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Debunking The Logic In Favor Of Paywalls
Marion Maneker over at the Big Money website wrote a piece entitled "The Weird Logic of Paywall Challengers." He attempts to show that the arguments used by those against paywalls are illogical. He also attempts to show that paywalls are not only a good idea but a necessity for news websites.
First, a little background. Some internet news sites are making people pay to view content. That's called a paywall. You can't view the content without paying. So far the attempts to implement paywalls have been complete failures. For example, when Newsday set up a paywall, only 35 people paid. After the Times instituted a paywall, its readership dropped by 2/3rds. And because those articles are not being indexed by Google (or Bing or Yahoo), they're essentially invisible to people on the web.
So what's Maneker arguments in favor of paywalls? What errors in logic have those against paywalls made? Let's go through his points.
His first point is that even if ad revenues are back, news outlets should diversify by charging anyway. He doesn't seem to get this, but as I explained above, paywalls kill off advertising by driving viewers and readers away. So Maneker's argument that news outlets should diversify by relying on both advertising and paywalls fails as it is self contradictory.
His second point is that news outlets charging "for content has always been part of its long-term strategy." He's absolutely right that newspapers have tended to charge for content. However, that was never done for profit. Profits always came from advertising, classifieds, and obituaries.
There were two reasons newspapers did charge. The first was to cover the costs of publishing. However, those costs no longer exist in the digital realm.
The second reason newspapers charged was to show advertisers how many actual readers they had. If a newspaper publisher simply gave away its papers, it could claim that millions of people are reading when in fact no one is reading. People paying for newspapers is a pretty good indication to advertisers that people are in fact reading. But in the digital realm news outlets do not need paying customers to tell advertisers how many unique people are reading. All that information can be tracked automatically in real time. Heck, in the digital realm news outlets can give specific information about page views and what ads are working and what ads are not.
His third point is that "central to any media strategy should be the idea of charging for some content." Has he never listened to broadcast radio? Has he never watched broadcast TV? Has he never used Google, Facebook, or Twitter? And despite being contradicted by legitimate business models, his third argument is circular. He's essentially arguing that news outlets should charge for content because they should charge for content. It only concludes its premise without telling us why.
Along with his third point he pulls the following assertion out of his ass, "Digital distribution should make content much cheaper--but it shouldn't make it free." Why shouldn't it be free? He never explains.
Hundreds of years ago the most efficient means to distribute news was to print it on paper and deliver it locally. Times changed. Radio came along and made delivering news in real time more efficient. But it still lacked the newspaper's depth. TV news had the same problem. But the internet does not. It has the efficiency, the immediacy, and the depth. Because the distribution costs are essentially zero, economically speaking, there is no reason why the cost of the content should not also be free.
If Maneker's piece is any indication, the pro-paywallers' dream of making us pay for news is a lost cause.
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Kristin Hersh Turns An Album Into A Book
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Jury Dumps Patent Used To Sue Facebook
Either way, it looks like the jury in the case seemed to agree with me about the quality of the patent. The jury has declared the patent invalid. Clearly, the only explanation is that the jury was also made up of idiots. Next time, Leader Technologies should file the lawsuit in East Texas where they know how to make juries, rather than Delaware.
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Don't Read Too Much Into The Claims That Intellectual Ventures Returns Are Negative
That's because the IRR for a venture fund, especially in the early years, is pretty meaningless. A typical venture fund lasts ten years, and the first few years is when all that money is being invested, and there's no real returns. On top of that (and, more importantly), the IRR is usually reported based on a totally made up number, which is what the VCs believe their portfolio is valued at, since it doesn't involve a liquid market. VCs were afraid that publishing such numbers would freak people out, and lead VCs to focus on more short-term investments. I don't think that's really happened, but it does appear that the Intellectual Ventures funds represented here (showing IRRs of -73% and -10%) might not really mean anything.
Without knowing the details of what those funds represent, or how long the timeframe is for those funds, it's difficult to assess what's really going on. It does look like IV isn't valuing its first fund very highly any more, and considering it's Intellectual Ventures I, perhaps you can assume it's further along in the process. But, in a game where a sudden "home run" can change things quickly (even if we're talking about patent infringement lawsuits or licensing demands, rather than true venture investments), it's difficult to make any serious call on the performance just yet.
