Taxi, Limo Trade Group Hates Innovative Upstarts, Labels Them 'Rogue Applications'

from the can't-beat-'em-in-the-market,-so... dept

Thu, Mar 28th 2013 1:03pm — Mike Masnick

There's nothing like a bit of disruptive innovation to make the legacy players start busting out the old moral panics. We've written a few times about the new generation of ride-for-hire and ride-share services, which are really disrupting the old taxi and limo business -- leading to all sorts of highly questionable lawsuits and attempts at regulating these new players into oblivion. In almost every case, it seems quite clear that these attacks are not because the service is bad for consumers... but because it's disrupting traditional players who haven't innovated. So, it came as little surprise this week to receive an email from the "Taxi, Limousine & Paratransit Association" excitedly telling me all about a new paper they've issued with a giant "warning" about what they call "rogue apps." Isn't that great? Rather than innovative and disruptive services that consumers absolutely love, they just rebrand them as "rogue" apps and they can make them seem sssssssssssssscary. The paper grades various new services, giving them a "red light," "yellow light" or "green light."

Not surprisingly, the more well known apps -- Uber, SideCar, Lyft and Tickengo -- all have received the coveted "red light." While according to the TLPA this means they're dangerous "rogue apps," to me it suggests that they're all doing something right. They're providing services that people want that are more convenient or better priced than the old guard, which is why the old guard has to attack them.

The key point they make is that these are all "unregulated" taxi services, which allows them to go into full out moral panic mode about how, without regulations, these services will likely take advantage of consumers. The paper talks about threats of "criminal" drivers and the potential for meter rigging. Of course, as we've seen in other industries, this seems like a clear case of businesses using regulations to keep out innovation and competitors, rather than for a legitimate purpose. Yes, many of those regulations were put in place for a good reason originally, yet many of those reasons really don't apply to these new services.

In the past, you needed regulations to protect you from drivers taking extra long paths to where you wanted to go, driving poorly or charging too much -- because drivers could do that and there was little recourse. But the thing about these new services, which rely heavily on online reputation systems, is that these reputation systems make the need for such regulations much less necessary. The services, like Uber, set the price and poor drivers get booted from the system based on user reviews. And, since most people who have a mobile phone these days to use one of these apps will also have GPS on those phones, people can self-monitor if the driver is taking a reasonable route. Basically, the original safety reasons (which, again, may have made sense at the time) for many of those regulations simply may not really apply to these new services. But rather than deal with that, the legacy players are doing what legacy players do: using those regulations to try to stomp out innovation and stifle competition.

Filed Under: innovation, limos, protectionism, regulations, taxis, threats
Companies: lyft, sidecar, tickengo, tlpa, uber

26 Comments

Awesome Stuff: Life Never Sounded So Good... On The Go

Innovation

from the speakers,-speakers-and-headphones dept

Sat, Mar 23rd 2013 9:00am — Mike Masnick

So we're back with another week of awesome stuff. I really did not intend for each week to have a theme, but that's sort of how it's worked out for the past few weeks, and why stop now? This week, let's talk about speakers.

