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Stop Wallowing And Start Doing Cool Stuff With Business Models, The Wil Wheaton Edition

Mike Masnick — Wed, 25 Nov 2009 19:37:00 PST

We gently knocked Wil Wheaton recently for saying some things that we thought were a bit wrongheaded in terms of dealing with people copying his work -- while noting that for the most part he absolutely seemed to "get" where things were heading and had a long history of embracing that. Whatever you think of that minor blip, it looks like he's definitely got the right idea when it comes to new business models. Reader Avengingwatcher alerts us to a recent blog post by Wheaton where he's inspired by the fact that people can just "get excited and make things" if they have an idea, rather than having to go through the old gatekeeper model that so many were stuck in for so long. Specifically, he talks about print-on-demand solutions that take much of the upfront risk out of creating just about anything -- since you no longer need to pay for massive production at the beginning, and can just see what people want and order:

This is incredibly inspiring to me, and I hope that it's just as inspiring to indie artists everywhere. Why not take a creative risk and see if it works out? Unlike the old days, when we had to purchase a lot of stock ahead of time and hope we could sell it, we can just Get Excited and Make Things, knowing that the very worst that can happen is that nobody likes that thing we made as much as we thought they would.

Much of this is inspired by some experiments some friends are doing and discussing -- and one of the links he puts forth tries to tackle the "but this only works if you're big and famous" fallacy that we've debunked in the past.

I have to admit that 2009 has really become the year of creators embracing cool, working business models. These days, we get probably five to ten submissions per day of more artists embracing these sorts of business models that we talk about. We used to write about many of these, but it's reached the stage where we really only pick and choose to write about really interesting or unique ones, even as we see that many of these are working wonders. But the key point is the one that Wheaton hinges his post on, which is that more and more people aren't worrying any more, but they've decided to
Get Excited and Make Things
Is there any better motto for what's happening these days?

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Researchers: Copying And Imitation Is Good For Society

Mike Masnick — Wed, 25 Nov 2009 18:51:00 PST

When we talk about intellectual property issues, many maximalists on both the copyright and patent side of things have this inherent sense that "copying" is "bad." Not just "bad," it's downright immoral. You hear words like "freeloading," "parasites," "pirates," "thieves," "copycats," etc. Yet, time and time again, when we look at industries or societies where there is less (or no) intellectual property protection, we notice something interesting: while there is definitely a lot of copying going on, it hasn't proven bad for overall innovation, and at times it's been shown to be very good for overall innovation. When we've talked about things like the chemical industry in Switzerland in the late 19th century (which was not covered by patents), there were certainly many chemical companies who focused on copying -- but there were also many who were quite innovative, and the overall impact to the economy was very strong.

The same is true if we look at the fashion industry, which does not have copyrights. It thrives without copyright protection in part because of all that copying. The copying serves a few very useful functions: first, it helps "perfect" the offering, as each "copyist" may improve on it a bit. Second, it helps diffuse the new idea throughout society, by offering it up in many places and ways that the originator was unable to. Third, it offers an element of price differentiation (the wealthy want the original/official version and pay more for it, others want the cheaper knockoffs). Fourth, it actually helps to validate the original idea (if there's a knockoff, the original must be cool). Finally, it stimulates additional brand new creativity from the original creator, who must realize that he or she cannot rest on any laurels, and needs to get to work on the next great design.

Copying serves an important function in getting new concepts out there.

And, now some researchers have started to look into it, and actually have built a model that shows society is likely better off when copying is the norm. Aaron deOliveira alerts us to the research on this, which tries to model societies with creators and innovators, and finds that society is served best when 30% of the population is involved in creating new goods, while 70% is focused on copying. Now, you can read through the full research and quibble with the methodology, but the basic premise is sound, and has been borne out in real life, in situations where copying was widely allowed. Hopefully there will be more research done in this arena, to see if this sort of modeling can be refined a bit more to take more factors into account. But, for now, this is a good place to start, and a reminder to those who seem to think that "copying" is somehow bad, that it serves a valuable part in the overall ecosystem of building and distributing innovative offerings.

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Steve Jobs Tells Startup Startup To Change Names, Saying 'It's No Big Deal'

Mike Masnick — Wed, 25 Nov 2009 18:05:00 PST

Reader mick alerts us to the story of a small eight-person startup that makes a popular app for backing up your iPod music, which had been called "iPodRip" until Steve Jobs and Apple's lawyers got involved, demanding the company cease using the name and hand over its domain. It's even told the guy that even if he rebrands his app, he can't even say that it's the app "formerly known as" iPodRip. While lawyers told him he could successfully fight Apple on this, the guy gave in and is in the process of changing the name to iRip. Someone involved with the company actually sent Steve Jobs an email about the whole situation, and got the response:

"Change your apps name. Not that big of a deal."

