I’m thrilled to be going to Dublin in late January to talk about “Free Ride.” On January 24, at 6:30pm, I will give a talk at Hodges Figgis – the kind of cool, old Dublin bookstore where every writer dreams of speaking. The next day I will speak at the Screen Directors Guild of Ireland’s “Digital Biscuit” conference, where I will appear with Bill Whelan. (I have to confess that I don’t quite get the title, but this seems like a great event.) Later that afternoon, I will address the Institute of International and European Affairs at 1pm. If you can come to any of these events, please say hello.
Since I haven’t spoken much in New York this year, I wanted to mention that I’ll be giving a keynote speech at the Copyright and Technology 2012 conference. I’ll be “opening” for David Lowery, a talented musician, as well as a vocal advocate for musicians in a debate that could certainly use more of them.
If you read this blog, you can register for the conference at a discount – $100 instead of $400, which isn’t quite free, but it’s not too shabby. (You need to use a discount code: 100GBRJYH.) You should also say hello.
Last week I went to Visby, Sweden, to speak at Almedalen Week, a political event that involves a series of speeches and policy discussions on the island of Gotland. Although I couldn’t understand everything, since I don’t understand a word of Swedish, I was happy that my ideas got a good reception in the country where the Pirate Party emerged. Indeed, to judge by my admittedly limited conversations, it seems like Sweden is quickly getting over the idea that all content must be free.
I also did some interviews with Swedish media, which I wanted to post here. Dagens Nyheter, one of the major dailies, shot an interview with me that you can see here, and Swedish public television’s web site covered my book here. This one is in Swedish, so I haven’t read it myself.
On Friday I flew to London, where the great Ben Watt of Everything But The Girl interviewed me at an Association of Independent Music event – good fun, since I’m used to being on the other end of these conversations. I should have video of that in a few days, but there’s a decent description of it here.
Update: Here’s another piece about the book, in Sweden’s Journalisten.
This has nothing to do with the normal subject matter of this blog, but please indulge me. On May 10, Carroll Shelby died at the age of 89. If you know anything about cars, you know what a legend he was, and what a loss this is. If you don’t, well, Shelby designed the Shelby Cobra and the Shelby Mustang and led the famous Ford racing team that beat Ferrari at Le Mans in 1966 and 1967. He was also, at various times, an Army Air Corps flight instructor, a race car driver, a big-game hunter, and the inventor of the chili cookoff.
I interviewed Shelby for a 2006 Vanity Fair story, so I was lucky enough to hear some amazing stories about his remarkable life. And after warning me that “ah’m almost 83 and I’ve had a heart transplant,” he raced me around Ford’s Michigan Proving Grounds fast enough to take a couple of years off my life.
They aren’t making any more like him.
The Wall Street Journal just ran my review of the new book by William Patry, How to Fix Copyright. As I write, Patry is a respected legal scholar, and he has plenty of smart, sensible ideas on the subject. But the biggest problem with copyright laws is that many technology companies do whatever they can to ignore them, and Patry doesn’t offer practical suggestions on how to change that.
In the comments section, Patry expresses disappointment that “The Wall Street Journal chose to have my book reviewed by an extreme partisan rather than by someone on staff who might have an objective view.” While I welcome his thoughts, I’m not sure why he’d expect an objective reviewer and I would hardly identify myself as an “extreme partisan”: I favor shorter copyright terms, greater leeway for fair use, and many of Patry’s suggestions. In any case, I hope this will be an interesting discussion of a book worth talking about.
I haven’t posted this week, since I’ve been on vacation. Obviously, between the SOPA blackout and the Megaupload takedown this was the wrong week to take off. But so it goes. I’m still away, but I’ll have more to say on both of these issues next week. Until then, I wanted to point readers to a few pieces on the subject that I think are very smart. I’m not saying I agree with them completely – but I think they’re well worth a read.
-On the day intelligent debate died, technology thinker Jaron Lanier wrote a New York Times op-ed that got to the heart of the debate. This isn’t really a debate about free speech – it’s about how the Internet should work. The problem is that, after mocking the media business for refusing to adjust its business model, large technology companies are trying to preserve theirs.
-Andrew Orlowski wrote an amusing analysis of the debate over SOPA and makes a point that can’t be repeated enough: “Last year, Google made 11 million sites disappear on a whim, removing the .co.cc domains from its search index because the sites were deemed by Google to be “spammy”.” (It had no way of determining that absolutely all of them were.) I don’t have a problem with this. But most SOPA opponents would find this reprehensible, since they object to the idea that Google should de-index sites devoted to piracy. But if it’s OK for Google to exercise good judgement in a way that helps its own business, why isn’t it OK for it to do the same in a way that upholds the law? Like Lanier, Orlowski is especially interesting to read because he knows technology so well.
-Jeffrey Rosen wrote an interesting analysis of SOPA in the New Republic that calls it “A Bad Solution to a Very Real Problem.” I admit: I’m biased because he mentions my book favorably. His piece is refreshingly free of the sky-is-falling rhetoric we’ve heard from Google and Stanford. (There’s so little space between them that I will call them either ‘Googford’ or ‘Stanoogle’ from now on.) He, too, makes a point that can’t be repeated often enough: “There are lawyers and lobbies on both sides of the debate, however, and neither side is devoted to the promotion of creativity for its own sake.”
It has become standard operating procedure for companies that want to distribute content online to ask forgiveness instead of permission. The companies themselves pitch this as innovation, then tell rights-holders to file DMCA takedown notices – often by the thousands. By then, of course, they have far more negotiating leverage. YouTube’s offer to the media business could be summarized, in geek terminology, as ‘all your video are belong to us’ – so you might as well take what we give you.
The obvious problem is this: How much can you trust a company that deliberately attempts to profit from the work of others without providing any compensation? (Whether YouTube’s behavior was legal under the DMCA will be determined in court, but emails that came out in Viacom’s lawsuit make it clear that the company’s employees didn’t think they were going to get rich on cat videos.) Ironically, most online streaming services are actually less transparent than major labels when it comes to royalty accounting – and that’s saying something.
So it’s not all that surprising to hear that the online music service Grooveshark has just been sued by EMI – the only major music company it actually had a deal with. (Universal’s suit against Grooveshark is ongoing, and Sony and Warner recently filed suits of their own.) In its complaint, EMI Publishing – the division of EMI that controls the copyrights to songs, not recordings – that it has “made not a single royalty payment to EMI, nor provided a single accounting statement.” Ouch.
This fits with Grooveshark’s strategy – “achieving all this growth without paying a dime to any of the labels” – as outlined by chariman Sina Simantob in a December 2009 email. Much as musicians who want their work removed from the service have to repeatedly file DMCA takedown notices for the same work, perhaps companies simply have to sue in order to get paid. (Grooveshark told The New York Times that this was a contract dispute it expected to resolve.) Sadly, this would hardly be unprecedented in the music business.
If I had to guess, I’d suggest that Grooveshark’s apparent decision not to pay EMI Publishing could even be part of its legal strategy. Remember that EMI Music Publishing controls the rights to songs released by other major labels, some of which are suing Grooveshark. If Grooveshark were to account to EMI Publishing for those songs, it would mean that the company knew how much they were being played. And the DMCA safe harbor only applies if a company like Grooveshark lacks “actual knowledge that the material or an activity using the material on the system is infringing.”
Please keep in mind that this is just a guess: I’m not a lawyer, and the DMCA is a complex law subject to varying interpretations. But it does seem that it would be pretty tough for Grooveshark to pay song royalties to EMI Publishing for a recording owned by Universal Music Group, while at the same time insisting that it doesn’t know which Universal Music recordings are on its site.
