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Is One Unauthorized Copy Of Guitar Hero Worth $7 Million?

Michael Masnick — Fri, 10 Jul 2009 03:42:27 PST

JJ points us to a look at some of the sillier outcomes from the $1.92 million verdict against Jammie Thomas. Based on that, for example, sharing a single unauthorized copy of Guitar Hero 4 might put you at risk for nearly $7 million. The argument is that the game comes with 86 musical tracks, and thus a single unauthorized copy could put you at risk of infringing on the copyrights of each and every one of those songs. It's difficult to see how anyone could think this is a reasonable outcome (except for the paid mouthpieces, of course). It's yet another example of just how incredibly out of touch copyright law is these days with the way content is actually used. Copyright law was designed for situations involving commercial copying, not some kid sharing a video game with a friend. The fact that the results are so out of whack with any sort of sensible response to the actions of users should be a sign that it's time to scale back the law, not to make it even more strict as the entertainment industry insists.

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Is Deceptively Getting People To Spam Their Friends Identity Theft?

Michael Masnick — Fri, 10 Jul 2009 01:28:17 PST

Last month, the social networking site Tagged got in some PR trouble after its attempt at "viral marketing" went a little haywire, causing lots of people to inadvertently spam their friends with invites to the service (and then those who signed up may have done the same). Such things are pretty common. They're deceptive and annoying, and companies that engage in them don't tend to last very long because no one really wants to use their service. But is it identity theft?

That seems to be the claim from NY Attorney General Andrew Cuomo who is suing the company, claiming that it "stole the address books and identities of millions of people." While we in no way endorse what Tagged did -- it is deceptive and scammy -- it's definitely seems like going over the line to call it identity theft, or even address book theft. Tagged apparently quickly pulled the plug on the campaign, and while there could be an action against the company for deceptive marketing practices, one would think that the company's reputation has been so damaged already that it's not going to be able to sign up many legitimate users. Tacking on attacks about privacy invasion and identity theft seems like bit much.

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YouTube Takedown Again Being Used To Try To Block Newsworthy Content

Michael Masnick — Thu, 9 Jul 2009 23:28:39 PST

Apparently, there's a big hubbub up in Canada over an embarrassing act involving Prime Minister Stephen Harper pocketing a communion wafer during a Catholic funeral. The video of the episode is getting a lot of attention... but now one of the main copies of the video has been taken down due to a YouTube copyright claim. Still, what's really odd is that the video was done by CPAC, but the takedown notice is from Radio Canada. As Michael Gesit points out, it's difficult to see what the copyright claim is, as the clip itself can be considered newsworthy and "fair dealing" (Canada uses "fair dealing" rules rather than "fair use") for others to show it.

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What Does Radical Transparency In Government Look Like?

Michael Masnick — Thu, 9 Jul 2009 21:13:37 PST

We've certainly complained when the new administration has failed to live up to its "transparency" promises, but the hiring of Vivek Kundra as federal CIO and Aneesh Chopra as federal CTO has put two real believers in transparency and openness in charge of the technology side of our federal government... and we're starting to see the very first results of that. It's still early, but it's actually quite impressive how much Kindra has accomplished in a very short time. Tim O'Reilly details the new federal IT spending dashboards that can be found at USASpending.gov, and it's really impressive for a gov't project put together in an incredibly short period of time. It actually shows each (participating) departments' projects, including goals and how close they are to meeting those goals. Real accountability? In government? Wow. The whole thing is built in drupal and data feeds are open to the public, so others can take the data on build on it. While it may be a small thing at this point, it's a huge step directionally in showing a commitment to more openness and transparency.

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This Is Investigative Reporting? News Corp. Allegedly Hacked Into Phones, Paid Off People To Silence Them

Michael Masnick — Thu, 9 Jul 2009 19:17:19 PST

We keep being told that only newspapers can do "real" investigative reporting, even though we've seen plenty of evidence of others doing quite impressive investigative reporting without having a background in journalism. And, now, we find out that some investigative reporting by those "real" journalists apparently involved breaking the law, violating individuals' privacy... and then paying people off to keep quiet about it. At least that's the charge from The Guardian against Rupert Murdoch's News Corp. According to the Guardian's report (and, yes, the Guardian is a real newspaper and appears to have done a nice investigative job here -- we're not saying newspapers can't do good investigative reporting), there's growing evidence that a lot of folks involved in Murdoch's News Group Newspapers were involved in hiring people to hack into thousands of mobile phones to record and transcribe phone calls between various politicians and celebrities, and also involved tricking "government agencies, banks, phone companies and others... into handing over confidential information." And? When that evidence started to come out, they apparently paid up a bunch of hush money and convinced a court to seal the files. Again, this isn't to implicate all newspapers (the fact that another newspaper figured this out is great). But the idea that newspaper investigative reporting is somehow "pure" once again seems to be in question.

