If you’ve been following the Silvio Berlusconi of the Internet for very long, you’ll probably get the idea that he thinks that YouTube has already eclipsed television. (If you don’t know who that is, see “Google CEO and serial womanizer Eric Schmidt spends $15 million on private, no doorman Manhattan penthouse and then has it totally soundproofed.” Or how about the New York Post, “Google Boss Schmidt Spending Big Bucks on Womanizing.” Or just ask around CNET about why they were banned from the Googleplex a while back.)
In recent developments, Chromecast, for example, allows you to watch YouTube on your HDMI enabled television set in the privacy of your home and as the reviewers are careful to say, other platforms like Netflix or Hulu.
But I digress. Let’s not bring too much eyesight to the willfully blind.
So what might you want to watch in the privacy of your home on YouTube? Or what might your children be watching?
Here’s one in the Berlusconi theme: “Hot Teen Looking for Older Man.” Now remember–YouTube always says that they take down videos when they are flagged by “the community.” Kind of a virtual stoning. So what happens in between the time the video is uploaded and the time it is sufficiently “flagged”? (Does anyone know what “sufficiently flagged” entails?)
Here’s one thing that happens. “Hot Teen Looking for Older Men” is a how-to video in the great tradition of YouTube. Except this time, it’s not how to get illegal drugs or how to pirate movies. No, this time it’s how older men can get “hot teens” to send them videos of themselves. Here’s a few screen caps from the opening frames of this little instructional video:
And then just in case you didn’t get the idea, there’s about 3 minutes of a young girl dancing, or as I believe it is known, “twerking.” (I didn’t post a screen shot of her because I have no idea how old she is.)
Google, which says it has a ‘zero-tolerance’ policy on child sexual abuse content, has argued policing the billions of images, stories and data generated daily on the internet would be a Herculean task and any controls could inadvertently restrict legitimate online searches.
Just exactly like television, right?
(One question that comes to mind is whether this video is actually a product placement for the featured website.)
Then there’s this account from the Long War Journal:
The Al Nusrah Front for the People of the Levant, al Qaeda’s affiliate in Syria, and an allied jihadist group known as the Ansar al Khilafah have both claimed credit for taking control of a town near the city of Aleppo and killing more than 100 soldiers. Both groups have conducted joint operations in the past.
The Ansar al Khilafah, or Supporters of the Caliphate, released a video showing the aftermath of the execution of more than 50 Syrian soldiers and officers following the takeover of the town.
Footage of the aftermath of the massacre was published on YouTube. The bodies of dozens of men in and out of uniform are seen in various locations in the town. Some appear to have been executed. Heavily armed men chant “Allahu Akbar” (“Allah is greatest”) at the end of the video.
The video has since been removed by YouTube for violating its “policy on shocking and disgusting content.”
Just exactly like television, right?
And then LWJ also reports:
The Ansar al Khilafah in Aleppo was formed in December 2012. A video on the formation of the group was released on YouTube, showing a commander surrounded by scores of heavily armed fighters, and children with several black banners of jihad flying among the crowd. The group’s commander pledged to impose sharia and establish a caliphate.
Yes, available tonight in your house.
In case you haven’t figured it out yet, YouTube is a huge part of the jihadi public messaging campaign.
Kind of like this:
Or like this:
Or like this:
Just like television.
Or–as Nebraska Attorney General Jon Bruning said, “Google stands to make money from ads running in conjunction with instructional videos on everything from illegally purchasing prescription drugs and making fraudulent passports to promoting human trafficking and terrorist propaganda,” said Bruning. “I’m deeply disappointed with Google’s lackadaisical attitude toward Internet safety and consumer protection. The company should be held accountable for profiting from a platform that perpetuates criminal activity.”
But not according to Google. According to Google, YouTube is just like TV.
So go buy that Chromecast dongle, let’s do our part to make sure that Silvio becomes the King of All Media.
Chicks dig the dongle.