As a journalist, when you report facts that companies prefer to keep hidden, they usually call you to tell you how you got something wrong. Sometimes, they tell other reporters how you got something wrong. Every once in a while, If they can’t find anything wrong, they resort to personal attacks.
Naturally, he was also a fellow at the Berkman Center.
I am honored by two recent reviews of Free Ride. On his Copyright and Technology blog, Bill Rosenblatt discusses the book as a counter-narrative to the conventional wisdom (which he calls The Script). And in a CNN.com commentary, Andrew Keen calls Free Ride “one of the most impressive of this year’s non-fiction books, amid respected works by Tyler Cowen and James Gleick.
I am also happy to share a new Spin.com interview. And I will leave you with one of my final comments to the reporter who did it: “Google is not Woodstock; it’s a technology company.”
I’m happy to say that “Free Ride” keeps getting media attention – which means I keep getting chances to run my mouth about the issues that face the media business online.
Here is an interview I did with The Wrap about piracy, pricing, and the future of the media business in general. Since it’s a business site, I got the chance to talk in some depth about the exact nature of the media’s problems, as well as potential solutions.
I’m also thrilled to be the subject of “The Sunday Conversation” in today’s Los Angeles Times. In 1994 – in what seems like another world – my first job out of graduate school was an internship at the Los Angeles Times Calendar section, where I covered minor music news, wrote about small films, and profiled a movie-set “Baby Wrangler.” It was “intern stuff,” in other words, and I did it in “intern style” – with much more enthusiasm than expertise. It wasn’t always easy, but I had a blast and I learned a lot. Whatever the journalism businesses of the future look like – digital or analog, big or small – I hope they have the organizational stability to give young reporters the same learning opportunities.
In Free Ride, I case a skeptical eye on Google’s contributions to universities like Stanford and Harvard, as well as organizations like Creative Commons and the New America Foundation. Reactions have varied: Journalists taught to follow the money see this as responsible reporting, while academics with fellowships at Google-funded institutions cried foul.The institutions, all of which I contacted for comments, objected as well.
You can decide for yourself if I have a point. When I did a Businessweek story on this issue, I got the following response from Stanford Law School: “As an institution, Stanford Law School does not take an advocacy position on issues, political or otherwise, and maintains a position of strict autonomy when it comes to academic research.” (The statement also contained information on its research policies.) And yet tomorrow the Stanford Law School’s Center for Information and Society will hold a panel on “What’s Wrong With SOPA?” that will “explore the potential impact of SOPA on Silicon Valley, the concerns that have been voiced by legal scholars, technology companies, entrepreneurs, engineers and venture capitalists, and what the technology sector can do to make a difference in the outcome of this bill.” Panelists include two Stanford professors, a Google copyright counsel, a venture capitalist, a former Google attorney, two top executives at technology companies – and no one who seems to believe this bill isn’t a menace to society as we know it.
Personally, I think SOPA is too vague – I think most of the objections to the bill are hysterical, but it needs to be more specific. I’m sure that plenty of people who read this blog will disagree, and that’s fair enough – this is an important issue that deserves serious debate. But does online copyright infringement ever really receives serious debate at Stanford, where Google has donated generously to the Law School and the university’s dean sits on the company’s board? (There are two sides to a debate: One of the panelists, Fred von Lohmann, is an extremely smart lawyer and a nice guy but I’m not sure who he’d debate with.) Could they not find anyone to argue the other side?
Just to be clear, I’m not suggesting that anyone who objects to SOPA favors piracy or anything like that: There are serious issues about which reasonable people can disagree. But how much disagreement will there be at a panel that seems structured to come off like a pep rally? If these lawyers have convictions and the arguments to back them up, shouldn’t they go out of their way to invite the other side? More important, isn’t this exactly the kind of issue that Stanford’s statement says it doesn’t take an advocacy position on?
Slowly but surely, mainstream publications are catching on to the fact that the debate over PROTECT IP and SOPA involved giant corporate interests on both sides. In a smart New York magazine story, Jason Zengerle points out that “SOPA is just an old-fashioned Washington battle between two entrenched corporate camps.” I am biased, since he quoted me, but I think he’s right.
Does that mean we should simply accept SOPA the way it is? No – I think that debating these issues is important, and I hope it leads to a more specific bill that will accomplish the same goals. But having that debate means recognizing how much money Google and other technology companies are spending to influence it. Say what you want about the MPAA – they’re very open about where their funding comes from. The New America Foundation is not nearly as transparent. The organization does important work on many issues, but it seems worth noting that it made technology policy more of a priority after Eric Schmidt became chairman of its board of directors. If Disney chief executive Bob Iger ran a think tank, I don’t think journalists would take what it said at face value – and they would be right not to.
Because you demanded it, here are two recordings from my U.S. tour.*
Here’s a Podcast from my appearance at Vanderbilt University’s Curb Center For Art, Enterprise & Public Policy.
And here’s a video of my appearance at USC’s Annenberg School of Communication.
*To be entirely honest, no one demanded this and my “U.S. tour” amounted to a handful of speaking engagements punctuated by inconvenient air travel and fast food. But I had fun!
One of the things I love about Google, and there are a few, is the clever illustrations it uses to decorate its home page. At first these “Google Doodles” appeared mostly on holidays – St. Patrick’s Day, Valentine’s Day. New Year’s. By the middle of the last decade, the company had started celebrating iconic birthdays – of Albert Einstein, Vincent Van Gogh,and other icons. Over the last few years, those lovable rascals at the Googleplex seem to be having so much fun that they’ve found fun ways to mark various elections, Dr. Seuss’ birthday, and the 50th Anniversary of the LEGO Brick. Sometimes, part of the fun is seeing them honor geek icons who aren’t well-known to the general public: The Doodle for Stanislaw Lem, the Polish science fiction author who wrote “Solaris,” is a wonder to behold.
Of course, Googlers aren’t known for their sense of irony. Today the company’s homepage honors the birthday of Mark Twain. What’s interesting is the way it does so. The illustration looks like a comic strip with three panels. In the first, one boy hands his friend a paint can; in the second, he watches as his friend paints a fence; in the third, he offers a thumbs-up for his buddy’s work as his friend sits, exhausted, on the ground. The scene evokes “The Adventures of Tom Sawyer,” when Tom’s Aunt Polly makes him whitewash her fence and he tricks his friends into doing the work by convincing them that it’s fun.
In modern terms, this might be called “Sawyersourcing” – and few companies have done more to promote it than Google. Jimmy Wales is more of a Sawyer-esque character, a quintessentially American huckster who talked people he never met into writing an encyclopedia for him, then convinced the media that he wanted to run a charity even though he’s an Objectivist. But Google made this idea respectable by making large donations to Creative Commons, Harvard’s Berkman Center, and other institutions. Sometimes, Sawyersourcing produces great work. But technology companies, like Tom, rarely volunteer to share the wealth the way they share the work.
Twain himself, one suspects, would be laughing his ass off.
Free Ride just received a review in The New York Times, and it’s a two-page rave. Naturally, I’m thrilled. Apart from any commercial considerations, it’s great to have the respect of other writers – especially a prominent law professor. And I think it shows how public opinion on these issues is finally starting to change.
We are now having a vigorous debate over how to enforce existing laws online, as well we should, even if the quality of that debate occasionally involves asking the opinion of a teenage Canadian pop star who can’t quite name all of the continents. But people have started to realize that amateur media won’t replace the work of professional creators. They’re even talking about the debate as one between Silicon Valley giants and Hollywood media companies – and starting to notice that online activists have a financial bias of their own.
Have a great Thanksgiving.
I attempted to take some of the hysteria out of the debate here. Bottom line: This is not a conflict between content creators and the public, but rather one between creators and the companies that support them on one hand and those that make money from their work without paying them on the other.