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Why Might China And India Want To Strengthen National Intellectual Property Policy?

Kevin Donovan — Thu, 9 Jul 2009 17:33:00 PST

This is the third post in a series of posts looking at the question of intellectual property rights in both China and India. We'll be adding new posts to this series each week for the next few weeks.

In the last post, we explained the numerous changes made to strengthen intellectual property in China and India. Yet, to many observers, it has not been enough. Governments, donors, academics and private industry encourage, some more subtly than others, China and India to “harmonize” their domestic intellectual property by strengthening regulations and enforcement.

The Vested Interests

According to the US-China Business Council, an industry group representing American companies operating in China, weak penalties, delayed enforcement and protectionist policies limit China’s ability to become a leading innovator (“Statement of the US-China Business Council” PDF). A survey of its members says intellectual property enforcement is China’s most serious shortfall in implementing WTO commitments, though 1/3 said it had improved. They advocate increased enforcement, more training for judges and prosecutors, public awareness campaigns and lower thresholds for criminal penalties.

The United States Trade Representative (USTR), too, condemns China’s IP regime. The USTR has placed China on the Priority Watch List of its annual “Special 301 Report” that evaluates the IP policies of dozens of countries. India, too, makes this list as a “significant concern,” though China is the primary country of concern (USTR Special 301 2008 Report). In the report, the USTR cites the US copyright industry’s estimate that piracy cost the United States $500 million in 2004 (USTR Special 301 2005 Report). Another estimate by the International Intellectual Property Association says that copyright piracy in 2008 in India and China cost the U.S. $1,096.2 million and $3,504 million, respectively (IIPA 2009 PDF). These sources also claim that counterfeiting reduces tax receipts and domestic growth. To combat this alleged threat to America’s economy, the USTR is actively working to increase global intellectual property standards through bilateral free trade agreements and the Anti-Counterfeiting Trade Agreement, currently being negotiated in secret (USTR Special 301 2008 Report).

The Academics

These groups motives and facts should be viewed with caution - their statistics have been shown to be wildly innacurate and their motives dubious. There are others, however, who advocate for stronger intellectual property in China and India, and believe it to be in the best interest of the two countries. Under this thinking, promoting IP in China and India will further their ability to capitalize on international information flows and promote domestic innovation.

Most basically, the increased export opportunities available as a WTO member makes the adoption of new technologies profitable for more firms (Dutta & Sharma PDF). A recent study has shown that royalty payments for technology transfer, R&D expenditures and total levels of foreign patent applications all increase with intellectual property reforms (Branstetter 2006). One common line of thinking closely related is the belief that FDI will increase with stronger intellectual property. Executives at multinational corporations (MNCs) say that IP rules are a very important factor in deciding R&D locations – before investing substantially in new R&D, companies want to be assured that they will have the opportunity to recoup those costs through exclusive control of their innovations (Lanjouw 1997). China and India suffer from ineffective R&D – they devote a small share of labor and GDP to research, and in both countries much of the work is done by the government – so foreign investment in the sector could prove useful. India, especially, needs improvement in the commercialization of its patents (Dahlman 2005). It is argued that market incentives (via IP) would increase efficiency.

Unfortunately, the evidence is not clear-cut. A 2005 study found that IP laws have little discernible influence on the growth of R&D stocks, though the international transfer of and propensity to patent do seem to be influenced (Jaumotte 2005). Another study from the same year, though, shows that stronger intellectual property will improve the incentives for a foreign rights holder to enter emerging markets, but that it will also increase that firm’s market power, diminishing the ability of domestic firms to compete. However, technology has spillover effects, especially due to the disclosure required by patent applications, which can, in theory, make productivity gains from foreign firms available to domestic firms. Yet, although a 2004 study finds that FDI could theoretically lead to widespread gains in domestic productivity, because companies block spillover through various means, in practice, the sectoral gains are minimal. This is particularly worrisome for China and India because the sectors in which they presumably have some burgeoning capabilities will receive little benefit from international linkages.