First up, there's the Yaba Portable Speaker & Guitar Amp by PLX Devices. We've seen tiny speakers (that use whatever surface they're on) to create bigger sounds before, but the Yaba at least appears to have a pretty cool design that seems quite small for the level of sound they seem to suggest they're able to get out of it. It's tough to tell how well it really works in action unless you can see it in person, but conceptually, it looks cool. The fact that there's a version that can double as an absolutely tiny guitar amp seems quite cool for guitarists as well. Could definitely see plenty of uses for a device like this. It only just launched, but seems well on its way to hitting the goal. Early bird pricing at $39 sounds like a great deal, though they (not surprisingly) sold out quickly.
But what if you've got some big old speakers around? How about easily turning them into portable speakers that play off of your mobile phone via Bluetooth (or regular line-in jack)? That's the plan for The Vamp, a tiny stylish box that can connect to any old speaker magnetically, providing both the connection and power. Even if you don't have old speakers around, the project's creator Paul Cocksedge notes that you can pick up old speakers for just a few bucks these days, since they've become somewhat obsolete. And yet here's a neat way to bring new life to old speakers. Cool idea. This one is still decently below its target, but it seems likely that it will get there in time.
Of course, who uses speakers any more? These days, it's all about the earbuds. And that's why the last "awesome stuff" item this week is The Elroy. I'll admit, it took me a little while to understand exactly what this was, but basically it tries to combine the wireless flexibility of bluetooth with the general convenience of typical earbuds. That is, uptop, it's like a normal earbud setup (in fact, it sounds like you can use your own earbuds if you'd like), but about 1/3 of the way down a normal cord length, they just connect to a little bluetooth gadget which wirelessly communicates with whatever devices you want. So... no long cords getting in the way. Plus, it acts as a magnetic holder for the earbuds, which means no more dealing with tangled wires. And the phone features will even pick up / hang up as you detach / attach the earbuds to the unit. The thing that I can't fully get past is that the device itself still looks a little dorky -- not unlike bluetooth headsets, but now clipped to your shirt somewhere. The project describes it as "a piece of electronic jewelry" which sounds like a stretch. Also, it seems a bit on the pricey side for the benefit it provides -- but clearly lots of people disagree with that assessment, as it's quickly shot way past its target goal.

Well, that should give you plenty to listen to for a while. We'll be back next week, with more crowdfunded awesome stuff...

Filed Under: awesome stuff, crowdfunding, headphones, speakers

6 Comments

Flattr Makes It Easier Than Ever To Support Content Creators Just By Favoriting Tweets

Business Models

from the give-it-a-go dept

Tue, Mar 19th 2013 8:13pm — Mike Masnick

We've written about Flattr a bunch of times over the past few years, as we find it to be a really interesting experiment in both micropayments and in supporting content creators. If you're unfamiliar with the concept (which was created, in part, by Peter Sunde from The Pirate Bay), each user of Flattr puts some amount of money (total is up to the user) into its account each month, and they can then click on "Flattr" links around the internet. At the end of each month, Flattr tallies up the total amount of content you've "flattr'd" and divides your monthly allotment by that amount. Thus, if you want to give creators $10/month, and then flattr 10 pieces of content, each creator will get $1 (actually, $0.90 after Flattr's 10% cut). If you flattr 20 pieces of content, each one gets $0.50 (er... $0.45). The thing we liked about this is that it gets you past a big part of the mental transaction costs of micropayments: that is, if you have to think about "is this piece of content worth $0.50 or $0.10?" you're already going to lose a bunch of potential customers who don't even want to bother with thinking about it. But, with Flattr, they don't have to think about it for each piece of content. Once they're convinced to take part and fund their account each month, it makes no difference to them how many piece of content they flattr.

As some of you know, we've had a Flattr widget on every one of our posts for the past couple of years. It brings in a small amount of money each month -- maybe between $50 and $100 or so. Of course, part of the issue is that there are some usage hurdles. The service has a small but dedicated user base, but it seemed to stagnate over the years. On top of that, there was a bit of a chicken and egg problem, in that the process of finding content that is Flattr-enabled is still somewhat haphazard -- and then Flattr users need to remember to flattr that content. However, that's now getting much easier as Flattr has announced integration with a number of different services, including (most importantly) Twitter, Instagram and Soundcloud (also: Vimeo, Flickr, github, 500px and app.net). So, now, if you connect your accounts, you can give money simply by favoriting tweets.

And, yes, that means if you want to toss a bit of change our way, you can now do so with a Flattr account by favoriting the tweets on our official Twitter account or my personal Twitter feed as well -- both of which are connected to the Techdirt Flattr account.