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White House Seeks Easier FBI Access To Internet Records, Blocks Oversight Attempt... Just As FBI Caught Cheating On Exam To Stop Abuse
And, it appears that since there was no outrage over all of this, the White House keeps pushing further. Three new articles highlight what a travesty this has become. First, the White House wants to quietly make it easier for the FBI to demand internet log file information without a judge's approval." Just as I finished reading that, I saw Julian Sanchez's new writeup about how the White House blocked and killed a proposal to give the GAO power to review US intelligence agencies. The GAO is the one government operation that seems to actually focus on doing what's right, rather than what's politically expedient. Sanchez notes that, beyond the sterling reputation of the GAO, it's also ready, willing and able to handle this kind of oversight: The GAO has the capacity Congress lacks: as of last year, the office had 199 staffers cleared at the top-secret level, with 96 holding still more rarefied "sensitive compartmented information" clearances. And those cleared staff have a proven record of working to oversee highly classified Defense Department programs without generating leaks. Gen. Clapper, the prospective DNI, has testified that the GAO "held our feet to the fire" at the Pentagon with thorough analysis and constructive criticism.
Unlike the inspectors general at the various agencies--which also do vital oversight work--the GAO is directly answerable to Congress, not to the executive branch. And while it's in a position to take a broad, pangovernmental view, the GAO also hosts analysts with highly specialized economic and management expertise the IG offices lack. Unleashing GAO would be the first step in discovering what the Post couldn't: whether the billions we're pouring into building a surveillance and national security state are really making us safer. Oh, and just to make this all more comically depressing, just as I finished reading both of these stories, I saw a story about a new investigation into reports that FBI agents were caught cheating on an exam, which was designed to get them to stop abusing surveillance tools. Yes, you read that right. After all the reports of abuse of surveillance tools, the FBI set up a series of tests to train FBI agents how to properly go about surveillance without breaking the law... and a bunch of FBI agents allegedly cheated on the test that's supposed to stop them from "cheating" on the law. And, not just a few. From the quotes, it sounds like this cheating was "widespread." But, of course, it might not matter, since the requirements for surveillance are being lowered, oversight is being blocked, and apparently the White House is willing to retroactively "legalize" any illegal surveillance anyway.
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UK Gov't Review Says Google WiFi Sniffing Didn't Sniff Anything Significant
But, of course, lots of governments are "investigating." I fully expect some less-technically savvy government groups to get confused about this and still condemn Google, but the UK's investigation has found that Google did not collect sensitive data: The ICO said in a statement: "On the basis of the samples we saw, we are satisfied so far that it is unlikely that Google will have captured significant amounts of personal data."
It added: "There is also no evidence - as yet - that the data captured by Google has caused or could cause any individual detriment."
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Forging Science: The Story Of How Famed Painting Authenticator Likely Duped The Art World
Remembering that, I was fascinated to see that The New Yorker recently did a long feature piece on Peter Paul Biro and dove in to read it. The first half of the article covers Biro's rise to fame. How a few of these "fingerprinting" authentications had made him quite famous, with that documentary ratcheting up his fame level even higher. The key point that everyone keeps noting is that, rather than the traditional form of authentication -- the condescending art experts in the documentary who are ripe for mocking and use what often feel like extremely subjective techniques -- this involved science. After all, if the fingerprints matched, how can you question that?
But, then, the article takes a turn. There are a few cracks in the story, and someone who knows Biro well suggests that the reporter, David Grann, look a bit more deeply into Biro's (and his family's) history. It turns out that they were involved in several lawsuits years earlier involving selling what were later found to be forged artwork. Of course, painting forgeries are nothing new, but as Grann dug deeper and deeper he kept coming across evidence that Biro's "authentications," may have involved questionable practices -- including planting faked fingerprints on some of the paintings he was supposed to be authenticating. It's an amazing and gripping article -- and totally calls into question pretty much all of Biro's work. At the end of it, I was just as convinced that the truck driver's "Pollock" painting is not by Pollock, as I was that it was by Pollock at the end of the documentary!
But I found most interesting of all was the reasons why so many people were convinced that Biro's authentications were real. It wasn't just the use of "science." And it wasn't just that people had this natural inclination to believe that so-called "art experts" don't know what they're talking about, but that Biro appears (and, for what it's worth, Biro denies the allegations in the article) to have used what are effectively social engineering tricks to make this work. There's a certain brilliance in realizing that rather than forging paintings, there may be money to be made in authenticating works by effectively forging fingerprints on top of other works -- which then gives it the air of legitimacy-via-science. Honestly, the whole idea that someone would go in and forge fingerprints on top of a piece of art work just doesn't seem in the realm of possibility, and so most people didn't even consider it.
