July 31, 2005

More on the NYC Payola Settlement [9:33 pm]

How Payola Went Corporate

And so goes the latest version of payola, the illegal trading of secret payments in exchange for airplay. Attempts to game the system are nearly as old as the industry itself. “Song pluggers” urged certain songs on big band leaders in the 1930’s and 40’s, accompanied by bundles of cash to make the musical choice easier. Disc jockeys in the 1950’s were handed cash bribes or fur coats for their wives. The independent promoters of the late 1970’s and 1980’s plied station directors with drugs and prostitutes.

The latest scandal to hit the music business shows that just as the industry has turned corporate in recent decades, so too has its underbelly. Documents ferreted out by investigators for Attorney General Eliot Spitzer of New York show that executives at Sony BMG Music Entertainment’s labels (including Epic) concocted their deals with some of the biggest commercial radio chains in the country. Last week, the company acknowledged its improper promotional practices and agreed to pay a $10 million fine.

The scandal also offers a reminder that, in important ways, little in the business has changed. The record labels still try to curry favor with station programmers, even though traditional radio is less powerful than it has been for decades, as satellite and Internet radio, as well as devices like iPods, give music lovers more control over what they listen to.

But commercial radio still dwarfs its competitors and retains its singular ability to mint hit records. And the record business is hit-driven.

Later: related F.C.C. to Scrutinize ‘Pay to Play’ in Radio

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Turning to the Web For TV [9:28 pm]

And turning the Web into TV? More People Turn to the Web to Watch TV

It looks like that future may well be by way of the computer, as big media and Internet companies develop new Web-based video programming and advertising that is truly under the command of the viewer. As Americans grow more comfortable watching programs online, Internet programming is beginning to combine the interactivity and immediacy of the Web with the alluring engagement of television.

[...] For all of them, and many more media and Internet companies, investing in new Internet video programming is a way to cash in on the demands of advertisers who want to put their commercials on computer screens, where new viewers are watching. And on many Web sites, viewers can’t skip the video commercials, the way they can when using TiVo and other video recorders.

[...] An Internet commercial typically costs about $15 to $20 for each 1,000 viewers, nearly as much as broadcast networks charge. The price is high because there is more demand from advertisers than there is Internet video programming available. Broadband Enterprises estimates about $200 million will be spent on Internet video this year, up from $75 million last year. That pales in comparison to the $65 billion or so spent on broadcast and cable television advertising, but it is growing faster.

While much of the development of Internet video is now being driven by advertising, there is a growing crop of pay-per-view and subscription video services.

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The Online Arms Race, Continued [9:18 pm]

New File-Sharing Techniques Are Likely to Test Court Decision

At a computer security conference in Las Vegas on Thursday, an Irish software designer [FreeNet's Ian Clarke] described a new version of a peer-to-peer file-sharing system that he says will make it easier to share digital information anonymously and make detection by corporations and governments far more difficult.

Others have described similar efforts to build a so-called darknet that aims to shield the identities of those sharing information. The issue is complicated by the fact that the small group of technologists designing the new systems say their goal is to create tools to circumvent censorship and political repression - not to abet copyright violation.

Such a stand is certain to test the impact of the Supreme Court ruling in June against Grokster and StreamCast Networks, publishers of peer-to-peer file-sharing software, a number of legal specialists and industry executives said.

Clarke’s slides clarke's last slide

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Software Patents-No! [7:46 pm]

A nice background summary tale of software patents: Why Bill Gates Wants 3,000 New Patents

I have not seen the software in use. But if I were in a position to make a ruling, and even if I accepted the originality claim on its face, I would process these swiftly: Rejected.

Microsoft’s other pending applications - 3,368 at last count - should receive the same treatment. And while tidying up, let’s also toss out the 3,955 patents that Microsoft has already been issued.

Perhaps that is going too far. Certainly, we should go through the lot and reinstate the occasional invention embodied in hardware. But patent protection for software? No. Not for Microsoft, nor for anyone else.

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