One study found that increased intellectual property has a significant positive impact on the productivity of R&D, as measured by patents per dollar of R&D, though this metric is suspect because a patent does not necessarily translate into any economically or socially desirable outcome (Brahmbhatt 2007).

In the coming weeks, we'll discuss the likely downsides of increased intellectual property in China and India.

Other posts in this series:

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Jack White The Latest Musician To Experiment With Smart New Business Models

Michael Masnick — Thu, 9 Jul 2009 16:06:00 PST

Every time we discuss musicians or smaller labels that seem to be figuring out how to embrace modern business models by connecting with fans and giving them a reason to buy, we're told that the model doesn't really work beyond a few small "exceptions." Yet, pretty much every day we keep getting sent more and more examples of these "exceptions." At some point we have to wonder what it will take for the disbelievers to recognize that it's not the exception at all. It is the rule.

The latest comes to us care of GrindEFX, who notes that Jack White (of The White Strpies and the Raconteurs) and his own label, Third Man Records, is offering a nice two tiered subscription service, where fans get extra benefits for being members. To be honest, this sounds an awful lot like the business model that we discussed way back in 2003 (and were told it would never work). It's interesting to see this done at the "label" level, where you get benefits from multiple bands on the label. That could definitely work for a label with a lot of bands that have similar sounds that fans are likely to enjoy across the board.

Anyway, we await the explanations in the comments for why this, too, is an exception and why this business model will never work for others.

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Surprise, Surprise: Pharma Abusing IP Laws To Prevent Competition

Michael Masnick — Thu, 9 Jul 2009 14:49:00 PST

The deeper and deeper you look into the pharmaceutical market and the way those firms use patents, the worse and worse it looks. There's little evidence that pharmaceutical companies really need the kind of exclusivity that patents provide, but it's become so established an idea, that some actually believe that pharma would disappear without patents. However, the truth is quite different. The chemistry industry -- the precursor to the pharma industry -- actually fought against patents in the early days, knowing that robust competition was what drove innovation and profits. Patents only allowed the leaders to stomp out competition and limit the overall market, increasing their own profits, but slowing innovation and product development.

Thus it should come as no surprise at all that a new report has found that pharmaceutical companies are regularly abusing patents for anti-competitive purposes (thanks Rob Hyndman for the link):

Pharmaceutical companies are manipulating the intellectual property rights system and are "actively trying to delay the entry of generic medicines onto their markets," a top EU official said of an EU inquiry into the pharmaceutical sector released Wednesday. As a result, there has been a decline in the number of innovative medicines getting to the market, it says.

In other words, contrary to the popular myth, patents are actually being used to hold back innovation in the healthcare market.

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Using Creative Fiction To Increase Value Of Trinkets On eBay

Michael Masnick — Thu, 9 Jul 2009 13:30:00 PST

When we talk about understanding how to embrace the economics of infinite goods, one of the key points I've tried to make is that every product is a bundle of scarce and infinite goods. That's a point that some people have a lot of trouble with at times, insisting that some people who create infinite goods have no scarcities to sell... and, conversely, that those who make scarce goods, sometimes have no infinite goods to give away with them. While it may be a bit more complicated to separate out the scarce and infinite goods, it doesn't mean they don't exist.

Parker writes in to point out a fascinating example. Apparently a group of fiction writers are experimenting with selling physical goods on eBay with fictional stories given away "free" in the description. The project is called Significant Objects, and involves a bunch of fiction writers purchasing random trinkets, and then coming up with a neat story to go with them. The post at io9 notes that some stories seem better than others at increasing the auction bids, but points out that: "If Rosenfeld's success is any indication, these authors may actually get paid more for short fiction on eBay than they would at most publications."

Again, some will incorrectly claim that we're saying that fiction writers should start selling crap on eBay, but that's not it at all. This is just one (fun) example of many of content creators smartly using infinite goods (the stories) to make a scarce good (the trinket) more valuable, and putting in place a business model to profit from it. Once again, we learn that creativity knows no bounds, not just in creating content, but in playing around with new business models.

