North Korean Study Confirms It: People Will Share, Whatever The Risks

from the fact-of-life dept

A couple of weeks ago, I wrote about how the ever-increasing storage capacity of portable hard drives made it unlikely that the sharing of music could ever be stopped. That was a somewhat theoretical piece based on general trends in technology; but here's some supporting data from a rather unusual source: North Korea (aka the "Democratic People's Republic of Korea" - DPRK).

It comes in the form of an extensive study entitled "A Quiet Opening: North Koreans in a Changing Media Environment" (pdf). It's long but really worth reading for the insights it gives into a world that has been almost entirely hidden from the West for half a century. Rather surprisingly, it shows the impact that the physical sharing of pirated materials from South Korea and elsewhere is having on the once isolated nation. As TorrentFreak puts it:

With Internet unavailable to all but a tiny percentage of the elite, citizens of North Korea are obtaining their information through other means, notably file-sharing devices such as DVDs, MP3 and MP4 players, and USB drives.

The vast majority of those music and video players are owned by young people:

"About 70-80 percent of people that have MP3/4 players are young people," a 44-year-old male who left DPRK in 2010 reports. "When you do a crackdown of MP3/4 players among high school and university students, you see that 100 percent of them have South Korean music."

That's significant because the penalties for anyone caught with forbidden music and videos are severe: months or even years in a North Korean prison camp. TorrentFreak makes the obvious connection:

despite the massive risks, young people in the DPRK are apparently prepared to defy the regime by consuming unauthorized media anyway, something they have in common with the US youth who share files in the face of $150,000 statutory damages.

That explains why the copyright industries' current approach to enforcement isn't working, and -- more importantly -- why it will never work, no matter how harsh the penalties become. Whatever the risks, people will carry on sharing.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: file sharing, north korea, piracy

Hollywood Bending Over Backwards To Appease China

from the and-i-thought-they-were-all-thieves dept

For decades, we've been hearing complaints from the entertainment industry about just how evil China was, and how rampant "piracy" was in China and how the country needed to crack down... blah, blah, blah. But a funny thing happened on the way to the Great Wall, it seems that Hollywood has finally realized that there are over a billion people in China, and a lot of them are interested in paying for American movies. Back in March, when the MPAA's yearly numbers came out (showing continued growth, of course), the report repeatedly mentioned the rapidly growing Chinese market.

What's interesting, though, is that this is now causing Hollywood to actually rethink how movies represent people in China. That link is to a recent segment from the radio show On the Media, where they talk about how Hollywood suddenly is bending over backwards to make Chinese consumers happy -- including changing the content of movies so as not to offend the Chinese. The key story: when MGM remade the movie Red Dawn (yes, another remake), it replaced the "Soviet" enemy threat from the original with a Chinese threat. Except... after the movie was done, the studio realized that might cut out the Chinese market, so they went back in and re-edited the film to make the Chinese people into North Koreans instead.

The studio is now digitally removing Chinese flags and military symbols from the movie and are hard at work re-recording dialogue so that no one mistakes the brazen invaders for the Chinese.

There seems to be something rather ironic in the fact that Hollywood spent so much time bitching about the awful Chinese market... and now they're making massive changes to movies just to appease that market... But, of course, there's a bigger lesson here: actually providing markets with what they want, rather than worrying about piracy, seems to be a pretty good way of making money. It's just too bad that Hollywood hasn't realized that back here at home yet.

Filed Under: china, hollywood, piracy, red dawn
Companies: mgm, mpaa

Not Only Can You 'Compete With Free' You Have To If You Don't Want Your Business Overrun By Piracy

from the basic-economics dept

Rob Reid, who recently got a ton of well deserved attention for his hilarious TED talk on copyright math, has a WSJ op-ed piece, in which he tries to explain why there's so little ebook infringement, compared to music infringement. The crux of his argument? Even though the big publishers aren't really great about this stuff, rather than fight the technology, they were actually quick to embrace the technology and make authorized works available for purchase. Contrast that to the music industry, which sued every advancement in technology, including the first MP3 player, and didn't actually license an MP3 download store until many, many years after MP3 players were widely available.

Compare this to the situation in books. Although it had some small-time forerunners, the Kindle, like the Rio MP3 player, brought portability to a mass market. But the Kindle launched with licenses rather than lawsuits from the key rights-holders in its domain, and offered more than 90% of the day's best sellers when it shipped.