Well, some of them are, anyway. In a smart and thorough review, Businessweek calls Free Ride “a timely and impressive book.” Obviously, I’m biased. But I like the way the review captured the events I’m reacting to, as well as a sense that the current dysfunctional market for media online simply isn’t sustainable. “Know that old Irving Kristol maxim that a neoconservative is a liberal who has been mugged by reality?” writer David Kamp asks. “Well, Free Ride is the book for the Net utopian who has been mugged by insolvency.” I hope this is the case, since there certainly seem to be a lot of them out there.
Fortune calls my book a “smart, caustic tour of the modern culture industry.” This review, too, conveys a sense of being mugged – perhaps by consultants with faith-based business strategies. “Levine points out that after nearly two decades of dreamy, collectivist rhetoric about cyberculture, crowdsourcing, citizen journalism and the like, professional media organizations still produce the bulk of compelling online content,” Richard McGill Murphy writes. And as he shows, I have the statistics to back this up.
I further explore some of these ideas in interviews with Salon, AdWeek, and the Los Angeles Times. In the first case, especially, many commenters attack me for disliking technology or favoring blockbuster culture – neither of which I ever say. I like technology, and my own taste run toward more adventurous music. At the same time, I think that creators should be compensated for their work and technology companies need to follow laws – and there does seem to be evidence that many people prefer the Transformers movies to anything under a Creative Commons license.
Apparently, this doesn’t sit well with everyone. Techdirt, which specializes in sputtering outrage against creators who assert their rights, has decided that it wants a market for everything except creative work. “While it’s true that copyright law creates a market for copyright, there’s no economic evidence that that, in itself, is desirable,” the blog says. “If you have something that is infinitely reproducible, such as ideas, to put artificial limitations on them is economically inefficient and limits growth.”
Where to begin? First, copyright law does not limit the spread of ideas – period. (It only covers specific expressions of ideas.) Second, this is the law of the land. “The Framers intended copyright itself to be the engine of free expression,” according to a majority opinion written by Justice Sandra Day O’Connor in a 1985 case. “By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate.” Third – and this is something that techies just can’t seem to get their heads around – the professional creative work that accounts for a substantial share of Internet traffic isn’t generated by computers or by artists suckered into signing away their rights to Sergey Brin’s mother-in-law. Not only does this work create growth and jobs in media businesses, it practically created the Internet as we know it. Finding this work is what most people use the Internet for.
These days, technology companies like to claim they don’t need professional content to succeed – that they can do just fine transmitting home videos and amateur writing. If that’s true, though, why are they so intent on signing deals with media companies?
As I do interviews to promote my book, one of the questions I’m always asked is, “Where do we go from here?” Sometimes this is phrased more along the lines of, “OK, if you’re so smart, what can we do about this?”
Here’s the solution!
Well, maybe not. I think I have some interesting ideas about “how the culture business can fight back,” but I’m the first to admit that we’re just starting to make some serious decisions about how to balance the rights of various people in the online world. So far, the discussion has been pretty lame – entertainment conglomerates complain about “digital theft” while technology companies promote “free speech.” That’s not much of a conversation: I’d rather call copyright infringement by its proper name, and it’s important to realize that “the Framers intended copyright itself to be the engine of free expression,” in the words of a U.S. Supreme Court decision. On this level, what I really want to do is ask some important questions that have become lost in a lobbying struggle between creators and Big Search.
In a Salon interview that ran yesterday, I talk a bit about how we can balance the interests of various parties online. Many of the comments attack me for promoting the interests of big media companies, but I don’t see where I did that. I am defending the rights of creators to their work, which could favor companies or individuals, but that’s a very different thing. Besides, these days, the power has shifted to Silicon Valley. In 2010, Amazon spent more money to lobby Congress than the MPAA. The rallying cry of a free and open Internet has become a call to Leave No Venture Capitalist Behind. We deserve better.
In the last chapter of Free Ride – excerpted here in Billboard – I talk about how we might apply smart, light regulation to the Internet in a way that protects the rights of creators and consumers alike. We need to make sure the Internet will remain an open venue for free expression. At the same time, we need to impose some limits to protect the free speech rights of professional creators. As I say in the book, we should not dismantle the 300-year-old tradition of a market for creative work so the Internet can continue to work the way it did in 1995.
Google spreads Astroturf as far as the eye can see. Check it out.
Addition: The Register covers the opening of Google’s new center for Google Studies – a €4.5 million academic institution in Berlin. Google says “it is an independent academic body.” And if you believe that, the company has a bridge to sell you in Bavaria.
After two years of work, Free Ride comes out today. If you don’t have a copy yet, buy one. If you have one already, tell a friend. If you hate the book, tell people that as well.
I just arrived in the U.S. for three weeks to do some promotional events – first in New York, then Nashville, and finally Los Angeles. (There’s a list to the right.) I hope to see some of you there. If you live in any of these places, email me and perhaps we can meet at another time.
At noon today, I will be on The Leonard Lopate Show on WNYC, 93.9 FM. Please listen.
As recently as 20 years ago, television was such a “vast wasteland” that Bruce Springsteen could accurately sing about “57 Channels (And Nothin’ On).” A decade after that, his guitarist, Steven Van Zandt, was on a television show that Norman Mailer called “the closest thing to the Great American Novel in today’s culture.” And shows like Mad Men, Breaking Bad, and Sons of Anarchy have complex plots, conflicted characters, and more human intelligence than almost any movie in theaters.
What happened to television in the last decade is like what happened to pop music in the sixties: Auteurs took what was generally disposable culture and turned it into art. In both cases, a new medium helped them realize these possibilities. In the sixties, the LP allowed recording artists to stretch out beyond the confines of the seven-inch single. More recently, cable made it practical – which is to say, profitable – to produce sophisticated serialized dramas for a relatively small audience.
Could it be that we get what we pay for? In an article for The Wall Street Journal based on my book, I show how the same rising cable bills we love to complain about turned the “idiot box” into a medium for some of the smartest popular culture made today.
Needless to say, you won’t see anything like this on YouTube.
ALSO: I am running a contest on my Twitter account, @RobertBLevine_ . The best explanation of why there’s only one artist on the Creative Commons Board of Directors wins a free, signed book. (Second prize: Two books!) Feel free to post or Tweet answers.
One of the oldest talking points of anti-copyright activists is that Jefferson expressed skepticism about protecting creative works. This idea comes from an 1813 letter to Isaac McPherson, in which Thomas Jefferson himself expresses what some believe is a suspicion of copyright. The money quote, repeated ad nauseum in books like Lewis Hyde’s Common As Air, is this: “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”
As Hyde sees reads this quote, the implication is clear: Sharing a creative work does not lessen the value of the original. From this, some intelligent people conclude, Thingz shud be free on teh Interwebz. The law professor David Post recently wrote a piece tracing a clear line from Jefferson’s letter to the limits on online copyright enforcement to the events of the Arab Spring. Essentially, he suggested, Jefferson + Twitter = freedom!
Maybe not. More serious academics like Evgeny Morozov have shown that the Internet played roughly the same role in toppling Arab governments that blue jeans did in the fall of the USSR: It’s an effective symbol, as way as a powerful way to communicate, but the truth is far more complicated. It’s also unclear what commercial-scale piracy on Megaupload has to do with any of this, but we’ll save that for another day.
Like many arguments made by anti-copyright academics, Post’s is not only illogical but based on shoddy scholarship. In a recent post, Copyhype blogger Terry Hart showed that Post either misrepresented or misunderstood Jefferson’s letter completely. Most important: Jefferson was talking about patents rather than copyrights. Also, the language in question doesn’t apply to copyright, since those laws covers expressions rather than ideas by definition. Bruce Springsteen has no claim to the idea of writing songs about New Jersey – just the particular songs that he wrote and recorded. For a law professor, these are significant mistakes.
