Jonathan Coulton Destroys The Rationale Behind The Megaupload Seizure With A Single Tweet; Follows Up With Epic Blog Post

from the and-the-score-is-Coulton:-a-billion;-content-industries:-less-than-zero dept

With Megaupload seized by the feds and everyone else even slightly involved seized by Anonymous, man-without-a-label Jonathan Coulton stepped into the breach and tweeted what we all only wish we were thinking:



(If you can't read it, Coulton said: "Any other musicians notice that ever since they shut down MegaUpload, the money has just been POURING in?")

And that's the crux of it, isn't it? The DOJ claims that Megaupload's infringement has cost copyright holders a half-billion dollars over an unspecified timeframe. And now that it's been shuttered, the money should start pouring in. But, of course, it won't. So, what then? First off, as Coulton points out, there's bound to be collateral damage.

Along with all the illegal stuff happening on MegaUpload was some amount of completely legal stuff. People used MegaUpload to send large files around. Some number of those files were personal files owned by the people sending them. I have no idea what the ratio was, and probably it would be impossible to figure that out with any certainty, but let's stipulate that it was a very large percentage of illegal activity, and only a very tiny percentage of the users were there for anything other than downloading content that they didn't buy. Still, today that tiny percentage had something taken away from them, without warning, maybe just a service they liked using, but maybe a piece of digital media that belonged to them - if they uploaded something and didn't keep a copy, that thing is now gone. Them's the breaks I guess, but in evaluating whether this shutdown was a net positive for us humans, you have to take that into account.

Even some of the illegal usage was likely the kind of activity that approaches what I consider to be victimless piracy: people downloading stuff they already bought but lost, people downloading stuff they missed on TV and couldn't find on Netflix or iTunes, people downloading stuff they didn't like and regretted watching or hearing and never would have bought anyway, people downloading a Jonathan Coulton album (oh let's say, Artificial Heart, the new Jonathan Coulton album, which is an awesome Jonathan Coulton album called Artificial Heart) and loving it so much that in a year they decide to buy a ticket to a Jonathan Coulton show and walk up to the merch table and hand me $20. I know not everyone will think all of those things are victimless crimes, and even I can admit that some of them maybe kinda sorta have victims, but my point is that you can't easily say that every illegal download is a lost sale, because it's a lot more complicated than that. So when you evaluate the "damage" that a site like MegaUpload is causing, you have to think about these things too. The grand jury indictment against them says they've caused $500 million in damages to copyright owners. Given the complexity of actual usage on a site like MegaUpload, how can they possibly know that?

So, there's that. An allegedly huge provider of "lost sales" taken down, along with other non-infringing material. Does anyone really think the DOJ is going to bother sorting out what's legitimate and what isn't? I wouldn't hold my breath. And to what end? Supposedly, this is a step towards returning the MPAA and RIAA fortunes to their all-time highs. But when Megaupload's takedown fails to convert into sales, then what?

No one (not even Coulton) truly expects the seizure of a single storage locker, even a mammoth one like Megaupload, to make an appreciable difference in future sales of music and movies. More sites will have to be seized, sites like Mediafire, Rapidshare, Divshare, Hulkshare, Filesonic, etc. Many of these sites host a ton of perfectly legal, non-infringing media. Look around Bandcamp for a bit and you'll run across links to these sites (Mediafire seems to be a favorite) posted by artists for their fans to make use of. Hulkshare hosts hundreds of mixtapes, uploaded by the artists themselves and promoted at sites like Datpiff.

And as each of these sites tumble without a noticeable change in sales, the march will continue on towards other sites that might be hosting infringing material. How long will it take before the rightsholders ask to peek at the contents of your cloud services? Are they going to ask, like so many commenters here, that you produce receipts for everything you have stored?

Even though the White House shot down the current incarnation of SOPA, it still made this statement:

Let us be clear-online piracy is a real problem that harms the American economy, and threatens jobs for significant numbers of middle class workers and hurts some of our nation's most creative and innovative companies and entrepreneurs. It harms everyone from struggling artists to production crews, and from startup social media companies to large movie studios. While we are strongly committed to the vigorous enforcement of intellectual property rights, existing tools are not strong enough to root out the worst online pirates beyond our borders.