This meant that consumers discovered digital books through a licensed experience that delighted them. Exciting hardware, a critical mass of titles and Amazon's retail sensibilities were all integrated into a single elegant package that piracy has never matched.

Of course, piracy emerged anyway. Countless unlicensed e-books can be found online, and millions of people use them. But sales figures suggest that relatively few of these downloads represent foregone purchases. Most Kindle, iPad and Nook owners seem to view piracy as a low-rent and time-consuming experience compared with the sanctioned alternatives. They probably wouldn't if the publishers had kicked things off with a five-year content boycott.

This highlights a key point that many of us have been trying to make for a long, long time. The "answer" to the "piracy question" is not greater enforcement or more draconian laws, as the entertainment industry keeps telling us, but rather more legitimate services that can provide good value to consumers. The music industry failed at that for so long, that it really helped drive the culture of infringing music.

For years, we've pointed out that of course you can compete with free. But what Rob's article is highlighting is even more fundamental. Not only can you compete with free, you must compete with free or you're going to lose out. If you don't offer a legitimate alternative, people will flock to the illegitimate ones. Yes, some people will always infringe, but over and over again we see how legitimate services pull people away from file sharing and towards paying -- if they provide enough value at a reasonable price.

Now, I know that some will quibble with one other major difference between books and music that Rob sort of leaps over in his piece: it was much easier to create digital music than ebooks. You could just take CDs and drop it into your computer and there you go. There really wasn't a simple equivalent for books. Sure, lots of people have scanners, but that's a laborious process. Still, I'm not convinced that was really as big a deal as I'm sure some will make of it. That's because once a single copy of a book is digitized, it's very quickly available all over the place. And there were plenty of people working to digitize books long before the Kindle came along. It might have been a limiting factor, but certainly not a complete hindrance to ebook infringement.

Either way, the key takeaway can hardly be challenged: the way to deal with piracy is to offer good legitimate services, and preferably more than just one, so they can compete on adding value. Unfortunately, many in the industry like to just dip their toes in the water with a few services -- and as soon as they become successful, seek to raise prices. That's no way to encourage a long term market success.

Filed Under: compete with free, copyright math, kindle, mp3, piracy, rob reid

Dear Ari Emanuel: We're All Meeting On The Internet, Come Join Us

from the and-living-and-working-here-too dept

We recently posted about Hollywood super agent Ari Emanuel's ridiculous demands that Google somehow find the magic "stop piracy" button. That story is turning into something much more interesting. The next day, at the same conference, a Google exec, Susan Wojcicki, pointed out the obvious: that Emanuel doesn't know what he's talking about (she used a more diplomatic phrase, noting that he was "misinformed").

Emanuel has since shot back that he's not at all misinformed about the need for the geeks in Northern California to solve his problems:

I am misinformed about a lot — just ask my wife — but I’m not misinformed about this: One of our last remaining dominant American exports is our creativity, no matter how you define it, either as a story or as an algorithm. There is equal genius behind companies like Apple, Facebook, Amazon and Google as there is behind artists who create stories that resonate around the world. We need to protect America’s intellectual property and Hollywood can’t do it on its own. I understand that the onus is not entirely Google’s, but let’s stop talking at each other and get in a room with all parties to figure this out. To be clear, I don’t want to rehash SOPA as we can all agree that was a reflection of Southern California’s arrogance, and let’s also not pretend that we’re working together on this issue because we have Youtube channels together. This is a larger conversation. It’s time for Hollywood, our government and Silicon Valley to step up and collectively resolve this problem. Let me know where and when and I’ll be there.

Ari

The problem, of course, is that his very premise is wrong. He's taking the position that we need to "protect" first, rather than just fix our business models. This is a very mercantilist viewpoint: where protectionism beats innovation. But we've got centuries of economic proof that that's not how you evolve and it's not how you innovate and compete. What you do is you figure out ways to add value and to embrace new business models. Any effort that starts from the default position that what we need is more "protection" rather than greater innovation is doomed to fail -- because that innovation is an unstoppable train, and the "protection" aspect doesn't work. So if you don't focus on the innovation, then someone else will, and you'll have wasted all your time, effort and money on a "solution" that simply drives your business somewhere else. To the place that has focused on innovation.

