The Economic Argument For Why Court's Viacom Ruling Makes Sense... And Why Viacom Hates It
from the money-money-money dept
Larry Downes has a different, but important, analysis of the Viacom/YouTube decision, where he looks at it from an economic perspective. Specifically, he looks at it from "the principle of least cost avoidance." The idea is that which solution costs the least from a social perspective: Google trying to prevent infringing videos from appearing on YouTube or Viacom doing the same? And he makes the convincing case that the ruling here makes the most economic sense by a long shot. He compares it to the recent Tiffany/eBay ruling which hits on the same basic principles (noting that eBay is not responsible for others selling counterfeit Tiffany goods). Downes first points out that these platforms, like YouTube and eBay have certainly opened up amazing new markets that have great social benefit -- even if they've also opened up opportunities for infringement. There's no doubt that there's value in both platforms, but the question is does that value outweigh the downsides, and if so, what's the most economically beneficial way to "police" any such infringement:Given the fact that activities harmful to rights holders are certain to occur, in other words, the least cost avoider principles says that a judge should rule in a way that puts the burden of minimizing the damage on the party who can most efficiently avoid it. In this case, the choice would be between YouTube (preview all content before posting and ensure legal rights have been cleared), Viacom (monitor sites carefully and quickly demand takedown of infringing content) or the users themselves (don't post unauthorized content without expecting to pay damages or possible criminal sanctions).This is, to some extent, just a different way of making the point that having the platform provider monitor all content is so difficult as to make it prohibitively costly from a social standpoint. Viacom is upset because the ruling does, in fact, increase its own cost. But the other choice puts a much greater economic burden on society as a whole, because it would almost certainly make services like YouTube a lot less useful. So if you were to judge this purely on the basis of an economic/social solution that makes society better off, the judge clearly ruled in the best manner.
Here, the right answer economically is Viacom, the rights holder who is directly harmed by the infringing behavior.
That may seem unfair from a moral standpoint. For, after all, Viacom is the direct victim of the users' clearly unlawful behavior and the failure of YouTube, the enabler of the users, to stop it. Why should the victim be held responsible for making sure they are not caused further damage in the future?
But there's a certain economic logic to that decision, though one difficult to quantify (Judge Stanton made no effort to do so; indeed he did not invoke the least cost avoider principle explicitly.) The grant of a copyright or a trademark is the grant of a monopoly on a certain class of information, a grant that itself comes with inherent economic inefficiencies in the service of encouraging overall social value--encouraging investment in creative works.
Part of the cost of having such a valuable monopoly is the cost of policing it, even in new media and new services that the rights holder may not have any particular interest in using itself.
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Filed Under: copyright, economics, least cost avoidance, liability
Companies: google, viacom, youtube
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Most cost avoidance
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The grant of a copyright or a trademark is the grant of a monopoly on a certain class of information, a grant that itself comes with inherent economic inefficiencies in the service of encouraging overall social value--encouraging investment in creative works.
Here's another example of why it's important to distinguish "theft" from "infringement". If IP were really property, then it would not make sense to hold the victim responsible the preventing the damage caused by theft. But because IP is not property, but a limited right granted to a party for the overall benefit to society, it makes perfect sense to view enforcement of that right in the context of the overall benefit (and cost) to society. This issue is only confusing if you mistakenly view IP as property which can be "stolen".
Also, shouldn't it be the principle of most cost avoidance?
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essentially, the judge said that ip property is not important, not relevant, and ip laws should be disregarded. this judgement is almost certain to be overturned, and if not, there is almost certain to be new laws passed to fix this obvious legal black hole.
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"essentially, the judge said that ip property is not important, not relevant, and ip laws should be disregarded."
That's not what the judge said, even though it is the truth. Viacom can still protect it's own videos, they just have to do it themselves.
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then they have to raise the price of their products to pay for all this stuff, which in turn makes more of you want to steal it rather than pay for it.
a stunning, nasty defeat for rights holders, and something that is likely financially unsupportable by the content producers.
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or even better, embrace the modern age and UTILISE the services provided by youtube etc (by acknowledging the value to them of FREE ADVERTISING and more)
no suggestions of them having to increase their cost-base to do either of these, just to be a bit more intelligent in their approach towards possible rights infringements and not waste resources on lawsuits, which as this one has shown, are a waste of time and (more importantly to them) money.
for me, the unnecessary lawsuit approach appears as negative advertising so they're shooting themselves in the foot and are increasingly unlikely to get me to pay for anything anyway.
Ultimately, they need to figure it out for themselves. if it takes wasting money on pointless lawsuits for them to finally get there, so be it.
