the Bibliothèque Nationale of France, warned of the same kind of problems and gave similar examples of botched scans of French cultural works in his 2007 work “Google and the Myth of Universal Knowledge“.

Jean-Noël Jeanneney will be partcularly galled (no pun intended) by yet another variety of metadata screwup in Google Books–authorship attributed to the writer of a forward–Madame Bovary by HENRY JAMES for example.

Now remember–this is The Google we are talking about. The Google who only hires the best and the brightest. The Google who only hires from the best schools. The Google who would have you believe that they are the second coming. The Google who seems to employ people who don’t know who wrote Madame Bovary and who don’t know that Tom Wolfe wasn’t born in 1888.

The librarians who trusted The Google to scan their works thought they would get something back that was going to further their mission. I feel very, very certain that the metadata that was delivered by the best libraries in the world along with the books to be scanned was correct. What these librarians got back was gibberish.

Given the right machine, you could train a reasonably intelligent pet to scan books. In fact, I have dogs that could do a bang-up job with a little training. If–all they had to do was hit the “scan” button.

I would not expect a dog to know who wrote Madame Bovary.

What is valuable about a registry of intellectual property is not the digitized assets. Any fool with some money and time can digitize books. What is valuable is the name, rank and serial number that are connected to the books. Not to mention how they are organized, which has all kinds of cultural overtones.

But if you can’t even know who the authors are with any reliability or if you can’t know when a book was published (that is–who to pay and how much), then you’ll never be able to associate the payee information (such as W-9) with the titles.

That’s if you actually ever intended to pay anyone anything.

I wonder how these librarians feel now. Looks like Marian got googled.

Google Books, Unclaimed Property and Google as State

September 16, 2009 Comments off

Like the tar baby, the Google Books settlement agreement often raises more questions than it answers. Take something simple–unclaimed funds.

Some of you may recall the shock and awe of Elliot Spitzer’s attack on the music industry–that is the attack on the music industry relating to royalties that were earned but unpaid due to a loss of contact information–a few years ago. This was the episode when the former governor imposed extraordinary transaction costs on record companies in an effort to transfer unpaid royalties from the control of the record company where they were earned to the State of New York (where the funds are presumably applied to the then-current deficit until someone comes along to claim them).

Almost every state has an unclaimed property law–this is where bank accounts end up that are “abandoned”, utility deposits that are unclaimed etc. The state is supposed to keep this unclaimed property on its books forever.

Google, of course, never met a law it couldn’t twist to its advantage. So it is with unclaimed earnings:

Try Section 6.3–unclaimed funds from Google Books will be applied to costs and then distributed to the club. I mean the Books Registry.

Actually–this section is probably not strictly speaking legal. Each state of the United States and probably the governments of foreign countries could claim the “unclaimed funds” for its citizens. But legality is not something that troubles the “make me” culture of the corporate King Kong.

And how Google handles unclaimed funds is just a little footnote to the main event.

The creepy Leviathan of Mountain View just keeps getting creepier.

Strange–I don’t see any governors lining up to take shots at the very political Google.

"An End Run Around Copyright As We Know It": U.S. Register of Copyright Marybeth Peters on Google Books

September 15, 2009 Comments off

Marybeth Peters gave her usual cogent analysis at a congressional hearing last week, this time on the Google Books case. It is well worth a close reading, both for this case and for its ameliorative powers in general (since we seem to have a pandemic of federal judges being infected with the de facto compulsory license flu by Google and its fellow travelers, starting with Lenz and Veoh).

A very quotable synopsis of the “de facto compulsory license” problem:

[Register Peters explains] why allowing Google to continue to scan millions of books into the future, on a rolling schedule with no deadline, is tantamount to creating a private compulsory license through the judiciary. This is not to say that a compulsory license or collective license for book digitization projects may or may not be an interesting idea. Rather, our point is that such decisions are the domain of Congress and must be weighed openly and deliberately, and with a clear sense of both the beneficiaries and the public objective.”

She goes on to call Congress’ attention to “…certain provisions of the proposed settlement dramatically compromise the legal rights of authors, publishers and other persons who own out-of-print books. Under copyright law, out-of-print works enjoy the same legal protection as in-print works. To allow a commercial entity to sell such works without consent is an end-run around copyright law as we know it.”

Hopefully, the Congress and Judge Chin will give heavy consideration to the copyright authority for the United States.

WSJ: Dan Clancy Explains it All to You

September 8, 2009 Comments off

“Dan Clancy, creator of the Google program, said that a lot of the European concerns had been already addressed in the U.S. settlement and the emphasis on rights-holder control should put minds at ease.”

Ah, so THAT explains why they’re going nuts. Just too stupid to understand that the GOOG already handled it.

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