January 28, 2008

Tim Wu On The Tension Between Promotion and Piracy [4:08 pm]

Of course, Microsoft has managed this pretty effectively, but the network effects of software are somewhat different from those of popularity: Please pirate my Sundance film

Film piracy, the conventional wisdom goes, is a threat to the film industry at all levels. Thats certainly the sense at the Sundance Film Festival, where both the festival and distributors invest heavily in anti-piracy measures, including undercover agents who attend screenings to capture illicit videotapers. But it turns out that they may be wasting their money. Sundance films, present and past, simply do not register in the online pirate world—unless they are one of the few that have already made it big like Clerks or Little Miss Sunshine. This proves two things: When it comes to content piracy, obscurity, not security, is the best defense. It also demonstrates that movie pirates are fundamentally parasitic, not predatory.

[...] Not a single 2008 Sundance film is on any major pirate site that I could find. That might be accounted for by anti-piracy measures, but here’s the kicker: There are also almost no 2007 films on leading pirate sites, and none of last year’s Sundance “hits.” The online pirate world and the Sundance world are, as far as I can tell, separate domains.

Why this result? The simplest explanation is that it takes a critical mass of interest—lots of people who want to see a film—before it will get decent pirate distribution. There are a number of reasons for this, but, crucially, every step of the piracy distribution system relies on knowing that the film exists at all. Moreover, to get effective, fast distribution on a peer-to-peer network, you need lots of reliable peers—enough people willing to share the burden of distributing the film online.

In the end, it’s a numbers game. [...]

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Wha-aat? [9:58 am]

So, if I follow this correctly, it is so important to the safety of the nation to make the current temporary bill permanent that the President will veto a 30 day extension — an extension needed, among other reasons, because of the White House’s late delivery of pertinent documentation about the surveillance program? A demonstration of just how shameless this administration is: Veto of Wiretap Measure Is Threatenedpdf

The White House warned Democratic leaders yesterday that President Bush would veto a proposal to extend an expiring surveillance law by 30 days, saying that Congress should quickly approve a Senate bill favored by the Bush administration.

The move is aimed at forcing Congress to renew and expand the Protect America Act — which is due to expire at the end of the day Thursday — and escalates a national security showdown between Democrats and the White House just before the president’s annual State of the Union address.

[...] In his weekly radio address, Bush said “we cannot afford to wait” for a permanent legislation.

“If this law expires, it will become harder to figure out what our enemies are doing to infiltrate our country, harder for us to uncover terrorist plots and harder to prevent attacks on the American people,” Bush said.

But [Harry] Reid said that “current law ensures that no ongoing collection activity will be cut off on February 1.”

For more background, see this entry: Something Else From This Week’s New Yorker

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Sweden Caves To MPAA/IFPI Pressure [9:28 am]

Sweden to charge Pirate Bay in copyright casepdf

Sweden plans this week to charge the people running Pirate Bay, one of the world’s most visited Web sites, with being accessories in breaking copyright law.

[...] Public prosecutor Hakan Roswall said last week he will charge the Swedish site’s organizers with accessory and conspiracy to break copyright law, which could lead to fines or up to two years in prison.

The charges will be filed in a district court on January 31.

[...] No copyright material is stored on Pirate Bay’s servers and no swapping of files actually takes place there. Rather, Pirate Bay locates file sharers on the Internet and acts as a directory of so-called torrent files.

Later: Sweden charges Pirate Bay with copyright offences [pdf] (31 Jan 2008) — also Sweden Accuses 4 of Copyright Offenses

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Coping With The Rush To Computer Voting (updated) [9:07 am]

A paper jam roils California votepdf

In a series of controversial decisions last year, California Secretary of State Debra Bowen decertified the vast majority of electronic voting machines in the state, arguing that they were vulnerable to tampering and have defects that could corrupt vote counts.

As a result of her order, about a third of California counties are scrambling to prepare for the Feb. 5 presidential primary, printing millions of paper ballots, acquiring new optical scanners and pressing into service optical scanners normally used to count absentee ballots.