But how big is this "piracy problem?" And how much does it actually "harm" the American economy? The way Coulton sees it, there's no reason to believe this "problem" is crying out for a legislative solution:

Is it really as dire as all that? It's an emergency is it? Tim (O'Reilly) points out that he and a lot of other content creators have been happily coexisting with piracy all this time, and I'm certainly one of them. Make good stuff, then make it easy for people to buy it. There's your anti-piracy plan. The big content companies are TERRIBLE at doing both of these things, so it's no wonder they're not doing so well in the current environment. And right now everyone's fighting to control distribution channels, which is why I can't watch Star Wars on Netflix or iTunes. It's fine if you want to have that fight, but don't yell and scream about how you're losing business to piracy when your stuff isn't even available in the box I have on top of my TV. A lot of us have figured out how to do this.

So if you can stand me sounding a little crazy, listen: where is the proof that piracy causes economic harm to anyone? Looking at the music business, yes profits have gone down ever since Napster, but has anyone effectively demonstrated the causal link between that and piracy? There are many alternate theories (people buying songs and not whole albums, music sucking more, niches and indie acts becoming more viable, etc.). The Swiss government did a study and determined that unauthorized downloading (which 1/3 of their citizens do) does not create any loss in revenue for the entertainment industry.

When the money fails to pour in, no one will be surprised but the content industry. And they'll be surprised and angry. Equating casual infringement with lost sales has always been a terrible assumption, but without this key bit of theoretical math, the RIAA/MPAA would be unable to make hysterical claims about job losses, overseas robber barons and Megaupload absconding with a half-billion of their cash. The problem is: the public doesn't see it this way.

We are constantly demonstrating through our actions what we believe to be the norms for acquiring and consuming content. Right now a lot of us think that it's OK to download stuff through illegal sites under certain circumstances, and a lot of us think it's totally fine to use those things to make videos and put them on YouTube even though YouTube profits from it. That's not ME saying that, that's US saying that - we're a nation of pirates and infringers. Based on our behavior, you would not be wrong to deduce that some of us think funny videos on YouTube are more important than honoring intellectual property rights. This kind of thing has happened before. Entire industries rise and fall as the world changes and our priorities shift. Sorry.

I believe in copyright. I benefit from it. I don't want it to go away. I love that we have laws and people to enforce them. But if I had to give up one thing, if I had to choose between copyright and the wild west, semi-lawless, innovation-fest that is the internet? I'll take the internet every time.

Amen to that.

Filed Under: jonathan coulton, piracy, revenue
Companies: megaupload

Network TV Execs Discover What Pirates Always Knew: Making Stuff Available Online Is Good Marketing

from the wait,-what? dept

Want to understand just how tone deaf and clueless the legacy entertainment industry players are these days? It appears that network TV execs have just discovered the brilliant idea of using the internet to pre-release TV shows in an effort to build up buzz and an audience who will watch the full series. The stunning thing here is that these are the very same companies who go absolutely ballistic if their works get "leaked" early online -- and insist that criminal penalties are needed to stop this kind of action. It's really quite amazing how these execs are coming to the same conclusion that pretty much every internet user came to years ago: just make the damn stuff available. Instead, they're acting like it's some big revelation:

The networks have embraced the idea — originally hatched by cable networks — of introducing initial episodes of their shows through other distribution outlets like YouTube before they have their premiere on their own schedules.

Yes, the same YouTube that Viacom is still trying to sue out of existence. The same YouTube that supporters of PIPA and SOPA still insist is really a den of "piracy" from which Google unfairly profits.

So, here's a simple question: How much are these networks paying YouTube/Google for the use of YouTube's software, bandwidth and audience? Nothing? Damn those TV networks... just wanting all that stuff for free. But, more to the point, if laws like PIPA and SOPA were put in place a few years ago, the networks wouldn't even have a YouTube to do this. This is what's most stunning about all of this. They seem to think that they've come up with something brilliant and new here, when this is all that "pirates" were doing earlier: putting stuff online to make it accessible. When "pirates" do it, it's theft? And when companies do it, it's some brilliant marketing scheme? How's that work?

Filed Under: free, marketing, networks, online, piracy, streaming, tv

Top Photographer On Why He Doesn't Care If His Stuff Is Pirated

from the why-can't-everyone-be-this-sensible? dept

Trey Ratcliff is an extremely successful photographer, who specializes in HDR photography. His blog Stuck in Customs is the top travel photography blog on the internet, with over a million views each week.