Post’s response is pretty poor. (I admit that I’m biased since Terry is a friend, but it really is – see for yourself.) He argues that Jefferson’s comments are important to the debate on copyright “because he’s Jefferson,” “because he was smarter than you, or I, or anyone else currently commenting on intellectual property matters,” and “because he was the first person in history to articulate, in one document (and a short one, at that) the foundational theory of intellectual property.” The first two are obviously true, but just because what Jefferson says is important doesn’t make it relevant – he was talking about another subject entirely! (Famously, Jefferson also owned slaves, so the importance of what he says doesn’t make it a good basis for a legal system.) The third is completely untrue, and Terry provides several examples that prove it.
The details of the debate over Jefferson’s letter and its place in American law are best left to historians and lawyers. As a journalist, I would ask this: How could a law professor like Post make such obvious mistakes? As I show in Free Ride, this is par for the course. William Patry is a respected copyright scholar, and his book is full of embarrassing errors – the kind of stuff anyone could easily check. And the king of bloopers is Lawrence Lessig, a law professor who can’t be bothered to get his facts right. (There are many examples of Patry’s and Lessig’s mistakes in my book.) Lessig suggested that efforts to cut online copyright infringement were “rendering a generation criminal” – when the piracy he was talking about was a matter of civil law. For the average person, this is a completely understandable misstatement. But for a Harvard law professor?
(Important clarification added: Lessig points out that this behavior was illegal under the 1997 No Electronic Theft Act, which made it criminal. But the “generation” he was talking about was never charged under this; those who uploaded works to file-sharing services faced liability, not criminal charges. If you look at the specific piece I took his quote from, it only talks about RIAA lawsuits.)
By now you’re probably wondering why I – a mere journalist – think I’m as smart as these respected legal academics. I don’t. And that’s precisely the point: They seem too smart to make these kinds of mistakes. So I wonder why they keep saying things that aren’t true.
I know I promised a post on global copyright laws, but this is much more fun: The New York Times recently announced that it is attracting more readers, despite putting up a paywall. Surprise!
Everyone who’s anyone in new media punditry agreed that the Times paywall was an awful idea. Michael Wolff ridiculed it. Jeff Jarvis saw it as a sign of failure. And Cory Doctorow, who manages to be taken seriously as a business pundit even though he doesn’t seem to believe anything can be sold online, questioned whether it was “wishful thinking or just crazy?” Doctorow even thought the Times might restore to “planting secret permacookies;” if it did, he predicted, “the FTC will probably be unamused to learn that the Grey Lady is actively exploiting browser vulnerabilities (or, as the federal Computer Fraud and Abuse statute puts it, “exceeding authorized access” on a remote system — which carries a 20 year prison sentence, incidentally).”
Not only have New York Times business staffers avoided jail, the paywall strategy sure seems to be working. (Disclosure: I used to write for the Times as a freelancer and I probably will again; I’m also happy to see the paper do well because I like reading it.) As Journalism.co.uk reports, unique users are up – by just 2.3 percent, but that’s pretty good considering that some of those users are now paying to read the paper online. And while the number of page views is shrinking, most of that decline is overseas, where the Times isn’t as effective at selling ads. So most of the page views the paper lost probably weren’t worth very much in the first place. In their place, the Times gained 224,000 digital subscribers who are worth real money – not only for the fees they pay but for the premium advertising that can be sold once more is known about them.
Even Times executives sound surprised at their success. “I really worried that we’d lose a lot of our younger readers who we had really aggressively courted with a bunch of innovative ideas, social media use etc,” says Jim Roberts, the paper’s assistant managing editor for digital.” But that didn’t happen. And, quite frankly, the paywall is far more important to the paper’s financial future than any of its other innovations. The problem with the journalism business isn’t attracting readers – the Times always has, and it continues to do so online. The problem is making those readers pay – figuratively or literally. And since no one has figured out the first – online ads are usually worth less than a tenth of what they would be in print – the Times will need to depend on the second.
What’s even more interesting is how wrong the conventional wisdom was – yet again. Advertising just isn’t worth much online, and that won’t change anytime soon. It’s easy enough to show this. In the U.S., the percentage of GDP spent on advertising hasn’t changed much since the fifties; in colloquial terms, the pie isn’t growing. As media moves online, more ad spending will go to ads based on search and social networks that newspapers can’t duplicate. That means less money for everyone else. And while there’s almost certainly enough pie to go around for low-cost rewrite businesses like the Huffington Post, it’s hard to imagine there’s enough to fund serious investigative journalism.
Pundits like Wolff, Jarvis, and Doctorow don’t see this. They feel that free is THE FUTURE and that newspapers need to REMAIN RELEVANT. (The second point is fair enough, but relevance doesn’t pay the bills; for that matter, papers forced to undertake mass layoffs lose some of their relevance as well.) The question is why they so rarely acknowledge they’re wrong. Wolff, at least is an excellent writer who offers nuanced arguments. Jarvis and Doctorow seem to believe in open business models with unquestioning, almost religious fervor.
And their Holy War has consequences. Jarvis advised the Ann Arbor News, which closed its print product and became a Web site (as well as, technically, a new company.) Some months later, the new web site laid off reporters and announced it would reduce its journalistic ambitions yet again. Doctorow champions Creative Commons licenses, which let artists sign away their rights without receiving anything in return. (The organization’s board consists of anti-copyright advocates and a single artist.) Some of his business ideas work, such as selling deluxe physical products; but creators who pursue them don’t need to give up their rights in order to do so.
How long can these guys like this keep being wrong? And when will journalists start calling them on it?
One of the most satisfying things about the reception of Free Ride is the way it has reached people around the world. When I decided to do the book, I set out to write it from a more international perspective than I see in most technology writing. And while a tight deadline and budget meant I couldn’t get as many perspectives as I wanted, I’m thrilled that I was able to travel to London, Brussels, and Copenhagen; do some reporting in Berlin, where I live; and hire researchers to provide material on France and Sweden.
Reading recent books by Lawrence Lessig and other “copyleft” pundits, you could get the sense that the entire world is subject to U.S. law, where copyright exists to incentivize creativity. That’s not generally true outside of the Anglo-American world, which has a legal system based on U.K. law. In the Continental European tradition, copyright is a more fundamental right. Not only do artists get a limited monopoly over what they create, they also get “moral rights” – to the “paternity” and “integrity” of their work. This gets complicated very quickly, but in practical terms, this means they may very well have the right not to be remixed. Rather conveniently, Lessig does not mention this in any of his writing on the subject.
Other laws are also very different in Europe. In Germany, privacy is a fundamental right, to the point that tabloids often blur out the faces of celebrities’ children. (For historical reasons, German attitudes on privacy differ as well: The “Wi-Spy scandal,” in which Google cars gathering images for the company’s Street View service accessed open Wi-Fi networks, was a minor story in the U.S. but a very big deal here.) Attitudes toward freedom of speech differ as well. In France, the British designer John Galliano convicted and fined for his anti-Semitc tirade; in the U.S., what he did would be legal, although it would obviously have professional consequences.
Vive la différence. Personally, I have a hard time with the idea of laws against “hate speech,” partly because I worry that they might make martyrs of drunken morons like Galliano. But I’m fairly sure the French don’t care what I think: They’re French! They voted for these laws (indirectly, at least), and they tend to take a dim view of Americans trying to impose their values on the rest of the world. (It’s one thing to protest the laws of countries that violate basic human rights or those where the government is not democratically elected; that’s not what I’m talking about here.) Given the state of the U.S. economy, why wouldn’t they?