Pleasant. Of course, at this point it seems worth pointing out that years long battle Jobs fought with the Beatles' Apple Corp. over the "Apple" name. Would Jobs have been okay if John, Paul, Ringo and George had simply told him "Change your company name. Not that big of a deal"? Now, yes, it is true that a company needs to enforce its trademark, lest it become generic, but in this case it certainly seems like the name was descriptive in a way that certainly didn't imply endorsement from Apple. But, of course, when you've got lawyers who can bully on your behalf, the details apparently aren't that important.

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Profitable 'Pay Us Or We'll Sue You For File Sharing' Scheme About To Send 30,000 More Letters

Mike Masnick — Wed, 25 Nov 2009 17:26:37 PST

Remember ACS:Law? The shakedown organization that appears to have taken over where Davenport Lyons left off (including using some of the identical documents), and who has "partnered" with DigiProtect, the company that gleefully admits that it purposely puts files on file sharing networks just to collect the IP addresses of anyone who downloads, is asking for the identifying info on 30,000 UK users. To put that in perspective, in the years long campaign by the RIAA to sue people for file sharing, they apparently requested info on about 35,000 IP addresses. Of course, when spreading such a big net, it's no surprise that tons of innocent people get caught in it. But that's really of little concern, since no real lawsuits have been filed. They're just hoping a bunch of people feel that it's easier to pay up. It's not about stopping piracy or getting people to buy -- it's about shaking people down for as much money as possible.

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UK Police Arresting People Just To Add To DNA Database?

Mike Masnick — Wed, 25 Nov 2009 16:46:35 PST

We were just talking about how pretty much any government database will get abused by government employees eventually. But it's not just on the accessing or revealing of data that this can happen. How about the collection of data as well? Jabberwocky alerts us to the news that police in the UK have supposedly been arresting innocent people just to add them to the UK's DNA database. The report looking into this, sarcastically titled "Nothing to hide, nothing to fear?" finds that nearly one in five of the DNA records in the database are from innocent people. And part of that is an "arrest first, ask questions later" policy towards collecting DNA:

The commission had received evidence from a former police superintendent that it was now the norm to arrest offenders for everything possible. "It is apparently understood by serving police officers that one of the reasons, if not the reason, for the change in practice is so that the DNA of the offender can be obtained," said Montgomery, adding that it would be a matter of very great concern if this was now a widespread practice.

Oh yeah, to make matters worse: "there is very little concrete evidence on the importance of the DNA match in leading to a conviction and whether the suspect would have been identified by other means anyway." Don't you feel safer now?

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Funny How Those In Favor Of ACTA Are Against Treaty Providing More Access To Content For Vision Impaired

Mike Masnick — Wed, 25 Nov 2009 16:01:00 PST

It seems pretty bizarre that companies and industry organizations would be against helping those with reading disabilities or vision impairment -- but that's exactly what you get in the discussion over creating some loopholes in copyright law to make it easier to reformat content to help those who would have difficulties reading it otherwise. Their concern, of course, is anything that can be seen as weakening copyright law. As we've noted in the past, there's never really been any weakening of copyright law... ever. The only exception I can think of is when the US officially established that government documents could not be covered by copyright. But every other change has only strengthened it -- so perhaps it's no surprise that the usual suspects, including the MPAA and the RIAA are upset about this, claiming that this WIPO treaty on this subject would "begin to dismantle the existing global treaty structure of copyright law, through the adoption of an international instrument at odds with existing, longstanding and well-settled norms."

Now, that's funny, because you could pretty much say that ACTA is doing the same thing... and yet these same groups are strongly in favor of ACTA, which would also be at odds with existing, longstanding and well-settled norms." Funny how their view changes completely when discussing treaties that would beef up copyright law vs. those that would create important and useful loopholes in it.

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Advertising As Content: Newspaper Raising Newsstand Prices For Thanksgiving Papers With Black Friday Ads

Mike Masnick — Wed, 25 Nov 2009 15:15:00 PST

With newspapers struggling with declining sales and subscriptions, it seems that a few of the major newspaper chains have realized that when they have a newspaper with something of real value to a lot more people than usual, perhaps it makes sense to bump up the prices. Both Tribune Co. and E.W. Scripps are planning to raise the newsstand price of Thursday's paper, treating it like a standard Sunday paper, recognizing that many people want the paper just for the ad circulars that detail "Black Friday" sales. In some ways, it's yet another point of evidence that ads (relevant ones) represent content -- in this case, content that a lot of people are apparently willing to pay for.