Naively, then, you might expect him to be a typical artistic fat-cat who regards every act of piracy of his photos as a personal insult that in a just world would be avenged by amputation of limbs and life incarceration at the minimum. Actually, he uses Creative Commons licensing for all his work, and has just written a wonderful post with the self-explanatory title "Five Reasons Why I Don't Care if My Stuff is Pirated - A New Way of Thinking", pointed out to us by Paul Newport, where he states:

All of my stuff is pirated. Everything from my HDR Video Tutorial to eBooks to Apps. Fine. It's all there on PirateBay and MegaUpload and all that stuff. Here are the reasons why I don't mind

He then goes to list five reasons that show a deep understanding of why piracy happens, and why it isn't necessarily so bad for those whose works are pirated. For example, Ratcliff points out:

Theft of bits are like the Tic Tacs that get stolen from the 7-11. It's the cost of doing business on the Internet.

That is, the actual loss is trivial (bits are practically free), and you learn to live with it because of the counterbalancing benefits. He also has a belief in the innate goodness of people:

Many people that pirate stuff now from me just don't have any money. But, they like me and want my stuff.

After all, that's why they pirate it. And if/when they eventually get their finances sorted out, they'll remember Ratcliff's generosity in allowing them to download his stuff for free without conducting a witchhunt as a result, and pay it back by buying from him. As he says:

Pirates are not cretins riddled with immoral behavior in every part of their life. These are all generally good people who would gladly support me, their friendly local neighborhood artist, if they could easily afford it. They can't now, but they will be able to some day...

He mentions another very practical reason not to dismiss pirates as the enemy:

Pirates have friends that have money. It's still word-of-mouth, the most effective friend-to-friend marketing in the world. If pirates like what you do, they'll tell their friends.

That's an important point: even if the pirates don't buy stuff now, they may well spread free publicity that drives sales elsewhere. If you vilify pirates, you are spurning an important part of your unofficial marketing department.

Finally, Ratcliff gives one central reason why he's not really that worried about piracy:

Last, and most important, as soon as I opened everything up, our business has grown and grown.

But he also notes:

piracy is not the reason that revenues are increasing, but they are not hurting revenues

The curious thing is, the same is true of the music and film industries, which continue to thrive despite all the online piracy, as Techdirt has pointed out in the past.

In other words, everything that Ratcliff says in his extremely wise post about photography also applies to music and films. But whereas he accepts the need for "A New Way of Thinking" as he puts it, and can even see that piracy is beneficial to him in many ways, the copyright industries cling to their traditional perspectives, and insist on fighting this "scourge" with ever-greater ferocity in the face of their continuing failure to expunge it – with huge collateral damage to the rest of us, as SOPA and PIPA make clear.

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Filed Under: embrace, photography, piracy, trey ratcliff, word of mouth

Alan Greenspan: Failed To Predict Bubble Popping... And Failed In Predicting Home Taping Would Kill Music

from the innovation:-public-enemy-number-1-for-over-a-half-century dept

Even if SOPA passes in its current form, largely intact and full of overreach opportunities, there's no reason to believe this will be the last (or even the most overreaching) legislation crafted at the behest of the content industries.

The -AA's long history of overreaction to various "threats" (read: technological advancements) has been well detailed here at Techdirt. Joe Karaganis opens a recent post at the SSRC (Social Science Research Council) blog with this mystery quote:

Several of these analyses of alleged harm to the recording industry... were presented and debated during hearings on copyright... At each hearing, X presented the results of the most recent analysis done for the recording industry by his firm... [As] in his earlier testimonies, he stated that continued [copying] had grave implications for the viability of the recording industry. Noting that recording-industry releases were down by almost half since ****, and that industry employment had declined... X stated that further growth in [copying] would cause further decline in these industry indicators.

Karaganis asks: "So, who is X and what is the timeframe?"

If it's hard to guess, there's a reason for that. Because of the industries' insistence on turning every new "threat" into a federal case, this could have happened at any time in the last 50 years. Or it could be happening right now. The answer, however, is a bit surprising, considering who is being referenced.

Did you guess: Alan Greenspan in the early 1980s? Bravo.

