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We all know what this symbol means:

usedhead

Two people are not allowed to share an iPad.

Just kidding. It means the lavatory in the airplane is occupied. Also that it can be used by persons of either gender.

Which gender you are is of no concern to the airline. Or to the lavatory. Because it doesn’t matter.

The fact that lavatories outside airplanes generally sort visitors by gender is also not a big deal. They’ve done that for a long time. To my knowledge this is a matter of custom more than of law.

But for some damn fool reason, “conservative” legislators (you know, the kind that supposedly don’t like new laws and bigger government) in North Carolina, which was my home state for two decades, decided to pass the Public Facilities Privacy & Security Act, which was meant to overturn a piece of local legislation in Charlotte prohibiting operators of public facilities from discriminating on the basis of gender identity or sexual orientation.

Much freaking out has ensued since then. All of it could have been avoided if conservative sympathies actually applied. Meaning, leave well enough alone.

Or just don’t be stupid and pigheaded, which North Carolina’s legislature and governor are clearly being right now.

 

 

It didn't happen in 2010, but it will in 2016.

It didn’t happen in 2010, but it will in 2016.

This Post ran on my blog almost six years ago. I was wrong about the timing, but not about the turning: because it’s about to happen this month at the Computer History Museum in Silicon Valley. More about that below the post.
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The tide turned today. Mark it: 31 July 2010.

That’s when The Wall Street Journal published The Web’s Gold Mine: Your Secrets, subtitled A Journal investigation finds that one of the fastest-growing businesses on the Internet is the business of spying on consumers. First in a series. It has ten links to other sections of today’s report.

It’s pretty freaking amazing — and amazingly freaky, when you dig down to the business assumptions behind it. Here’s the gist:

The Journal conducted a comprehensive study that assesses and analyzes the broad array of cookies and other surveillance technology that companies are deploying on Internet users. It reveals that the tracking of consumers has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.

It gets worse:

In between the Internet user and the advertiser, the Journal identified more than 100 middlemen — tracking companies, data brokers and advertising networks — competing to meet the growing demand for data on individual behavior and interests.The data on Ms. Hayes-Beaty’s film-watching habits, for instance, is being offered to advertisers on BlueKai Inc., one of the new data exchanges. “It is a sea change in the way the industry works,” says Omar Tawakol, CEO of BlueKai. “Advertisers want to buy access to people, not Web pages.” The Journal examined the 50 most popular U.S. websites, which account for about 40% of the Web pages viewed by Americans. (The Journal also tested its own site, WSJ.com.) It then analyzed the tracking files and programs these sites downloaded onto a test computer. As a group, the top 50 sites placed 3,180 tracking files in total on the Journal’s test computer. Nearly a third of these were innocuous, deployed to remember the password to a favorite site or tally most-popular articles. But over two-thirds — 2,224 — were installed by 131 companies, many of which are in the business of tracking Web users to create rich databases of consumer profiles that can be sold.

Here’s what’s delusional about all this: There is no demand for tracking by individual customers. All the demand comes from advertisers — or from companies selling to advertisers. For now.

Here is the difference between an advertiser and an ordinary company just trying to sell stuff to customers: nothing. If a better way to sell stuff comes along — especially if customers like it better than this crap the Journal is reporting on — advertising is in trouble.

Here is the difference between an active customer who wants to buy stuff and a consumer targeted by secretive tracking bullshit: everything.

Two things are going to happen here. One is that we’ll stop putting up with it. The other is that we’ll find better ways for demand and supply to meet — ways that don’t involve tracking or the guesswork called advertising.

Improving a pain in the ass doesn’t make it a kiss. The frontier here is on the demand side, not the supply side.

Advertising may pay for lots of great stuff (such as search) that we take for granted, but advertising even at its best is guesswork. It flourishes in the absence of more efficient and direct demand-supply interactions.

The idea of making advertising perfectly personal has been a holy grail of the business since Day Alpha. Now that Day Omega is approaching, thanks to creepy shit like this, the advertsing business is going to crash up against a harsh fact: “consumers” are real people, and most real people are creeped out by this stuff.

Rough impersonal guesswork is tolerable. Totally personalized guesswork is not.

Trust me, if I had exposed every possible action in my life this past week, including every word I wrote, every click I made, everything I ate and smelled and heard and looked at, the guesswork engine has not been built that can tell any seller the next thing I’ll actually want. (Even Amazon, widely regarded as the best at this stuff, sucks to some degree.)