[...] The counties believed the machines provided a bulwark against a disputed election, like the one that hit Florida’s punch-card system in 2000. In their view, that election demonstrated an accuracy problem, not a security problem. Nonetheless, the electronic machines are under a cloud.

Bowen enlisted a team of eminent computer scientists from top laboratories and universities. They were able to hack into every type of voting machine. “People just don’t trust them,” Bowen said about the electronic machines. “You only have one chance to get an election right.”

Part II: Electronic voting is facing a recallpdf

Congress thought it was fixing the system in 2002 when it passed HAVA, laying the groundwork to eliminate punch-card systems, create new standards for certifying electronic voting machines and provide access to the disabled.

It created the Election Assistance Commission, a panel of two Republicans and two Democrats, to administer the new law.

But the $3 billion was handed out to states before the agency was formed, before new standards were created and before the commission could certify independent labs that would put a federal stamp of approval on the new equipment. As a result, the states purchased the machines based on the marketing of the four major electronic voting machine companies.

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“Fantasy” Lands, For Marketers [9:04 am]

Disney draws an interesting line here, in that it doesn’t accept advertising — but it certainly is gaining incredible market research for its own products: Disney adds fantasy landspdf

Walt Disney Co. is no stranger to fantasy worlds, transporting audiences — whether to a cottage in the woods with a young princess in “Snow White and the Seven Dwarfs” or to the Great Barrier Reef aboard the Finding Nemo Submarine Voyage ride at Disneyland.

Now, Disney is spinning its tales in the newest mass medium — online virtual worlds, where children adopt cartoonish avatars and play games.

Disney and other entertainment companies are rushing to capitalize on the latest Internet phenomenon: the rise of virtual worlds for kids. Online haunts for grown-ups, such as Second Life, grab the attention of corporate marketers. But digital playgrounds for the juice-box set — such as Disney’s Club Penguin and Ganz Inc.’s Webkinz — are drawing bigger crowds.

[...] Disney says it opted for subscriptions to defray the costs of monitoring and providing a safe environment for kids to play online. It chose not to permit advertising. Webkinz drew criticism from a parent group last month for displaying ads for the “Alvin and the Chipmunks” film and encouraging young users to buy chipmunk costumes and food for their virtual pets.

For Disney, a virtual world such as “Pirates” pays dividends beyond the potential subscription revenue. It keeps fans of the movie franchise interacting with the characters and primed for the next chapter in the “Pirates” epic, be it a film, a game or merchandise.

[...] “The media companies are starting to realize that virtual worlds represent a very easy, very controllable, very compelling and very sticky media channel,” said Stephen Prentice, analyst for technology research firm Gartner Inc.

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Refining the Business Model - 3 [8:59 am]

Major record companies weigh deal with online servicepdf

Major record companies may be considering deals with Qtrax to allow music lovers to listen to any tune, anytime, free of charge.

Qtrax says that the four big labels — Universal Music Group, owned by Vivendi; Sony-BMG Music Entertainment; Warner Music Group; and EMI Group — have agreed to license their digital catalogs to the service, which aims to exploit online music bandits for commercial purposes.

Executives at Universal, Warner and EMI say they haven’t signed deals with Qtrax, though a Universal spokesman says the label is “really close” to coming to terms. Officals with Sony haven’t returned phone calls.

A Qtrax spokesman insists the deals have been made.

Later (1/29/2008): Qtrax jumped gun on online deal, labels saypdf

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In Search of the Elusive Digital Book Platform [8:32 am]

A Kindle reviewer wants us to believe the time has come — I’m not so sure, although I don’t agree with Steve Job’s take, either: Freed From the Page, but a Book Nonetheless

Building a portable electronic reader was the easy part; matching the visual quality of ink on paper took longer. But display technology has advanced to the point where the digital page is easy on the eyes, too. At last, an e-reader performs well when placed in page-to-page competition with paper.

As a result, the digitization of personal book collections is certain to have its day soon.

