Infringement of Creative Work Ok… If You’re a Corporation

Here’s an interesting development for you. According to our Government, infringement of copyright is unlawful and such behaviour damages the interests of the country and diminishes the incentive to create. In order to stop such behaviour we must go to extreme lengths to protect the rights of our creative classes. However also according to the Government, it is perfectly ok if a patent is infringed and inventors designs are stolen wholesale. Indeed it was Lord ‘Piracy is Killing the Country’ Mandelson himself who said that harsher measure against those that infringe patents was not necessary (the jury is still out on whether Mandelson has a split personality). Perhaps the telling difference between these scenarios is this; when copyright is infringed it is the individual infringing upon the major corporation. When patents are infringed… well I’m sure you can finish that sentence.

Props to and more info at ‘Out-Law Radio

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Gary Hall’s Pirate Philosophy

Just a quick one.

Recently Prof. Gary Hall of Coventry released an article ‘Pirate Philosophy: Open Access, open Editing, Free Content, Free/Libre/Open Media’ via BitTorrent. The original torrent file utilises The Pirate Bay’s tracker, the future of which is uncertain at the moment. I’ve resubmitted the torrent utilising the Open BitTorrent Tracker.

You can grab the torrent from MiniNova.

Licensing The Pirate Bay

I was caught off guard today by the announcement that Global Gaming Factory’s shareholders voted to continue their motions to purchase The Pirate Bay. Despite the loss of investors scared away by the less than smooth months GGF has had, those that remain have decided to continue on with the venture.

Torrent Freak mentions that as of yet GGF have still not secured any licensing deals, the crucial element required for the business to even start operations. The question is will they secure them at all?

When Napster took a nose dive in court and were forced to close shop until they could operate legally one of their biggest hurdles was the fact that none of the major labels would licence to them. They distrusted not only the brand but also the executives that ran the company and eventually the original Napster liquidated. It was eventually resurrected by Roxio as a sub-par subscription site using MP3.com tech after Vivendi ruthlessly bought them out.

There are some parallels with TPB buyout in that the success of the business model is dependant on licensing, which they have yet to acquire. The brand is certainly one that has caused a lot of sleepless nights to the industry and I imagine many would love to see the venture fail just because it has ‘that’ name. Finally with the freeze placed on their stock due to an ongoing investigation, a sudden loss of key company executives and a run on the investors is it the case that the industry will trust GGF anymore than they trusted our loveable foursome?

There is perhaps a bigger question here as well that I believe has been present throughout the media industry’s relations with ‘illegal’ file-sharing: is it about the content or is it about the system? Is it the fact that their products are being shared across p2p networks that worries them, or is it the networks themselves? It’s more than likely that the industry realise that the real threat these networks pose is that they make much of their business redundant. It used to be that if you were a musician and wanted to get heard your main conduit to an audience was a label, who would promote you and distribute your work. Now for many artists the possibility of going it alone is more tangible.

It’s not necessarily the case that the industry has failed to distinguish between the technology of file-sharing – which is perfectly legal – and the distribution of copyrighted content – which we have to admit is technically not – due to ignorance. They hark back to the old days where they controlled the entire supply chain and the profit margins were great. Now they have pesky middlemen from the computer industry disrupting their perfectly tuned ecosystem. The more they can convince people that the ‘networks’ are illegal, the safer their dominance.

So, will the Pirate Bay MKII receive their licensing? It’ll be interesting to find out.

Thank the Media for Information Freedom

Perhaps one of the most prominent patterns I’ve seen in my research is increasing decentralisation in information transfer primarily driven by media. Services such as MP3.com and Napster who wanted to work alongside the music industry were incredibly centralised. MP3.com worked off the classic server/client system of information distribution, whilst Napster was centralised by its index servers that co-ordinated the finding and transfer of information. These made the services vulnerable to take-downs, but they never built those systems with the aim of defending themselves, they wanted to work with the industry.