I had started reading the article last week (as mentioned, it's pretty long), but ended up finishing it up now, because I was thinking some more about the recent story of those glass negatives that have been "authenticated" as being from Ansel Adams -- which Ansel Adams' estate is vehemently denying are Adams' work. After reading The New Yorker piece, it's difficult not to be increasingly skeptical of the claims of these new negatives, even with all of the "scientific" evidence that has been mentioned by the team involved in the authentication.
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Comcast Cares: Pay Us The $0.00 You Owe, Or We Cut You Off
While Comcast has received a lot of attention for its "Comcast Cares" initiative (the head of which recently left the company), it certainly looks like they have a few kinks to work out. Phil Anderson points us to the story of Comcast demanding the $0.00 a customer owes and threatening to turn off service if it's not received.
It's not hard to figure out how something like this happens. For whatever reason, the customer didn't owe any money that month -- perhaps a credit, or he had overpaid in a previous month, or something like that. But, Comcast's system is probably set up with the recording of "a payment" separate from the amount, such that not receiving any payment sets off a red flag, with no simple check to see if the reason is that no money is owed. You would think that this is something that Comcast would have caught a lot earlier...
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Software Firms Overwhelmingly Against Patents
The execs were also asked how much incentive patents provided for developing software, and the answer was about as close to none as you could expect. On a scale from 0 to 5, software execs said that patents were a 0.96 as an incentive for inventing something new and a 0.93 in commercializing a product and bringing it to market (innovating). And, before you say that this was skewed by people without patents, the report notes: the results did not change significantly even when focusing only on responses from software entrepreneurs whose firms hold at least one patent or application. Even patent-holding software entrepreneurs reported that patents provide just above a weak incentive for engaging in these innovation-related activities. The other interesting finding? If a firm is venture-backed, it's more likely to get patents, but this doesn't appear to suggest that the patents are valuable. It seems to indicate that entrepreneurs still believe the old claim that venture capitalists want to see patents, so they feel the need to get patents just to show to investors.
On the whole, it certainly appears that the vast majority of the software industry isn't interested in patents, don't find them useful or important, and certainly don't see them as creating an incentive. Even those who get patents don't see much value in them, and appear to only get them because they feel pressured to get the patents for external reasons. All in all, this is a pretty damning bit of research for those who suggest patents help the software industry.
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Second Lawsuit Over School Webcams Involves Student Who Was Photographed 469 Times Over 2 Months
What happened was that the student lost his laptop on December 18th. The laptop was found by a teacher and returned to the student on the 21st... but also on the 21st, the school's IT folks turned on LanRev's "TheftTrak" service. Even though the laptop had been returned to the student, the LanRev system was never turned off. It took 469 secret images and captured 543 secret screenshots. It wasn't turned off until that first lawsuit was filed, and someone in the IT department realized there might be an issue there...
What's really scary? If a school administrator hadn't revealed the whole system to the first student by showing him a photo of him at home, this would still be going on and none of the students would know about it. The only reason this lawsuit is being filed is because of the information that came out during the investigation into the first incident.
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Perfect 10 Loses Again, As Court Says DMCA Notices Need To Be Properly Filed
Thankfully, in the US version of the lawsuit (in which Perfect 10 seems to lose over and over and over again), the judge noted this failure by Perfect 10 to properly file DMCA takedown notices and dismissed large parts of the lawsuit. Similar to what Perfect 10 bragged about and what Rapidshare claimed, it appears that Perfect 10's "notices" were hardly informative. It also seems to have gone out of its way to make it difficult for Google to quickly respond -- including sending the notices to the wrong email address. As EFF notes: For example, many of its "notices" consisted of a cover letter, a spreadsheet with URLs (many of which linked only to a top-level URL for a website, as opposed to a specific infringing URL) and a hard drive or DVD containing Perfect 10's electronic files of its photos. Not good enough, said the court -- the information required by the DMCA must be contained in a single written communication; forcing a service provider to cobble together adequate notice from a variety of sources is just too burdensome. While this is entertaining in that it's the latest in a long line of legal smackdowns against Perfect 10 and its questionable litigation strategy, this ruling could be important in a variety of other cases as well. One of the key issues being fought about in a series of cases is what constitutes "knowledge" for a service provider, requiring it to take action under the DMCA. In both the Veoh/Universal Music case and the YouTube/Viacom case, judges found that the knowledge had to come from specific DMCA takedown notices, that indicated where the specific infringing works were. However, in the IsoHunt case, a judge went in a different direction, claiming that "red flag" knowledge was enough. That is, if there was enough information out there to raise a "red flag," then the service provider needed to take action.
