Offline Shopping Cart Piracy

James DeLong really knows how to put things in perspective, so long as you set aside the tortured economic reasoning (e.g., how are the shopping carts suddenly non-rivalrous?).  Shopping cart theft is clearly a serious problem. In various lectures, JZ has pointed out that shopping cart theft costs retailers 800 million dollars per year – I can’t find an article supports that figure right now, but Wikipedia has the same number. Meanwhile, US music sales declined a mere ~$400 million last year, which doesn’t include the revenue gained from digital sales.  I expect DeLong will soon redouble his efforts to stop the menace of offline shopping cart piracy.

P2P Surveys Becoming Almost Entirely Worthless

Too often, people use survey data to argue that the RIAA’s lawsuits have had a significant impact on downloads. After the latest AP poll, I think it’s time we treat these surveys as wholly unreliable. 

According to WIRED, “Eighty percent of the respondents consider it stealing to download
music for free without the copyright holder’s permission, and 92
percent say they’ve never done it, according to the poll conducted for
The Associated Press and Rolling Stone magazine.”

But it can’t possibly be the case that only 8 percent of Americans (~24 million) have *ever* downloaded without permission.  Over 3 years ago, an Ispos survey found that 60 million Americans had downloaded.  When Pew suggested P2P use had “sharply decline[d]” after the RIAA lawsuits began, the report concluded that 35 million adults had at least at one time been downloading.  Clearly, it’s not that downloading has decreased, but that respondents have become more reluctant to reveal potentially illicit behavior.

In turn, studies that try to monitor P2P networks, to gauge total users and traffic, are more reliable. But  it’s worth noting that these studies are also likely to underestimate the total “darknet,” as P2P users shift to other networks, small groups sharing services, IM, and other channels.  Even that ignores shifts to the sneakernet – studies have also tried to gauge acquisition through CD burning, but people can increasingly use portable and micro hard drives.

Reemerging and Relocating

Just about 3 years ago, I started this blog. I began writing in part to reinvigorate my academic studies, which had become remarkably unfulfilling. Blogging helped change that to some extent. As it turned out, school and writing could be fun after all.

At least in the formal sense, the school part comes to an end for now. I took my last final exam today; pending any unforeseen circumstances, I’m a Harvard graduate. This last push of exams, as well as enjoying my final moments at college and doing some travelling, contributed to the recent paucity of posts.

Rest assured, the writing will continue, albeit still at a trickle at this blog in the near future. Next month, I move to San Francisco and start work as a Webwriter/Activist for EFF.

When I started this blog, I had fairly modest aspirations for my involvement in the copyfight and Internet activism; I would have been content if
only Donna, Mary, and Frank paid any attention to me. I feel fortunate to have interacted with so many people through this blog and to have had so many tremendous experiences at the Berkman Center, Creative Commons, the Samuelson Clinic, and beyond. I can’t tell you how excited I am to start this next chapter.

As some of you might know, I’ve been looking forward to moving home, back to SF, for awhile. At the same time, there are many things I will miss about Boston, particularly the Berkman Center. That community was where I felt most at home here at Harvard, and I am deeply indebted and thankful to everyone there. I’ll fortunately get to continue my affiliation with them in various forms, and the virtual connections will of course persist.

Wippit Offers 60,000 MP3s for 90 Bucks

Not sure if I missed it or this has just been poorly publicized, but have a look at Wippit‘s new model.  Parts of their website are so out of date (e.g., they no longer use P2P), that the service has often confused me.  At the least, I think they’ve licensed much more music than when Wippit 2.0 came out.

Here’s the pitch from the press release I received via email: for a $90 year-long subscription, you can download 60,000 MP3s – that’s about 667 songs per dollar, with no DRM.  Apparently, this catalog doesn’t grow in number, but it does change in composition – some songs will be added that are available to subscribers, but other songs will be subtracted so that the catalog is never more than 60,000.  At least, that’s what the FAQ suggests.  Still, if you download all 60k when you sign up, and then download all new additions, the catalog grows in effect.  Wippit also does offer DRM-wrapped songs for purchase to subscribers at a discount from the price offered to non-subscribers.

