What *Is* Reality?

A dispatch from Second Life: Virtual Bernanke guides ‘Second Life’pdf

On July 25, the company controlling “Second Life” announced that it would no longer allow gambling. Economic activity was cut by nearly half as gambling halls shut down.

That’s a recipe for disaster in any economy, with job losses and a possible currency collapse, but the online world stayed on an even keel. That’s in part due to the fact that few people make a living there, but also to the firm grip on its currency market by “Second Life’s” equivalent of Ben Bernanke, chairman of the Federal Reserve.

It’s just one example of how economists and virtual worlds are teaming up, to mutual benefit. Outside “Second Life,” a game company just hired its first full-time economist. Another economist, coming from the academic side, believes that just as virtual economies need economists, so economists need virtual economies — to experiment with.

The “Second Life” equivalent of Bernanke is John Zdanowski. He’s the chief financial officer at Linden Lab, the privately held company that runs the world. Using “Second Life” software, he spoke to The Associated Press as an “avatar,” or 3-D representation, in Linden Lab’s virtual headquarters.

All I Have To Do Is Say Something Nice …

And I get a demonstration of why we have to be careful, even when we agree about why copyright matters: Control of Dances Is at Issue in Lawsuit

Choreographers associated with the New Dance Group, an activist-minded crucible of modern dance that flourished in the 1930s, ’40s and ’50s, based works on Woody Guthrie’s songs, the struggles of the Depression and the Spanish Civil War. Now one of those choreographers and the children of two others are embroiled in a very modern court battle over who has the right to perform their dances.

The three have sued New Dance, which now serves as a teaching studio and has a company, and its artistic director, Rick Schussel, seeking a legal ruling that only they can give permission for any performances.

“My main concern is that my mom’s dances get reproduced the way she wanted them reproduced,” Abigail Blatt said of her mother, Sophie Maslow, a prominent figure in the early years of modern dance. “What would happen if anybody could just take whatever they saw and copy it?” […]

Yes — what if?

Why Are Some Fights So Nasty? Because the Stakes Are So Small

This rhetoric has already been tried out in the realm of television — and don’t expect that the New York Times doesn’t have a stake in this outcome: Whiting Out the Ads, but at What Cost?

Likewise, in the larger scheme of things, Adblock Plus — while still a niche product for a niche browser — is potentially a huge development in the online world, and not because it simplifies Web sites cluttered with advertisements.

The larger importance of Adblock is its potential for extreme menace to the online-advertising business model. After an installation that takes but a minute or two, Adblock usually makes all commercial communication disappear. No flashing whack-a-mole banners. No Google ads based on the search terms you have entered.

From that perspective, the program is an unwelcome arrival after years of worry that there might never be an online advertising business model to support the expense of creating entertainment programming or journalism, or sophisticated search engines, for that matter.

More interesting has been the vituperative reactions from the little players in this space:

For now, the opposition to Adblock Plus has been led by small Web sites who want all Firefox users blocked from Internet sites in retaliation. One such advocacy site, whyfirefoxisblocked.com, taunts a Firefox user with the headline, “You’ve reached this page because the site you were trying to visit now blocks the Firefox browser.”

The page includes the following argument: “While blanket ad blocking in general is still theft, the real problem is Adblock Plus’s unwillingness to allow individual site owners the freedom to block people using their plug-in. Blocking Firefox is the only alternative.”

Mr. Palant, writing on a blog related to the project (adblockplus.org/blog/), lashed out at those kinds of arguments.

“There is only one reliable way to make sure your ads aren’t blocked — make sure the users don’t want to block them,” he wrote. “Don’t forget about the users. Use ads in a way that doesn’t degrade their experience.”

So, What Was Settled?

Google agrees not to harm American Blind, but otherwise, we have little information to go on here: Google Settles Trademark Suit

Google settled a lawsuit with American Blind and Wallpaper Factory, which had claimed advertisements on Google Web pages infringed trademarks.

The closely held American Blind, an Internet seller of home decorating materials, contended that Google’s AdWords program — advertising on Google’s Internet site that is linked to brand-name search results — illegally allowed competitors to buy the right to use search keywords like “American Blind” that are protected trademarks. A trial was scheduled for November.

Refining the Online Bookselling Experience

Amazon Drops Inventory Data, Irking Writers

“While quantity is certainly an interesting piece of data, that information did not help software developers drive traffic to Amazon.com,” said Drew Herdener, a spokesman for Amazon. “Customers could still make a choice on whether or not to buy a product without having to know how many are in stock.”

The inventory numbers had been available since 2006 and helped Web developers drive business to Amazon. Amazon pays a referral fee when a visitor clicks through from another Web site and buys the item.

Although the numbers were meant to help these sellers, the people who valued them the most were writers. Paul Aiken, the executive director of the Authors Guild, said the Amazon policy change makes the book-selling business “that much more opaque for authors.”

Fudd’s First Law of Opposition (updated)

If you push something hard enough, it will fall over” — Firesign Theatre: Microsoft Favored to Win Open Document Vote

Amid intense lobbying, Microsoft is expected to squeak out a victory this week to have its open document format, Office Open XML, recognized as an international standard, people tracking the vote said Monday.