Some of you may have seen the story about the merger of Omnicom and Publicis the huge global advertising agencies. When the House IP Subcommittee holds hearings about “innovation”, they will hopefully be interested in the effect of this merger on brand sponsored piracy. We have noted in the past that Omnicom clients (particularly Chiat Day clients) have been particularly nonresponsive on explaining why they support online theft of music and movies. Plus, who can forget the Chiat Day “Arists vs Artists” campaign.
Poll by Damn the Science!
Washington lobbyist Matt Schruers, who works for the Computer & Communications Industry Association, is floating a paper released by the Government Accountability Office (“Intellectual Property: Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods” (GAO-10-423)).
So you get the context, the Computer & Communications Industry Association is a very well funded lobby shop in Washington that is (was?) one of the big backers of the Internet Radio Fairness Act through its membership in the Internet Radio Fairness Coalition and is prominently mentioned in the Google Shill List. I fully expect them to be major opponents of Ranking Member Mel Watt’s performance rights legislation that could be introduced as soon as next week. The CCIA also funds a variety of studies that try to tell us things like stealing is good and the movie business is a “fair use industry” whatever that means.
The GAO “report” essentially takes the “stealing is good for you” position. Specifically, the Report states “some experts and literature point out that certain stakeholders may experience some positive effects from counterfeits and piracy, though there is little information available on potential positive effects.”
Even though there is “little information available on potential positive effects” of crime–a bizarre position–the Government Accountability Office then goes on to offer readers a table reference to the “positive effects” of criminal activity.
MTP readers will remember that I raised a number of questions about the GAO “report”, in particular, who did the GAO interview in developing the report. This is important, because the report offers no original study and is replete with references to “experts” who are not clearly identified. It relies on controversial studies without considering opposing views, “experts” such as Oberholzer-Gee and Strumpf who produced a music study that contains this Butz-ism, so condescending only a professor could utter it:
“A…decline in industry profitability might not hurt artistic production [or] artist motivations. The remuneration of artistic talent differs from other types of labor….[Artists]might continue being creative even when the monetary incentives to do so become weaker [because] many of them enjoy fame, admiration, social status, and free beer in bars – suggesting a reduction in monetary incentives might possibly have a reduced impact on the quantity and quality of artistic production.”
Musicians will work for “free beer”? And of course, “admiration”, get it? The “admiration” often follows the “free beer,” I guess. Strangely reminiscent of Amanda Palmer’s “beer, high fives and hugs”, right? And that worked out so well.
So who are these “experts” that the report keeps referring to? There is an index that has a list of names but also has this statement:
“We also met with representatives from other industry associations and other organizations outside of the structured interview process in order to gain more in-depth information and additional perspectives on both of our objectives.”
This could literally be anyone in the world.
As MTP readers will recall, we sent the GAO a Freedom of Information Act request and asked for an explanation of who these unnamed “experts” were. This was the GAO’s reply:
“This letter responds to your April 10, 2011, follow-up request pertaining to my March 1,2011 (PRI-ll-043), response letter to you. Specifically, you are asserting that my response to question 2 of your December 30,2010, request was non-responsive [because the response did not disclose the identity of the unnamed experts]. Upon receipt of your follow-up request, I consulted with our International Affairs and Trade team that issued GAO-1O-423 entitled INTELLECTUAL PROPERTY: Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods. They advised me that on page 30 of the report at Appendix I, we provided the criteria for selecting experts and on page 31, we list our 12 experts, of which 8 were the names of individuals and 4 were the names of organizations and federal agencies.
Consistent with GAO’s practice, we did not provide the names of the officials who were speaking as representatives from the 4 organizations in our report. In addition, the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP Act) mandated that GAO conduct this work GAO addressed this report to the Chairman and Ranking Member, U.S. Senate, Committee on the Judiciary, and the Chairman and Ranking Member, House of Representatives, Committee on the Judiciary. GAO’s policies and procedures related to the public availability of GAO records require that we must first obtain authorization from the congressional committees that requested GAO to do the work before we review records for release. See 4 C.F.R. § 81.6(a). We consulted with the congressional committees of jurisdiction regarding your December 30,2010, request [but not the second request regarding nonresponsiveness] and received limited authorization to address the questions raised in your letter about the experts referred to in the report. The committees did not authorize release of any additional identifying information about experts we interviewed, other than what we have already noted in the report. Therefore, we decline to release the names and/or any affiliation of the experts referred to in the report pursuant to 4 C.F.R. § 81.6(a).”