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Are Entertainment Industry Tactics Working?

Mike Masnick — Wed, 25 Nov 2009 14:14:00 PST

It's been somewhat amusing over the last day or so to see a bunch of our usual critics all submit the same exact story with some sort of triumphant "I told you so!!!!!" (usually in less friendly language). It's a report that music sales are up in Sweden following the strict anti-piracy law that went into effect earlier this year. The claim is that this is proof that the RIAA/MPAA/IFPI/BPI/etc strategies work. To them, this is clear, irrefutable evidence that draconian measures to crack down on unauthorized file sharing really does make people buy. That would be quite interesting if true, but our friends employed by these companies might want to wait a bit before breaking out the champagne over a dead cat bounce.

First, there are some who are questioning the actual numbers. So far, the only numbers have come directly from the IFPI, who hasn't provided much in the way of detail (and have a long history of publishing questionable, fact-challenged numbers). In fact, the very lack of detail would likely indicate that there are extenuating circumstances here. And, when we're talking about Sweden, it has to also be noted that services like Spotify (which dragged the labels kicking and screaming into the modern world) were just launched at the very end of last year. So, it could be that it was one of these more modern services that helped convince people to buy music rather than any crackdown. But, of course, the bigger question is whether or not any boost is sustainable. It was reported that there was a drop in file sharing after the Swedish IPRED law went into effect (though, again, many argue that the "drop" was simply because more people started using encryption and those who measure file sharing traffic had no way to deal with it, so pretended they all stopped). Yet, it didn't take long for the traffic numbers to bounce back up.

And that's the issue. If your entire business model is based on whacking people with a stick and telling them what they can't do, you may get brief moments of compliance, but at the first chance they get to go back to a more consumer-friendly system, they will. So while our friends in the entertainment industry will likely misread this situation into believing that its strategy of pissing off pretty much everyone makes business sense, let's wait and see how this works out in the next year or so. Dead cat bounces can fool lots of folks, but there are very few industries that succeed by basing their future on such things.

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Photographer Compares Microstock Sites To Pollution And Drug Dealing

Mike Masnick — Wed, 25 Nov 2009 13:00:00 PST

I guess it's natural to lash out at technologies and companies that undermine a business model built up on artificial barriers and scarcity, but it won't do much good in terms of actually adapting. But it's kind of amusing when it's done at the same time that someone is embracing those new technologies as they undermine other business models at the same time. Taylor Davidson points us to a photographer bashing the idea that microstock sites like iStockPhoto help "create new markets." It's actually been really depressing to see so many photographers react so poorly to new technologies, and this case is no exception. In the ranting post, he compares microstock sites to pollution in China and drug dealing. All the rant really screams out is "I'm so set in my ways that I can't compete or adapt my business model."

However, the really amusing part is highlighted by an anonymous commenter on the site who mocks the photographer for whining about how microstock sites are undercutting his old business model at the same time that he's advertising his own books and services online, rather than advertising in newspapers and phone books. As the commenter notes:

If everyone is supposed to stop posting their photos and selling to istock, how about photographers stop using the Web and advertise in phone books and newspapers so those jobs aren't lost? And maybe you can go back to using film instead of digital so that film manufacturers aren't put out of business? Sounds like to me you're all for taking advantage of technology except when others doing it hurts your bottom line.

And that's really a key point. Technology changes markets, and the more you look, the more you realize that it almost always enlarges the overall market for those who take advantage of it. Yes, there's more competition in the photographer market, and the model for stock photography has changed. But the nice thing about the microstock market is that it has opened new markets. A lot more people can and do buy stock photos than did in the past. If I can't find a decent Creative Commons/public domain photo for presentations, I'll go in search of one I can license from a microstock photo site in a second, because it'll just cost $1 or so. So I actually end up spending a fair amount on stock photos in the course of a regular year. Compare that to the situation seven years ago when we were working on a revamp of our corporate website. We went in search of a photo to use, and the licensing deals we saw wanted about $1,000 for just one year of usage. That meant we spent nothing, because that just doesn't make sense.