But, even worse, is his arrogance in thinking that this is a problem that requires "Hollywood, our government and Silicon Valley to step up and collectively resolve this problem." This is the same thing we've been hearing for months out of Chris Dodd and the Hollywood crew: it's time to get back into the backroom and craft "a deal." That's how they think, but it completely misses the point. This isn't about crafting a backroom deal, it's about recognizing the power of the internet, and the importance of the internet to people.

Every time a Chris Dodd or an Ari Emaneuel suggests a backroom deal between Hollywood, Silicon Valley and the government, he leaves out the people who actually matter: all of us, out here, on the internet.

And, to that point, if he wants to know "where" this larger conversation is happening: it's right here. On the internet. It's on news sites and social media sites. It's on Reddit and Twitter and Facebook. It's here on Techdirt and lots of other blogs. We live on the internet and this conversation has been happening for a decade. Ari and his buddies have always been welcome to join, so it's a bit disingenuous for him to suggest that he'll "be there" when we tell him where "the meeting" is. It's here. It's going on all around you and you've always been welcome to join. But you don't. And, no, I won't even get into the irony of him demanding a "meeting" when Hollywood did absolutely everything to keep the rest of the world out of the backroom meetings that led to SOPA.

Joshua Topolsky, the editor in chief of The Verge -- who challenged Emanuel, and was rudely told to "go sit down" and had Emanuel ask "where do you work?" -- has written his own response, in which he tells Emanuel he works on the internet:

What Ari seems to forget, and what maybe politicians and the film and TV industry seem to forget is the last time piracy was a flashpoint between the entertainment and tech industries, the problem was not solved by sledgehammer legislation. Or takedowns. Or yelling. It was solved by the music industry accepting that their old model was broken, and technologists figuring out a new way to do business. And that gets to the core of this problem for Ari. We didn't go back to the way things were after the RIAA sued college students — the industry changed.

He doesn't want to change his business model, and he will do anything he can to protect it — including altering the basic functionality of the internet. Pirating and Apple's resulting rise in the music business changed that business forever... and diminished its financial footprint. Entrenched companies that owned every part of the food chain suddenly discovered they were just another cog in a big wheel.

Ari doesn't want that anymore than the music industry wanted it, or traditional media wanted it. Ned Ludd and his machine wreckers didn't like change either.

But there is one simple truth that I really believe in, in life or in business: adapt or die.

You want to know where I work Ari? I work on the internet. Welcome aboard.

I'd argue it goes even further than that. We don't just work on the internet. We live and breathe the internet. It is our identity. Emanuel looks at the internet, and he doesn't get it. To him, it's just a version of television that doesn't pay as well, so that's not interesting. In his talk, he repeatedly demanded a business model that pays as well as TV. That's not how this works. Disruptive innovation doesn't wait until you go back and provide the legacy players with a business model that pays just as well as the old business model. That's not disruption. Disruption works because the legacy players are too shortsighted to see the trend lines, and so infatuated with their fat profits that they don't recognize the potential of the new mediums, and only seek to regulate against them becoming too pesky. The train companies pushed for legislation requiring all automobiles be preceded by a person walking on the road waving red flags.

Emanuel is asking for everyone to come up with the next version of red flag laws for the internet. That's not how this works.

If he wanted a real conversation, it wouldn't be focused on the parameters of how do we set up protectionist, mercantilist barriers. It would be on how do we create more value and then monetize that value. And those conversations are happening all the time, all over the internet. He's welcome to join. He's always been welcome to join. But it requires doing a little actual working and living on the internet.

Filed Under: ari emanuel, copyright, innovation, internet, piracy, protection
Companies: google, william morris

French Film Exec Insists That Anti-Piracy Efforts Made Sure No French Films Were Downloaded For 7 Months

from the this-is-called-denial dept

We've certainly seen the entertainment industry continually try to pretend that Hadopi's clear failure is a success story. However, sometimes it seems to go from just massaging the numbers into outright denial. That seems to be the case with Nicolas Seydoux, who is both the president of a French film company and the head of the local anti-piracy organization, ALPA.