I’ll write more about the differences in global copyright laws tomorrow, as I just returned from the You Are In Control conference in Iceland. Today, I wanted to share some of the interviews with me that have recently run in a few international publications.
Folha de S.Paulo, one of the most important newspapers in Brazil, recently ran an interview that got at some of my views on technology. It’s also available in Portuguese (obviously) and Spanish but here’s the English version.
Grapevine, an Icelandic publication, recently ran an interview where I was pressed on some of my views by a skeptical reporter. I enjoyed it because I think that this kind of questioning helps me clarify my own arguments. Also, I love the title.
Considerati, a Dutch think tank, recently ran an interview with me as well. There’s also an interesting discussion below the piece where some very smart commenters and I are exploring some of the issues it raises.
In the past year, The Guardian has become more important than ever. The paper played a key role in providing context for the information in the WikiLeaks cables, and its reporting on the “phone-hacking” scandal at Rupert Murdoch’s News Corporation was the media story of the year. But, as a well reported story in the German newsweekly Der Spiegel points out, these journalistic triumphs have not helped its bottom line. “In purely economic terms,” the article reports, with typical German bluntness, “it’s a complete fiasco.”
Guardian editor Alan Rusbridger has pursued an innovative, daring, and potentially ruinous strategy of prioritizing the paper’s free Web site over its print edition. The Guardian publishes so much more content online than it does in print that its online version is clearly superior, even if one values the convenience of print. This is impressively forward-looking. It’s also financially stupid, since the Web site generates far less revenue, since the ads there sell for much less. (Although I’m far more familiar with the economics of U.S. newspapers than their U.K. counterparts, the cover price of most publications barely covers the costs of printing and distribution.) The better the Guardian Web site gets, the more readers will choose it over the print edition. At a time when most media executives complain about being forced to trade analog dollars for digital dimes, Rusbridger is actually making an effort to do so.
One could argue that this is painful but necessary, that the Guardian needs to eat its own lunch before someone else does. Maybe so. The question is whether a publication on this path will end up looking anything like the Guardian as we know it. To his credit, Rusbridger isn’t afraid of change. He wants to maximize his paper’s online audience, and integrate crowdsourcing into its reporting process in a way that helps it do more with less. It’s a noble vision.
The reality doesn’t look as good. The paper got its phone-hacking scoops the old-fashioned way: With great reporting by professional journalists. And as its online strategy causes revenue to fall further, it will be forced to cut journalist jobs, as it has already. A smaller staff will produce fewer of the scoops that set the Guardian apart from other English papers.
On some level, Rusbridger knows this: He recently acknowledged that “We need reporters who go out and do reporting,” as opposed to relying only on social media tools. The question is why he’s pursuing a business strategy that will require him to lay off more of them – and whether he’ll be able to change course before he significantly weakens the paper’s journalism.
Call me crazy, but I bet the Silicon Valley Human Rights Conference won’t discuss Article 27 of the Universal Declaration of Human Rights, which reads in part as follows:
“Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”
In fact – surprise! – it looks like one meeting on the agenda could end up specifically promoting the agenda of Google, which just happens to be a sponsor. Take a look:
Workshop 1: Intermediary liability – What are the freedom of speech and business implications of making content platforms responsible for user-generated content?
The implication seems clear: Holding YouTube responsible for massive copyright violations amounts to a freedom of speech issue. This has been a Google talking point for some time. In October 2010, the company co-hosted Internet at Liberty 2010: The Promise and Perils of Online Free Expression, an event that had several lofty aims including “making sure that platforms like Google aren’t held liable for content they host.” Keeping corporations safe from legal damages – an issue for activism if there ever was one!
The Internet certainly presents important human rights issues, although I don’t think intermediary liability is one of them. I do think too much intermediary liability could curtail innovation, which would be a bad thing but hardly a human rights violation. The truth is that we need to discuss these issues in a much more nuanced way.
Every right reaches some limit when it interferes with the rights of another. The classic formulation is that “your right to swing your fist ends where my nose begins.” The same applies online. Open Internet champions see Apple as a censor, since it chooses what can be sold in its App Store. But one could also argue that Apple’s selection process represents its own freedom of speech. Why does a rejection from Apple interfere with free expression any more than a rejection letter from a magazine? (As a freelance journalist, my rights were violated almost daily, I’m sorry to report) Apple may have too much market power, but that’s another issue entirely.
Copyright issues are also more nuanced than Google would have us believe. As some online activists see the issue, copyright is nothing more than a censorship regime. But that’s nonsense: No one believes that free speech includes the right to charge admission to a screening of “Star Wars” in your living room. In fact, in the U.S. at least, “The Framers intended copyright itself to be the engine of free expression,” according to Justice Sandra Day O’Connor majority opinion in a Supreme Court case. Copyright law doesn’t only limit free expression – it encourages it.
We clearly need to run the Internet in a way that encourages free expression. But I don’t think that involves shutting down YouTube or allowing it to profit from all the copyright infringement it encourages. I think it means writing sensible laws that assign some responsibility to companies like Google – enough to make them behave responsibly but still allow them to thrive. I know a conference on writing sensible laws would not have as much publicity value as the Silicon Valley Human Rights Conference – it’s complicated, abstract, and often rather dull. But this corporate pep rally, disguised as a serious conference, only obscures the important issues.
“[u]ltimately Napster could evolve into a full-fledged music distribution platform, usurping the record industry as we know it today.”
-Sean Parker, Napster internal memo, 1999
“This is actually very similar to what I dreamt of 10 years ago.”
-Sean Parker, speech about Spotify at last week’s Facebook’s f8 event
Although I will mostly use this blog to explore the issues in Free Ride, I also wanted to point readers to this interview I did with the Scottish novelist Ewan Morrison. I met Ewan about a month ago, at the Edinburgh Literary Festival, where he sat on a panel about the end of books and asked important questions about what that might mean for authors. To vastly oversimplify, he thinks it could be very bad – and I obviously agree.
More than most writers on this topic, Ewan is also asking some interesting political questions: How “free” helps the technology business, how free culture became identified with the left, and why progressives feel so comfortable helping companies at the expense of artists. I don’t have all the answers, but I think these are important questions to ask. Why are many progressives so uncomfortable with Wal-Mart and so enthusiastic about Amazon when both companies use their scale to give consumers more value for their money at the expense of small businesses and working conditions alike. Making iPods in China may not be a great job, but workers in at least one Amazon warehouse face sweatshop conditions in the U.S.
This intellectual inconsistency bothers me. While the Internet has generated impressive economic growth, the vast majority of it seems to go to a relatively small group of people – an idea that progressives have traditionally found distasteful. And yet Arianna Huffington can’t say enough good things about Silicon Valley start-up culture. At this point, anyone concerned about corporate power ought to worry much more about Google than Universal Music.
Earlier this week, the EU extended the copyright term for sound recordings from 50 to 70 years, leading to the usual spittle-spraying outrage from bloggers who never seem to care much about music in the first place. What they got right, almost in spite of themselves, is that the current term of 50 years seems eminently reasonable. The new policy will mostly help record labels.
Most arguments against retroactive copyright term extensions tend to be illogical, hysterical or both. Arguing that copyright term extensions represent an undue limit on free speech, as Lawrence Lessig did before the U.S. Supreme Court, seems ridiculous. (The Court wasn’t convinced either.) Saying that this current move represents a “cultural disaster” seems to be pushing it as well. Free culture activists believe that the Internet has brought about a “Renaissance 2.0″ and that copyright greatly restricts creativity. Both of those things cannot be true at once. Somehow, Chad Vader endures.
