Blizzard Still Twisting And Distorting Copyright To Go After Cheaters

from the paved-with-good-intentions dept

The road to Hell, as they say, is paved with good intentions. The lesson in that axiom is that one should always be wary of the potentially adverse consequences of actions intended to be good. Blizzard, unfortunately, appears to be something of a performance art piece on this concept. For many years now it has, under the auspices of protecting the larger portion of its customers' gaming experience, gone after hackers and cheaters in its games by twisting copyright law into a tortured pretzel. It began with Starcraft and then transitioned into World of Warcraft, both relying on a morose entwining of copyright law and terms of service. That combination essentially creates a cascade of faulty nonsense, starting with the concept that software is only licensed and not sold to customers, that ToS agreements are so binding that breaking them breaks the license, and finally that breaking the license negates the ability for fleeting copying that the software employs, creating a copyright infringement. If your head is spinning, you aren't alone.

Yet, Blizzard continues on, now going back into the Starcraft realm to sue "hackers" for copyright infringement in the name of protecting the larger audience of the game.

Blizzard filed papers in a California court on May 19th alleging that an unidentified group of programmers infringed on the publisher's StarCraft II copyright with a series of cheats and in-game exploits collectively known as the "ValiantChaos MapHack." Designed to give StarCraft II players any number of competitive advantages when playing the game online, the MapHack was made available online through the ValiantChaos forum—provided that forum members paid $62.50 for access to its VIP section. The complaint Blizzard filed says that the company is taking action against the programmers in order to "protect the sanctity of the StarCraft II experience" against "hacks, mods or any other unauthorized third-party software" that undermines the competition central to the game's online multiplayer.

It would be quite easy for any Starcraft 2 player to cheer Blizzard on at this point. I don't play this particular game, but I've wished all manner of ill in the past on those that were obviously using cheats and hacks in online games in the past. Counter Strike, in particular, did more to teach me how much I hate cheaters than any other single experience in my entire life. That said, we still have the same problems as before.

Blizzard's filing again lays out its view that its software is licensed, rather than sold in the traditional meaning -- and that a violation of its ToS and EULA agreements nullifies that license. In addition, it claims both that the hacks created by the hackers (even if their copies were purchased legitimately) constituted a modified end-product, or illegal derivative work, and that this resulted in both direct and contributory infringement in the instance of every copy of the hack they provided, used or sold. It also, of course, argues that anti-circumvention clauses of the DMCA apply.

The problem with all of this is that it still relies on the twisted assumptions that Blizzard customers don't actually own what they bought and that ToS and EULA agreements are so binding that violation of them negates the license that the company insists was all that was purchased. As I mentioned, this may be done in a valiant effort to keep most of its customers as happy as possible, but that doesn't make it right. The wider implications of these rulings is horrifying. There simply will be unintended consequences in this that will prove to be far more harmful than any annoying game-hackers can create with their irritating products.

This may seem crappy, but the best course for everyone involved would be for Blizzard to simply jump back into the arms race with these cheaters and hackers and try its best to keep them off the company's servers. Going the legal nuclear option and twisting copyright into the mix may only amplify the amount of harm being done all around.

Filed Under: cheaters, copyright, games, hackers, license, sales, software, starcraft
Companies: blizzard

Streetlight Manifesto Can't Fulfill Pre-Orders Because Label Refuses To Give Them Their Own Records

from the labels-represent-artists? dept

A year ago, we wrote about how the band Streetlight Manifesto was urging people to boycott its own album, unless it was bought directly from the band, because their label, Victory Records, wasn't giving them any of the money. Here's what they said at the time:

We’re writing today to ask you to please boycott all Streetlight related items by not purchasing any of our records or merchandise from Victory’s website, any traditional CD stores, online third party retailers or any digital distribution service (iTunes, Amazon etc). Victory has a long-time reputation of pocketing all of the proceeds from a band’s music and merch, with shady accounting and generally bully-ish behavior. If you want to support Streetlight, our music and our ability to tour and continue to release music, please make all SM related purchases from our own webstore, The RISC Store (www.riscstore.com), or come out to a show and buy a shirt or cd from us directly. In regards to getting the music we make, you can buy directly from us, or, alternately, we’re sure you can find a way to get the tunes onto your computer that may not be, ahem, traditional… Speaking a Bit metaphorically, there is a Torrent of methods to accomplish this, and Google is your always loyal friend…

Believe it or not, things have now gotten even worse. Tim Griffiths writes in to let us know that the band was preparing to launch its latest album, and had even been taking preorders for the album through its own store as mentioned above... but now they claim Victory won't even give them copies of their own album to sell:

Q: Why do I not have my record yet? I totally want it.

A: Simple – Victory Records has refused to send us any of Streetlight’s new album. Without that – we can not send out pre-orders. Classy move. Read on for more information about your order.