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Trent Reznor Explains What A Musician Needs To Do To Be Successful These Days

Michael Masnick — Thu, 9 Jul 2009 12:12:00 PST

Pretty much every other person who's ever read the site has sent this one in today, so I figure it's worth writing up. We've talked for a long time about how unknown/up-and-coming artists can embrace new business models to be more successful these days. In fact, five or six years ago the only artists who were doing these kinds of experiments were the up-and-coming ones. And when we did that, people complained that "well, sure, this works for the unknowns, because they have nothing to lose, but it's not a real business model." And then, in the last couple of years, with folks like Trent Reznor and some other well known artists embracing new models, suddenly the refrain changed: "well, sure, this works for them because they already have a huge following... but it'll never work for everyone else." What was silly was that they were both effectively doing the same thing: better connecting with fans, and offering them something of scarce value to buy. In my more recent presentations, I've been careful to show how artists big, medium and small are all successfully embracing new models based on this formula: Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model
And those who are embracing it are finding that it works and works incredibly well in many cases. Yet, still people want to insist that it can't work. In fact, Reznor himself heard this when he mentioned that the Beastie Boys new offering (built on the Topspin platform) was "how you sell music today." In response, the second wave of naysayers listed above came out to complain, so Reznor decided to respond by explaining how new artists get noticed, build a following and build a business model these days. And the formula is basically: connect with fans and give them a reason to buy... and use free music to do both of those things. He does note, that if you want to be a superstar, you probably need to sign with a label, but doing so will mean giving up pretty much everything: control, profits, ownership. However, if you just want to be a success...

* Forget thinking you are going to make any real money from record sales. Make your record cheaply (but great) and GIVE IT AWAY. As an artist you want as many people as possible to hear your work. Word of mouth is the only true marketing that matters....

* Parter with a TopSpin or similar or build your own website, but what you NEED to do is this - give your music away as high-quality DRM-free MP3s. Collect people's email info in exchange (which means having the infrastructure to do so) and start building your database of potential customers. Then, offer a variety of premium packages for sale and make them limited editions / scarce goods. Base the price and amount available on what you think you can sell. Make the packages special - make them by hand, sign them, make them unique, make them something YOU would want to have as a fan...

* The point is this: music IS free whether you want to believe that or not. Every piece of music you can think of is available free right now a click away. This is a fact - it sucks as the musician BUT THAT'S THE WAY IT IS (for now). So... have the public get what they want FROM YOU instead of a torrent site and garner good will in the process (plus build your database)....

* Have your MySpace page, but get a site outside MySpace - it's dying and reads as cheap / generic. Remove all Flash from your website. Remove all stupid intros and load-times. MAKE IT SIMPLE TO NAVIGATE AND EASY TO FIND AND HEAR MUSIC (but don't autoplay). Constantly update your site with content - pictures, blogs, whatever. Give people a reason to return to your site all the time. Put up a bulletin board and start a community. Engage your fans (with caution!) Make cheap videos. Film yourself talking. Play shows. Make interesting things. Get a Twitter account. Be interesting. Be real. Submit your music to blogs that may be interested. NEVER CHASE TRENDS. Utilize the multitude of tools available to you for very little cost of any - Flickr / YouTube / Vimeo / SoundCloud / Twitter etc.

* If you don't know anything about new media or how people communicate these days, none of this will work. The role of an independent musician these days requires a mastery of first hand use of these tools. If you don't get it - find someone who does to do this for you. If you are waiting around for the phone to ring or that A & R guy to show up at your gig - good luck, you're going to be waiting a while.

Great stuff, as usual, and certainly reinforces the point: it's certainly hard work, but it is doable. If you're unknown, use this process to get known. Once you're known, you can start to implement all different elements of the business model, using the music to make scarce goods much more valuable and start earning that way. Great advice for artists big, medium and small...

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DC Police Chief Says It's 'Cowardly' To Monitor Speed Traps With Your iPhone

Michael Masnick — Thu, 9 Jul 2009 10:55:30 PST

Jeff Nolan points us to the news that Washington DC's police chief is denouncing users of an iPhone app to monitor speed traps/speed cameras/red light cameras as being "cowardly." Apparently, real men prefer ignorance about where the police are hiding to give them tickets for driving a couple miles per hour over the speed limit. The app actually sounds pretty useful, alerting users if they're near one of the cameras or a known speed trap. The creator of the software makes the most salient point:

"If police come against us, it's going to make them look like they are only [after] revenue"

Indeed. Shouldn't the police be happy that a software product is helping people slow down or avoid running red lights? How could that possibly be seen as a bad thing... or "cowardly"?