The move would help Microsoft, the world’s largest software maker, maintain its competitive advantage in the expanding field of open document formats.

Later — wow! Who’d a thunk it?! Panel Rejects Microsoft’s Open Format

Tom Robertson, Microsoft’s general manager for interoperability and standards, predicted that Microsoft’s format would be eventually adopted.

“Open XML is already widely available and is being used by Apple and Novell,” he said. “It is in the Palm operating system, and in the Java and Linux operating environments.”

Some critics of Microsoft blamed the company’s own aggressive lobbying for its defeat.

Rick Rubin Profile, A Look At The State of the Industry

It’s him or Hit Song Science, apparently: The Music Man

“The music business, as a whole, has lost its faith in content,” David Geffen, the legendary music mogul, told me recently. “Only 10 years ago, companies wanted to make records, presumably good records, and see if they sold. But panic has set in, and now it’s no longer about making music, it’s all about how to sell music. And there’s no clear answer about how to fix that problem. But I still believe that the top priority at any record company has to be coming up with great music. And for that reason, Sony was very smart to hire Rick.”

[…] “The Big Red focus groups were both depressing and informative, and they confirmed what I — and Rick — already knew,” DiDia told me afterward. “The kids all said that a) no one listens to the radio anymore, b) they mostly steal music, but they don’t consider it stealing, and c) they get most of their music from iTunes on their iPod. They told us that MySpace is over, it’s just not cool anymore; Facebook is still cool, but that might not last much longer; and the biggest thing in their life is word of mouth. That’s how they hear about music, bands, everything.”

[…] “Until very recently,” Rubin told me over lunch at Hugo’s, a health-conscious restaurant in Hollywood, “there were a handful of channels in the music business that the gatekeepers controlled. They were radio, Tower Records, MTV, certain mainstream press like Rolling Stone. That’s how people found out about new things. Every record company in the industry was built to work that model. There was a time when if you had something that wasn’t so good, through muscle and lack of other choices, you could push that not very good product through those channels. And that’s how the music business functioned for 50 years. Well, the world has changed. And the industry has not.”

[…] “The CD debuted at No. 4,” Rubin told me at Hugo’s, still sounding upset. “It was the highest debut of Neil [Diamond]’s career, off to a great start. But Columbia — it was some kind of corporate thing — had put spyware on the CD. That kept people from copying it, but it also somehow recorded information about whoever bought the record. The spyware became public knowledge, and people freaked out. There were some lawsuits filed, and the CD was recalled by Columbia. Literally pulled from stores. We came out on a Tuesday, by the following week the CD was not available. Columbia released it again in a month, but we never recovered. Neil was furious, and I vowed never to make another album with Columbia.”

[…] From Napster to the iPod, the music business has been wrong about how much it can dictate to its audience. “Steve Jobs understood Napster better than the record business did,” David Geffen told me. “IPods made it easy for people to share music, and Apple took a big percentage of the business that once belonged to the record companies. The subscription model is the only way to save the music business. If music is easily available at a price of five or six dollars a month, then nobody will steal it.”

For this model to be effective, all the record companies will have to agree. “It’s like getting the heads of the five families together,” said Mark DiDia, referencing “The Godfather.” “It will be very difficult, but what else are we going to do?”

Rubin sees no other solution. “Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done,” he said. “The future technology companies will either wait for the record companies to smarten up, or they’ll let them sink until they can buy them for 10 cents on the dollar and own the whole thing.”

[…] Rubin paused. “That’s the magic of the business,” he said. “It’s all doom and gloom, but then you go to a Gossip show or hear Neil in the studio and you remember that too many people make and love music for it to ever die. It will never be over. The music will outlast us all.”

It’s New York Fashion Week

Of course you’re going to see a lot on this subject: Before Models Can Turn Around, Knockoffs Fly

A debate is raging in the American fashion industry over such designs. Copying, which has always existed in fashion, has become so pervasive in the Internet era it is now the No. 1 priority of the Council of Fashion Designers of America, which is lobbying Congress to extend copyright protection to clothing. Nine senators introduced a bill last month to support the designers. An expert working with the designers’ trade group estimates that knockoffs represent a minimum of 5 percent of the $181 billion American apparel market.

Outlawing them is certainly an uphill battle, since many shoppers see nothing wrong with knockoffs, especially as prices for designer goods skyrocket. Critics of the designers’ group even argue that copies are good for fashion because they encourage designers to continuously invent new wares to stay ahead.

Designers say that is pre-Internet thinking.

“For me, this is not simply about copying,” said Anna Sui, one of more than 20 designers who have filed lawsuits against Forever 21, one of the country’s fastest-growing clothing chains, for selling what they claim are copies of their apparel. “The issue is also timing. These copies are hitting the market before the original versions do.”

[…] The cut or details of a garment cannot be copyrighted under existing law, although logos and original prints can be protected. Anna Sui’s suit against Forever 21, which has 400 stores and sales estimated at more than $1 billion, claims it has infringed against her prints on 26 occasions.