To say that Greenspan's reputation has taken a bit of hit since stepping down as chairman of the Federal Reserve would be an understatement. To see that he wilfully (perhaps motivated by a donation) pled on the RIAA's and MPAA's behalf does nothing to resurrect his respectability. Karaganis quotes from a recounting of home taping battles, put together by the (now defunct) OTA (Office of Technology Assessment):

By 1986, industry stakeholders...had sponsored almost a dozen surveys and studies, usually to support or oppose passage of home-copying legislation. ... OTA noted:

In the 1985 analysis, sponsored by the RIAA, Greenspan estimated that in 1984, each instance of home taping cost the taper $1.67 per album equivalent, compared with an average retail price of $6.80. On the basis of an earlier report on home taping by the firm Audits & Surveys, Townsend & Greenspan estimated that 42 percent of all home tapings from prerecorded material and 40% of off-the-air (broadcast) tapings would have generated sales, if taping had not been possible. Then, assuming that 40 percent of home taping in 1984 was in lieu of purchases of records or recorded cassettes, the firm estimated 1984 retail losses of some $1.5 billion...

Moreover, as in his earlier testimonies, he stated that continued home taping had grave implications for the viability of the recording industry. Noting that recording-industry releases were down by almost half since 1979, and that industry employment had declined from 29,000 in the late 1970s to less than 19,000 in 1984, Greenspan stated that further growth in home taping would cause further decline in these industry indicators.

This sort of alarmism is very familiar to anyone paying attention. The refusal to recognize the technological advancement as being a possible ally to the industries is shrugged off in favor of panicked statements and questionable numbers. This very refusal to consider the "benefit" side of the argument is called out by the OTA and other industry groups:

Greenspan's two earlier studies had estimated losses...amounting to $1.05 billion for 1981 and $1.4 billion in 1982. The Consumer Electronics Group of the Electronics Industries Association (EIA), the Audio Recording Rights Coalition, and the Home Recording Rights Coalition (HRRC) submitted dissenting comments and testimony disputing these estimates. ... EIA claimed that the analysis for RIAA had ignored the stimulative effects of home taping on sales of recordings, and that some home tapes (e.g. selection tapes made for portable or car tape players) are not substitutes for prerecorded products... A pattern emerges in these debates. The published recording industry arguments and economic analyses deal only with estimates of alleged harms...

Much like the past decade, the RIAA and MPAA have spent an immense amount of time, energy and money attempting to place the blame for their economic downturn solely in the hands of infringers, completely ignoring other surrounding economic factors or the drastic changes in consumer habits. This selective blindness is nothing new:

[I]t's worth noting that Greenspan spent several years trying to pass stronger enforcement laws based on a scare story about a temporary dip in the market, as the cassette displaced the 8-Track and vinyl went into decline (and the US suffered a major recession). Stronger enforcement was a solution to maintaining the revenue levels associated with the LP and 8-Track. And he made this case at the beginning of the greatest boom period in the recorded music industry: the CD era. Now that the CD is dying, our present-day Greenspans are doing the same.

Everything continues to change but the arguments remain the same. The fact that Alan Greenspan delivered these remarks is somewhat surprising considering his later stance on IP issues. In a 2004 speech at the Stanford Institute for Economic Policy Research Economic Summit, Greenspan had this to say, seemingly forgetting his earlier efforts on the home taping battlefront:

"If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system--developed for a world in which physical assets predominated--for an economy in which value increasingly is embodied in ideas rather than tangible capital?"

Greenspan is mostly referring to patents here, but a lot of what he says holds true across the rest of the intellectual property spectrum. There is a good possibility that Greenspan learned something from his earlier experience, recognizing the fact that technological progression tends to displace legacy industries, but it just as often creates new opportunities, provided it is not stifled by antagonistic legislation designed by the legacy industries in order to protect the status quo.

And about that status quo? Whose status quo is really being protected?

As the MP3 replaced the CD, the major labels cut their distribution costs, struggled to keep digital prices at rough parity with the CD, and pocketed the difference. An artist signed with a major label still makes 15-20% on wholesale-no more than for a good deal in the CD era. Many of the indie labels and digital aggregator services, in contrast, return 50-90% of the wholesale price to the artist. It is glaringly obvious that the major labels' 80% wholesale cut isn't sustainable-nor, I will predict, is Apple's 30% retail cut. Piracy was the messenger, not the message.