One might expect that Wippit would have no major or even significant independent content.  After all, the high license fees for this sort of service killed the original eMusic.  So one would expect this to be more like Garageband.com, with all niche or amateur content.

Not so, at least from my cursory observations.  You’re not going to get 60,000 of the most popular current content.  But I bet many (though not everyone) could find 9 albums that they otherwise would have been interested in getting. And as long as there are 90 bucks worth of albums worth getting, why not buy them through Wippit and acquire another ~59.9k tracks basically for free? While it doesn’t have the latest Britney album, Wippit does have the newest Franz Ferdinand and Interpol albums, for instance.  Popular independents like Dizzee Rascal and Royksopp are available, as are songs by independent artists I haven’t been able to find through Rhapsody or iTunes, like Soulwax and Rex the Dog.

This value-proposition would be a lot better if Wippit’s website were not such a phenomenal disaster.  The search tool is slow and clunky, and some songs are mislabelled (labelled as MP3 but actually only available as DRM-wrapped WMA).  There’s no recommendation system to help you figure out what else of the 60k you might like.

You could use other recommendation systems, though, to make some determinations.  In particular, people might use software like MoodLogic’s to sort through their music.

I report all this cautiously, since Wippit’s website can sometimes be quite confusing.  But the email they sent suggests that my assessment is accurate.

Reclaiming Sharing

Today, I will be publishing a paper entitled, “Consumer Taste Sharing is Driving The Online Music Business and Democratizing Culture,” which I co-authored with Gartner researcher and Berkman Center collaborator Mike McGuire. The paper was originally published in slightly different form by Gartner. I will also be giving a talk about the paper at the Berkman Center, which will be webcast here.

For frequent readers of this blog, the main thrust of this paper may be familiar. New tools enable consumers to share their musical tastes. Sometimes this means simply sharing the names of artists or songs they like (e.g., playlist sharing) while other forms involve sharing the music itself (e.g., music podcasting). Data suggests that enabling new forms of taste-sharing may have significant business benefits, promoting artists and driving online music transactions. The tools might also unleash cultural benefits. Most significantly, consumers can play DJ, becoming creators in their own right, and diminish or reshape the power traditional tastemakers like radio and TV have had. In so doing, these tools might help expose people to a greater diversity of music and facilitate the formation of taste-based communities.

Of course, people will use some tools, like podcasting, in ways that infringe copyright, and, like P2P, people will use podcasts to acquire copyrighted content for free without permission. The potential harm of this infringement is not something I take up in this paper. For too long, I think the issues raised by infringing downloading have distracted rights holders and policymakers alike from the benefits of enabling individuals to act as content distributors.

Regardless of what one thinks of infringing downloading, enabling licensed or otherwise lawful forms of sharing would have significant benefits. Finding ways to make music sharing flourish is thus worth pursuing independent of the industry’s need to “compete with free.” Mike and I do argue that enabling sharing can help the music industry compete with free, and that should add to the impetus to support it. But even if infringing downloading simply went away, enabling consumers to be content sharers would still be valuable. It is a win-win proposition, benefiting rights holders, consumers, tech companies, and our culture as a whole.

In the future, I hope to take up some of the ways the industry can support music podcasters and others who want to share copyrighted works. In this paper, though, we simply try to lay out the potential benefits of sharing tools.

Another DRM Protest, Another Classic Stallman Moment

Sandwich board suit strikes again.

Meet the New Beam-it, Similar to the Old Beam-it

So far as I can tell, Michael Robertson’s new Oboe Music Locker is leaning on music owner’s fair use right and the DMCA safe harbor 512(c) to avoid the fate of his sued-to-death Beam-it service (aka, the MP3.com suit). 
Since Oboe isn’t loading the songs by itself and is instead allowing
users to copy music onto Oboe’s servers, Oboe is much like any other
hosting service. The uploader may be making a fair use. Even if there
is some direct infringement occurring, rights holders would have to
send a notice for takedown.  Of course, the rights holders have no
idea what’s in people’s private lockers, so this seems unlikely. 
At least that’s what their reasoning seems to be.

Question: to what extent could these screenshots give Oboe sufficient knowledge to preclude protection under the safe harbor?