In a recent statement, Seydoux insisted that the "methods developed by ALPA" (going beyond just Hadopi) made sure that not a single French film was downloaded between May 15th and December 15th in 2011:

“Between 15 May and 15 December 2011, no French film has been downloaded from the Internet,”

Oddly, he doesn't even seem to distinguish authorized online movie services from unauthorized. He just insists that no films have been downloaded. At first, I thought that perhaps he really meant that no new French films had been leaked online, but that's not what he says. He literally claims that zero French films were downloaded during those seven months. I guess he's declaring victory for his anti-piracy organization, but it's impressive how the pure bubble he's living in does not even come close to reflecting reality.

Filed Under: alpa, france, hadopi, nicolas seydoux, piracy

News Corp. Wonders If There Could Possibly Be Any Arguments Against Anti-Piracy Efforts

from the apparently-paying-attention-isn't-a-core-competence-at-murdoch-and-co. dept

The International Institute of Communications is hosting a particularly one-sided "roundtable seminar" in Hong Kong this week about "content piracy." Just from that phrase, you should know the deck has been stacked against a reasoned analysis of the nature of internet communications. So, it shouldn't be a surprise that the RSVP email is actually from News Corp., or that the "agenda" of the session is entirely one-sided, and suggests a pretty impressive tone-deafness to the worldwide protests against SOPA/PIPA and ACTA. For example, the final question is particularly amusing:

Are there arguments against actions aimed to reduce the impact of these overseas rogue websites?

Apparently, all the concerns about collateral damage, free speech, due process, internet security and the like fell on deaf ears at News Corp. Instead, they seem to be wondering how anyone could possibly have an argument against the next SOPA. An intellectually honest discussion would at least admit that there are arguments being made both for and against these kinds of actions, and actually explore the reality. As we've noted plenty of times in the past, it's no secret that online infringement represents a challenge for established players, but that doesn't mean the immediate reaction should be to go on the attack in a way that creates many more problems, and is unlikely to solve the problem they think they're attacking. So, the argument "against" going after such websites is that it won't work, it's a waste of time and money, it will have tons of collateral damage... and you can better deal with the "problem" by providing more quality legitimate services without restrictions and at better prices. See? Not that hard.

Filed Under: acta, pipa, piracy, rogue sites, sopa
Companies: news corp

Amanda Palmer And Steve Albini On 'Piracy': It Only Helps Musicians

from the spread-the-music dept

Okay, here's a bit of a two-fer. With all of the attention that Amanda Palmer has been getting for her massively successful Kickstarter campaign, we had some commenters here questioning whether or not she would freak out if people then shared her music. Thankfully, in her latest update about the project she answers that and many other questions from some folks who are still a little confused about what's going on. But, for this post, let's focus on the simple question of "piracy" -- since it's one that comes up often enough around here:

i think music should be shared. all the time. by everybody. i think it’s pure insanity to make music filesharing illegal.
and with that said, i have, for years, encouraged my fans to burn, download and share all of my music with each other and with strangers.
and i will never stop doing that. all that sharing eventually comes back to me in all forms of income and goodwill.

This actually reminded me that, a few weeks earlier, famed music producer Steve Albini did an AMA on Reddit, in which he was asked a similar question, to which he responded:

I reject the term "piracy." It's people listening to music and sharing it with other people, and it's good for musicians because it widens the audience for music. The record industry doesn't like trading music because they see it as lost sales, but that's nonsense. Sales have declined because physical discs are no longer the distribution medium for mass-appeal pop music, and expecting people to treat files as physical objects to be inventoried and bought individually is absurd.

The downtrend in sales has hurt the recording business, obviously, but not us specifically because we never relied on the mainstream record industry for our clientele. Bands are always going to want to record themselves, and there will always be a market among serious music fans for well-made record albums. I'll point to the success of the Chicago label Numero Group as an example.

There won't ever be a mass-market record industry again, and that's fine with me because that industry didn't operate for the benefit of the musicians or the audience, the only classes of people I care about.

Free distribution of music has created a huge growth in the audience for live music performance, where most bands spend most of their time and energy anyway. Ticket prices have risen to the point that even club-level touring bands can earn a middle-class income if they keep their shit together, and every band now has access to a world-wide audience at no cost of acquisition. That's fantastic.