Costs have decreased across the board, but artists are still getting the short end of the stick. This isn't about them. It's about the labels, studios and their executives. Despite their constant complaints about how much sales have decreased, executive salaries have never been subject to the same downturn. Karaganis quotes The Lefsetz Letter:

Used to be running a label paid well, but it was mostly about the music, the lifestyle. Then, with the advent of MTV and the CD, suddenly Tommy Mottola was far richer than the acts. And Tommy and his ilk started hanging with other rich people in the Hamptons, they felt entitled to their wealth. Such that when Napster blew a hole in the paradigm, everybody was sacrificed but the top guy. The people running the labels are still as well paid as they were before Napster, before the recession. They're keeping up with the joneses, they're in charge, everybody's expendable but them. As for those people still working at the label...they're thrilled to have a job. Glad to be slaves on the plantation.

The arguments are old and repetitive and the rhetoric has expanded past "think of the poor artists" to "protecting jobs" to the outer reaches of credibility, conjuring up victims such as the US military and firemen. And that's because it's not really about protecting artists. It's about protecting industries which have become used to a certain "standard of living" and now the general public can't be as easily duped about sales numbers and executive salaries, all sorts of emotional buttons are being pushed in a very haphazard and desperate manner.

If it's any consolation, there will be more on the way. I highly suspect there will be never be a legislative solution to the problems of the content industries solely because much of the problem lies with the industries themselves.

(H/T - Ulysses)

Filed Under: alan greenspan, home taping, piracy, predictions, sopa

When The NY Times Builds On Other's Work, I Guess That's Journalism [Updated]

from the but-when-others-do-it...-it's-piracy? dept

Over the last few years, the NY Times has been whining about blogs and sites like HuffPo that it feels "pirates" its stories. Former executive editor Bill Keller trashed such things a few times over the past year.

Too often it amounts to taking words written by other people, packaging them on your own Web site and harvesting revenue that might otherwise be directed to the originators of the material. In Somalia this would be called piracy. In the mediasphere, it is a respected business model.

Now, as I said at the time, this is a pretty silly way to look at things. But it struck me as especially interesting since last week, we broke the news about the feds censoring Dajaz1.com for a year, before giving back the domain name. That was Thursday morning. Friday evening, the NY Times wrote its own version of the story... with nary a mention of our story. Their story didn't add anything beyond reporting what we and some others had done previously.

Now, let me be absolutely clear: I actually don't think crediting whoever scooped a story is really that big a deal. I tend to think it's a nice and neighborly thing to do, but hardly required, and I think some people put too much emphasis on it. However, I think it's kind of amusing that a newspaper like the NY Times, whose bosses have complained about others doing this kind of thing, would so regularly do this themselves. And, yes, the NY Times does this all the time. And, for what it's worth, people definitely noticed.

My point is not to complain about not getting a mention. My point is to highlight how the NY Times' looking down on other publications for supposedly just taking their stories and how that's "piracy," might deserve a pretty big rethink. News travels around in a lot of ways. Sometimes the NY Times gets there first, and sometimes they don't. Attacking others for reporting on the same thing they've reported on is going to make them look foolish when they do the same thing, as happened here.

Update: This morning both the editor and the reporter emailed to apologize and say that the original story did, in fact, mention Techdirt, but it got edited out by accident. To be honest, it's for reasons like this that I noted above that many people focus too much on the whole "credit" issue. The point of this post was never to demand credit, but to point out how when you always demand credit, it can come back to bite you. Either way, I appreciate the NY Times' quick response and the apology.

Filed Under: credit, journalism, piracy
Companies: dajaz1, ny times

Dutch Collection Society Found To Be Source Of Infringing Content

from the everyone's-a-pirate dept

Remember the story about the composer who found his music featured in anti-piracy ads and had a difficult time getting paid out, triggering a corruption scandal at collection society Buma/Stemra? It was obviously a bit ironic that the music in question was used in anti-piracy ads, but it appears the irony truck forgot to unload a package - filled to the brim with humiliation.