At the same time, it’s hard to see what good the term extension does for anyone except record labels; most artists signed that long ago have contracts that are one-sided even by music-business standards. This will not encourage the creation of new works, since the extension is retroactive. Most important, though, it gives the free culture crowd a flag to rally consumers against the concept of copyright in general.
The real problem with copyright is not that it legally lasts 70 years – it’s that it actually lasts 7 minutes. Albums are available illegally online as soon as they’re released – if not before. The protection creators are supposed to enjoy has become largely theoretical. The U.S. Constitution empowers Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Over the past decade, much of the discussion about copyright has centered on whether the laws still cover “limited times.” But the real issue is that they’re no longer securing anything at all. Although I am loath to click on a site that seems to combine farm equipment sales with book piracy, it looks like my own work is available illegally before it has even been published in the U.S. And while I don’t think highly enough of myself to declare this a cultural disaster, these kinds of sites definitely hurt my ability to write another book.
It might be useful to think of copyright in three dimensions: length, breadth, and depth. Let’s say the first refers to the term of protection, the second to how much it covers (in terms of what other creators can use), and the third to how effective the laws actually are. Since the rise of the Internet, we have extended the first and second at the expense of the third. And that’s the exact opposite of what we should be doing.
If copyright is supposed to encourage creation, we should have shorter terms, narrower coverage, and laws that can be enforced. That would allow anyone to use work after a certain amount of time. (We could argue about what the right term is, but 50 years seems reasonable to me; I would divide that into an automatic term of 25 years followed by another 25 years available on request.) It would give other creators a bit more freedom to make sample-based art. (This is tricky, but suffice it to say that I think Girl Talk should be covered by fair use but producers who sample as extensively as Puff Daddy should pay for the privilege.) Most of all, though, we need laws that actually work. The idea that I have the exclusive right to sell my own work doesn’t matter much if it doesn’t apply online.
Laws like this would also make more sense to the general public. We can all disagree on how long I should maintain the exclusive right to my work, or exactly how much that right should cover. But only the most ardent copyright opponents would suggest that I should not have that right at all. That’s what’s really at stake in the fight over online copyright – not how long protection lasts but whether it matters at all. Artists want effective protection. Free culture organizations funded by technology companies are against that. An additional 20 years of protection won’t mean much if the law doesn’t matter online.
Consumers following what pretentious activists call the “copyfight” could be forgiven for thinking it’s about the legality of unauthorized downloading. It’s not, of course, and it never has been. Downloading copyrighted material without payment or permission is almost always against the law – that’s why it’s called illegal downloading. The real question that courts around the world have spent the decade since Napster trying to answer is who should be held responsible.
It’s an important question. As Google points out every chance it gets, it would be impossible for the company to review every single video a user uploads to YouTube. On the other hand, it hardly seems unreasonable for it to take a closer look at videos marked “South Park.” But as Google maintains in Viacom’s lawsuit against YouTube, it has absolutely no responsibility to take any action at all until a copyright holder files a DMCA notice – even if the company that owns a particular video has continually objected to any use of its content. (The video service now uses a filter but it did not always do so.) Both extremes seem rather silly. To use a real-world example, I am unaware of any used book shop that requires everyone selling a hardcover to submit a receipt to prove he owns it – but I also imagine that police would take a rather dim view of a store that accepted 200 brand-new copies of the same title, fresh off the truck, no questions asked.
And yet that sums up Google’s policy toward illegal activity rather well. On a literal level, the company abides by its public relations mantra, “Don’t Be Evil.” But that’s only because it prefers to outsource bad behavior in a way that enables it to make money and still abide by the letter of the law. In at least one recent case, however, it did not even bother to do that.
There’s no better example of Google’s arrogance about the law than the company’s $500 million settlement with the Justice Department for accepting illegal ads from Canadian pharmacies. Google always says it should not be held responsible for the actions of those using its platforms, and online Google apologists have suggested that blocking all ads promoting illegal activity would be impossible. On the surface, this seems reasonable enough. But Google deals directly with some of its larger ad-buyers, and the company takes action when it sees fit: it banned those infamous teeth-whitening ads that were so popular several years ago. (Sorry kids, you’ll just have to brush!) And Google executives – including Andrew McLaughlin, who later served as deputy chief technology officer for the Obama White House – testified before Congress that they had a “rigorous” system for blocking ads from unlicensed pharmacies.
Of course, this testimony came from a company whose co-founder, Larry Page, once said under oath that he could not remember whether he favored buying YouTube. As it turns out, Justice Department officials believe Page knew all about these ads. And Google employees actually helped Canadian pharmacies adjust their ads so they wouldn’t be blocked, according to the Wall Street Journal. It takes some nerve for a company to say it doesn’t know about illegal activity when its own employees help facilitate it. I think the media business would call this chutzpah.
Remember, this is not the first time Google employees have actively helped companies advertising illegal products. In a 2005 lawsuit filed by the major movie studios against EasyDownloadCenter.com and TheDownloadPlace.com, the founders of the sites testified that Google assigned them account representatives and offered them credit to buy more than $800,000 worth of AdWords placements against searches like “bootleg movie download,” according to a 2007 Wall Street Journal story.
Thanks to the reporting of independent filmmaker Ellen Seidler – available at her invaluable blog – we also know that Google also doesn’t do much to block movie pirates from the AdSense network it uses to sell space on blogs. Although Google’s own policy says it removes pirate sites from its ad program, Seidler has shown that’s not true. She has also shown that Google also does as little as possible to limit pirate activity on its Blogger platform. It’s reasonable enough that Google doesn’t monitor the contents of Blogger sites – that might not even be possible. But when Seidler filed a DMCA request for a site that was full of links to pirated movies, she saw how little Google really cares about the issue; the company removed the link to her film, as it is required to by law, and left rest of the site untouched. This evil was someone else’s doing – Google just made money on it.
With great power, it seems, comes no responsibility at all.
So much for my efforts to blog regularly! Sorry for the radio silence, but I took a well-deserved vacation (well, I think so, anyway). Later this week, I’ll be back with a post about Google’s rising health care costs – it had to pay $500 million for selling ads to Canadian pharmacies. As promised, I’ll also show how the scallywags behind the Pirate Bay are more corrupt than any major label executive around. And, yes, I know that’s quite a claim!
In the meantime, I just had to comment on this post by Jeff Bercovici at Forbes, which reports that Arianna Huffington is now hiring teenagers to blog for HuffPost High School. First, I have to congratulate Bercovici for covering real news instead of Michael Arrington’s continuing temper-tantrum over the Silicon Valley Booster Club newsletter TechCrunch. (As even high-school bloggers know, Michael, you can’t sell something and still control it!) Second, I have to wonder if anyone at AOL thought this through. If the Huffington Post really counts as journalism – as Huffington keeps saying it does – who gets to edit all of the copy these students generate? Who is going to make sure they don’t libel anyone? And who keeps this from turning into http://www.lordoftheflies.com? Most important, though, why does Huffington get to keep claiming she’s a liberal? Last I heard, liberals favored worker protections like the minimum wage and child labor laws. If we are seeing Third World America, as Huffington claims in a book that was almost certainly written by an assistant, wouldn’t 13-year-olds working for a large corporation be one of the signs? Then again, maybe Huffington can teach her young workers to make money the old-fashioned way: Marry and then divorce it.
Every writer wants to have his book turned into a movie. But what I see on this site wasn’t what I had in mind. As far as I can tell – without downloading a file from a very dodgy-looking site – this Web page offers a download of the movie “Free Ride.” But it seems to advertise it with random sentences from around the Web that just happen to contain the phrase. I see lines from my blog, my book’s Amazon page, and a review, amid other, unrelated snippets of text.