Searching for Meaning in the MPAA-BitTorrent Deal

Brad Hill’s take on the MPAA-BitTorrent eal
is basically right, particularly his points at the end about its irrelevance.  While I
agree that this deal is insignificant in terms of stopping
infringement, I suppose it could have some relevance in terms of future litigation
or, at least, future litigation strategy.

For quite awhile, the MPAA/RIAA have been pushing the argument that a
service provider can be secondarily liable if filtering technologies
were available but not implemented.  After Grokster, this can now be evidence that the service provider intended to induce infringement.

In every subsequent case, the MPAA will hold up Bram as a “good actor”
and this deal as evidence that filtering can work.  They will tell
courts that any P2P service that doesn’t act like Bram is a “bad
actor,” and that everyone should be expected to do this sort of
filtering if Bram is willing to do it.

Will a court buy that?  Good question.

EFF Files Class Action Against Sony BMG

Here we go.

“The suit, to be filed in Los Angeles County Superior court, alleges
that the XCP and SunnComm technologies have been installed on the
computers of millions of unsuspecting music customers when they used
their CDs on machines running the Windows operating system. Researchers
have shown that the XCP technology was designed to have many of the
qualities of a “rootkit.” It was written with the intent of concealing
its presence and operation from the owner of the computer, and once
installed, it degrades the performance of the machine, opens new
security vulnerabilities, and installs updates through an Internet
connection to Sony BMG’s servers. The nature of a rootkit makes it
extremely difficult to remove, often leaving reformatting the
computer’s hard drive as the only solution. When Sony BMG offered a
program to uninstall the dangerous XCP software, researchers found that
the installer itself opened even more security vulnerabilities in
users’ machines. Sony BMG has still refused to use its marketing
prowess to widely publicize its recall program to reach the over 2
million XCP-infected customers, has failed to compensate users whose
computers were affected and has not eliminated the outrageous terms
found in its End User Licensing Agreement (EULA).”

Sony CD DRM Can Be Evaded With Piece of Tape

See this report
from Gartner researchers Martin Reynolds and Mike McGuire.  Just
another level of bizarre stupidity in this mess. Reynolds and McGuire
sum it up nicely:

“Sony BMG’s DRM technology will prevent
neither informed casual copiers nor high-volume ‘pirates’ from doing
whatever they like with the content the disc [sic]. It does, however,
load ‘stealth’ software — software that has been demonstrated to have
suspect effects — on uninformed users’ machines. The bottom line: Sony
BMG has created serious public-relations and legal issues for itself,
and for no good reason.”

How The Sony DRM Debacle Can Benefit the Digital Music Market

In discussing the impact of the Sony DRM debacle, Paul Resnikoff made
a fairly bizarre assessment: “But just how aware is the average consumer
in all of this? … A worst-case scenario would involve a high level of
awareness, and subsequent drops in CD buying. That is a problem for
everyone, because most buyers are unlikely to
make finer distinctions between various major labels and specific
protection schemes.”

To the contrary, the best-case scenario is a high level of consumer
awareness.  No matter what you think of the DMCA or what DRM’s
role should be in the market, we should all be able to agree on that.

DRM proponents often argue that DRM’s limitations will never be
unacceptably invasive or strict, because consumer desires will never
allow it.  If one music supplier uses DRM in a way that is too
restrictive, another supplier will exploit that opportunity, offering
music with less restrictions and drawing consumers away.  In sum,
the competitive market solves all.

And what do you need to get a competitive, efficient market?  Full information.  Perfect
information and perfectly competitive markets don’t exist outside of
textbooks, but we’d like to get as close as possible to those goals.

If consumers come away from the Sony debacle deciding to never buy
another DRMed CD again, that’s the market at work.  To the extent
this provokes consumers to be more critical when buying any DRMed
product, and they reject DRMed products on that basis, that’s the
market at work.

Resnikoff’s fear seems to be that this one incident teaches a false
lesson because this is an exceptional instance, and thus consumers will
in some sense be improperly informed. First, this is not completely exceptional.  Sony CD DRM certainly is an
extreme example of the harm DRM can do as well as a situation in which
people were buying DRMed content without fully understanding the
restrictions.  However, all the major online music
services are misleading in the way they advertise their services,
obscuring how restrictive their DRM actually is.
 