Music shows the way. The digitization of personal music collections began, however, only after the right combination of software and hardware — iTunes Music Store and the iPod — arrived. And as Apple did for music lovers, some company will devise an irresistible combination of software and hardware for book buyers. That company may be Amazon.

[...] [W]hen Mr. Jobs was asked two weeks ago at the Macworld Expo what he thought of the Kindle, he heaped scorn on the book industry. “It doesn’t matter how good or bad the product is; the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year.”

[...] The book world has always had an invisible asset that makes up for what it lacks in outsize revenue and profits: the passionate attachment that its authors, editors and most frequent customers have to books themselves. Indeed, in this respect, avid book readers resemble avid Mac users.

So, why will digital books take off, then?

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The Gawker-Scientology Fight Hits the Times [8:26 am]

Scientology Writes; Gawker Rises

At Scientology’s request, YouTube and other sites took down the copyrighted video, but Gawker refused, instead posting and mocking the reproachful letter sent by a Los Angeles lawyer representing the church.

As for whether Gawker will be hauled into court, Karin Pouw, a spokeswoman for the Scientologists, issued a statement that further action had not been “contemplated, let alone decided.” Equating the lawyer’s letter with a threat of a lawsuit amounts to “unsubstantiated rumors” by “those wishing to create further controversy and media attention,” she wrote.

Diane Zimmerman, an intellectual property professor at the New York University School of Law, said Gawker appeared to be within the copyright law’s “fair use” provision, which permits excerpting copyrighted material for news gathering or criticism.

See earlier Gawker Taking on Scientology

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Refining the Business Model - 2 [8:11 am]

Direct-to-DVD Releases Shed Their Loser Label

Once a dumping ground for movies considered virtually unwatchable, the direct-to-DVD pipeline is becoming increasingly important to mainstream film franchises.

Hollywood’s new direct-to-DVD strategy rests on calculating a sequel’s chances at the multiplex. Three big-screen “American Pie” movies rained money on Universal, selling more than $750 million of tickets worldwide, according to Box Office Mojo. But Universal had a decision to make when it came to approving a fourth installment for a theatrical release. The third film, “American Wedding,” cost $55 million plus tens of millions more to market — far more than its predecessor. Yet its ticket sales were 28 percent lower.

In previous years, the studio would have either pulled the plug on the series or continued to serve up sequels in theaters to increasingly smaller audiences. Opting for diminished returns was typically the industry’s course — why leave money on the table? — which is how wince-inducing films like “Police Academy 6: City Under Siege” ended up at the multiplex.

But studios have realized that the power of the DVD market gives them another option. They drop everything but the franchise concepts and the titles, and hire cheaper acting talent. Add a marketing campaign of decent weight to increase the size of the audience that remains and — presto — more profit, pound for pound, than some big action flicks. Oh, and get rid of that pejorative-sounding direct-to-DVD term. Call it DVD Premiere.

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Refining the Business Model [8:03 am]

I’m not sure where Bray gets his technical information (CDs are WAV, rather than PCM, data?), but the issue of sound quality as new formats are introduced is one that is as old as the audiophile community: More music dealers offering downloads with sound quality that rivals a CD’spdf

Internet music retailers offer millions of tunes, in every genre from opera to hip-hop to Palestinian folk songs. But it’s still hard to find online music that sounds good on a $10,000 stereo system.

Online music sellers like Apple Inc. and Amazon.com use digital compression technologies to shrink the sizes of music files, making them easier to store and download. But compression also hollows out the music, eliminating many of the sonic subtleties cherished by hardcore audiophiles. That’s why many finicky music lovers won’t sully their ears with today’s downloadable tunes and are clamoring for something better.

[...] A handful of online music dealers, including Magnatune, MusicGiants Inc., and AIX Media Group Inc., are responding with audio downloads that match, and in some cases exceed, the quality of standard CDs.

“If you’re going to ask people to move from CDs to downloads, I think you have to have something that’s just as compelling,” said Magnatune’s founder, John Buckman.

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