If you go to the site’s front page – the oddly named bcyccqbpud.blog.com – it seems to offer an array of pirated films. (Although, interestingly enough, none that seem especially popular.) It doesn’t offer any commentary or context – just what seem to be random lines from different Web sites. I suppose the EFF could argue that this amounts to absurdist poetry.
This isn’t especially surprising. (And I know it won’t affect me – I just find it ridiculous.) What worries me is that, under the interpretation of the DMCA that Google backs in Viacom’s case against YouTube, it might be legal. Should creators have to weigh fair use concerns before asking sites like this to remove their work, only to see it re-posted by an automated program? And, if so, how much less time will they devote to their creative work?
When Steve Jobs resigned from Apple yesterday, many writers pointed out that he was the archetypal Silicon Valley chief executive – a former hippie hacker who started a business in a garage and went on to change the world. But it’s also worth mentioning that he succeeded by ignoring the conventional wisdom of Silicon Valley. Indeed, if Jobs had followed the advice of technology pundits, Apple might have gone the way of Pets.com.
In 2003, when I was an editor at Wired, a colleague predicted that the success of Apple’s iPod would be short-lived. At the time, Apple was only beginning its remarkable comeback – it had less than 3 percent of the personal computer market, the iPod was still expensive enough to qualify as a luxury item, and the iTunes store had just launched. Like many others who followed the technology business, my fellow editor thought Apple was doomed because it wouldn’t open its systems so other companies could manufacture iPod-compatible MP3 players. The future was in open systems, and it belonged to those that prized efficiency above all things. Apple’s design prowess had nothing on Dell’s inventory control system!
It’s easy to make fun of this attitude, but it makes perfect sense to those with a certain worldview. Apple’s original sin was staying in the computer business when it should have licensed its operating system, like Microsoft did. And here it was, making the same mistake again! Once other manufacturers started making their own MP3 players, an established giant like Microsoft would provide software for them and the price would plummet. Who would pay a premium for Apple’s MP3 player – really just a hard drive, screen, and battery – just because it looked cool?
More than 200 million people, as it turned out.
Logically, my colleague was perfectly right. (His name has been withheld because failing to predict the future shouldn’t be seen as a flaw.) The iPod was really expensive for a bunch of commodity components in a white case. What he failed to realize – and what most people Silicon Valley executives still don’t realize – is that most people don’t make purchasing decisions according to logic. So the rigorous cost-benefit analysis that let the Wintel platform conquer the office market didn’t matter that much.
To understand the other editor’s point of view, look at this 2008 Wired story – “How Apple Got Everything Right By Doing Everything Wrong.” It points out that, in most ways, Apple is the exact opposite of Google, operating with a strict hierarchy, using a proprietary platform, and doing business with “a level of secrecy that makes Thomas Pynchon look like Paris Hilton.” To the readership of Wired, this was a smart, surprising story. But almost every business is run with a certain amount of secrecy – and, for that matter, so is Google. Just ask Eric Schmidt, who testified in a lawsuit that he deletes most of his email every day – presumably not because he can’t afford a larger hard drive.
As for Apple’s proprietary platform, it enables companies to innovate on quality instead of only efficiency. While Dell was sweating its manufacturing logistics to survive a brutal price war, Apple introduced FireWire, popularized at-home WiFi , and proved computers could be made in colors other than beige. This approach helps other companies innovate as well. Google’s open-source Android platform lets companies sell mobile phones for less, but it also enables the kind of piracy that makes it difficult for software companies to invest in original programs. Apple’s iPhone platform discourages piracy (but by no means makes it impossible), so it has become a hothouse for innovation. Would Bjork have been able to invest as much in her Biophilia apps if they were as easy to pirate as to pay for?
What Apple’s competitors still don’t get is that most consumers aren’t any more interested in the specs of their chipset than they are in the horsepower of their car. And while techies value the flexibility of open systems, most people prefer the simplicity of software that works seamlessly with hardware. (Hearing them talk about this is like listening to gearheads talk about the superiority of manual transmissions – you’re right, but please shut up already.) That’s why Apple products command a premium, which made it the most valuable technology company on the planet.
Think different, indeed.
When the hacker group Anonymous attacked the Church of Scientology, it seemed ridiculous. When it attacked law enforcement sites, it wasn’t so funny anymore. What can you say about a group that treasures freed speech so much it tries to silence anyone who disagrees with it? It’s a philosophy only a libertarian acid casualty could love.
This week Anonymous once again attacked the German collecting society GEMA (the equivalent of the U.S. organizations ASCAP and BMI.) On Monday, the group hacked GEMA’s Web site to display a message that it blocked the “right to freedom.” In an age of 140-character political slogans, I suppose this passes for a manifesto.
GEMA’s offense against freedom? The organization has not made deal with YouTube to let the video site use songs by its writers. (Like ASCAP and BMI, GEMA represents composers, who control the rights to sync their music with video.) Since GEMA, like most European collecting societies, essentially has a legal monopoly to represent all writers within Germany, this means YouTube can’t show most music videos there. As a sometime resident of Berlin, I can attest that this is extremely annoying, although I wouldn’t exactly call it oppression. But in the online world, as a famous German thinker might have put it, specious claims about freedom of speech are the continuation of negotiation by other means
Like so many other battles in what self-important activists call the “copyfight,” this is just a negotiation gone wrong. GEMA hasn’t refused to make a deal with YouTube – it’s just waiting for a deal that makes sense. It wants to make as much as possible for the writers it represents, while YouTube wants to pay them as little as possible, so it can make more money itself. There’s a word for this: Capitalism.
Essentially, the dispute between GEMA and YouTube is no different from millions of negotiations all over the world – except that Google likes to make its own rules. According to its interpretation of the DMCA – basically upheld in the court’s summary judgment in the Viacom case – YouTube can show any video uploaded by a user until the copyright owner files a formal takedown notice. (Organizations allied with Google want copyright owners to do an expensive legal review first.) I don’t think YouTube should have to review every single minute of video uploaded to its site, but I do think it should be required to do some filtering – which it does now, anyway. Otherwise YouTube can essentially tell copyright holders that it’s going to show their content whether they like it or not – so they might as well take a lowball offer.
In some cases, this is just fine with major labels – which have urged GEMA to make a deal. But the interests of labels don’t always coincide with those of artists, let alone songwriters. In the U.S., three of the four majors made a deal with YouTube to create Vevo, which seems to be thriving selling ads against their content. But is that good for artists or songwriters? No one knows since the deal between the labels and YouTube is so opaque. And although YouTube generates valuable exposure for artists, that doesn’t do much to help non-performing songwriters. The late Jerry Leiber didn’t sell many T-shirts.
Is GEMA stupid not to make a deal? Maybe – YouTube has become an important outlet for music. On the other hand, offering YouTube a lower price for music than it gives other video outlets would enable YouTube to undercut its competitors, which would in turn give it more market power to demand even lower rates. According to an article in Billboard, YouTube wants to pay a flat fee, while GEMA wants more information about which songs get played. But it’s hard to know anything for certain, since Google – the great champion of transparency – has insisted that negotiations remain confidential.
It’s hard to know who’s right. But artists would do well to remember that GEMA is run by and for songwriters. YouTube ultimately answers to Google CEO Larry Page, who, asked in a Viacom case deposition whether he favored the acquiring the video site, responded that, “I don’t remember being upset about it, so my guess is I was more positive than negative.” But who can be expected to remember the details of every little $1.65 billion transaction?
Does Paid Content understand paid content?
On June 18, the New York Post blocked access to its Web site for anyone running the Safari Web browser on an iPad. Presumably, the goal was to push consumers to the paper’s app. The Free World was outraged.
