JibJab Creator Interview

Passing the JibJab presidential test

Why is it important that the Web removes those layers you mention between the creative people and their potential audience?

It’s a question of leverage. If you’re two creators trying to break into the system, there are all kinds of gatekeepers. These people don’t necessarily know what is good, in terms of entertainment, more than anyone. The number of stories you could find about Hollywood development hell are probably endless.

What the Web lets us do is not just walk in the door with a pitch, it lets us show people a tangible product and to be able to say, “We’ve got 500,000 people who signed up for our newsletter, 10 million people who sent this, 20 percent sent it to a friend, 15 percent downloaded it, and 5 percent bought merchandise from our Web site.” That’s the kind of leverage creators have never had before the Internet.

In the UK Papers

The Great Ormand Street Hospital wants to claim Peter Pan into perpetuity, but they have probably run up against an irresistable force (I read about this last week in the UK, but haven’t had time to followup much): Hospital to fight Disney over Peter Pan rights [pdf]

The hospital is to consult lawyers next week to investigate whether a children’s adventure book published by Disney in America infringes the hospital’s long-held ownership of the copyright of J M Barrie’s Peter Pan.

Millions of pounds earned from royalty fees have been spent on helping sick children as a result of Barrie’s decision to give his copyright to the hospital before his death in 1937.

Great Ormond Street, increasingly concerned at the cost and difficulties of policing the copyright, has written to Hyperion Books, a New York-based division of the film company, to protest that Peter and The Starcatchers, which is billed as a prequel to Peter Pan, has been published without its permission.

It has complained that Hyperion is denying the hospital money that it could spend on research and medical equipment. The hospital said Barrie’s original fairy story remains in copyright in America until 2023, even though it runs out in Europe in 2007.

Disney was equally emphatic yesterday that Peter Pan was already out of copyright in America.

See Eugene Volokh’s take

Later: See this from Larry Lessig’s blog: Disney is right; and Jason Schultz’ take in Copyfight – Disney Caught Pirating from Public Domain — and Children!

Later: A NYTimes article on the success of the book: Familiar Stories With Big Sales

Price Pressure on CD Sales

Wal-Mart Wants $10 CDs [pdf]

Wal-mart wants every CD you buy to cost less than ten bucks. And the nation’s largest retailer — which moved a quarter of a trillion dollars’ worth of goods last year — usually gets its way. Suppliers who don’t accede to Wal-Mart’s “everyday low price” mantra often find their products bounced from the chain’s stores, excluded from being sold to the 138 million people who shop at a Wal-Mart store every week.

[…] “This wasn’t framed as a gentle negotiation,” says one label rep. “It’s a line in the sand — you don’t do this, then the threat is this.” (Wal-Mart denies these claims.) As a result, all of the major labels agreed to supply some popular albums to Wal-Mart’s $9.72 program. “We’re in such a competitive world, and you can’t reach consumers if you’re not in Wal-Mart,” admits another label executive.

Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry’s major priorities. That’s because if Wal-Mart cut back on music, industry sales would suffer severely — though Wal-Mart’s shareholders would barely bat an eye. While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart’s total sales. “If they got out of selling music, it would mean nothing to them,” says another label executive. “This keeps me awake at night.”

[…] Major labels insist that the low prices mass retailers such as Wal-Mart and Best Buy demand are impossible for them to achieve. But Best Buy senior vice president Gary Arnold counters, “The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn’t properly priced.” Labels point to roster cuts and layoffs as evidence that they can’t sell CDs cheaper.

This breakdown of the cost of a typical major-label release by the independent market-research firm Almighty Institute of Music Retail shows where the money goes for a new album with a list price of $15.99.

$0.17 Musicians’ unions

$0.80 Packaging/manufacturing

$0.82 Publishing royalties

$0.80 Retail profit

$0.90 Distribution

$1.60 Artists’ royalties

$1.70 Label profit

$2.40 Marketing/promotion

$2.91 Label overhead

$3.89 Retail overhead

As commenters on the Pho list have noted, there’s nothing here about volume sensitivity, as we talked about in class last week in the UK.

JetGroove Responds

JetGroove culls songs as music biz says ‘cease, desist’

Controversial music download site JetGroove has removed more than 50,000 songs from its database after receiving cease and desist requests from the International Federation of Phonographic Industries (IFPI) and its UK wing, the British Phonographic Industry (BPI).

The move comes after it emerged that the website had contacted the UK’s Association of Independent Music (AIM) “this summer” with a view to opening negotiations to secure a licensing deal.

According to AIM sources, no agreement had yet been reached by the time JetGroove went live with a ‘beta’ site earlier this month. That launch prompted numerous complaints to the BPI and AIM from British independent labels who discovered their material listed on the site without authorisation.

It’s Hard To Keep A Good Idea Down

Although publicity might not be the best thing — Car computer hobbyists hack XM Radio

A band of car and computer hobbyists has reconnected the XM Radio broadcasts to PCs, after the satellite radio company discontinued hardware that was being used to copy and archive digital music from the service.

The XM satellite radio service is used largely through dedicated hardware, but until last month could be heard on a computer by using hardware that plugged directly into the PC. The company phased that PC link out, in part citing slow demand, after a Canadian programmer wrote software that allowed listeners to record and archive individual songs on a computer as MP3s.