Meanwhile I have money ready to spend on about eight things, right now, that I’d be glad to let the right sellers know, provided that information is confined to my relationship with those sellers, and that it doesn’t feed into anybody’s guesswork mill. I’m ready to share that information on exactly those conditions.

Tools to do that will be far more leveraged in the ready-to-spend economy than any guesswork system. (And we’re working on those tools.) Chris Locke put it best in Cluetrain eleven years ago. He said, if you only have time for one clue this year, this is the one to get…

Thanks to the Wall Street Journal, that dealing may finally come in 2010.

[Later…] Jeff Jarvis thinks the Journal is being silly. I love Jeff, and I agree that the Journal may be blurring some concerns, off-base on some of the tech and even a bit breathless; but I also think they’re on to something, and I’m glad they’re on it.

Most people don’t know how much they’re being followed, and I think what the Journal’s doing here really does mark a turning point.

I also think, as I said, that the deeper story is the market for advertising, which is actually threatened by absolute personalization. (The future market for real engagement, however, is enormous. But that’s a different business than advertising — and it’s no less thick with data… just data that’s voluntarily shared with trusted limits to use by others.)

[Later still…] TechCrunch had some fun throwing Eric Clemons and Danny Sullivan together. Steel Cage Debate On The Future Of Online Advertising: Danny Sullivan Vs. Eric Clemons, says the headline. Eric’s original is Why Advertising is Failing on the Internet. Danny’s reply is at that first link. As you might guess, I lean toward Eric on this one. But this post is a kind of corollary to Eric’s case, which is compressed here (at the first link again):

I stand by my earlier points:

  • Users don’t trust ads
  • Users don’t want to view ads
  • Users don’t need ads
  • Ads cannot be the sole source of funding for the internet
  • Ad revenue will diminish because of brutal competition brought on by an oversupply of inventory, and it will be replaced in many instances by micropayments and subscription payments for content.
  • There are numerous other business models that will work on the net, that will be tried, and that will succeed.

The last point, actually, seemed to be the most important. It was really the intent of the article, and the original title was “Business Models for Monetizing the Internet: Surely There Must Be Something Other Than Advertising.” This point got lost in the fury over the title of the article and in rage over the idea that online advertising might lose its importance.

My case is that advertisers themselves will tire of the guesswork business when something better comes along. Whether or not that “something better” funds Web sites and services is beside the points I am making, though it could hardly be a more important topic.

For what it’s worth, I believe that the Googles of the world are well positioned to take advantage of a new economy in which demand drives supply at least as well as supply drives demand. So, in fact, are some of those back-end data companies. (Disclosure: I currently consult one of them.)

Look at it this way…

  • What if all that collected data were yours and not just theirs?
  • What if you could improve that data voluntarily?
  • What if there were standard ways you could get that data back, and use it in your own ways?
  • What if those same companies were in the business of helping you buy stuff, and not just helping sellers target you?

Those questions are all on the table now.

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9 April 2016 — The What They Know series ran in The Wall Street Journal until 2012. Since then the tracking economy has grown into a monster that Shoshana Zuboff calls The Big Other, and Surveillance Capitalism.

The tide against surveillance began to turn with the adoption of ad blockers and tracking blockers. But, while those provide a measure of relief, they don’t fix the problem. For that we need tools that engage the publishers and advertisers of the world, in ways that work for them as well.

They might think it’s working for them today; but it’s clearly not, and this has been apparent for a long time.

In Identity and the Independent Web, published in October 2010, John Battelle said “the fact is, the choices provided to us as we navigate are increasingly driven by algorithms modeled on the service’s understanding of our identity. We know this, and we’re cool with the deal.”

In The Data Bubble II (also in October 2010) I replied,

In fact we don’t know, we’re not cool with it, and it isn’t a deal.

If we knew, The Wall Street Journal wouldn’t have a reason to clue us in at such length.

We’re cool with it only to the degree that we are uncomplaining about it — so far.

And it isn’t a “deal” because nothing was ever negotiated.

To have a deal, both parties need to come to the table with terms the other can understand and accept. For example, we could come with a term that says, Just show me ads that aren’t based on tracking me. (In other words, Just show me the kind of advertising we’ve always had in the offline world — and in the online one before the surveillance-based “interactive” kind gave brain cancer to Madison Avenue.)