Of course, the other hope in all of this is that it will help lead to more people using Flattr in the first place. That's because Flattr users who favorite a tweet of someone who is not using Flattr are still designating those flattrs for that account. That doesn't mean that Flattr is holding money for those accounts (since that could add up!), but simply accumulating flattrs. Thus, if I "favorite" a Twitter account that doesn't use Flattr once a month, and that person finally signs up for Flattr a year later, it would count all 12 of my favorites as if they came that month (thus giving users on other services incentives to sign up sooner rather than later). Flattr is working on automatically notifying people who can "claim" money, but initially they're hoping the community will do that job for them, with an "unclaimed" page that highlights those with the most Flattrs on the various connected networks. Someone call Randall Munroe and let him know he has a whole bunch of unclaimed Flatttrs for the xkcd Twitter account. Ditto Wikipedia and the Torproject. Similarly, someone might want to alert Linus that his Github account is leading the way in unclaimed Github flattrs as well.

There are, also, some obvious social networks that are missing -- though I've been told that Facebook, YouTube and Tumblr are obviously key among them. It sounds like Google+ may be a bit further down the list. All in all, we still love the idea of Flattr, and think that this is a good step as it evolves its business. It still requires getting people to sign up to pay -- and that, of course, will always be a big hurdle -- but making it easier to do something once you have joined seems like a very good thing.

Filed Under: business models, flattr, integration, micropayments, social media
Companies: flattr

61 Comments

No, The Death Of Google Reader Doesn't Mean 'Free' Doesn't Work

Business Models

from the lots-of-paid-services-fail-too dept

Fri, Mar 15th 2013 7:39pm — Mike Masnick

With the imminent death of Google Reader, I've seen a number of people whose opinions I respect quite a bit, say something about how "this shows why paying for software is important," or, alternatively "why free software isn't a good idea." One of many examples of this is Dave Winer's statement: "Next time, please pay a fair price for the services you depend on. Those have a better chance of surviving the bubbles." Mike McDerment, CEO of Freshbooks, pointed me to an article he recently wrote about "why free is bad" when it comes to "key" services. I have a ton of respect for both of these guys, and I understand exactly where they're coming from, but I don't buy it.

Plenty of "paid" services go out of business as well, and often it's because not enough people pay. So they shut down. The end result is the same thing. Obviously, services need revenue to survive, and sometimes "free" + some other business model (freemium, ads, something else) won't bring in enough revenue -- and sometimes "paid" won't bring in enough revenue. Neither business model has a "premium" so to speak on being sure to bring in enough revenue. Each has different benefits and challenges. I've seen tons of services launch with a "pay" model, only to get a dozen or so customers and have to shut down. Similarly, there have been free services that have clearly been successful and made lots of money. And lots of things in between.

As we've said before there's nothing ideologically "pure" about a fee-based business model, as opposed to one supported through other revenue streams. If you charge, you're guaranteed to have fewer users. That can be a good thing, but it can also be a huge challenge. Furthermore, the suggestion that the providers of free services don't care about their users is not definitively true either. I'm sure it's true for some services, but I get treated like crap by plenty of fee-based providers as well. Similarly, free-based providers still need to treat users right, or they go away, and there goes their business model, no matter what it is.

Simple point: just because Google couldn't make a business out of a free RSS reader, it does not mean that business models that have a free component do not work, since, obviously, much of the rest of Google's business is based on offering stuff for free, and monetizing elsewhere. And, similarly, just because you have a paid app, it does not mean that enough people will pay to make a viable business out of it. In both cases, the situations are basically the same: whatever you do, you need to be able to bring in enough revenue, and that usually needs to involve offering a good product with plenty of benefits. The business model discussion that goes on top of that is interesting, but not defining in the way some people seem to want it to be.

Filed Under: business models, free, google reader, paid, software
Companies: google

77 Comments

Kickstarter Projects That Don't Meet Their Goal Are Not 'Failures'; They Help People Avoid Failures

Say That Again

from the remember-that dept

Thu, Mar 14th 2013 11:01am — Mike Masnick

A little while back, on one of our "funniest/most insightful comments of the week" posts, we featured a comment that someone made anonymously, in response to a story about Bjork's Kickstarter project that was taken down before it ended, after it did not look like it was going to get anywhere near the required threshold. However, the comment has stuck with me and I think it deserves a post. In particular, the commenter called us out for saying that her project "failed."

This was not a "failure!"