Now a small Florida company that makes in-car computer systems has re-created its own version of the hardware, saying its customers want a way to hook their onboard PCs to an XM system.

[…] The continued tension over XM’s link to personal computers foreshadows what has already become a larger debate over new digital radio technology. Broadcasters are slowly moving to signals that provide pristine, CD-quality signals over the airwaves. Record companies in particular are worried that consumers will record music using TiVo-like devices, putting more downward pressure on music sales.

The Recording Industry Association of America has already asked the Federal Communications Commission to include some kind of copy-protection standard along with rules for digital radio technology.

The new XM Radio equipment also shines a light on a small community of hobbyists who are pioneering onboard car computer systems, however.

Format Transition?

Or whistling past the graveyard? MP3 losing steam?

“People are still getting MP3s and putting them on hard drives but are deleting them at a rate faster than they’re acquiring them,” said Isaac Josephson, a researcher at NPD MusicWatch Digital. “People tend to think that downloads are more disposable than rips (copies from a CD), and currently, the lion’s share (of MP3s) are downloads.”

[…] Indeed, the big winners over the past year have been the two formats backed by Microsoft and Apple, each of which has gained about 5 percent “hard-drive share” in the past year, according to the ongoing study by NPD MusicWatch Digital. The project surveys the hard-drive contents of 40,000 different people to track Internet and software trends.

Researchers say the data does not show that MP3 is losing much of its popularity–files encoded in the format are just more disposable than rivals. People are still downloading boatloads of MP3 files–but they are discarding them at an even faster rate, the researchers said.

[…] Some analysts say MP3 is evolving into a different role as a format many people use to sample music or keep temporarily, while the rival formats from Apple and Microsoft are being used for permanent digital-music collections.

As far as I’m concerned, that last paragraph is a leap of faith that I’m not yet prepared to make — but I’m a cynic.

Later – Slashdot’s MP3 Going the Way of the 8-Track?

The Grey Lady Makes Some Changes

From the Desk of David Pogue: The Tech Section Reborn

In addition to my two weekly columns (this one and the one that appears in the paper), I’ll also be writing a daily blog entry, starting soon. I will point out cool links, focus on emerging tech trends, answer reader mail, share funny tech experiences, and so on.

[…] * And speaking of free: The entire archive of previous Circuits articles is now FREE! Not just mine, but also Basics, Online Shopper, What’s Next, Game Theory, and more. The days of having to pay $3 per past article are over.

I’m thrilled by this development for two reasons. First, I’ve always wondered why my reviews of new computers, gadgets and software cost money, when book reviews, movie reviews, and restaurant reviews were a free resource for all. Second, it means that I can stop having to send out copies of past columns to readers who can’t find them anymore, or bumming them out by saying, “You’ll have to cough up the three bucks.”

Interview on Verizon Decision

Supreme Court Internet Privacy Decision — an online Q&A with Verizon attorney Sarah Deutsch

Washington, DC: The RIAA has said that if it’s not allowed to file John Doe subpoenas, the added expense it’ll incur in court costs means that it won’t be able to offer settlements to copyright infringers as small as it would otherwise. Have you seen any evidence of this since the ruling came down against the RIAA?

Sarah Deutsch: RIAa has mechanized the John Doe process to such an extent it’s like a factory assembly line. They have consistently said the John Doe process is working and that their enforcement campaign hasn’t “missed a beat.” I hear claims are generally settling for around $3000 — many of the targets are children, grandparents, teenagers with limited resources. You are directed to a “settlement center” which sends you a form settlement agreement.

Wilkes-Barre, PA: I am having trouble understanding why the RIAA targets Internet service providers. If this were TV, does that mean if millions of Americans bought a cord say that was legally sold in stores and this cord could somehow connect the TV to a pay channel like HBO for free, that Comcast or Starpower would be responsible? Not the store that sold the cord? Why don’t these groups go after the businesses that are helping people illegally download songs instead?

Sarah Deutsch: Unfortunately, telecommunications companies and high tech companies in the distribution chain have always been targets of copyright holders looking for deep pockets. Part of the strategy has been to shift the burden of policing for copyrights and enforcing private rights on to our industries. We have resisted become the Internet police — although we certainly want to work cooperatively as partners and not as enemies. We have spent the last 10 years fighting bill after bill in Congress that seeks to hold the intermediary liable.

New Paths to Broadband

F.C.C. Clears Internet Access by Power Lines

Clearing the way for homes and businesses to receive high-speed Internet services through their electrical outlets, the Federal Communications Commission adopted rules on Thursday that would enable the utility companies to offer an alternative to the broadband communications services now provided by cable and phone companies.

As a further spur to the rollout of broadband Internet services, the F.C.C. also ruled that the regional Bell companies do not have to give competitors access to fiber optic lines that reach into consumers’ home – a decision that prompted two of the Bells, SBC Communications and BellSouth, to announce that they would move quickly to build new fiber optic networks in residential neighborhoods. The ruling was criticized by rivals of the Bells and consumer groups, which called it anticompetitive and said it would lead to higher prices.

Also FCC Approves New Broadband Hookups and Broadband: More Power to You