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Why Does Wal-Mart Need A 3,379-Word Terms Of Use For Its Twitter Account?

Michael Masnick — Thu, 9 Jul 2009 09:42:00 PST

Twitter only gives you 140-characters, of course, but what do you do if you're an old-school company that's been around for ages and is used to legalizing everything? Apparently, you create a 3,379-word terms of use for your Twitter account. Boing Boing points us to Wal-Mart's Twitter Terms of Use, which is really impressive if only in that if it were Twittered in 140-character increments it would take about 165 separate tweets. But, honestly, I can't figure out who this Terms of Use is directed at. It can't be those who read the various Twitter feeds from Wal-Mart employees, since most of them will never even come to this page at all (they're just following on Twitter, not on Wal-Mart's site). It's unlikely that it's for the Wal-Mart employees directly, as one assumes they don't need a public Terms of Use. So what's its purpose?

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ASCAP's Latest Claim: Embedding YouTube Videos Requires Public Performance License

Michael Masnick — Thu, 9 Jul 2009 08:30:00 PST

A few years back, we idly wondered if it could possibly be copyright infringement to embed a YouTube video on your own site. It would be a very difficult argument, since an embed code is really no different than a link. The content itself is hosted by YouTube and was uploaded by some other party. Yet, we figured eventually someone would make a claim along those lines... and wouldn't you know it would be ASCAP?

ASCAP must be really hard up for cash these days, because it's going down the PRS route of trying to claim that just about anything now counts as a public performance. Just a few weeks ago, came the news that your mobile phone ringing in public is a public performance. It's also been telling composers/song writers to hold back on allowing their songs in video games like Rock Band/Guitar Hero on the assumption they should get more money for it (not realizing that getting songs in those games has been shown to raise the profile of the artists allowing them to make a lot more money).

So, the latest? Apparently ASCAP has started sending collection letters to various websites that have embedded YouTube videos that contain music, claiming they need to pay up for a performance license. This is definitely a huge stretch legally, but when has that stopped ASCAP? Meanwhile, you may recall that YouTube was just ordered to pay millions to ASCAP -- which you would think would cover this sort of thing -- but not according to ASCAP. If that's true, then ASCAP would be getting double/triple/quadrupled/etc. paid for embedded videos, which certainly doesn't seem right (or legal).

And, once again, we're left with a situation where ASCAP -- which always positions itself as having the best interests of songwriters/composers/publishers in mind -- is actually causing significant harm for artists. By adding to the cost of having people promote those artists on their own websites, they're greatly diminishing the ability of people to get the word out about these artists.

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LeBron James Discovering What Happens When You Try To Suppress Something

Michael Masnick — Thu, 9 Jul 2009 07:11:00 PST

Every time you think people understand that trying to suppress some kind of information only draws more attention to it, it happens again. The latest, as pointed out by Tim O'Reilly is that basketball star LeBron James had videos confiscated after he was dunked on by a college sophomore -- and because of that it's now being written up on various news sites and blogs. If he'd just let the video go out it may have amused a few people but no one would have thought any less of James, one of the best players ever to play the game. Instead, even more people are finding out about it and makes James look really insecure and controlling. In fact, the Rivals.com points out that because the video can't be seen, people will just assume it makes James look as bad as possible:

The Crawford dunk would have been a temporary embarrassment for LeBron. Let's say the video was put on YouTube. It blows up for a bit, dominates blogs for 36 hours, everyone has a good chuckle and then it's forgotten about.

But by censoring the tape, LeBron turns the dunk into a legend. On video, it's just a dunk. Without video, the jam can reach mythic proportions. Because nobody can see it, the story of the dunk will grow in stature with each telling. Today, it was a simple two-handed slam. In a few days, it will be a 360-degree windmill. By the time Crawford makes his Xavier debut in October, he will have jumped off LeBron's shoulders, flipped in the air, slammed the ball home with his left pinkie and then handed LeBron $3.99 for his dry cleaning.

One day, perhaps, people will learn...

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Does The US Government Really Need 'Wider Latitude' To Monitor Private Networks?