We should hope that consumers come away from this scandal more critical
about DRM in general; if they decide to purchase music from the online
music services, they should do so knowing what they’re buying.

Second, if this is a false lesson, then the solution is more
information about DRM. The onus is on record labels, online music
services, and DRM proponents to make those “finer distinctions” and
explain to consumers why they should buy DRMed products. If you think
current music DRM restrictions are not so bad, I challenge you: start the “say yes to DRM!” campaign. And if consumers don’t buy your message, take that as a signal from the market.

Support EFF’s Fight For Bloggers’ Rights

If you’re a blogger, you should thank EFF for the many ways in which it’s fighting for your rights.  Lucky for you, you can do so by participating in a special membership campaign that’s kicking off today. Here’s the announcement:

“Here at EFF, we’re fighting hard for bloggers’ rights.
We’ve created the Legal Guide for Bloggers, we’re litigating the
reporter’s privilege for online journalists and we are working hard to
defend bloggers’ rights to free expression, political speech, and
anonymity, just to name a few.

But we need your help to spread the word,
grow our membership and keep fighting. So we’re launching a special
membership campaign specifically for bloggers. We’ve created a button
for you to put in a permanent space on your blog that declares your
support for bloggers’ rights, and for the work EFF does to support
them. The button links to our blogger’s rights campaign, http://www.eff.org/bloggers/join/.

We’d like to offer all bloggers who put
the button up on their blog a discounted EFF membership. In addition,
each month we’ll choose one of our favorite blogs to highlight in
EFFector, our online newsletter, which reaches over 50,000 people. And
the owners of the ten blogs that bring in the most donation money to
EFF will receive a pair of EFF’s blogger pajama bottoms and an EFF
blogger t-shirt. You can support blogger’s rights, spread the word
about EFF, and become a member at a lower rate.

Check out our various buttons at www.eff.org/bloggers/badges, and join the campaign to support Bloggers’ Rights!”

And even if you’re not a blogger, if you enjoy reading this blog or
any others, consider supporting EFF’s fight for bloggers’ rights by
becoming an EFF member.  Just click the link below.

Support Blogger's Rights!
Support Blogger’s Rights!

Grokster Brand to Live On, Eventually Die

The Grokster settlement is now official.  The sale to Mashboxx isn’t, but it seems like we’re headed in that direction.

Some may think that Grokster’s conversion to a legitimate service is
important because it’ll have brand name recognition.  I doubt it –
we need only look at Napster 2.0 to see how little a previously popular
P2P brand can help a licensed service.  Grokster’s going to live
and die by how good Mashboxx’s system is.  If it’s just an iTunes
Music Store with a P2P client skin on top of it (e.g., Peer Impact), I
don’t think it’ll make any waves.  If it can generate a richer
sharing experience than the current online music stores do, then it may
have some traction.  Mostly, DRM, price points, and catalog will
still be the keys.

P2P Litigation Summit: Take Two

If you’re not already sick of my voice, here’s a second podcast,
a
revised version of what I presented at the conference.  It’s not
totally fleshed out, but it’s got the main points.  A video
was taken of the conference, so maybe you’ll get a chance later to see
what I actually said.  Perhaps I’ll be able to type this up in
a more succinct format later, but for now I had to just talk it out.

For more analysis, see Content and Control, the paper on which some of my presentation was based.

P2P Litigation Summit: First Thoughts

On Thursday, I attended and spoke at the P2P Litigation Summit. 
It was an enlightening, interesting, and exhausting day.  Keeping with my reporting from FMC, here are
my first take-aways in podcast form.  Next, I’ll post a version of the
presentation I gave.

Highlights:
1.  Hearing the story of David Andora, an innocent person targeted by the record industry.
2.  Learning about the intimidation tactics of the record industry’s Settlement Support Center.
3.  Having former Napster CEO Hank Barry call me a record industry apologist.
(Hank and I were actually, I think, in some agreement, and what he said
about me was more a product of my lack of clarity than anything
else.  In any case, it was a priceless moment I’ll never forget.)

All that, and much more in this podcast….

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