When the industry reacted as they did (read as ‘rather badly’) it spurred on certain software developers to work towards making their networks as decentralised as they could and the politics changed. Justin Frankel, founder of Nullsoft the company responsible for Winamp and the original Gnutella protocol wasn’t the corporate type and his system was designed not to work with the industry. Despite the sale of Nullsoft to AOL his perception of the buyout quickly changed when he realised how much his personal perspectives jarred with those of AOL. When Frankel saw what Napster was doing his first thoughts were how it could be done without being sued. His fairly autonomous Nullsoft staff worked away at Gnutella and released it for free on the net. Gnutella worked as a completely decentralised network, no matter how many computers were taken offline, the network persisted. It was no longer a case of ‘can we work with the industry’ but ‘can we get past the industry’. Proof of success lies in the fact that the Gnutella protocol still persists, its most popular client software being Limewire.

Other systems such as Kazaa, Grokster and WinMX all worked on similar variations of the Gnutella system. The next shift in data transfer came with BitTorrent. Strangely BitTorrent was never designed with piracy in mind, Bram Cohen (the original protocol coder) once said

“Distributing stuff that is clearly illegal with BitTorrent is a really dumb idea. BitTorrent doesn’t have any anonymity features. There are things about it that make it very incompatible with anonymity”

BitTorrent was designed for fast reliable media distribution, but on a legal footing. That’s why if you go to BitTorrent.com you’ll see endorsements from Fox, Warner Bros and Paramount Studios. BitTorrent became the piracy powerhouse it is today because it was released open source and the privacy aspects were built in later, including the ability to decentralise. Usually BitTorrent requires a tracker to co-ordinate the sharing of information, a big ol’ centralised server just screaming for a takedown notice. This wasn’t a problem to Cohen but the community worked their way around this by introducing DHT and peer exchange which make BitTorrent function more like Gnutella than Napster by making every client a tracker (quite how they do this technically is still beyond me).

This is the level of decentralisation we’re at now. However what we’ve also seen with The Pirate Bay lawsuits and raids is that BitTorrent is vulnerable, because of the technical centralisation, but also interestingly the social centralisation. The suit against the pirate bay was possible because there was a degree of centralisation in the apparent responsibility for it, that being the four plucky chaps that ran it. Similar cases have arisen for other trackers where the administrators have been targeted. The servers frequently get shifted around or backups are hidden in various countries ready to kick in if one set go down but the people are a different matter.

This is one of the reasons I believe the pirate bay admin have decided to sell it off. I don’t think they truly believe anyone will turn it into a pay service and I don’t think they care either. The pirate bay became too centralised as an icon. The hope is that the next stage of P2P will be decentralised to the point where no index site is needed to find content, no tracker to co-ordinate the transfers and no administrators to run anything. Simply client software all running as index, tracker and admin all at once. We can already see this in certain clients such as Vuze who are attempting a similar shift in being both content platform and torrent client. Torrent files, the small files that direct a software client to connect to a certain tracker and look for certain content will be considered less as a requirement for content sharing, and more as a browser based shareable link to a network that is always on.

What is interesting about this drive towards decentralisation is the necessary role that the media industries have played in it. Both as the reason to create the systems themselves by providing the profit motive (Napster and BitTorrent) and as the impetus to make them faster, stronger and more open by consistently attempting to shut them down. Perhaps one day we will salute the media industry as the greatest driver for information freedom.

“It has never, ever been easier to break the law”

As I continue my perusal of the SABIP report on Digital Consumers in the Online AgeI’m finding yet more things that get my goat. The target of this particular moment’s focus is one of their ‘Key Findings’ titled “It has never, ever been easier to break the law” on page 12.

When I saw this I thought ‘Yes! Something in this report that I agree with’, however this joy was short lived. The report’s take on this statement is that it is relatively easy to get into file-sharing, with the media constantly telling us how to find the sites, Google providing easy information when searching for ‘free music’ (that evil Google) and peer-pressure in social networks… apparently Pirate Bay is the new crafty cigarette.