And that’s how we turn the tide. This month. We’ll prepare the work on VRM Day (25 April), and then hammer it into code at IIW (26–28 April). By the end of that week we’ll post the term and the code at Customer Commons (which was designed for that purpose, on the Creative Commons model).

Having this term (which needs a name — help us think of one) is a good deal for advertisers because non-tracking based ads are not only perfectly understood and good at doing what they’ve always done, but because they are actually worth more (thank you, Don Marti) than the tracking-based kind.

It’s a good deal for high-reputation publishers, because it gets them out of a shitty business that tracks their readers to low reputation sites where placing ads is cheaper. And it lets them keep publishing ads that readers can appreciate because the ads clearly support the publication. (Bet they can charge more for the ads too, simply because they are worth more.)

It’s even good for the “interactive” advertising business because it allows the next round of terms to support advertising based on tracking that the reader actually welcomes. If there is such a thing, however, it needs to be on terms the reader asserts, and not on labor-intensive industry-run opt-out systems such as Ad Choices.

If you have a stake in these outcomes, come to VRM Day and IIW and help us make it happen. VRM Day is free, and IIW is very cheap compared to most other conferences. It is also an unconference. That means it has no keynotes or panels. Instead it’s about getting stuff done, over three days of breakouts, all on topics chosen by you, me and anybody else who shows up.

When we’re done, the Data Bubble will start bursting for real. It won’t mean that data goes away, however. It will just mean that data gets put to better uses than the icky ones we’ve put up with for at least six years too long.

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This post also appears in Medium.

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This is for Christopher Baker.

Chris was nine years old when a friend shot him through the head by mistake, using a gun the friend’s father kept for protection. Chris was a great kid: fun-loving, kind and athletic. In the open casket at his funeral, he wore a baseball cap that covered the fatal wound. The hole in his parents hearts would never be filled. Chris was their only child, and they never had another.

If Chris had lived, he would be forty-two years old now. Instead, for those who remember him, he’ll always be nine.

If you think I’m about to go into an argument for gun control, be disappointed, because I don’t have one. Like millions of others who know innocent victims of gunfire, I feel grief and despair, even after all these years. Unlike many or most of them, I have no answer.

As Gideon Litchfield writes in Quartz, There is nothing more to say. There is no “debate,” no “national conversation.” There are only entrenched positions that don’t influence each other at all. Specifically, the gun non-debate—

echoes another frozen conflict: the one in Israel-Palestine. Four years of covering it made me see that, in certain disputes, the opposing forces attain a sort of self-correcting stasis. Even after a particularly cruel outrage, equilibrium returns quickly, as if neither side can let go of its claim to eternal victimhood. Change does come—many decades-long conflicts have ended—but it takes its own, often mysterious path that neither words nor any single tragedy can alter.

Indeed, instead of “gun-control debate,” we should call it the “gun-control conflict.” There is no debate here, only forces locked in frozen combat.

And the number of cats out of bags are legion. Today there are more guns than people in the U.S. Given that fact alone, it is not much easier to “control” the gun market, or the use of guns, in the U.S., than it is to control the tides. Guns are abundant and loose in human nature. I fear the best we can hope for is not being among the unlucky, as Chris was.

 

 

 

I’ll be on a webinar this morning talking with folks about The Intention Economy and the Rise in Customer Power. That link goes to my recent post about it on the blog of Modria, the VRM company hosting the event.

It’s at 9:30am Pacific time. Read more about it and register to attend here. There it also says “As a bonus, all registered attendees will receive a free copy of Doc’s latest book, The Intention Economy: How Customers Are Taking Charge in either printed or Kindle format.”

See/hear you there/then.

 

 

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[Update, 4 June 2016—I’m attempting to listen right now to WFAN/101.9 and it’s obliterated by signals flanking it on 101.7 and 102.1. Maybe my tweet about it here will finally get some journalists interested in the topic.]