The issue is made more complex by the fact that the band's lead singer, Toh Kay, also released a companion album to the SM album, with a very similar name. SM's new album is The Hands That Thieve, while Toh Kay's is The Hand That Thieves. When Toh Kay put up a video from his album, Victory claimed it infringed on their copyright and had it taken down.

Q: I wanted to hear the Toh Kay record. The music video – before Victory took it down – was beautiful and so was the song. My gosh. What happened?

A: Victory had given Streetlight a choice: either completely kill the Toh Kay record (their absurd reasoning was that its sale would “cannibalize” Streetlight sales, ha!) or hand it over to them so they can release it and exclusively profit from it. Streetlight has experienced and documented years of Victory not paying royalties while continuously profiting from their music, so it was a no-brainer. We had to cancel the record, no matter how much we all loved it and how hard the guys worked on it. That music video, by the way, is also “illegal”. So if you saw it – your eyes are criminals.

The band is offering to give back people's money, or figure out other ways to satisfy various orders. As in the past, they've also suggested that alternative means to finding the album might be fans' best path:

Q: The Streetlight record leaked online – I already ordered it through you – how should I feel inside about downloading it?

A: We can’t tell you how or where to download it – but if you already paid for it, and it’s being withheld from you by the band’s own record label – well, take that how you will.

And also, this:

Q: This whole situation makes me hate the music industry and I now understand why it – as a business entity – is failing across the board.

A: Yeah. I hear ya. I just downloaded Dredd 3D – wanna watch it with me?

Remember stories like this the next time labels pretend that they represent the best interests of artists.

Filed Under: copyright, dispute, labels, sales, streetlight manifesto, toh kay
Companies: victory records

A Tale Of Two Studies: File Sharing Helps Sales!

from the the-other-side-of-the-coin dept

In the first part of this three part series, we talked about some research that suggested that the shutdown of Megaupload directly resulted in an increase in the sale and rental of digital movies. The study's authors used that to suggest that this proves that unauthorized download sites displace actual sales, and that there is likely a positive economic impact on copyright holders when properties like Megaupload are shutdown. However, as noted, another study that came out just after that one seemed to suggest something very different.

The second study, put out by the European Council, also is rather compelling, but argues something almost entirely contradictory: that there is no sign that infringement leads to a decrease in sales. In fact, it shows a very slight increase in sales. The researchers here were looking at a different market, however. They looked at digital music, and the impact of infringing downloads on authorized streams and downloads. The research found little impact:

Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country differences in these effects.

Going a bit further, they note:

Perhaps surprisingly, our results present no evidence of digital music sales displacement. While we find important cross country differences in the effects of downloading on music purchases, our findings suggest a rather small complementarity between these two music consumption channels. It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them. The complementarity effect of online streaming is found to be somewhat larger, suggesting a stimulating effect of this activity on the sales of digital music.

Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues.

There are some significant similarities between the two different studies. Both go through the previous research into this issue and tend to cite almost all of the same papers (which is a good sign) to show what's been done before, and what the limitations are of that research. Both also focus on the question of online impact. That is, previous research has tended to focus on the impact on other modes of consumption: i.e., does downloading increase or decrease DVD purchasing, CD purchasing or movie theater sales. Both of these reports, however, look strictly at unauthorized downloading/streaming as compared to authorized downloading/streaming.

The specific methodologies differ somewhat, however. The MPAA paper compares overall sales/rentals vs. Megaupload penetration. The EC paper looks at direct clickstream traffic data as provided by Nielsen NetView, which collects direct data on exactly what sites people visit. The EC researchers, Luis Agular and Bertin Martens, then classified visits to different "music consumption" sites to see if they could isolate some sort of relationship between unauthorized streams and downloads and authorized ones. As with the MPAA study, there are some potential limitations there (mainly in sussing out the details of what people are actually doing on any particular page -- especially when some pages, such as Amazon.com, could result in other activity that is not music related), but the researchers do a good job trying to control for these limitations.

Also, it's good to see that in some cases the underlying data between the two studies agrees. Both, for example, show much greater usage of sites that have many unauthorized uses in Spain, for example. Unfortunately, other than Spain, France and Germany, the selection countries studied in the two reports is mostly different, so it's difficult to confirm other points between the two.

The EC study confirms another point that should be settled by now: those who use unauthorized sites are the biggest fans, by far.

The figures show that legal consumers (individuals that never clicked on an illegal music website during 2011) are, on average, active 2.5 months a year, while downloaders are active almost 6 months a year. Most interestingly, downloaders are also more active than legals both in terms of legal downloading (10% more clicks) and legal streaming (40% more clicks), as shown by their mean values of clicks. A positive relationship between legal and illegal consumption of digital music therefore emerges from this simple comparison of means. Comparing streamers and non- streamers (individuals that never clicked on a streaming music website during 2011) leads to similar conclusions. The figures show that streamers click more than twice as much on legal downloading websites, while their clicks on illegal downloading websites is 90% higher than for non-streamers. Again, this simple comparison of means shows a positive relationship between the different consumption channels and in particular between streaming and legal purchases.