Platforms like Kickstarter have changed the way the market is functioning, and our ways of thinking about it (even here on Techdirt) have to catch up.

Bjork's campaign did not fail, even though the results were not what she was hoping for. She successfully learned that the market was not interested in this product.

Spending £375,000 of her own money? Now THAT would have been a failure.

Using Kickstarter is more like running a science experiment than it is like selling a product. It increases the efficiency of the market by orders of magnitude, and apparently beyond our ability to think about it clearly.

This point -- even if it was calling us out -- is so true, and it's so important for people to understand. It's easy to use the word "failure" for those projects that don't meet their goal. Hell, just in writing this post, I repeatedly had to consciously stop myself from using the words "fail" or "failure" in describing projects that don't reach their goal. But, the commenter is right: those projects are not failed projects once you realize what Kickstarter really is: a platform to judge the market for products, and to build commitment and funding around them. If a project doesn't reach the goal, that's actually valuable market research, suggesting that if they had gone ahead, without going through the experience, they likely would have "failed."

So, in actuality, it makes sense to look at such projects and recognize that they were saved from a dismal failure, in which large sums of money may have been spent, but at the same time clarifying the market's reaction to a product before it's even been introduced. With so many people thinking of Kickstarter more as a store, than as a platform for supporting people trying to turn cool ideas into reality, it's important to be careful in how we choose our language. Putting up a Kickstarter project that doesn't reach its goal shouldn't be seen as a failure. It should be seen as a useful bit of data, which helps one avoid failure, and also to (hopefully) sharpen up their product and pitch so that the next time, it is more likely to be funded.

Filed Under: bjork, crowdfunding
Companies: kickstarter

42 Comments

The Killing Of Google Reader Highlights The Risk Of Relying On A Single Provider

Surprises

from the leaves-open-an-opportunity dept

Wed, Mar 13th 2013 5:44pm — Mike Masnick

Every few months, Google has been "shutting down" various offerings they feel are under-used, in an effort to regain some focus. Many of these are uncontroversial, though a few have been surprising and freaked some users out. Many, for example, were surprised and upset when Google announced it was phasing out iGoogle. But today's news that it is shutting down Google Reader took many, many people by surprise. My Twitter feed blew up with people freaking out about it. For those who use it, many really rely on it for their daily information gathering process. I know the feeling, because I used to do that -- though a few years ago I shifted to mostly using Twitter via a well-organized Tweetdeck, and found that to be just as (if not more) effective, though a somewhat different overall experience that took some getting used to.

Still, a very large number of folks I know feel like they practically live inside Google Reader -- and I know (for example) that Google Reader is a huge driver of traffic to this site, so I get the feeling many of you use Google Reader as well. The thing that seems to have so many folks upset is the fact that there really aren't any comparable alternatives if you want that same basic experience. In fact, you could argue that Google effectively killed off many of those alternatives. Back in the day there were things like Newsgator and Bloglines, but both were effectively marginalized or pushed into other markets because Google Reader really did become the de facto standard RSS reader that so many used and relied on.

Anyway, I have a few separate thoughts on all of this and might as well go through them bullet point style:

This highlights the problem of relying too much on a single provider when there are few alternatives. As such, I wonder if Google may not realize the wider impact of this move. For example, it has me directly rethinking how much I rely on Google Calendar, Google Drive and Gmail. Now, I don't think any of those are going away any time soon, but not too long ago (um, yesterday, according to some...) you could have said the same exact thing about Reader. I'm now planning to do a more serious personal audit of services I use and how reliant I am on a single provider, and start making sure I have working alternatives in place and ready to go. In the end, this will certainly make me a lot less tied to Google's services, which is probably a good thing, but probably not the sort of thing Google is hoping its users will be doing.
As mentioned, personally, I moved away from RSS readers to a purely Twitter/Tweetdeck approach to consuming news. It took a few months of doing both, but when I shut down the RSS reader, I never looked back. It's a different experience, but has some benefits. But, what that suggests is that if people are looking for a culprit for what brought us to this moment, Twitter is the prime suspect. Yes, Twitter and RSS are different in many significant ways. But, in terms of the basic user benefit that people get out of both ("my stream of news & info"), they clearly compete.
The lack of serious alternatives represents a serious opportunity for someone enterprising. Believe it or not, before Google Reader even launched we at Techdirt had built our own RSS reader, called the Techdirt InfoAdvisor, that functioned quite a lot like Google Reader, but which had some other really useful features for us internally and for some of our business clients (we would use it to curate accounts for clients, with added commentary from us). Eventually, we shut it down, because (as Google has discovered), it's actually a lot of work to maintain something like that for a variety of reasons, and soaks up tremendous resources. Still, my first reaction was to joke that maybe we should dust off our old code, put it up and see if anyone wanted to use it. We're not likely to do that (unless all of you start throwing money our way), but someone else likely is going to jump into this space quickly. They may not build a huge business out of it, but I'd bet if they weren't looking for VC-style hockey stick returns, that someone could build a decent business out of it.
It is always interesting to look at product lifecycles, but most of the time when online products die off, the writing was on the wall long before it happened. This one struck me as a surprise since so many people relied so heavily on it, and it seems really abrupt and likely to upset the basic workflow of so many -- especially in the journalism and academic fields. I can respect the reasons for killing off a "non-essential" product, but it feels like Google seriously underestimated the level to which people had built Google reader into their daily lives.

It wouldn't surprise me, given how loud the backlash is, if Google extends the deadline for shutting down Reader, or if it eventually tries to work out some sort of alternative resolution. We saw the same thing, to a lesser extent, back when AskJeeves tried to shut down Bloglines (the Google Reader of its day before Google Reader existed). And, eventually, Ask sold it off to another company who apparently has kept it running (though, who knows how many users it has today). I think that experience actually pushed a bunch of Bloglines users to jump to Google on the assumption that Google Reader was safe. You would think that someone within Google would remember how that whole thing played out. It's surprising that they don't appear to have learned anything from it.

Filed Under: alternatives, google reader, readers, rss, shutting down, single providers
Companies: google, twitter

142 Comments

Innovative Open Textbook Company Fights Back Against Publishers' Copyright Infringement Lawsuit

from the what-infringement? dept

Wed, Mar 13th 2013 3:04pm — Mike Masnick

Last year, we wrote about how a bunch of the largest textbook publishing firms had teamed up to sue an innovative open textbook startup called Boundless for copyright infringement. Was Boundless reproducing their books? Nope. Instead it had created alternative textbooks from various open sources -- but those texts mirrored the basic structure of other textbooks. It was this copying of "selection, structure, organization and depth of coverage... right down to duplicating Plaintiff's pagination" that the textbook publishers went after. Not the content. Yes, they're pissed off that Boundless cleverly sought to compete in the marketplace by making sure its textbooks were good competitors and easier to substitute in -- but without copying any of the actual content.

It's been nearly a year, but Boundless has filed its counterclaims, denying the various charges, and insisting that its works have never infringed, that the textbook publishers are claiming copyright over "non-copyrightable material" and that even if there were infringement, they are protected by fair use. They also claim that the lawsuit is a form of copyright misuse and shows the publishers' "abuse of the copyright monopoly." Should make for an interesting case.

At the same time, Boundless is also seeking a declaratory judgment on its new offerings. Apparently, the company changed its offerings substantially over the last year, and while the case is still over what those earlier offerings looked like (which Boundless believes did not infringe), it's seeking a clear statement that its newer offerings won't get the company sued as well. Boundless' lawyer sent the publishers a letter last month, asking them to make it clear that the lawsuit was just over the older versions and that there were no issues with the new version, but the publishers have refused, saying that the results of the trial "will inform... current and future business practices." In other words, let's see what happens with this case, and then we'll decide if we can sue over more stuff.

We recently had a lively discussion in the comments on a recent post about the upcoming Supreme Court ruling in the Kirtsaeng case, which is somewhat relevant. The Kirstaeng case, of course, involves first sale rights, and whether or not you'll be able to resell what you bought legally abroad. A defender of taking away first sale rights (i.e., upholding the lower court ruling) argued that if the Supreme Court allows the first sale doctrine to apply to textbooks bought abroad, it will mean that textbook providers will jack up their prices abroad, rather than offer them cheaply, and thus poor students in third world countries will never be able to afford an education.