Now, we've long argued that such "red flag" knowledge is somewhat meaningless. If I know that lots of people are using a tool for infringement, but don't know which specific works are infringing, how can I be expected to do anything specific? Since there's no way for the service provider to pinpoint which works are infringing -- even if they know that many works likely are infringing -- then how can the service providers act in a way that doesn't create massive collateral damage for legitimate communication?
But this ruling, again, effectively is a vote against the concept of "red flag knowledge," since you could make the argument (and, Perfect 10 did) that even in the absence of a complying DMCA takedown notice, sending over its mess of information could constitute a red flag. But, as the judge properly notes, that makes little sense. The ruling goes through the ridiculous hoops that Google would need to jump through in order to find and take down specific works, and notes that the DMCA clearly did not intend for that to happen.
Of course, this isn't the first time that Perfect 10 has lost on this exact argument. The CCbill case involved more or less the same questions about "red flag" knowledge, and Perfect 10 lost there. This ruling relies heavily on that one. But, we seem to keep racking up rulings that say that any "red flag" knowledge still requires specific notification of what is infringing -- with the IsoHunt ruling being the one exception. It makes you wonder if the IsoHunt ruling is on a collision course with all of these others.
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Old Spice Man Gets Backed Up With A Few Numbers, Sales Up 107 Percent
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Michael Jackson's Estate Complains About Dancing MJ Zombie In Game
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Lawyer For Mother Accused Of Killing Baby, Threatens Separate Lawsuit Over People Copying His Facebook Photos
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Barney Frank's Attempt To Allow & Tax Online Gambling Moves Forward (Again)
Of course, this is not the first time that the House Finance Committee has approved such a bill, and in the past it went nowhere. So, there's still a half decent chance that this really means nothing much.
Still, there are some interesting provisions in the bill, as a few amendments were added, including banning the companies who have currently been letting Americans play poker online from getting approved for a license. Yes, all of those online gambling sites who are still offering services and hoping this bill passes... may get shut out by it. Of course, they might have a pretty strong legal case that this is not legal, seeing as some courts have suggested that poker is not technically gambling. Another amendment would bar those who are behind in child support payments from visiting online gambling sites, though I don't see how they enforce that one.
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Colbert Helps Save World From Polka Pirates
Separately, I do find it amusing to see folks like Colbert mock the overreaction to things like copyright infringement -- considering that his employer, Viacom, is so aggressive on spreading the myth that DVD counterfeiting is really about supporting terrorism and organized crime.
Update: Good discussion in the comments about what the specific charges were in this case. Apparently, the guy used government equipment to make the recording and DVDs, so the local government felt it was theirs -- and they sold their own DVDs, which this guy's DVDs undercut. He was charged with using city property for "personal gain." Oddly, there's an "embezzlement" charge as a part of this... More details here.
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Yes, People Can Comment On Content Business Models Without Having Produced Hit Content
Filmmaker Ross Pruden just wrote a blog post discussing this, where he pointed out that you don't need first-hand experience to understand details and make a proper judgment call about how to run a business. When we talk about music or movie business models, I'm not suggesting I know how to make a hit song or movie. But I can look at the economics and suggest what makes sense from a business perspective given the market today. Just as Ross can look at the market and realize that how things are done today don't make as much sense, even if he hasn't (yet) made a "commercially successful film."
This whole appeal to a false authority is a bit annoying, because it's an easy way to dismiss the messenger without addressing the message. I doubt it will change, but it was nice of Ross to call out this point. Having created a hit song doesn't mean you know how to navigate a changing market. Knowing how to produce a blockbuster movie doesn't mean you know how to use the internet to your advantage. Knowing how to get a patent doesn't mean you know how patents impact innovation. Unfortunately, some people think that if they know one aspect of these things, only they are allowed to comment on the business models or economic implications. That's simply not true -- and those who go there tend to be in denial about the market challenges they face.
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Wikileaks Afghan War Document Leak Again Raises Questions: Treason Or Whistleblowing?
Ellsberg says that the leak is no different than the Pentagon Papers. Both involved massive leaks that showed a government was not being entirely forthright with the public about the status of a war. Others in that article suggest there are some key differences, in the lack of any smoking gun of direct lying by the government (in the latest case, it was more about just not telling the full truth), as well as the scattershot nature of the content. But that's no matter to some grandstanding politicians, like Rep. Pete King who were quick to call the leak treasonous and demand prosecution of those involved (he seems to imply that he believes Manning leaked these documents, though no one has said that conclusively yet).