Of course, as many will (rightfully) point out, this is just correlation data, which is useful, but not enough to prove any causal relationship. So the researchers go further. They use a number of variables try to separate out which users are most interested in music itself, by looking at whether they visit other music-related websites, such as music lyrics or music news sites, as well as other types of "music consumption" sites like video websites. Again, the data suggests a clear causal relationship.

Our results suggest that illegal downloading and legal streaming have both a positive and significant effect on legal purchases of digital music.

As you can see in the report, they continue to slice and dice the data a few different ways to test for other potential variables that might be creating this situation, and each time they fail to find any evidence of it. Instead, they see the same thing: engaging in unauthorized downloading appears to lead to more digital purchases, and the same for authorized streaming.

In the third piece in this series, we'll see if we can reconcile what appear to be very different findings in these two studies, as well as respond to the entertainment industry's freak out about this second study.

Filed Under: european commission, file sharing, increased sales, music, sales, studies

A Tale Of Two Studies: File Sharing Hurts Sales!

from the fun-with-data dept

Over the last couple of weeks, we've seen a bunch of folks on all sides of the debates about file sharing point us to two studies that have come out, one of which supporters of greater copyright enforcement insist prove their point, and another which seems to show (yet again) that file sharing has little impact on buying habits. I wanted to take the time to look through both studies before writing about them, and since they came out so close together, we might as well do one post looking at both. As I started to write up a single post about it all, it got really, really long. So I'm breaking it into three separate posts. One about the first study, which argues that file sharing hurts sales, one that looks at the second study, which argues that file sharing does not hurt sales (and may actually increase sales), and then a third post, which tries to reconcile the findings of the two studies, while also responding to some of the criticism.

The first study is called Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales and is by Brett Danaher and Michael Smith. Smith, especially, has a long history of producing reports that copyright maximalists love. For example, both he and Danaher were responsible for a study last year claiming that the Hadopi 3 strikes program had increased iTunes sales. Unfortunately, a quick review of that report raised serious questions about the basis for those claims, as an alternative hypothesis (related to the sale of new iPhones) showed much more compelling data. I see his name on a lot of research sent around by the maximalists. It's worth noting, as well, that the study was effectively funded by the MPAA, since it was a project of a program run by Smith and funded by the MPAA. Oddly, the paper fails to disclose this tidbit.

This new study seeks to answer a question we've been asking over and over again: do any of these enforcement efforts actually increase sales? There has been evidence that greater enforcement has a small, but temporary, impact on decreasing infringement, but there was not that much data concerning actual sales. In fact, we've pointed to data (contradicting Smith's other report) that suggested Hadopi had done little, if anything, to increase sales. However, the data here has been limited, in part because there are so many other variables at play, so it's difficult to separate out the actual impact. Smith and Danaher try to use data from various studios to look at the impact on movie sales following the Megaupload shutdown.

To try to determine the impact of the shutdown of Megaupload, Danaher and Smith basically compare movie sales before and after the shutdown date in a few different countries that had very different Megaupload usage. For example, they (using Google Adwords data) suggest that Megaupload had 2% penetration in the US, but 17% in Spain. Then they look at what the impact was in terms of digital movie sales and rentals compared across the different countries, and whether or not there were more sales in countries that had more Megaupload usage. They use this to argue that the key difference is Megaupload usage. The end result is that countries that had more Megaupload penetration saw a greater increase in digital movie sales and rentals following the shutdown than the countries that had lower Megaupload penetration. As they note:

This difference is both statistically and economically significant. Our findings indicate that digital movie revenues for two studios were 6-10% higher over the 18 weeks following the shutdown (across 12 countries) than they would have been if not for the shutdown.

This chart highlights the basics: As you can see, the countries that had higher Megaupload penetration (Mexico, Belgium, France and Spain) all also showed distinctly more sales relative to the other countries, which had relatively lower Megaupload penetration. There's a similar chart for rental data as well, in which you see a similar pattern, though not nearly as strong a correlation.

While I've seen some criticism online of these findings, I actually think the basic research and methodology is fairly solid. Those who have jumped up and said "correlation is not causation" are ignoring the various methods that the researchers used to isolate the shutdown. However, I'm not sure that the conclusions are quite as meaningful as some have suggested. First off, we've seen very similar data when it came to decreases in file sharing after enforcement increases -- but the impact has always been shown to be temporary, until people settle in on a new method for infringement. It would make sense that some users of such a service, who don't want to go hunting for a new free option, will switch to an authorized service if it's available. But if they become aware of other services, they might also switch back. The amount of time the impact lasts will be a key thing to watch.