Yet when I saw this initial statement my mind turned to ‘Infringement Nation by John Tehranian. This wonderful article from The University of Utah’s S.J. Quinney College of Law documents a day in the life of the average Law Professor and how his daily practice infringes copyright left right and centre.

By the end of the day, John has infringed the copyrights of twenty emails, three legal articles, an architectural rendering, a poem, five photographs, an animated character, a musical composition, a painting, and fifty notes and drawings. All told, he has committed at least eighty-three acts of infringement and faces liability in the amount of $12.45 million There is nothing particularly extraordinary about John’s activities. Yet if copyright holders were inclined to enforce their rights to the maximum extent allowed by law, barring last minute salvation from the notoriously ambiguous fair use defense, he would be liable for a mind-boggling$4.544 billion in potential damages each year. And, surprisingly, he has not even committed a single act of infringement through P2P file-sharing.


(Tehranian, 2007:547)

If we tallied up the acts of copyright infringement that occurred outside of P2P systems I’m sure they would be much more substantial. I agree that it has never been easier to break the law, but perhaps that is because of the law, not because of the individual.

“These Figures are Staggering”

I‘ve just had a quick look through the SABIP report on Digital Consumers in the Online Age’ which has been featured over on the BBC.

Here’s an extract I’d like you to read…

On one peer-to-peer network we found that at midday on a weekday there were 1.3 million users, sharing content. If each “peer” from this network (not the largest) downloaded one file per day the resulting number of downloads (music, film, television, e-books, software and games were all available) would be 473 million items per year. If the figure for each individual is closer to five or more items per day, the lowest estimate of downloaded material (remembering that the entire season of the Fox television series “24”, or the “complete” works of the rock group Led Zeppelin can be one file) is just under 2.4 billion files. And if the average value of each file is £5 – that is a rough low average of the price of a DVD or CD, rather than the higher prices of software or E-books – we have the online members of one file sharing network consuming approximately £12 billion in content annually – for free. These figures are staggering. (SABIP, 2009:6)

Dear me, don’t strain yourself SABIP! The accuracy of those figures are indeed astounding, truly the quantitative method for discerning the empirical data knocks me to the floor.

The brilliance of this work has also been taken up by Zeropaid who also feel the passage is worthy of such joyous quoting. These are the figures quoted by the BBC and I imagine the ones that will stick in the minds of our beloved ordained policy makers. This of course is not a problem at all as the report clearly demonstrates the ability to discern absolute truth with their statistical prowess.

I bow down to your greatness SABIP, these figures are staggering.

***************************

UPDATE

The report also cites Zentner’s 2006 research stating that those who file-share are 30% less likely to purchase music. You may find that report difficult to locate as SABIP failed to include a reference in their bibliography (truly staggering).

[The article is called ‘Measuring the Effect of File Sharing on Music Purchases’, by Zentner, A. (2006) Journal of Law and Economics, Vol. 49, No. 1, University of Chicago. If you have access to such things it can be picked up here.]

Moving on: Indeed Zentner did say that file-sharing reduces the likelihood of purchasing music by 30% (see page 87). However he also said…

The database does not contain information on quantities of music purchased or on intensities of music downloads to calculate what music sales would have been in the absence of music downloading. (Zentner, 2006: 85)


Zentner’s analysis is based on the assumption that if file-sharing did not exist, people would buy all the music that they downloaded.

The percentage of people who bought music is much larger among the group who regularly download MP3 files (55.8 percent) than among those who do not (37.7 percent), which suggests that MP3 downloaders have a strong taste for music.(Zentner, 2006: 73)

…and are essentially the music industry’s customer base.

But hey, even if Zentner’s work is a statistical piece that shows the music industry is being murdered by file-sharers, there are still those pesky other pieces of research that aren’t three years old saying quite the opposite.