The usual accusations followed. Big thinker Dave Winer warned “this is breaking the web.” The paper was compared to a dictatorship: Paid Content reported “The NYP literally is blocking the web for a subset of users (usually that’s left to totalitarian regimes).” (Boldface theirs.) Failure was predicted: In the same post Paid Content called it “one of the most poorly conceived paywall efforts I’ve come across—and I’ve seen more than a few.” Ironically, of course, Paid Content never met a free online strategy it didn’t like.
And yet – wouldn’t you know it – the Post app is No. 12 on the list of top-grossing apps, according to Min Online. It’s hard to know how much this means: The list is vague, the battle for app revenue is still beginning, and the Post doesn’t report the kind of news most consumers seem to pay for. And, yet, there it is, the second-highest-grossing publication app after Zinio. And, with all apologies to Winer, the Web still works.
Perhaps soon it will start working for newspapers as well.
The online magazine The Register was nice enough to do an interview with me about some of the ideas in my book. As you’ll see if you look at the discussion about a blanket license, I don’t have all the answers. We need to make some serious decisions about how to fund culture in the digital age. But I think I’m asking some of the right questions. Here’s one: When did we start confusing Google’s interests with the public interest?
Last week I published two opinion pieces based on my book – one in the Guardian and one in Wired UK. The reaction was fierce and generally unfavorable: At least a few dozen Guardian commenters thought I was wishing for a return to the age of the CD, excusing the music industry’s reluctance to change, or defending major-label greed.
Although I plead guilty to having a tough time summarizing a 300-page book in 1500 words, it was not my intent to do any of these – at least not exactly. I do think that major labels have tried to slow the inevitable extinction of the CD because it’s a business model that favors them, about which I’ll say more in a minute. And I know that they try very hard to make as much money as possible, which to many people signifies greed. But this hardly sets them apart other businesses: This is just what companies do.
I’m not saying “Greed is good.” (Neither did Gordon Gekko, apparently.) I’m saying that it is the force that drives companies, which call it “maximizing shareholder value.” They have a fiduciary duty to do this, and I think this is as it should be. (I also strongly believe government needs to do a better job of making sure that companies pursuing profits don’t wreck the rest of society in the process, but that’s another book entirely.) And record labels are hardly alone in their pursuit of profit: One of the ironic parts about controversy over copyright online is that venture capitalists call media executives greedy. Think Class Warfare 2.0 – billionaires vs. millionaires. Whomever wins, musicians lose.
We could certainly argue about whether outsize record company profits are bad for society, but I think that’s a tough case to make – we’re not talking about BP here. The legal term of copyright is indefensibly long, and we should fix it. But it’s more urgent to address the fact that the practical term of copyright is way too short – new albums and movies are available on file-sharing sites hours after they come out. And much of the public anger about record company greed concerns the price of CDs, not an issue that has a tremendous impact on society. Democracy will endure if some people can’t afford Watch the Throne.
Record labels certainly overpay executives, but I’m not sure what to do about that. Salaries in the media business are appalling, but so is the wealth of Mark Pincus, and I’d suggest that Watch the Throne is way better than “Farmville.” And the idea of having a central authority decide how much money people “should” make has a rather unfortunate history behind it (although I do favor higher marginal tax rates). Anyone who invests in media companies – I don’t, since it would be a conflict of interest – should look at how much money they devote to executive pay.
This inevitably raises another question: Do the executives who make all this money actually do a good job? That’s complicated. Certainly, the major labels were far too slow to sell music downloads, which is one reason Apple is eating their lunch. Five years ago, I believed the executives who ran these companies made all the wrong moves. But then I started to wonder who made the right ones. Newspapers are collapsing, Hollywood is in trouble, and the book business is having the same kinds of problems. It’s much harder to know it all then it used to be.
From that perspective, what’s the rush? Abandoning the CD before consumers do would be like putting down the cash cow because it started limping. Wherever you think the music business is going, it seems foolish to stop selling $15 CDs until it gets there.
Even former Napster chief executive Hank Barry – no fan of the major labels, he – sees the logic in this. “To this day it bugs me when people say, ‘They’re so backward,’” Barry told me as I did some reporting on the labels’ negotiations with Napster. “They’re not backward at all. They’ve got a physical model that’s a high-margin, high-revenue model. So it’s a perfectly rational business decision for them to stay in the physical world as long as they possibly can.”
That’s in the short term, of course. What if the best strategy is to give away music and try to make money in other ways, by selling concert tickets and merchandise? In order to do that, labels would need to completely rewrite their artist contracts – assuming that they can even get artists to agree to this new business model. This would take years. In the meantime, they’d have to keep revenue coming in – and the current model of selling music does just that. So even if you really believe that music must inevitably be free – and I don’t – it’s still impossible to give it away immediately without going out of business.
I’m not saying the labels made all the right moves – obviously they didn’t. What I am saying is that a preference for selling $15 CDs instead of 99-cent singles is completely logical. Major label executives aren’t especially sympathetic characters, but I’m not sure how much that should matter. And, as I’ll show later this week, the guys behind the Pirate Bay make them look like angels.
As some will undoubtedly note, it seems a bit odd to write a free blog, without getting paid, to promote a book – Free Ride – that suggests the future of media should involve the opposite strategy. What the hell am I doing?
As I see the media business, it makes perfect sense.
Over the past decade and a half, the Web has evolved into a medium that’s ideal for sharing information but ill-suited for commerce. There are several reasons for this, but the most important one is that, as a system, it does not include any significant technical barriers to the spread of information. This is a great thing if you want to share information but a bad thing if you want to sell it. But as a way to promote something – a movie, a book, an upcoming hacker attack against a San Francisco public transportation agency – the Web is hard to beat. Hence, this blog. Please Tweet, link, and otherwise spread the word.
My book, as you’ll notice, is not available online for free – at least not legally. That’s because I don’t want to spread those words – at least not all of them – without getting paid. This is what the Web isn’t good for. So while my book is available for semi-closed platforms like the Kindle, I would be reluctant to sell it in an open format like PDF. Generally speaking, it’s hard to sell something that people can get for free at the same time and in the same quality.
So how can I justify charging so much for a digital edition of my book that’s practically free to copy and distribute online? (I don’t actually make these decisions – my publisher does – but I think our views are pretty similar.) It’s important to note that while the book costs almost nothing to distribute online, it was rather expensive to write in the first place. Aside from the editing and marketing done by my publisher, the main expense was my advance – the money I made for writing. Out of this, I paid a couple of researchers, a couple of translators, and a transcriber (partly because my deadline was so tight). I also spent money traveling to Washington DC, Los Angeles, London, Brussels, Copenhagen, and Düsseldorf. In order to get a sense of what a book really costs, you have to divide these fixed costs by the number of copies sold – before you know what that number will be.
That gets at a point many people don’t seem to understand about the media business, as well as a major theme in my book: Creating things almost always costs money. And while the Internet has revolutionized distribution, it hasn’t affected the creative process nearly as much. Technology provides creative people great tools: Home-recording equipment, inexpensive video cameras, and in my case some incredibly useful research resources. But the falling price of those tools don’t tell the whole story: In order to create quality work, musicians need producers, directors need actors, and writers need editors. (We don’t like to admit it, but we do.) In most cases, their work affects the final product more than the tools used. A friend of mine has a great story about hearing a technology entrepreneur say that a computer could now hold Abbey Road Studios; his reaction was to wonder whether it also had room for George Martin, whose musical training helped bring the Beatles’ vision to life.
That doesn’t mean creators and companies can’t make money giving things away – some can and do. But I do think the ease of making money online by distributing free media has been greatly exaggerated. Over the next few months, I’ll explain why by expanding on some of the ideas in Free Ride. So, to revisit the question about what the hell I’m doing, you could look at this blog as my “Freemium” strategy. But I also want it to generate an interesting, informed conversation, and I hope you’ll come along for the ride.