Additionally, places poorly-served by the old-school record business (small or isolate towns, third-world and non-english-speaking countries) now have access to everything instead of a small sampling of music controlled by a hidebound local industry. When my band toured Eastern Europe a couple of years ago we had full houses despite having sold literally no records in most of those countries. Thank you internets.

Considering that Amanda actually linked to Albini's fantabulous rant about what happens when you sign a major label deal from many years ago (nearly two decades) in her previous blog post about where all the money is going, it doesn't surprise me to find out that she's still on the same wavelength as Albini today.

The key point that both Palmer and Albini recognize is that it's not about the "sharing" or "piracy" or whatever you want to call it. It's about what you do with it. Both recognize that if you play your cards right, things can be absolutely fantastic for musicians these days, because not only can they have more control over their own destinies by taking charge of their careers, the biggest challenge is obscurity not piracy. And, in fact, file sharing (not "piracy" if it's supported by the artists themselves) can help alleviate that problem, help them build up larger audiences around the globe -- at no cost -- and then do something with that fanbase later.

I keep seeing critics complain that Amanda's Kickstarter campaign only is useful to someone like Amanda because she "had a big fanbase" already. That ignores (completely) how she built up that fanbase. And part of that is making sure as many people as possible could and did hear her music. In that context, fighting against "piracy" seems to be fighting against an artist's own best interests...

Filed Under: amanda palmer, piracy, sharing, steve albini
Companies: kickstarter

Chris Dodd Says MPAA Is On The Wrong Track; We Agree

from the well,-let's-see-some-leadership dept

Over at the Cannes Film Festival, MPAA boss Chris Dodd apparently told Variety that the MPAA is "on the wrong track" when it calls infringement "theft."

"We're in a transformative period with an explosion of technology that's going to need content... We're going to have to be more subtle and consumer-oriented.... We're on the wrong track if we describe this as thievery."

Now, I thought that was kind of interesting, because it appears that the folks who work for Dodd haven't received the memo. The MPAA website is chock full of his minions calling it "theft" every chance they get. There's an entire page supposedly dedicated to "types of content theft." There's a page on "rogue websites," that calls them "havens for theft." There's a link in the footer to a website called FightFilmTheft.org. There's also a link in the footer to the ICE website (you know, the government agency illegally seizing and censoring websites based on no evidence) saying to click the logo "to report IP theft." Then there's the MPAA's "blog," which as of this writing has the word "theft" on the front page a mere fifteen times (and "steal" or "stealing" another three times). So, er, Dodd might want to have a chat with his staffers.

Because, according to Chris Dodd, the MPAA is on the wrong track.

And, for once, I think we actually agree with Chris Dodd. Of course, some of us have been saying this since Dodd's first speech on the job -- which (of course) focused on saying how infringement was "no different" than theft.

There's also some history here. For a while, the industry focused on the word "piracy" to describe infringement. But about three years ago, a movie studio exec made the claim that the industry had "made a mistake" using the word "piracy," because it "glamorized" the practice (of course, Hollywood helped out with the glamorization thanks to some big blockbuster movies starring Johnny Depp...). Practically overnight, the use of "piracy" changed in the industry to "content theft." So, perhaps this is the start of a new phase...

Either way, it certainly doesn't seem like Dodd has really figured out just how disastrous things are going under his "leadership." Much of the story still has him blaming tech companies for stopping SOPA and PIPA. Until he realizes that it was the public the spoke up (and actually helped drag along those tech companies), he's never going to understand what happened, and never going to be able to lead appropriately. Hell, you can even see his dangerous framing in the short statement above. Notice he said they need to be more "subtle." He hasn't realized that their entire policy focus is wrong. He just thinks they're being too brazen about it.

We've asked Dodd (repeatedly, now) to actually come out and talk to the public. I'm sure the folks at Reddit would be happy to set up an AMA. We'd be happy to have him come and chat with our community as well. Yet, he refuses to do so. Instead, he continues to only lobby behind the scenes and blame the wrong parties in public. Things are never going to improve if he keeps on that path. He doesn't need to be "more subtle." He needs to actually understand what that public tried to tell him back in January. Instead, he seems to be sticking his fingers in his ears and taking random guesses.