Consumer Culture in Times of Crisis,” conducted by the BI Norwegian School of Management, the largest business school in Norway, and the second largest in all of Europe, concluded that file-sharers actually buy 10 times as much music as they download for free.The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study For Industry Canada,” a study commissioned by Industry Canada, a ministry of the Canadian federal government, found that for every album downloaded illegally legal CD purchases increased by 0.44, or by about half an album.


Props to
Zeropaid again.

The Long Tail of P2P: Some Issues

After having a read through the PRS report that has been causing a bit of a stir, I find myself feeling mildly uneasy with the implications. Although the authors – and I’m thankful for it – end with a declaration that blindly rallying against P2P is probably not the most rational course of action for the music biz, the implied statements about the future role of P2P worries me.

The crux of the article appears to be around the refuting of the theory of ‘long-tail’ economics. Standard economics works on a system where you will bring out a small range of products and sell many of them. Long-tail economics is an idea from Wired’s Chris Anderson and presents the notion that with Digital Distribution and the increasing ability to provide huge archives of music for little cost, it may be that we are moving to an economics where there are no ‘hits’ but that distributors would sell a small amount of many products.

The report’s authors Page & Garland claim that based on their surveys of both legal and illegal digital music markets, the fact of the matter is that there is still a propensity for ‘hits’. They claim that in the legal market 90% of the revenue is generated by as little as 5% of the product. In the illegal market this rises slightly with 80% of the transfers being comprised of only 5% of the available material. In both markets we have ‘hits’ and then the rest. Due to the apparent similarity between the two markets, the authors curiously suggest that P2P networks could be successfully used for mainstream marketing, however independent artists are unlikely to succeed in such an environment.

Buried in the back of the report in the Appendix is this statement

Put more bluntly, the 10 million tracks that failed to find a buyer on the legal digital shelf have found (at least) a swapper in this illegal market. Many conclusions could be drawn from these observations, but here’s our preferred choice: If the sellers sell it,it might never be bought;but if the swappers offer it,at least one person will likely take it. It goes without saying however, that for the creator and artists watching their niche offerings being swapped a single time on P2P, this form of ‘freemium’ activity may not be paying for lunch.

Agreed, if you only ever get exposure to one person it’s unlikely that you’ll hit it big. However what seems to be the case from the earlier stats is that artists have a better chance of being distributed via P2P than they do via legal markets. 98% of all recording artists in the music industry are not attached to a major label, leaving 2% with the entire billion dollar music industry behind them. Is it really a surprise that they have a greater degree of exposure? What this study seems to ignore is the skew that such marketing can have on popularity and the value of the middle ground.

The top most shared and most bought music will always be comparable due to the amount of exposure a certain elite contingent of artists receive. There will also be a bottom group with no shares and no sales. However the middle ground is what matters for independent artists. If they can increase their exposure by a few thousand – a paltry sum for the big hitters – that may be the difference between obscurity and exposure.

The report also appears to be more favourable of free legal streaming services such as Spotify which offer large catalogues of music. Spotify in particular works a model of interspersing adverts between songs allowing them to collect revenue to pay the broadcast licence. Currently the ads are fairly sparse and unintrusive, making the experience rather enjoyable. However Zeropaid identifies a possible motive behind this report. With favourable statements regarding both the possibility of utilising the P2P environment for mainstream marketing and online streaming services it seems suspect that the PRS recently announced plans for two new online music licences, one for music download and subscription services, and one for streaming. The exact fees for streaming services are currently ‘under consideration’.

What this appears to be to me is further attempts to formalise and colonise the services that have arisen and solidified despite the industry’s efforts. The article on the BBC is a cleverly placed piece of self promotion that both normalises the idea of P2P (it no longer destroys the industry, it makes the big artists more popular) and also re-asserts the validity of the industry itself (indie artists should give up the P2P idea and accept that they need legitimate business).