In other words, GAO refused to disclose who the unnamed experts were. And they are–with characteristic bureaucratic spin–trying to blame it on the Congress. And–stay with me here–at the same time implying that the GAO was responsive to my assertion they were nonresponsive due to their failure to disclose the names of the experts because they responded to the assertion that they would not disclose the names. Pretty slick, eh? If you look up “mandarin” in the dictionary….
So you will imagine my surprise to see a lobbyist picking up the ball on the primary theory of the GAO study–that any study of piracy must take into account the positive effects of crime–particularly a lobbyist working for the CCIA, the consistent opponent of artist rights in my view. (Show me one instance where CCIA or its members wanted to enforce the rights of professional artists or treat professional artists fairly?)
Mr. Schruers, Vice President of Law & Policy for CCIA, dredges up the GAO report in a post on the CCIA’s “Project Disco” blog (aww, Project Disco, ain’t that cute? Music lovers!) He says:
So what is The Issue of Which One May Not Speak? The fact that money not spent on pirated content is, in many cases, still spent. [Genius! Alert the Nobel Committee!}
The U.S. Government Accountability Office pointed this out in a widely discussed report in 2010, observing that “effects of piracy within the United States are mainly redistributions within the economy for other purposes and that they should not be considered as a loss to the overall economy.” Money does not “just vanish.” A Swiss Government commission made a similar observation the following year.
Nevertheless, critics excoriated the GAO report and others like it for simply observing that intra-economy transfers are often redistributive, instead of destructive. Polite people just don’t say things like that.
And then he says this:
Normatively bad isn’t the same as an economically bad, however. Not all normative transgressions necessarily have macroeconomic consequences. And yet those two items are invariably linked when studies consider infringement. Infringement is bad, therefore we must assign an economic cost to its badness. Hence, study after study makes the repeatedly discredited assumption that every infringement is a lost sale, usually calculated at the highest retail price for which the good was offered, and every lost sale represents a commensurate economic loss.
Let’s take a closer look at this one. Mr. Schruers raises the issue of whether “every” infringement is a lost sale. By “lost sale”, I assume he means a sale lost to the rightful owner through a retail transaction with a consumer. However, there is another way to look at “lost sales”–did anyone make money from what could otherwise have been a retail transaction with the consumer (at least a potential sale). Was there an intervening actor who did make money from the transaction? An intervening actor who interfered with a potential economic benefit between a buyer and a seller for goods the seller had for sale?
Just because the rightful seller lost the sale does not mean the sale was lost. Which is kind of the GAO’s point, right? We must take into account the positive effects of crime, or at least the positive effects on the real buyer and seller while fencing the unauthorized goods.
Enter brand sponsored piracy. In a world of brand sponsored piracy, unauthorized sites monetize movies, music, lyrics, television shows, television broadcasts, books, games, software and other intellectual property. These unauthorized sites monetize every transaction with the consumer by selling advertising inventory on the pirate site. So for these sites–the overwhelming majority of pirate sites–there are no lost sales because every transaction is monetized. (Former Adsense client Megavideo perfected this model.)
And the GAO will be glad to hear that the gold is being spread around–the ads don’t appear by magic. Ads are served to unauthorized sites by ad networks–such as those who are members of the Internet Advertising Bureau. And good news for Mr. Schruers–he needn’t look far to find these beneficiaries of redistribution, many are his members.
Of course the unauthorized sites can sell advertising inventory for less money because they have no content costs–because they are stealing. As long as the IAB members keep signing up new ad publishers from whatever source derived, they make money as long as the rate of increase in new publishers offsets the decline in CPMs or CPCs, which is the kind of mandatory full line forcing that I suspect Google’s “enhanced campaigns” is all about. (Hello Mr. Madoff.)