As we pointed out, this is hogwash and ignores that markets are dynamic. If the big expensive publishers decide to drop out of such markets, it seems pretty clear that there will be others who will quickly step in -- and innovative companies like Boundless were exactly what we were thinking about. They're not infringing on the works of the big publishers. They're providing much-needed competition against an oligopoly that has worked hard at keeping prices ridiculously high for educational resources. It's a market ripe for disruption, and it's silly (though not unexpected) that publishers are seeking to abuse copyright law to stamp out that disruption, rather than learning to innovate themselves.

Filed Under: copyright, open, textbooks

Startups And Innovators Speak Out In Favor Of Fixing CFAA

Legal Issues

from the good-for-them dept

Tue, Mar 12th 2013 8:21pm — Mike Masnick

The good folks over at the EFF have posted a letter from a group of startups and innovators to Congress seeking reform of the CFAA (Computer Fraud and Abuse Act), which has been abused for years, most notably and recently, in the case against Aaron Swartz (full disclosure: I helped review the initial letter and helped the EFF get some of the signatures on the letter). This is important, because, as we have noted, plenty of innovators and entrepreneurs could have been charged under this law for some of their random hacking experiments, some of which directly led them to create amazing innovations.

Many people have thought that the tech industry isn't as interested in CFAA reform, since it supposedly protects them in cases where they have been hacked, but that's not the case. Through out the startup community, I've heard many people who were horrified to learn about the charges against Aaron Swartz, as they quickly realized how easy it would be for a Justice Department official to spin what they themselves were doing into something nefarious sounding. That does not help innovation.

No one is in favor of having no rules at all, but clearly the CFAA is outdated, broken and widely abused. Fixing the law to focus on actual malicious and nefarious attacks would be a huge step forward, not just for the public, but for innovators and entrepreneurs who often build great things by starting with a simple hack.

Filed Under: aaron swartz, cfaa, entrepreneurship, hacking, innovation

11 Comments

Case Study: Band Embraces Grooveshark And Catapults Its Career

Business Models

from the well,-look-at-that dept

Tue, Mar 12th 2013 4:03pm — Mike Masnick

One of the things that we've found odd about the decade and a half history of the legacy entertainment industry seeking (often successfully) to shut down a variety of new platforms, is that if you actually looked at the artists who didn't completely freak out at these new services and who recognized what the new services were (better platforms for distribution and promotion, rather than the end of all civilization and culture as we know it), you quickly find that, if done right, the platforms could be used to those artists' advantage. We saw artists use the original Napster to their advantage, only to see it shut down. Ditto for MP3.com, Grokster, Kazaa, Limewire, Megaupload and more. Plenty of artists have discussed how incredibly useful The Pirate Bay has been as a platform for distribution and promotion.

Now, admittedly, many of these companies and services were shut down for some form of copyright infringement or inducement to infringement. So, you can argue that they were illegal. But if we went back even further, we saw the same complaints against many other platforms including the radio, cable TV, the VCR, the DVR, the MP3 player and online video services like YouTube. And yet, every one of those has survived, and they have turned out to be very important parts of the market. In fact, you can look and see how each of those helped expand and grow markets, even as they were decried as being tools of infringement when they first came on the scene.

This is why I'm so fascinated by the artists who are the early adopters -- who jump onto these platforms in the early days and show how they can be used to the artist's own advantage. Because it's through those people that we learn how these platforms, be they tools of infringement or not, can quite possibly help artists much more than hurt them -- if those artists learn to use the tools correctly.