Using YouHaveDownload, a tool that tracks torrent transfers on various public torrent trackers and matches them with IPs, a popular Dutch weblog has uncovered piracy at that aforementioned collection society. They scanned the IP range of Buma/Stemra's HQ and among the pirated material they found:

• An episode of Entourage (whois).
• A copy of the game Battlefield 3 (whois).

The tool only covers about 4 to 6% of what's available on the networks it tracks, so it's possible that there's a lot more sharing evil piracy going on from their offices as well.

If anything, this scandal really shouldn't be a scandal. Anti-piracy lobbying and campaigning has led to sharing becoming a taboo, while the money spent could have been used to facilitate sharing and to build sustainable business models on top of that. Despite pirates among their own ranks, organizations like Buma/Stemra feel that the Dutch policy of downloading from unauthorized sources for personal use being legal should be altered (read their statement). Even though the Dutch parliament disagrees, the Dutch government is trying to get exactly such laws altered citing EU pressure, even though the Digital Agenda Commissioner, Neelie Kroes (herself Dutch), has stated opposite goals. With people in parliament who do not know "what or who is a torrent," it's not entirely unlikely that the govt actually manages to get the law changed after all.

Buma/Stemra was quick to respond and acknowledge that IPs are not reliable to determine infringers. Apparently the IP addresses used for piracy (ending in .246 and .248) cannot be used by employees to access the web internet, so the collection society claims they were spoofed. (Update: their, now removed (cache), statement said internet, instead of web - apologies). Oddly, the IP from which the email with the press announcement was sent, ~.247, hasn't been spoofed. Did I mention they brought up spoofing after a spokesperson first claimed that the IP addresses could have originated from anywhere in the business park even though everything from ~.240 to ~.255 is linked to Buma/Stemra's office?

Sure, this scandal is humiliating, but it's not as embarrassing as the war against innovation. You can use this moment to better understand the human nature of sharing, to understand that downloads don't translate directly to lost sales, and to rethink your lobbying strategy to push for a more sane framework. Or, you know, you can continue to upset fans whilst amusingly tumbling from one scandal into the next.

Meanwhile, it will be interesting to see if there are more pirates in disguise amongst hardline politicians, RIAA & MPAA folks, and other classic opponents of more flexible copyright legislation. You all know where to find the tool now, so perhaps it can happen through a lesson about crowdsourcing. That is, have fun and see what you can find...

Filed Under: caught, copyright, europe, netherlands, piracy, youhavedownload
Companies: buma/stemra

A Problem Worse Than Piracy? The Ridiculous Structure Of Online Music Licensing Deals

from the can't-make-money-this-way dept

We've pointed out many, many times in the past that the absolute best (and perhaps only) way to really get people to move away from infringing is to offer better, cheaper, more convenient and feature-filled legitimate services. But those are pretty difficult to come by -- in part because of the insane demands by the legacy entertainment industry players. Why do you think it took over two years for Spotify to finally come to the US? Because the labels demands were crazy and unsustainable. Michael Robertson is now revealing some of those demands, but sums it up best in his first paragraph:

Imagine a new hot-dog selling venture. Let’s also say there’s only one supplier to purchase hot dogs from. Instead of simply charging a fixed price for hot dogs, that supplier demands the HIGHER of the following: $1 per hot dog sold OR $2 for every customer served OR 50 percent of all revenues for anything sold in the store. In addition, the supplier requires a two-year minimum order of 300 hot dogs per day, payable all in advance. If fewer hot dogs are sold, there is no refund. If more than 300 hot dogs are sold each day, payments to the supplier are generated by calculating $2 per customer or 50 percent of total revenues, so an additional payment is due to the supplier. After the first two years, the supplier can unilaterally adjust any of the pricing terms and the shop can never switch suppliers.

Doesn't seem like a particularly good business. When you hear of deals like that, it's kind of amazing that any of these businesses exist at all.

Filed Under: business, licensing, music, piracy
Companies: spotify

HADOPI Wants To Research File Downloads: Shouldn't It Have Done That First?

from the better-late-than-never dept

One of the most important aspects of the UK's Hargreaves Report was that it called for copyright policy to be based on evidence. It also noted that so far that simply hadn't been the case, and that practically all of the so-called "studies" used to justify laws in this area came from the copyright industries, with missing or dubious methodologies.