So, yes, the economics are changing, but if you're smart, you can take advantage of it. It may mean moving beyond just the stock photo market, or using such photographs (or even giving away works for free) to build up reputation for freelance or custom assignments. Most photographers I know never made much money from stock photos anyway, finding much more value in commissioned work. And recently, I've been hearing of success stories from some really good photographers who have used their existing work, given away for free, as strong advertising to get more (and more lucrative) commissions.

In the end, it really comes down to how you deal with it. Do you whine and stomp your feet and compare the new world to pollution? Or do you figure out how to adapt? Economic progress doesn't care in the slightest how much you liked how things used to be.

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If Movie Piracy Is Really A Problem, It's Hollywood's Fault

Mike Masnick — Wed, 25 Nov 2009 11:48:00 PST

The folks in Hollywood have been working overtime lately trying to convince the world that piracy is harming the industry, even as the industry is having its best year ever in terms of both money made and the number of movies released. It's an uphill slog, so lobbyists, lawyers and execs from the various studios have resorted to what can only be described as "making stuff up." But, like the poor corn farmers that NBC Universal lawyers think are being hurt by movie piracy, most of these claims don't pass the laugh test.

But, of course, the story goes even deeper than that. As we've noted before, despite claims to the contrary, "piracy" is almost always an indicator of unmet consumer demand and a failure on the part of the industry to meet that demand. Matt Mason's book from last year made this quite clear, and now the EFF's Fred von Lohmann has done a great job detailing how any "problems" that Hollywood might face from "piracy" are problems of its own making. He points to the attempts by the major studios to block Redbox and delay movie rentals.

It's the same thing we've seen over and over again. You don't win customers by taking rights away from them. You win customers by adding more value. But that seems to be total anathema to Hollywood. Instead, it seems to think that the only way to run a business is to take away or disable rights and features from users, and then charge them to re-enable them. It's not difficult to see why this is not just a recipe for failure, but one that will only drive more people to piracy, after the industry blocks them from getting what it seems perfectly reasonable to expect -- and what the technology clearly allows.

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If Google Visitors Are Worthless, It's Only Because Newspaper Execs Don't Know What They're Doing

Mike Masnick — Wed, 25 Nov 2009 10:27:00 PST

Once again, Danny Sullivan is ripping to shreds the arguments being made by newspaper execs who are talking about how Google is a "parasite" on their content, despite sending tons of traffic. In this episode, Danny looks at the silly claim that visitors from Google are worthless, by comparing the situation to a regular shopfront and how they handle browsers vs. requiring a fee to get inside in the first place. He also goes on to look at how the Wall Street Journal (to which he is a subscriber) tries to monetize him online, and the only clear conclusion is that if News Corp. execs think that traffic from Google is worthless, it's only because they're making it worthless by doing an incredibly poor job capitalizing on all that free traffic.

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Multitasking Is Our Main Activity

Mike Masnick — Wed, 25 Nov 2009 09:01:00 PST

Earlier this year, I wrote a post questioning whether the "inefficiency" found in multitasking was a bug or a feature. It was in response to studies pointing out that people who multitask tend to be less efficient at specific tasks. Folks like Nick Carr like to hold up things like that as examples of how modern technology makes us dumber, but more and more people are questioning that concept. While this is from a few months ago, Kevin Donovan points us an excellent piece by economist Tyler Cowen that challenges the concept that internet multitasking is a problem. In it, he makes a key point:

Multitasking is not a distraction from our main activity, it is our main activity.

That's a nicer way of saying what we said a few months ago. The "inefficiencies" from multitasking aren't a bug. They're a feature. Cowen goes on to explain it using the analogy of a long distance relationship compared to a stable marriage:

A long-distance relationship is, in emotional terms, a bit like culture in the time of Cervantes or Mozart. The costs of travel and access were high, at least compared to modern times. When you did arrive, the performance was often very exciting and indeed monumental. Sadly, the rest of the time you didn't have that much culture at all. Even books were expensive and hard to get. Compared to what is possible in modern life, you couldn't be as happy overall but your peak experiences could be extremely memorable, just as in the long-distance relationship.

Now let's consider how living together and marriage differ from a long-distance relationship. When you share a home, the costs of seeing each other are very low. Your partner is usually right there. Most days include no grand events, but you have lots of regular and predictable interactions, along with a kind of grittiness or even ugliness rarely seen in a long-distance relationship. There are dirty dishes in the sink, hedges to be trimmed, maybe diapers to be changed.

If you are happily married, or even somewhat happily married, your internal life will be very rich. You will take all those small events and, in your mind and in the mind of your spouse, weave them together in the form of a deeply satisfying narrative, dirty diapers and all. It won't always look glorious on the outside, but the internal experience of such a marriage is better than what's normally possible in a long-distance relationship.