The radio dial here IMG_8116in “upstate” Manhattan and the Bronx is packed with pirate radio signals. Many are smack next to New York’s licensed landmarks. Here’s what I’m getting right now on our kitchen radio…

  • 88.1 “Romantica New York” Spanish announcers, music in English and Spanish. Right next to WBGO (@wbgo), New York’s jazz station (licensed to Newark).
  • 89.3 Spanish. Right next to WFDU and WNYU (@wnyu), the Fairleigh Dickenson and NYU stations that share time on 89.1.
  • 89.7 Spanish. Talk. Call-ins. Right next to WKCR (@wkcrfm), the Columbia University station on 89.9.
  • 91.3 Spanish, as I recall. It just popped off the air. Right next to WNYE on 91.5.
  • 92.1 Spanish, currently playing traditional Mexican (e.g. Mariachi) music and talking up a Mexican restaurant. Right next to 92.3 WBMP “Amp radio” (@923amp) in New York.
  • 94.3 Spanish talk. Not next to any local station, but two notches removed from 94.7 WNSH “Nash” (@nashfm947ny) in New York (licensed to Newark).
  • 95.3 Spanish music. Right next to 95.5 WPLJ (@955plj) in New York. (Note that in the screen shot above, of my kitchen radio, it lights up the ST (stereo) indicator.)
  • 98.9 Spanish talk and music. Right next to 98.7 WEPN-FM (@espnny98_7), ESPN’s flagship station on 98.7.
  • 99.3 Spanish talk. Right next to 99.5 WBAI in New York.
  • 101.7 Spanish music. Right next to 101.9 WFAN-FM (@wfan660) in New York.
  • 102.5 English talk, with a Caribbean accent. Just heard ads for businesses in The Bronx (nail salon) and New Jersey (dentist), massage therapy (50 fremont ave, East Orange, NJ), a reggae music concert, 708-282-8741. Right next to 102.7 WWFS, “Fresh 102.7” (@fresh1027ny) in New York.
  • 102.9 English talk and music, with a Jamaican accent. I believe this was the same station that earlier today was rebroadcasting a Kingston station, no doubt picked up off the Net. Also right next to WWFS.
  • 105.5 Some kind of Christian pop, I think. It’s not WDHA in Dover, NJ. I just checked that station’s stream online. Totally different.
  • 105.7 Music in English right now. Right next to 105.9 WQXR (@WQXR) in New York.
  • 106.1 English. Reggae dance. Ads: Mizama Apparel Plus, 4735 white plains road. Kings Electronics, 4372 White Plains Road. Jumbo concert in Mt. Vernon… Also right next to WQXR on the dial. All but blows QXR away, in fact. (QXR’s signal radiates from the same master antenna as most other New York stations, on the Empire State Building, but is just 610 watts, while most of the rest are 6000 watts.)
  • 106.9 English music. Caribbean accent. Right next to 106.7 WLTW “Lite FM” (@1067litefm) in New York.

This is a nearly completely different list of pirates than the one I compiled last fall from this same location, in the 10040 area code. (There were pirate signals on 89.3 and 89.7 then, but I’m not sure if these are the same.), None of the pirate signals match anything on this list of all the legitimate licensed signals radiating within 100km (60 miles) of here.

Man, I wish I knew Spanish. If I did, I would dig into as many of these as I could.

All of them, I am sure, are coming from the northern end of Manhattan and the Bronx, though 102.5 has so many ads for New Jersey places that I wonder if it’s actually over there somewhere.

All of them serve some kind of marketplace, I assume. And even though I don’t understand most of what they’re talking about (when they do talk), I’m fascinated by them.

At the same time they are all illegal, and to varying degrees interfere with legitimate licensed stations. If I were any of the legitimate stations listed above, I’d be concerned. Weaker stations (e.g. WKCR, WBGO and WQXR) especially.

There are a few New York pirate radio stories out there (here, here and here, for example); but they’re all thin, stale or old.

This is a real phenomenon with a lot of meat for an enterprising journalist — especially one who speaks Spanish. Any takers?

meerkatLook where Meerkat andperiscopeapp Periscope point. I mean, historically. They vector toward a future where anybody anywhere can send live video out to the glowing rectangles of the world.

If you’ve looked at the output of either, several things become clear about their inevitable evolutionary path:

  1. Mobile phone/data systems will get their gears stripped, in both directions. And it will get worse before it gets better.
  2. Stereo sound recording is coming. Binaural recording too. Next…
  3. 3D. Mobile devices in a generation or two will include two microphones and two cameras pointed toward the subject being broadcast. Next…
  4. VR, or virtual reality.