Of course, that was the strategy taken by the Nixon White House in response to the Pentagon Papers -- to attack the messenger. It looks like the Obama White House is taking a rather different response. While worrying about how the leaks could "jeopardize" people or operations on the ground, the White House is actually trying to turn the few revelations into an advantage, by claiming that the information revealed support the strategy the military has taken under his watch. Whether that's true or not, this actually does seem like the type of response that could diffuse the criticism much faster than simply screaming "traitor!"
Of course, some of the revelations, such as the news that the US was paying Afghani press people to run positive stories about the US don't look good at all, no matter how you spin them.
On the whole, it seems like the debate about whether this is "whistleblowing" or "traitorous" behavior misses the point. The fact is, information like this is going to get out -- probably at an increasing rate. The real question is how does the government and the military learn to function in a society where information is a lot more open and free.
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Can Man Who Found Long Lost Ansel Adams Glass Negatives Sell Prints?
Now, if the works were published (which seems unlikely) then it gets a bit complicated. If they were done before 1923 (and no one's exactly sure of the date on most of these negatives), then they're in the public domain. If they were done after 1923 and weren't registered at the Copyright Office then, again, they're in the public domain. If that's the case, then Norsigian actually could make prints, but once those prints were out there, others could most likely copy the prints and sell competing prints themselves legally, which could put a damper on the $200 million. Of course, there then could be things Norsigian could do, such as specially "branding" his prints in some manner, but it's a bit trickier.
If the works were published after 1923, registered at the Copyright Office and had that registration renewed, then they should retain the initial copyright until 95 years after publication, meaning, until at least 2018 (and, again, most likely remaining with Adams' heirs). But, if that were the case, it seems unlikely that these negatives would have been considered "lost," though it is possible.
And, for those of you wondering, no, owning the negatives does not give you the copyright on the images, even if that creates a weird situation where someone who owns a bunch of negatives might not legally be able to use those negatives (yay, copyright law!).
The most likely scenario remains the first one, which would suggest Norsigian might actually get into legal trouble for making prints. And, in fact, the managing director of the Ansel Adams Publishing Rights Trust, Bill Turnage, first says that Norsigian's claims are a "fraud" and he's actually considering suing over Norsigian's use of Ansel Adams' name for commercial purposes (the article claims "copyrighted name," but I believe the AP reporter gets that wrong -- at best there may be a publicity rights claim under California state law). Of course, that puts another twist on the situation as well. If the Adams' heirs deny the prints are Adams, but they've been authenticated as Adams', then could the Adams' heirs still then make a copyright claim on any prints? That could be fun.
Of course, Adams himself, were he alive, might find the whole debate amusing. As the article notes (and which is well known among followers of Adams): "Ansel interpreted the negative very heavily. He believed the negative was like a musical score. No two composers will interpret it the same way," he said. "Each print is a work of art." In other words, if Norsigian does make prints, they wouldn't be considered the same thing as a true Ansel Adams print. It might be more like a high school orchestra performing Beethoven.
Still, from a copyright perspective, there may be a very interesting legal battle brewing...
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Dear Warner Bros., It's Not 'Word Of Mouth' If You Have To Pay People To Promote Your Movies
This new article points out that "The Twitter Effect" doesn't really appear to have any impact at all, but does mention that studios are trying to jump on this "Twitter" bandwagon by "buying trending terms" on the site. But watching the movie studios try to figure out this whole social media landscape can be pretty funny. Adam Singer sent over an email he just received from Warner Bros. asking him to join its "word of mouth marketing team" in which the studio would pay him to say nice things about Warner Bros. films: Hello,
I am a part of the Warner Brothers word of mouth marketing team and recently came across your blog! Your blog uniquely stood out as dynamic, informative and highly creative. We are seeking bloggers that are passionate about entertainment to help us engage your readers with content that would be interesting to them.
We would like to have you join our WB Word marketing team to let fans know about our latest releases and relevant content/products. As a member of the team, you will be asked to display photos, clips, and stories on your Blog, Facebook and Twitter accounts. The best part is you will get paid! Additionally, we may even debut event previews and new content so that fans like you get to enjoy it first. Here's a tip for Warner Bros.' "word of mouth marketing team." If it's really "word of mouth marketing," it probably doesn't require you to pay people to talk about your bad movies. And, of course, depending on how the various bloggers on the "team" indicate their relationship with WB, the studio may be opening itself up to FTC problems.
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