All of that is prelude to this case study, concerning a band called Quiet Company that teamed up to take part in Grooveshark's new Artist Development project, in which Grooveshark would see if it could help "break a band" via the internet. Grooveshark, of course, is a company that is currently being sued by a large chunk of the recording industry for its music player. In talking to various artists about it-- even those who often are more willing to experiment with new platforms -- I've seen many artists really dislike Grooveshark. But, clearly, it has built up a giant, loyal and engaged user-base. And, as always, it seems that, if done right, artists could embrace that to a positive effect, which is appears to be what happened with Quiet Company. First up, if you'd like to hear some of their music, you can click the widget below: I spoke to Quiet Company's manager, who told me that the band was being courted by various record labels, but they quickly realized that they were getting offered deals that weren't the most "artist friendly," and that they had no desire to work with a record label unless they knew that the band was the one with the leverage. So, when Grooveshark approached them, noting that Quiet Company seemed to be doing quite well on Grooveshark, and that they wanted to try to help "break" the band online, the band thought it was a great idea. In terms of what Grooveshark did for the band, it included promoting the band more heavily within Grooveshark and in other places, promoting YouTube videos (more on that below), promoting tours with "tour skins" in locations where the band was heading, highlighting releases, doing promos, contests and the like. They also did some more traditional promotions work, including pushing college radio and festivals, while also finding brand sponsors.

There are a number of interesting tidbits in the case study looking at an entire year or so in which Grooveshark worked to help Quiet Company. One thing that's important to note, of course, is that the band didn't just rely on Grooveshark, but worked to use Grooveshark in combination with other platforms to get attention. Grooveshark seemed to drive steady growth in part by using its own tools to help drive growth elsewhere, such as YouTube. Take a look, for example, at the following timeline:

You can see that there's a massive spike coming when YouTube engagement ads ran. Those ads are something that Grooveshark launched last year, to help promote artists, and it looks like that clearly had a pretty big impact. The "ads" ask Grooveshark users to view a portion of a music video to get to use the rest of the site ad free for a period of time, and that massively increased the YouTube views for the band. The timing did also coincide with last year's SXSW Music, where the band played (and got significant press attention -- Time, NPR Music, Billboard -- which certainly helped), but the band says that Grooveshark was instrumental in getting the necessary exposure.

Furthermore, a closer look at Grooveshark promotions, shows that they also impacted things like visits to the website and Facebook likes.

But, perhaps more importantly, the end result of this experiment was that the band started making more money with a much broader, international fanbase. The band had a popular following, locally in Texas, where it was from, but had much less support as they got further from home. On Facebook and YouTube, the "top cities" were all in Texas. However, that changed drastically, leading to the ability to tour more widely. After the partnership, rather than just cities in Texas, they had big followings (via Facebook) in Bogota, Sao Paulo and Barcelona, among many other places. The top countries for followers if you looked at YouTube and Facebook included not just the US, but the UK, Canada, Germany, Brazil and Spain. The band is getting ready to perform outside the US for the first time.

And, not surprisingly, with a broader fan base, their touring revenue shot up as well.

All in all, it's an interesting case study of a band that had a loyal local following, but hadn't "broken." Then it embraced a platform like Grooveshark and to see if it helped or hurt the band. It certainly seems like the band is in a much better position after working with Grooveshark than before. Even if you make the case that their success had nothing to do with Grooveshark, but was due to other factors, it certainly doesn't look like working with Grooveshark harmed the band, as some would imply.

In talking to the band's manager, he repeatedly pointed out that the exposure from Grooveshark made all the difference in the world, and took the band from having a loyal and devoted local following to a band that really had a big following in many places around the globe. He pointed out that the key, in his mind, was that this was a promotional platform, with the focus being on building up a fanbase who loved the music, and to then tour to make money to support that. When asked if there were any "lessons learned" or regrets, the one thing he noted is that they should have been better prepared to go out on tour as soon as things started to break. He felt that they could have done a bit more if they were ready to tour more widely earlier last year.

Something else really interesting came out of the case study and the discussion: after all of this, Quiet Company actually got a private investment from a group of fans to continue what they're doing. That is, rather than signing with a record label, a huge fan actually approached the band and asked them about investing in them, and set up a deal (with a few other fans) that is better than a record deal in that it's very artist friendly. Quiet Company's manager told me that this fan has been a big supporter of the band for a long time -- often buying a bunch of tickets to their shows and just giving them out to a bunch of her friends, and they were pleasantly surprised when that turned into her investing directly in the band.