The same logic applies to culture. The Internet and other technologies mean that our favorite creators, or at least their creations, are literally part of our daily lives. It is no longer a long-distance relationship. It is no longer hard to get books and other written material. Pictures, music, and video appear on command. Culture is there all the time, and you can receive more of it, pretty much whenever you want.

In short, our relationship to culture has become more like marriage in the sense that it now enters our lives in an established flow, creating a better and more regular daily state of mind. True, culture has in some ways become uglier, or at least it would appear so to the outside observer. But when it comes to how we actually live and feel, contemporary culture is more satisfying and contributes to the happiness of far more people. That is why the public devours new technologies that offer extreme and immediate access to information.

Many critics of contemporary life want our culture to remain like a long-distance relationship at a time when most of us are growing into something more mature. We assemble culture for ourselves, creating and committing ourselves to a fascinating brocade. Very often the paper-and-ink book is less central to this new endeavor; it's just another cultural bit we consume along with many others. But we are better off for this change, a change that is filling our daily lives with beauty, suspense, and learning.

The full piece is much longer, but beautifully written and quite convincing.

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Greed vs. Due Diligence: Another Case Of Startup Fraud?

Mike Masnick — Wed, 25 Nov 2009 07:33:00 PST

The world of startups can be a fast moving place, with lots of money thrown around quite rapidly at times. In such a world, it's no surprise to hear stories of pure outright fraud mixed in with all of the real stories of actual startups. They seem to come along every year or so -- and usually involve companies raising a ton of VC money and simply making up financial results, which the VCs never seem to check. Last year, it was Entellium who raised $50 million while totally making up revenue numbers. We wondered, at the time, how its investors never got around to actually auditing the company they gave so much money to. However, it really is par for the course for many investors to simply trust the management.

The latest such case, as revealed by TechCrunch, appears to be Canopy Financial, a high flying startup that had raised $65 million, but apparently made up a bunch of its revenue, potentially even forging audit statements from KPMG. Amazingly, the company's CEO is claiming he had no idea this was happening, which is either untrue or an incredibly damning statement on what sort of CEO he is. Once again, though, you have to ask what the investors were doing, and how they handed over such large sums without ever doing any serious due diligence.

These sorts of scams are pretty depressing for all those legitimate startups out there, who work hard to build real businesses, and sometimes even lose out on being able to raise money from these same VCs who were totally snookered by the scammers (though, honestly, would you want those same folks to invest in you really considering their ability to get taken in such a scam?). There's a lot of good things that happen in Silicon Valley... and a lot of money thrown around. Unfortunately, when that happens, it's inevitable that some bad characters jump into the game as well and just cook the books.

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Anti-Piracy Group In Spain Fined For Bad Faith Actions Against File Sharing Systems

Mike Masnick — Wed, 25 Nov 2009 06:01:00 PST

We were just talking about how the justice system in Spain seems at least somewhat more reasonable on the subject of file sharing, and here's yet another example. A court has overturned injunctions on two file sharing sites and fined the anti-piracy group that brought charges against them in the first place for "acting in bad faith." The case was dismissed because the court realized (yet again) that linking to infringing material is not infringing itself. But, the "bad faith" part involved the anti-piracy group, SGAE, tricking the operator of the sites into believing that two SGAE employees were representatives of the court and had the right to search his home and confiscate computer hard drives. We've seen such things allowed elsewhere, so it's nice that the Spanish courts are letting private anti-piracy groups know that they are not law enforcement.

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ABA Journal's Patent Application To Score Interview With USPTO Boss David Kappos

Mike Masnick — Wed, 25 Nov 2009 03:55:18 PST

ChurchHatesTucker writes "The ABA Journal was unable to secure an interview with the USPTO chief, so they published a faux business method patent for securing an interview. Within four hours, they got their interview."

Yes, but the real question is whether or not the USPTO would approve the patent...

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Can Universities Make Sure That Drugs Based On Their Research Are Licensed Reasonably?