Filed Under: chris dodd, mpaa, piracy, theft

The Sky Continues To Rise: EU Gross Box Office Returns And EU Film Production Both Hit Record Highs In 2011

from the embarrassingly-successful dept

Even though just about every objective statistic suggests otherwise, the copyright industries still take turns bemoaning the terrible toll that piracy is supposedly taking on their markets. So it's good to come across some official figures that suggest the contrary, particularly because in this case they come from the European Audiovisual Observatory—not a market research company, but a public service body. Here are the latest numbers for the European film industry:

2011 was a year of stabilisation at the European box office as the marked upward trend of GBO [gross box office] of the past two years slowed down significantly, resulting nevertheless in an overall year-on-year increase. Based on provisional data the European Audiovisual Observatory estimates that EU gross box office returns increased marginally by 0.7% from EUR 6.37 billion [$8.14 billion] to EUR 6.4 billion [$8.18 billion], still the highest level on record. Cinema attendance remained stable with an estimated 962 million tickets sold.

Note that this is no mere one-off -- the report speaks of a "marked upward trend" of the previous two years that has slowed down significantly, but is still there, leading to what it terms "the highest level on record". That's about box office sales, but maybe the European film industry itself is suffering under the onslaught of popular US movies? It seems not:

2011 saw European films claiming back market share which they had lost to US 3D blockbusters in 2009 and 2010. Based on provisional figures, estimated market share for European films in the EU climbed from 25.2% to 28.5% in 2011, back to the ‘pre-3D’ levels of 2007 and 2008. Market share for US films on the other hand fell from 68.5% to an estimated 61.4%. This would be lowest level since 2001.

The best result for a decade, then. Now, that's all very well, but might still be the result of a few anomalous European blockbusters that have distorted the figures. According to the European Audiovisual Observatory, that's not the case:

EU production levels continued to grow to 1,285 feature films in 2011, 59 films more than in 2010 and a new record high.

In other words, in 2011, Europe note only saw record box office receipts at cinemas, but also record indigenous film production. It's a little hard to see how anyone could try to spin that as another "piracy is destroying the European film industry, we must bring in tougher copyright infringement laws" story, but I'm sure the usual suspects will try their darnedest.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: box office, european audiovisual observatory, european union, piracy

Microsoft-Funded BitTorrent Disruptor Won't Make Pirates Pay, But Might Break The Law

from the pointless dept

There was quite a bit of chatter recently about a Torrentfreak article discussing an operation called "Pirate Pay," which was funded by Microsoft, and claimed it could track and shut down unauthorized works being transmitted via BitTorrent. The report claimed that Walt Disney Studios and Sony Pictures were already customers. The description of how it works is as follows:

“We used a number of servers to make a connection to each and every P2P client that distributed this film. Then Pirate Pay sent specific traffic to confuse these clients about the real IP-addresses of other clients and to make them disconnect from each other,” Andrei Klimenko says.

John Pettitt, former VP of engineering at BitTorrent (who we've heard from before in a very different context related to software patents), noted in a mailing to Dave Farber's IP list that what Pirate Pay described didn't sound particularly effective or (more importantly) particularly legal.

Reading the article it sound like they are spoofing traffic to confuse torrent clients and force disconnects. It's not at all clear if this will work against all versions of the protocol (particularly the udp based version). Leaving aside the technical issues it's also unclear if such action is legal. It sounds like a targeted denial of service attack, a major corporation paying for such an attack leaves itself wide open to civil and criminal legal action particularly if they accidentally target the wrong torrent which given the history is highly likely.

Anyone want to take a guess as to how long it will be until a major entertainment company issues one of these misguided attacks on the wrong torrent, leading to an effective denial of service against legitimate content?

One other thought on this. The company's name is "Pirate Pay," which I'm sure the Hollywood folks get a kick out of. However, it's worth asking the question: how much of this activity would actually get anyone to pay? We've noted in the past that the entertainment industry seems much more focused on "stopping piracy" than it is on "getting more people to pay." You can argue that the former leads to the latter but there's little evidence to suggest that's true. Yet there is tremendous evidence that offering compelling services without significant restrictions at a reasonable price does, in fact, get people to pay. It's a tragedy that the industry isn't doing nearly enough of that, but instead seems focused on these harebrained (and potentially illegal) schemes to attack people.

Filed Under: bittorrent, john pettitt, p2p, piracy
Companies: pirate pay, sony pictures, walt disney studios