Since walking around like a dork holding a mobile in front of you shouldn’t be the only way to produce these videos, glasses like these are inevitable:

srlzglasses

(That’s a placeholder design in the public domain, so it has no IP drag, other than whatever submarine patents already exist, and I am sure there are some.)

Now pause to dig Facebook’s 10-year plan to build The Matrix. How long before Facebook buys Meerkat and builds it into Occulus Rift? Or buys Twitter, just to get Periscope and do the same?

Whatever else happens, the rights clearing question gets very personal. Do you want to be recorded by others and broadcast to the world or not? What are the social and device protocols for that? (Some are designed into the glasses above. Hope they help.)

We should start zero-basing some answers today, while the inevitable is in sight but isn’t here yet.

It should help to remember that all copyright laws were created in times when digital life was unimaginable (e.g. Stature of Anne, ASCAP), barely known (Act of 1976), or highly feared (WIPO, CTEA, DMCA).

How would we write new laws for the new video age that has barely started? Or why start with laws at all? (Remember that nearly all regulation protects yesterday from last Thursday — and are often written by know-nothings.)

We’ve only been living the networked life since graphical browsers and ISPs arrived in the mid-90’s. Meanwhile we’ve had thousands of years to develop civilization in the physical world.

Relatively speaking, digital networked life is Eden, which also didn’t come with privacy. That’s why we made clothing and shelter, and eventually put both on hooves and wheels.

How will we create the digital equivalents of the privacy technologies we call clothing, shelter, buttons, zippers, doors, windows, shades, blinds and curtains? Are the first answers technical or policy ones? Or both? (I favor the technical, fwiw. Code is Law and all that.)

Protecting the need for artists to make money is part of the picture. But it’s not the only part. And laws are only one way to protect artists, or anybody.

Manners come first, and we don’t have those yet. Meaning we also lack civilization, which is built on, and with, manners of many kinds. Think about much manners are lacking in the digital world. So far.

None of the big companies that dominate our digital lives have fully thought out how to protect anybody’s privacy. Those that come closest are ones we pay directly, and are therefore accountable to us (to a degree). Apple and Microsoft, for example, are doing more and more to isolate personal data to spaces the individual controls and the company can’t see — and to keep personal data away from the advertising business that sustains Google and Facebook, which both seem to regard personal privacy as a bug in civilization, rather than a feature of it. Note that we also pay those two companies nothing for their services. (We are mere consumers, whose lives are sold to the company’s actual customers, which are advertisers.)

Bottom line: the legal slate is covered in chalk, but the technical one is close to clean. What do we want to write there?

Start here: privacy is personal. We need to be able to signal our intentions about privacy — both as people doing the shooting, and the people being shot. A red light on a phone indicating recording status (as we have on video cameras) is one good step for video producers. On the other side of the camera, we need to signal what’s okay and what’s not. Clothing does that to some degree. So do doors, and shades and shutters on windows. We need the equivalent in our shared networked space. The faster and better we do that, the better we’ll be able to make good TV.

On Saturday I invited Serial listeners to recall the Edgar Smith case. Smith got away, literally, with murder. He did it by convincing the media and the public (and to a lesser degree the courts) that he was innocent man, falsely convicted of brutally killing a teenage girl. After he was released he attempted another murder, confessed to the original one and went back to prison.

Now I invite Serial listeners to recall a counter example: the West Memphis Three, who were convicted as teenagers in 1994 for the murders of three boys in West Memphis, Arkansas in 1993. One was sentenced to death and the other two were given life sentences. It was alleged, on debatable evidence gained by poor police work, that the victims were killed in a Satanic ritual.

All three are now free, having given Alford pleas. These are “guilty” pleas in which innocence is still maintained. (It’s complicated. Look it up.) To make a long story too short, it is now clear that they got bum raps and that other persons are the more likely perps. The miscarriage of justice in the case is so extreme that the dad of one of the victims has taken up the Three’s cause.

I met two of the Three, plus the dad, in 2012 after a screening of the documentary West of Memphis at the Santa Barbara Film Festival. I’m sure they are innocent.

The Memphis Three’s case, like Edgar Smith’s, is irrelevant to Adnan Syed’s. (He’s serving time for murder in the case Serial explores). The jury is still in for that one, and Adnan is still officially guilty. But maybe keeping these other cases in mind will help us all keep our minds open.