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The solution, as ever, is for Viacom to stop pretending it's the 20th century and bring its business in line with the realities of the modern marketplace, just as every industry has needed to for hundreds of years.
There's a great promotional tool out there they could use to help them market and sell their goods at minimal cost to themselves. It's called YouTube.
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Viacom knows what it's stuff is. Google does not. There is no possible way for Google to tell what is Viacom's and they don't want, what is Viacom's and they do, what is fair use, and what isn't even related to Viacom in any way shape or form. You say it's too hard for Viacom to police it's own work, I say it's impossible for anyone else.
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If it is financially unsupportable by the content producers then it is financially unsupportable full stop - so it should not be supported.
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No if you look that is not what is being asked,. All that is being asked is that Viacom should "inform the police" when their rights are infringed.
If you car is stolen of your house is burgled you do expect to have to bother to dial 999 (911 in US) don't you?
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how many pages currently in google? this ruling effectively means that media companies (each and individually) will be required to either accept widespread piracy and misuse of their content, or search each of those pages on a regular basis (and all new pages added) to try to stop unapproved usage.
for content creators, this leaves them with few economically viable options, and very likely lowers the long term value of the assets they create.
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As opposed to the situation in the 1980's where they would have had to spy on every single home to ensure no-one was taping their music. Very sensibly at the time they decided not to bother - and they didn't have the nerve to ask the government to do it for them.
The fact is that the cost to the nation as a whole of enforcing these rights now greatly exceeds their value. (and your argument implicitly admits this). In these circumstances enforcement makes no sense
They need to remember the Serenity Prayer:
God, grant me the serenity
To accept the things I cannot change;
Courage to change the things I can;
And wisdom to know the difference.
http://en.wikipedia.org/wiki/Serenity_Prayer
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Of course I'm pretty sure you'll dismiss this and say "That's Google's problem", but I'll give you a few tips to get you started anyway:
The method must work in EVERY possible instance, no matter how screwed up it is. In fact, the method must take into account possible mangling or obfuscation the uploaders may use to try to hide it's nature.
This, of course, rules out pattern matching, so you are going to have to use some sort of image/audio recognition algorithms, most of which are probabilistic (based on personal experience) and prone to (massive and humiliating) failure (brick walls clocked at 200mph come to mind...).
But this would also assume that Viacom provided Google with the material that could possible be infringed, or that Google somehow must know what material is infringing for these algorithms to be able to work.
Your only resource, I think, is to implement some sort of artificial intelligence and train it to identify what files infringe. My advice is open up the EMACS psychotherapist and have a chat with it to get you started on AI's and then build up from there.
Now, notice that the method must scale, meaning that you can't afford to take an hour to process 10 minutes of video since there are already about a gazzilion files on queue waiting to e processed. So this pretty much tosses the AI solution out the window (most AI's I've seen guzzle up CPU cycles like there's no tomorrow).
So basically, you're screwed. There is no way to algorithmically identify what files infringe or not. The only way is to have a human go through every file, or bog down the system to the point of uselessness. You could always try the magic eight-ball method...you'd probably have more luck there (statistically guaranteed to get it right 50% of the time, unless you are a moron).
These are my thoughts. If you have any better ideas, by all means, shoot.
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It's far less "insane" than requiring the service provider to pay for a staff to monitor an infinite amount of cyberspace to look for offending materials. Who better to determine if something infringes than the rights holder? A common TechDirt story is how the rights holders don't even know what is infringing. If they can't even determine this, how can the service provider be reasonably expected to do so?
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So what you are saying is that the cost of policing copyright exceeds the return that you can make from that copyright - and so you wish the rest of society to pay more than your (so called) property is actually worth to defend it for you. That truly would be insane.
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Spoken like a true alarmist: deceitful, specious, wrong. The law is clear (as you yourself ALWAYS point out and uphold as the standard to bear): the burden is on the copyright holder. Otherwise, dont put you stuff out under copyright and claim its privileges. You cant have it both ways.
"essentially, the judge said that ip property is not important, not relevant, and ip laws should be disregarded. this judgement is almost certain to be overturned, and if not, there is almost certain to be new laws passed to fix this obvious legal black hole."
Bullshit specious again. The ruling says no such thing, the judge is only stating what YOU YOURSELF always say: the law is the law and must be followed. You are completely being a hypocrite here, and have totally undermined any effort you have made to date to counter these points with your alarmist, chicken-little-meets-glen-beck rhetoric.