Of course, the other key thing that is left out of the picture in this study is the role of authorized services in all of this. Part of the reason for the growth of infringement on Megaupload in the first place was the dearth of compelling, simple, non-annoying, authorized services. The industry has, finally, been trying to increase those, and so it could be that people who couldn't find any legit services before looked around again after the shutdown and found newer, better services. While the authors of the report say the findings suggest that Megaupload usage decreases sales, a possible alternative explanation would be that the slow pace with which the industry rolled out authorized services was equally, if not more, responsible. Either way, this report is a useful contribution in understanding the impact.

In our next post, we'll explore the second study that came out even more recently, which appears to come to a very different conclusion.

Filed Under: brett danaher, copyright enforcement, file sharing, michael smith, sales, studies
Companies: megaupload

Three Strikes May Decrease File Sharing, But If Sales Keep Dropping, Who Cares?

from the and-so-it-goes dept

A year ago, we asked what could possibly be the "value" in "cracking down on piracy" if that didn't then lead to increased sales. It's an issue that we've dealt with time and time again. We ask people a simple question: would you rather stop piracy or make more money? Most people note that the latter is the real goal. If the former does not lead to the latter then what good does "stopping piracy" actually do? The answer is none at all. The latest data out of France shows that, despite Hadopi (the administrators of the 3 strikes program) claiming some sort of victory because stats on file sharing are down, the bigger issue is that the sale of recorded music keeps declining. Digital Music News, who normally supports the the "anti-piracy" side of things, has some slides from French labels that show that sales keep decreasing, even as Hadopi highlights a big drop in file sharing and the use of cyberlockers. But all that really matters is this one: This is the key point that we've been making for well over a decade now. "Fighting" piracy is not the same as making more money. The focus should be on figuring out ways to make money. Even if we believe that copyright infringement is a bad thing, if efforts to stop it are both expensive and ineffective, why continue? It makes absolutely no sense. Instead, let's focus on the areas of the industry that have shown that they are expanding and where there's lots of money to be made for those who embrace them.

Oh, and for what it's worth, you have to imagine that the "declines" reported in file sharing and cyberlockers severely undercounts those things too, as using some rather basic tools can let people hide that sort of information from being collected -- and the efforts by Hadopi to "educate" the public likely educated them about how to use VPNs. It does not appear to have educated them to go back to buying at the same levels as the artificially inflated rates in the past.

Filed Under: file sharing, france, hadopi, music, sales, three strikes
Companies: hadopi

Last Week To Order The Techdirt Holiday Bundle In Time For Christmas!

from the countdown dept

Our Holiday Bundle of gear in the Insider Shop has been a hit this season—and if you want to give one as a Christmas gift, time is running out. This Friday, December 14th, is the final deadline for Christmas shipping in the US, and to be safe (given the unpredictability of holiday mail) we recommend ordering sooner rather than later.

For only $99 (over $50 off the regular price), the Holiday Bundle includes:

• A Techdirt zip hoodie
• A Techdirt coffee mug
• Your choice of the DMCA Tee, the Seized Tee or the Logo Tee
• Access to the Insider Chat for one year
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• An Insider Badge on your profile and comments
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Plus, don't forget about our ongoing t-shirt sale! When you buy three or more t-shirts in any styles and sizes, you get them all for 15% off. The discount is automatically applied in your cart.

Happy holidays, and a big thanks to everyone for supporting Techdirt through our Insider Shop! By the way, if you want to give us a present this year, you can always drop something in our tip jar.

Filed Under: holiday bundle, sales, techdirt, techdirt insider shop

Draconian Downloading Law In Japan Goes Into Effect... Music Sales Drop

from the what-a-non-surprise dept

For years, we've pointed out that some in the music industry get so obsessed with "stopping piracy" that they miss the fact that their main job should be to increase revenue. They make the huge mistake of assuming that the two things are the same -- and that "stopping piracy" automatically leads to "increased revenue." Yet, almost every time that issue is explored empirically (over time), it doesn't seem to hold up. The latest example was sent in by Techdirt reader edinjapan, and it concerns the new draconian anti-piracy laws that recently went into effect there. If you believed the basic theory behind this law, this would mean that greater enforcement by police would mean less piracy... and a massive influx in revenue.

Except, the reality is that consumers are spending less on music than they were before the bill became law. The article actually posits that the government has made some people so fearful of being arrested that they won't do any downloading from legitimate sources any more -- just in case it's tainted. So even if they can cut out piracy (doubtful) there's little evidence to suggest much increase in commerce as a result.

Filed Under: copyright, japan, music, sales