Meanwhile, HuffPo has a nice set of takes by prosecutors and defense attorneys.

Not want.

Need.

If a site has one of these…

social-signin

… what is the least information they need from the user?

Seems to me that “social” login buttons like these are meant for the convenience of the user. But too often liberties are taken with them.

For example, here is what one company says in its terms & conditions:

Certain functionality may enable you to log-in using Facebook Connect, a Facebook, Inc. application, which is intended to provide interconnectivity between the Services and your Facebook.com profile. By using the Connect feature, you permit us to access your facebook.com profile, including without limitation,  information about you, your friends and privacy settings. When you use the Connect feature, you also agree to allow Facebook, Inc. to use information about your activities on our site and to access your facebook.com cookies.

This is an otherwise respectful (and respectable) company, which is why I’m not naming them here. They are also a retailer, and not supported by advertising. Nor is their offering “social” in the “social media” sense.

And, while the company might want Facebook profile stuff to better understand their customers, do they need it?

In answering the question, What do fully respectful sites need from social login?, it helps to ask another question: What does the individual need from that button, other than to log in with one click?

I’m asking these questions because this button here…

respect-connect-button

… needs definition of what respectful login is.

As I said in Time for Digital Emancipation, the definition (via the Respect Trust Framework) is that the user and the site respect each other’s boundaries. So we need to say what those boundaries are, or what they might be under different conditions. But a good place to start is by asking what the bare minimum needs of a site are.

So, what are they?

esb1Aereo‘s main appeal in the first place was helping viewers get over-the-air TV. If they had restricted their business and legal cases to that, instead of this…

Record & Stream Live TV Online with Aereo Cloud DVR

Coming soon to 19 more cities!

… they might still be in business. But nothing in that pitch — the last one they made, in the final version of their website while they were operating — said they weren’t much different than a cable company. So, not surprisingly, the Supreme Court smacked them down for being a cable wolf in cloud wool. Here’s how the Court explained the decision:

The Copyright Act of 1976 gives a copyright owner the “exclusive righ[t]” to “perform the copyrighted work publicly.” 17 U.S.C. §106(4). The Act’s Transmit Clause defines that exclusive right to include the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.” §101.

I submit that Aereo failed because they didn’t stick with what they were for in the first place. Instead they decided to ride the “cloud” buzz, which confused the offering first and the Court second.

To understand how they might have won, you need some background.

Before the ’76 law, cable was called CATV, for Community Antenna TeleVision. CATV answered the market’s need for clear signals where reception of over-the-air signals was poor or absent. But once “cable networks” (TBS, HBO, ESPN, etc.) showed up, and it was obvious that the handful of legacy broadcast networks (ABC, CBS, NBC, PBS, Univision) would be outnumbered by new cable networks, those networks (and their programming sources) wanted to be paid by these new distributors, who were charging customers for retailing their goods (legally, “performances”). The ’76 law gave them leverage to force those payments.

Over-the-air (OTA) TV was still available for anybody to receive for free using an antenna, of course. But this was a legacy grace — an exception to the rule of closed distribution through cable and satellite. But the distinction was clear. Cable and satellite were Pay TV, and OTA was Free TV. The selection of free signals was (and remains) relatively small, but not much smaller than “basic” cable.

As the number of channels available on Pay TV climbed, the percentage of people watching free TV went down. From a Consumer Electronics Association report in July 2013:

Arlington, VA – 07/30/2013 – New research released today from the Consumer Electronics Association (CEA) ® found that just seven percent of American TV households rely solely on an antenna for their television programming. The findings of the new study, U.S. Household Television Usage Update, are consistent with CEA’s 2010 research which found eight percent of TV households reported using an antenna only for television programming. According to historical CEA research, there has been a gradual decline in the percentage of TV households using antennas since 2005. The  phone survey of 1,009 U.S. adults is comparable to a 2012 Nielsen study indicating nine percent of all U.S. TV households are broadcast TV/over-the-air only, a decrease from 16 percent in 2003.

One reason for this is simply that there are more channels on cable than over the air. The other reason — the one that matters to Aereo — is that free TV reception nearly went away, thanks to the FCC’s mandated transition of OTA TV from analog to digital (DTV) transmission, which finished in June 2009.

For TV viewers, the DTV transition required new equipment to receive signals that were much harder to get. If you lived in any place shadowed from direct line-of-sight to signal sources, you were out of luck.