From the GAO’s perspective, it sounds like this is a win-win for everyone because there is no proof that any of these users would have purchased the content or software from a legitimate source before their buying decision was interfered with by the brand sponsored pirate sites. (Difficult to model given the ubiquitous availability of brand sponsored piracy.)
The consumer just didn’t have to make that choice because the unauthorized site offered the exact same content as the legitimate site, and nominally for free to the consumer. Of course, the content wasn’t free–the advertiser paid for it. And this is how you take into account the positive effects of crime.
Mr. Schruers disclaims support for piracy (he kind of has to, right?). His position seems quite at odds with the goals of CCIA member Grooveshark, so we wonder what the point of his post is if it is not to somehow defend something, or at least cloud the waters:
[S]ome degree of infringement is not wealth destruction but rather wealth redistribution.
The fact that infringement may be redistributive instead of destructive does not make it acceptable, of course. A violation of a government-granted right is normatively undesirable, because it flouts an entitlement that – at least in theory – reflects the will of the public. This is bad. Even if infringement is “only” redistributive, we still make strong normative societal judgments against involuntary wealth redistribution. This happens regardless of whether it results from law (e.g., by tax policy), or contrary to law (e.g., infringement).
So two questions come to mind–will Mr. Schruers also condemn the brand sponsored piracy that appears to be making some of his CCIA members rich? One member in particular comes to mind. Or is that the “redistribution” that he has in mind.
Because on the “redistribution” score, I agree with him–we are witnessing one of the biggest income transfers of all time. And surely it’s not too much of a reach to see that when an authorized site (say Spotify or Hulu) is trying to sell advertising to the same brands who buy ads on competing sites that are unauthorized and are not constrained to reflect content costs in their advertising pricing, this immediately results in creators getting less money from legitimate sites.
Then it is only a matter of time until you see something like the Internet Radio Fairness Act–backed by CCIA–when “disruptive” companies like Pandora ask artists to take less. So the artists get hit twice: First from the unauthorized site making money from infringement, not to mention the ad networks, ad agencies and everyone else in that chain. But second when the struggling legitimate companies try to compete for the same ad dollars and ask the artists to take a lower royalty.
If you are seeking a machine that will extract value from other people s property and redistribute it to CCIA members…the 1%? You probably could not find a better machine than brand sponsored piracy.
But the real question is this: Was Mr. Schruers one of the unnamed experts in the GAO report when the GAO did what might be called the “disco duck“? (Since Project Disco are such music lovers.)
We’ll never know unless the Judiciary Committee wants to take another look at what in the world the GAO was up to.
Only the CCIA has the brass to bring up the discredited GAO report http://www.project-disco.org/intellectual-property/072513-the-thing-we-dont-talk-about-in-piracy-estimates/
[This post appeared earlier in 2011–but given the rogue sites debate that demonstrates just how much money is being made from online theft, understanding who influenced this GAO “report” that found that “stealing is good” is even more necessary.]
Some of you may remember the report by the Government Accountability Office that studied the problem of online theft of artists’ work and discovered that no one was able to prove anything and that everyone failed to take into account the positive effects on the economy of theft–in other words, stealing is good.
The report, specifically the April 2010 Government Accountability Office publication “Intellectual Property: Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods” (GAO-10-423) was required under by the PRO-IP Act (P.L. 110-403), specifically Section 501(a) of the Act directed the undertaking of a “a study to help determine how the Federal Government could…
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While MTP readers will likely be watching today’s hearing before the “IP Subcommittee” in the U.S. House of Representatives, it is well to keep in mind that the Committee announced two hearings, presumably before the August recess that is scheduled to start August 3 and continue until September 9. That means that there is to be a second hearing next week, or more likely in one week from today.
While we commend the witnesses at today’s hearing and greatly appreciate the Chairman’s willingness to engage on these hearings, it is important to note that it is entirely possible that the good we expect will be done today will be blunted by the next hearing–and that will be the hearing that Members hear last before they go back to work in their districts.