Separately, he notes that the band believes strongly that this kind of thing was a result of the band really working hard to connect closely with their fans, and that with this greater exposure, it lets them try to do that on a larger scale.

This isn't, of course, to say that every artist should automatically jump on board with Grooveshark. It's just yet another case study in a growing list that shows that where artists carefully and smartly construct a broad strategy that leverages various tools to help promote and distribute their works, combined with connecting with the fans, they can have really compelling success stories. Even as some decry those platforms for claimed copyright infringement, it seems like these platforms can be helpful in doing the most important thing: building a fanbase. And, from there, the band needs to work to connect with that fanbase, and give them ways to support the band. It would be great if, rather than attacking such platforms over and over again, we spent more time like this, looking at ways that artists can use various platforms to their own advantage to succeed.

Filed Under: case studies, connecting with fans, exposure, promotion, quiet company
Companies: grooveshark

21 Comments

Innovators Break Stuff, Including The Rules: How Gates, Jobs & Zuckerberg Could Have Been Targeted Like Aaron Swartz

(Mis)Uses of Technology

from the do-we-want-to-stamp-out-that-kind-of-innovation? dept

Tue, Mar 12th 2013 9:50am — Mike Masnick

In a conversation with some folks in the tech industry recently, someone pointed out that nearly every super famous entrepreneur likely could have, at some point, been legitimately accused of violating the Computer Fraud and Abuse Act (CFAA), which is the law that prosecutors used against Aaron Swartz, and is in desperate need of an overhaul. Over at the EFF, Trevor Timm has a great post exploring how Steve Jobs, Bill Gates and Mark Zuckerberg all might have faced charges under the CFAA. You should read the whole thing, but here are a few snippets:

On Zuckerberg:

In 2006, while a sophomore at Harvard, Zuckerberg created a website called “Facemash” which compared photographs of Harvard’s entire population, asking users to compare two photos and vote on who looked better. Zuckerberg allegedly got access to these photos by “hacking” into each of Harvard’s nine House websites and then collecting them all on one site. It’s not clear what this “hacking” was, but since the charges against him included “breaching security,” it may have fun afoul of the law.

On Jobs:

Columbia Law Professor Tim Wu notes in the New Yorker that Apple co-founders Steve Jobs and Steve Wozniak, did acts that were “more economically damaging than, Swartz’s.” The two college roommates made what were called “blue boxes,” cheap devices that mimicked a certain frequency that allowed them to trick AT&T’s telephone system into making free long-distance calls. They also sold blue boxes before moving onto bigger and better ideas.

On Gates:

In his autobiography, Allen told the story of when the two future billionaires “got hold of” an administrator password at the company they worked at before starting Microsoft. The company had timeshared computers and Allen and Gates were getting charged for using them for their personal work.

The two men used the password to access the company's accounts and set about trying to find a free runtime account so that they could carry on programming without having to pay for the time. They also copied the account database for later perusal. However, management got wise to the plan.
"We hoped we'd get let off with a slap on the wrist, considering we hadn't done anything yet. But then the stern man said it could be 'criminal' to manipulate a commercial account. Bill and I were almost quivering."

Of course, defenders of the existing law will argue that these episodes are entirely unrelated to the later greatness that all three of these folks were eventually involved in. But that's not actually supported by the facts. Facesmash almost certainly directly led Zuckerberg to Facebook. And, in the case of Steve Jobs, he specifically told an interviewer:

“Experiences like that taught us the power of ideas…And if we hadn’t have made blue boxes, there would’ve been no Apple.”

Innovators innovate because they hack away at stuff. They push boundaries and they try new things to explore uncharted worlds. Do we really want to be punishing people like that with threats of 35 years in jail? (And, yes, the government absolutely did threaten him with 35 years.)

Filed Under: aaron swartz, bill gates, cfaa, hacking, innovation, mark zuckerberg, steve jobs
Companies: apple, facebook, microsoft

48 Comments

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