Kevin Donovan — Thu, 9 Jul 2009 05:37:10 PST

Harvard Law Professor, and former Bush White House lawyer, Jack Goldsmith has an opinion piece today in the NYT about cyber-security. In it, he makes a number of obvious (though admittedly often overlooked) points about the need for better education and information sharing, but then asserts that those, untried, methods will not be enough. Instead, he argues, "The government must be given wider latitude than in the past to monitor private networks and respond to the most serious computer threats." For a lawyer who saw first-hand (and even wrote a book about) the excesses of the Bush administration, this is a reckless claim. The repeatedly documented violations of civil liberties by the NSA and other government agencies (not to mention their private sector compatriots) through widespread network surveillance did not serve to protect and defend US critical infrastructure. In fact, by adding legitimacy to network monitoring, scholars like Goldsmith and respected countries like the USA make it easier for less savorable regimes to justify their digital surveillance and crackdowns. While China's "Green Dam" censorship software was justified on child-safety grounds, the next iteration of liberty limiting code could very well be to stop "cyber-terrorism" or some other amorphous, ill-defined concept.

A far more level-headed approach to cyber-security is taken by Evgeny Morozov in his recent essay in the Boston Review, which points out that "[m]uch of the data are gathered by ultra-secretive government agencies—which need to justify their own existence—and cyber-security companies—which derive commercial benefits from popular anxiety. Journalists do not help. Gloomy scenarios and speculations about cyber-Armaggedon draw attention, even if they are relatively short on facts." While Goldsmith is certainly not promoting increased government intervention out of self-interest, it is not good enough to pay lip-service to privacy and network openness. Decision-makers need to recognize that certain policies and rhetoric will inevitably have dangerous, unproductive unintended consequences.

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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NPR Plays Spot The Healthcare Lobbyists At Healthcare Reform Hearing

Michael Masnick — Thu, 9 Jul 2009 03:39:33 PST

As those involved in public policy issues know all too well, much of what happens in DC is driven (or at least heavily influenced) by lobbyists. But, for the most part, the lobbyists stay out of the spotlight, allowing politicians to present their positions for them. But the lobbyists themselves are never far away -- it's just that the press always has the cameras facing the politicians, and the lobbyists go undetected. That's why it's great to see that NPR actually has tried turning the cameras around (found via Jerry Brito). At a hearing on healthcare reform, NPR photographers turned around and photographed those in the audience, and then placed the photo online, asking viewers to identify the lobbyists in attendance. Brito points out that it's not clear that enough people who would know actually have looked at the photo, but it's still a nice idea.

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Why Doesn't Amazon Allow Referrals On Passed Links?

Michael Masnick — Thu, 9 Jul 2009 01:42:06 PST

A few months ago, we were talking about the growing value of "passed links" or "earned links." These are links that to things that others passed on to you, via email or social networking services like Facebook and Twitter. As more people have been using these services, the value of such links have grown as traffic generators. And yet, some have just realized that Amazon doesn't reward affiliates for using such links. It's not difficult to understand how this came about, but it certainly seems like the type of thing that the company should reconsider. Basically, Amazon's original affiliate program was so that you could send people to Amazon from your own site. In order to become an affiliate your site had to be approved. But if you're just passing around links, then that has little or nothing to do with your site, and thus Amazon doesn't pay such referral fees. I would imagine that Amazon is also quite worried about potential fraud.

But given the growing popularity of things like Twitter and Facebook, it seems like Amazon might want to reconsider this policy, and recognize that if someone promotes a book via these services, they're equally as deserving of the affiliate referral fee than if they had simply posted the link on their own site.

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Tales Of Collection Societies Gone Wrong: GEMA

Michael Masnick — Wed, 8 Jul 2009 22:42:00 PST

We've noted in the past some of the massive problems with various collections societies around the world. These groups are often given something of a monopoly over collecting music royalties, and even though they present themselves as being non-profits designed to help artists, the truth is usually something far different. Beyond abusing their position, their real goal is often not to help all artists, but a small subset at the top. This is what copyright law has pretty much always done. By setting up artificial barriers and monopoly rents, it allows a very few at the top to benefit at a grossly disproportionate level, and it's the rest of the creators who are harmed by this (i.e., if those monopoly rents mean that I need to pay much more than the true market rate to support some top pop star, I'm much less likely to spend money on an up and coming indie musician). The whole recording industry has been built around a few megastars, and it should be no surprise that the industry has used copyright law and collections societies in support of that.