The French three-strikes scheme known as HADOPI (actually the name of the government agency that oversees its implementation) is a perfect example of such dogma-based legislation: no research was done into how files were being shared or even whether they did any harm (there's a fair amount of evidence that file sharing increases sales).

So it's interesting to see HADOPI putting out a call for some research into streaming sites (original in French):

The commissioned study focuses on an economic analysis of streaming sites and direct download where illegal practices are the most common, offering cultural property in the areas of music and video.

This new interest in streaming sites is presumably a consequence of Nicolas Sarkozy's announcement at the recent Forum d'Avignon that "we have to tackle the streaming web sites." It's certainly welcome that HADOPI is doing some research before it draws up its proposals in this area; but shouldn't it have done the same with the original three-strikes scheme?

There's an interesting parallel with SOPA here. In the section with the splendid title "Denying U.S. Capital To Notorious Foreign Infringers", we read the following:

Report to Congress- The Intellectual Property Enforcement Coordinator shall, not later than 6 months after the date of the enactment of this Act, submit to the Committees on the Judiciary of the House of Representatives and the Senate a report that includes the following:

(1) An analysis of notorious foreign infringers and a discussion of how these infringers violate industry norms regarding the protection of intellectual property.

(2) An analysis of the significant harm inflicted by notorious foreign infringers on consumers, businesses, and intellectual property industries in the United States and abroad.

Again, it's good that some research into that "significant harm" will be carried out, but shouldn't that come before the legislation is drawn up and enacted, not after it?

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Filed Under: evidence, france, hadopi, hargreaves report, impact, pipa, piracy, post hoc, protect ip, research, sopa

Spotting Counterfeit Chips Is Hard; Spotting Digital Piracy Is Even Harder

from the harder-than-it-looks dept

One of the favorite techniques of those pushing for ever-more severe penalties for copyright infringement is to blur the distinction between analog counterfeits and digital copies. The argument then becomes: "counterfeit drugs can kill people, therefore we must come down hard on online filesharing." This trick can be seen most clearly in ACTA, which stands for "Anti-Counterfeiting Trade Agreement", but where the most problematic sections concern digital piracy, not counterfeits.

That false equivalence between counterfeits and digital copies is also employed to give the impression that since cheap knock-offs are pretty obvious, it's easy to tell the difference between a legal digital file, and one that is unauthorised. However, unauthorised digital files are generally exact copies of authorised ones, making it impossible to tell them apart. What counts is whether the distribution is authorized, and there are all kinds of legal considerations like fair use or Creative Commons licensing that can make it very hard to tell without detailed legal scrutiny in a court.

Even the assumption that physical copies are relatively easy to spot is dubious, as this fascinating essay from Andrew 'bunnie' Huang about counterfeit chips in military hardware explains. Here's the background:

Amendment 1092 to the Defense Authorization Act of 2012 is a well-intentioned but misguided provision outlining measures designed to reduce the prevalance of counterfeit chips in the US military supply chain.

< ...>

Under the proposed anti-counterfeit amendment, first-time offenders can receive a $5 million fine and 20 years prison for individuals, or $15 million for corporations; a penalty comparable to that of trafficking cocaine.

Huang then runs through the myriad ways in which counterfeits can be produced – and why spotting them is hard.

Alongside "trivial external mimicry" – authentic-looking but empty packages – he mentions the following: refurbished parts (authentic parts recovered from e-waste); rebinned parts (authentic but with markings changed to a higher specification); ghost-shift parts (produced in the official factory by employees, but unofficially); factory scrap (rejects and pilot runs recovered from the scrap heap); and second-sourcing gone bad (pin-compatible replacements produced by competitors remarked as superior brands.)

As Huang points out:

It’s one thing to inspect fruits and vegetables as they enter the country for pests and other problems; but it is misguided to require Customs officers to become experts in detecting fakes, and/or to burden vendors with the onus of determining whether parts are authentic, particularly with such high penalties involved and the relative ease that forgers can create high-quality counterfeit parts.

Indeed; and much the same could be said about asking local enforcement authorities or ISPs to detect whether digital copies are legal or not. It's yet another reason why ACTA is likely to have a chilling effect on the legitimate use of copyright materials online, and to throttle the next generation of digital innovation as a result.

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Filed Under: acta, conflation, counterfeits, digital, piracy