In the analog era, you could get signals with rabbit ears and a loop or a bowtie antenna on your TV, if you lived in an urban or suburban area. The pictures might have “snow” or “ghosts,” but you could see them. If you lived in an outlying suburb or a rural area, you would need a rooftop antenna. But DTV was much harder to get, and lots of people gave up and went to cable or just bailed from the whole thing.

It’s essential to note that the FCC’s claim that reception after the DTV transition would be “equivalent” was simply wrong. Here are the FCC’s maps of “equivalent” coverage after the transition. Text on that page says, “Signal strength calculations are based on the traditional TV reception model assuming an outdoor antenna 30 feet above ground level. Indoor reception may vary significantly.”

This is hokum. You’re not getting the signal without a good antenna, ideally placed, and even then your odds were short, because conditions need to be ideal.

The simple fact is that the DTV transition left millions of free TV viewers in the lurch — and that lurch was Aereo’s market. So here’s my point: There would have been no Aereo without the DTV transition.

Go to that last link and type in this zip code: 10040. It’s in the north end of Manhattan, where I am temporarily domiciled. You’ll get back a chart showing eleven strong signals, four moderate ones, and four weak ones. Our apartment is in that zip code, and we get nothing. Zip. Even with a directional outdoor antenna. Believe me, I’ve tried. There are a hundred blocks of buildings and terrain between us and the Empire State Building. If we want local over the air (OTA) TV, our only choice is — or was — Aereo.

By serving urban areas that got shafted by the DTV transition, Aereo is a perfect example of the marketplace at work: supply fulfilling demand. That should have been their case.

If Aereo had simply met the market’s demand for lost over-the-air signals, and supplied a DVR app for customers (rather than putting the DVR in The Cloud), they might have had a winnable case. But they didn’t argue that. Instead they stood behind the cloud and argued, in effect, for what they appeared to be: a way of circumventing copyright obligations by using over-the-air reception of signals as a loophole. Even Justice Scalia, in his dissent, said he wasn’t an Aereo fan: “I share the Court’s evident feeling that what Aereo is doing (or enabling to be done) to the Networks’ copyrighted programming ought not to be allowed.”

In his statement in response to the decision, Aereo CEO Kanojia said,

Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States.  And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle.

He’s kidding himself. OTA reception may be “meaningful” for 60 million Americans, but most of those people don’t care any more. And neither do today’s TV content production and distribution systems, which include far more than Hollywood and the broadcast/cable/satellite TV industries. They include you and me.

Still, some number of millions of people do care, and can’t get the free OTA signals they used to get in the analog age. That was Aereo’s market, and now that market is back in the lurch, probably permanently.

I believe the Court’s decision did two things:

  1. Positioned over-the-air transmission as little other than a checkbox requirement for stations to maintain “must carry” status with cable systems. Since these signals are expensive to maintain, it’s a matter of time before they go down with the setting sun. This will require regulatory easing (for example, by maintaining “must carry” in the absence of an actual signal, which is already partially the case anyway, since the signals have been lost to a great many people). Watch for that to happen in the next few years.
  2. Finished positioning cable as simply a paid distribution system for licensed content. The legal and historical connections to Community Antenna TV are now completely severed. To TV’s sources and distributors, Pay TV is the Only TV.

If you go to Aereo’s website now, you see a letter from Chet Kanojia. Here’s the money graf:

The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.

The legal case I outlined above would also have been stronger if Aereo had stuck with its original business case: charging viewers for access to their own antenna — not in “the cloud,” but in the physical world, looking directly at the signal source.

If Aereo had then provided apps on the receiving side (for tuning and recording), they would have been in a much better position, at least conceptually.

The Supreme Court understands demand and supply. If Aereo had said, “We’re only serving over-the-air TV viewers who lost their signals in the DTV transition,” the decision would have been framed as one between standing law and market demand. The Court might still have decided in favor of the law, but it would have been clear to them that market demand was in play. But Aereo clouded their case, literally. So the Supremes fell back on what they understood, which was the ’76 law.

Did “the cloud” take collateral damage? Could be. We’ll see.

Bonus link, with prophesy: TV 3.0.

Here is a list of copyright bills currently floating through Congress in the U.S.:

copyright

Interesting reading. Hope I’m not violating any copyrights by copying and pasting it. 🙂

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