Wolfgang Senges is digging into how this works in Germany, where some are finally questioning GEMA's actions. In delving into how GEMA works, Senges notes that its entire structure is specifically designed to really only give a small percentage of top artists a say in how GEMA operates. Everyone else just gets dragged along for the ride. Is it any wonder, then, that its policies are mostly designed to help those big artists, rather than others?

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Dear EMI: Pretending The Old World Still Exists Won't Get You Into The 21st Century

Michael Masnick — Wed, 8 Jul 2009 20:37:00 PST

As you may know, over in the UK, the music collection society PRS has been in rather contentious negotiations with various online services over streaming rates. Due to these fights, services like Pandora have shut down in the UK, and YouTube has pulled major label music videos. A couple months ago, PRS tried to compromise by announcing lower rates, which the press hailed as the record labels finally recognizing that their old monopoly rent royalty rates were no longer sustainable. Except... not everyone got the message. Even though these lower rates have been rejected as too high by the various online music streaming services, apparently EMI is arguing in the opposite direction, refusing to license its catalog at the lower rates.

It's difficult to see what EMI gets out of being stubborn here. It's clear that streaming services won't even accept these rates. All EMI is doing is pissing off artists on the label who can't figure out why their fans can't hear their music, making it harder for them, as musicians, to build up the necessary popularity to put in place any number of smart business models (you know, the models that EMI seems incapable of helping them implement).

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Exploring The Connected Nation Boondoggle

Michael Masnick — Wed, 8 Jul 2009 18:52:04 PST

Last year, we discussed whether or not Connected Nation broadband mapping group, was really just a big telco boondoggle designed to get gov't money and allow telcos to avoid really providing broadband data. For some reason, politicians are absolutely in love with Connected Nation, though. When I was in Washington DC recently, they talked about it like it was the solution to our country's broadband needs. That seems quite bizarre no matter how you look at it. First, it's just a "mapping" organization and it's run by the telcos themselves, allowing them to continue to fudge the data to make markets look a lot more competitive than they really are. And, yet, thanks to all the political love that goes out to Connected Nation, it looks like they're about to get hundreds of millions of dollars in broadband stimulus money.

Broadband Reports points us to Art Brodsky's "final warning" about Connected Nation, before we hand over tons of tax money to it, and it's not pretty. He notes the ridiculousness of politicians complaining that the gov't agency in charge of getting accurate maps has failed (solely because the telcos refuse to give them the data) and deciding the best "response" to this is to simply hand the whole project (and lots of money) over to the telcos who refused to give the data up in the first place:

The fruit is not the product of the state agency, however. Faison used his announcement to criticize e-NC: "Until now, we have not had a map showing street address availability of broadband. e-NC has generated maps based on information disclosed by the providers which are based on the average number of customers with broadband access in a wire center. Unfortunately, information provided in this fashion does not allow you to see where broadband is and where it is not, it does not allow you to see the holes in the Swiss cheese, and depending on the area the hole may be larger than the cheese."

Note the circular logic here. Faison and other members of his committee are criticizing e-NC for their maps, which were based on information supplied, or not, as it were, by the telecom industry. The state agency has been hampered by AT&T's unwillingness to supply broadband data and its insistence on a very restrictive non-disclosure agreement for information the company did supply.

Instead of pushing the industry to stop stonewalling e-NC, Faison and the others trashed e-NC's work and commended the work of – AT&T, the very company that hamstrung e-NC. Here is Faison’s praise for the industry: "In the face of legislation recommended by the Committee which would have required the providers to disclose precise information to the Legislature for our staff to generate a detailed map of availability, the providers have come together and collectively decided to provide the information through Connected Nation, to not only provide the "street address" map but also to make the map both accessible and interactive through the internet. Special recognition should be given to AT&T, Embarq, Sprint, Time Warner Cable, The Cable Association, the Telephone Co-op association, and Alltel for their work on this matter."

Brodsky goes on to show a Connected Nation map, and note how useless it is in actually giving granular data, and then compares it to another group's map, with much greater detail. I certainly agree that better data is important, but I have to admit I'm still somewhat confused as to what real problem we end up solving with mapping alone? Yes, it will give us more data to figure out just what the current situation is when it comes to broadband deployment, but that's got little to do with actually improving our broadband infrastructure.

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