Mike Masnick — Wed, 25 Nov 2009 01:44:39 PST

Joseph Franklin has written about how a group of universities have agreed to some basic principles (pdf) about providing drugs to developing nations at reasonable costs (or even free) in the interest of better global healthcare. However, Franklin wonders how well this will work in practice, and why it should only apply to developing nations, and not domestically as well. It's an interesting question, made more complicated by the fact that many drugs have their research started at universities -- frequently backed by government money -- but are later taken over by pharmaceutical companies who have no interest in such principles. I tend to think that such "principles" are nice to speak about, but are rarely effective in actually creating change. I would think that a much stronger argument is showing the economic benefits in keeping people alive. If you could rid some developing nations of certain diseases, you'd be able to open up vast new markets for other industries. Hell, imagine if you could get companies in other industries (food, clothing, transportation, etc.) to pay for drugs for the poor in developing nations, knowing that keeping them healthy will help those nations build their economy so they can start purchasing the same food, clothing and transportation...

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Companies Realizing That Content Is Advertising Via Web Series

Mike Masnick — Tue, 24 Nov 2009 21:21:22 PST

The NY Times has an article about the rise of online "web series" shows that are suddenly popular, noting that many brands are creating such things as a way to produce interesting content online while getting some attention for their brand. It's yet another realization that advertising is content and content is advertising. The key point, that many say they realize (and hopefully they live up to it) is that none of this works if the content itself sucks. So they're working on these shows with a focus on making them good and enjoyable to watch first, and including the sponsorship as a secondary part of the effort. I'm sure there may be some backlash over this idea, but it actually makes quite a lot of sense. It gets more good content out there, and helps brands get themselves noticed and remembered not for intrusive and annoying advertising, but for sponsoring something cool.

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Could You Prove That The Government Was Watching You Illegally?

Mike Masnick — Tue, 24 Nov 2009 19:01:26 PST

Wired has an article about a court dismissing a lawsuit by a guy who claimed the government was spying on him. The claims sound pretty much like your run-of-the-mill tinfoil-hat-wearing paranoid, so it's no surprise that the government tossed out the lawsuit. But, as David Kravets points out in the article, what if the government actually did put someone under 24-hour surveillance. Would there be any way to prove it? Since the government won't admit to things like who's on the no-fly list and still supports warrantless wiretaps, it could very easily make anyone who really is under surveillance out to be a nutcase tinfoil-hat wearing lunatic. It seems quite unlikely that was true in this case (or in most cases of such claims), but it does seem bizarre that if you really were in such a situation, proving it would be almost impossible as well.

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Reuters, AP Refuse To Cover Cricket Matches Over Restrictive Press Accreditation Rules

Mike Masnick — Tue, 24 Nov 2009 16:56:43 PST

Sports leagues around the world have been trying to put more and more restrictive rules on various journalists and news organizations when it comes to reporting on their events. In the US, both the NFL and the MLB have put ridiculous restrictions on what reporters can write about or post on their websites. While, technically, these leagues cannot stop news organizations from covering their events, they can restrict what kind of access they have. Of course, for basic coverage, when the events are televised, reporters could just as easily cover the event while watching it on TV. Still, it's been disappointing that the major news organizations have refused to stand up to the football and baseball leagues over this attempt to restrict their reporting.

Apparently, they only do that on sports that don't get as much attention (in the US, at least).

Last year, we wrote how the press was planning to boycott various cricket matches over similar attempts to limit reporting. And, once again, major news organizations like Reuters are proudly announcing that they will not be covering certain cricket matches due to the press policies. The Associated Press has announced similar plans, and says that the AFP is also refusing to cover the matches. At what point do these sports leagues realize that they're better off with press coverage than without?

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Comparing File Sharing To Payola: Could Have Had That Promotion For Free

Mike Masnick — Tue, 24 Nov 2009 15:21:41 PST

BullJustin points us to a short NPR piece about four massive failures by the recording industry. If we skip over number 3 (Kevin Federline), the other three are pretty relevant to what we talk about here on a regular basis: the Sony BMG rootkit fiasco that opened up security holes on computers without letting anyone know, the RIAA's lawsuit strategy of suing fans and the record labels' ongoing efforts at payola to get songs played on the radio.

However, BullJustin makes an amusing point in the submission concerning that last one:

It cost the industry untold millions in actual payola, independent promoter fees, and then more than $25 million in settlements, not to mention lawyer fees. If they would have just let people share the music online, the marketing they were looking for could have been free."

It really does make you wonder what goes through the minds of record label strategists. They tossed away millions paying people to get music heard, when they could have just embraced file sharing and made it cheaper and easier to get music heard without running into the legal problems of payola as well. Of course, the problem with that plan is that the labels also lose "control." They've paid to get songs on the radio because they wanted to just focus on a small group of artists who they could squeeze for as much profit as possible, dumping all the rest. File sharing makes it harder and raises the possibility that other artists might also get heard.

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