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essentially, the judge said that the limited monopoly granted on the content owners ip should be monitored by the party that stands to gain the most from the monopoly. i.e. the content owner.
this judgement is very reasonable and sound, and will no doubt result in massive lobbying on the part of the content owners to have it overturned.
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You know, I could have guessed exactly how you'd reply. Almost down the the exact works.
"essentially, the judge said that ip property is not important, not relevant, and ip laws should be disregarded. this judgement is almost certain to be overturned, and if not, there is almost certain to be new laws passed to fix this obvious legal black hole."
The judge said no such thing. Oh, and didn't your grammar teacher tell you it's bad form to say things like ...intellectual property property is not...whether or not you use slang?
Simply the judge referred directly back to the law as written and as centuries of precedence have pointed out that it's up to the rights holder to bring action in when they suspect infringement and not up to anyone else. The one trying to create a black hole appears, not to surprisingly to be you. Let's not bother mentioning a back door attempt to criminalize a civil issue (ip infringement, regardless of what I think of ip itself).
"it is absolutely insane to think that a copyright holder can afford the staff required to monitor literally an infinite amount of cyberspace to look for offending materials, and then be forced to take (often expensive) actions to have that content removed."
I think you may be starting to get it. Backwards but perhaps I see a small light coming on. It's just as insane to expect the like of YouTube, Ebay, MySpace, Craigs List or others to as well and that includes the printed classifieds in every newspaper in existence. In fact, it's insane to expect anyone to.
Instead of wasting time policing rights holders need to find ways to use that infinite space to their advantage rather than trying, impossibly, to contain the infinite in a finite box.
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"Part of the cost of having such a valuable monopoly is the cost of policing it"
It is something the IP maximalists have forgotten. You want copyright to last forever minus a day, you are going to have to police it for forever minus a day.
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Mistaken on both economics and morality.
Economics: "harmful to rights holders are certain to occur" -- No, loss of *potential* sales is *not* actually harmful. "Rights-holders" are simply greedy, and regard themselves as the acme of civilization, when they're *merely* entertainers. If patents were enforced the way and for length of time that they want copyright to be, we'd all be using candles.
Morality: "Viacom is the direct victim of the users' clearly unlawful behavior" -- Not "clearly": there's no income to the poster from posting on YouTube, and it may well be "fair use", besides that as above, "victim" is sheerly by absence of more income. Viacom wants others to expend resources for its benefit, and that is clearly immoral.
Copyright -- at least previously -- confers nothing but the right to file *civil* suit against those thought to be infringing. The "rights-holders" are now trying to get gov'ts to *actively* enforce a granted "right" to sell fantasies by minimizing everyone else's actual civil rights.
Downes looks like a neocon taking a very narrow economic view of society, promoting an exalted view of this small group of privileged "rights-holders".
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In these circumstances intelligent people have the sense not to try.
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Expensive? It doesn't cost anything to file a complaint with YouTube and they respond right away. The new system they have in place works very well in reporting possible infringing material. I made a music video using some of the footage from the upcoming Star Wars games. As soon as it was done uploading it was marked as having possible 3rd part content from Viacom and EA games. They let the video remain online until the copyright holders asks them to remove it. YouTube doesn't know if I have permission to use the material and some copyright holders allow unauthorized content to remain online. I made two music videos to an anime movie called Nausicaa. The studio removed one of them but allowed the other to remain.
In an interview with site AnimeNewsNetwork, FUNimation Entertainment copyright specialist Evan Flournay said they generally see AMVs as a sort of free advertising. "The basic thinking going into fan videos is thus: if it whets the audience's appetite, we'll leave it alone. But if it sates the audience's appetite, it needs to come down. Does that make sense?" he says.
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This thread...
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Money Talks BS Walks
But how much can it cost Viacom to have a couple of people monitoring YouTube and pushing out eForm notices? A couple of hundred thousand? Viacom probably has spent ten times more in the lawsuit. Let them put their money where their mouth is. We shouldn’t even be having this discussion if Viacom, a $17.3 billion company, does not see the cost-benefit of spending an infinitesimal fraction of those revenues on policing their content.
Yes copyright infringement is wrong. But we’re not debating that. We’re debating who pays for policing it. While I dislike the shoplifting analogy, it does fit here. Is the bus company responsible to search every passenger leaving the mall to make sure they have a sales receipt for every product they are carrying? After all, the bus is a potential getaway vehicle! Of course not, the store owners pay for security. They make the cost-benefit determination as to how much they should spend on security vs. “shrinkage.”
Viacom has made clear by its actions they don’t think they lose much money to YouTube posters. Sure spend a few million on lawyers and lobbyists to see if we can force everyone else to pay to protect our “property.”
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