Who will be the likely witnesses at next week’s hearing? There could be a surprise visit from a Google employee, but it is more likely that there will be a visit from the Electronic Frontier Foundation, the Berkman Center, the Computer & Communications Industry Association or their consultants, the Center for Democracy and Technology, Public Knowledge, the Berkeley Center for Law & Technology, the High Tech Law Institute at Santa Clara University, Stanford’s Center for Internet and Society, any of the various Samuelson clinics around the world or any one of a host of other “public interest” or “academic” folks.
If you want a list of potential witnesses, you could look at various court orders to determine who gets money from whom. For example, Google provided such a list of outlets in its paid service to Judge Alsup under court order in the Oracle v. Google case (see the famous “Google Shill List“). The Facebook Beacon class action settlement is a prime example of press-release-as-settlement that purported to establish an organization to study privacy with Chris Jay Hoofnagle (who heads Professor Samuelson’s Berkeley Center for Law & Technology), Tim Sparapani (Facebook’s public policy director) and writer Larry Magid. As far as we can tell, that organization was never created. We wrote to Mr. Magid for comment on whatever happened to the “Digital Trust Fund” over a year ago and have yet to receive a reply. Notwithstanding his responsibility for the money, it’s not mentioned on his personal website.
Roger Parloff at Fortune Magazine has a handy summary of how Google and Facebook siphon money to the Electronic Frontier Foundation and the Santa Clara law school among others in his excellent article on the subject (“Google and Facebook’s New Tactic In the Tech Wars“). And of course, there’s another handy guide to the supposedly tax exempt organizations (who seem to have no problem getting and keeping their 501(c)(3) status) who just this very week got millions more from Google (along with AARP who allied with Google on SOPA).
And of course Chris Ruen’s excellent book Freeloading.
So keep this in mind when the witnesses are announced–and I think it’s safe to say that the later they are announced, the more they would like to stay hidden.
However you feel about the pending immigration legislation, understand this: Silicon Valley firms are spreading a lot of gold around Washington to get their way. And their way is to support essentially an open border policy and open visa policy.
For example, the very Googlely Morning Tech reports that Senator Michael Bennet of Colorado got major donations from Facebook for his “leadership PAC” and it won’t surprise anyone that personal donations to the major backers of the legislation are coming from Silicon Valley types, major bucks for “…Sen. Lindsey Graham (R-S.C.)…And tech companies and executives offered similar support to Sens. Dick Durbin (D-Ill.), John McCain (R-Ariz.), Marco Rubio (R-Fla.) and Chuck Schumer (D-N.Y.). Only Sens. Jeff Flake (R-Ariz.) and Robert Menendez (D-N.J.), the final members of the group, didn’t draw serious cash from tech company campaign coffers during the immigration battle – but they don’t face election until 2018…The Gang of Eight bill, which the Senate advanced in June, largely delivered for the industry. It could more than double the H-1B pool, for example, while offering new visas that might entice foreign engineers and students to stay permanently in the United States.”
So keep an eye on these Senators in the coming “copyright reform.”
The law firm of Wilson, Sonsini, Goodrich & Rosati by its partner, Gary Reback, filed a motion to enter an appearance amicus curiae on behalf of certain clients in the computer industry, who wish to remain anonymous. Both the Government and [Google] argue that amici’s request to appear anonymously is inappropriate. Section 16(f), however, authorizes the Court to accept submissions by “any interested persons or agencies.” Thus, the Court could accept the submission directly from the law firm or the economists identified in the submission.The Tunney Act confers broad powers to gather information. There is nothing in the statute that would preclude the Court from receiving information from those unwilling to identify themselves. It is preferable for persons to identify themselves to permit the Court to ascertain any bias on their part. However, there could be instances where the fear of retaliation by an alleged monopolist could deprive the public of relevant, material information. Indeed, Mr. Reback’s clients have asserted the fear of retaliation as their reason for requesting anonymity. Nothing has been presented that would put into question the sincerity of their position.
Actually, that quotation doesn’t involve Google, it is from a case that Google hasn’t learned a thing about, U.S. v. Microsoft. A seminal antitrust case in the tech business that looks like milk and cookies compared to what Google is doing. And anyone in the music business will understand the fear of retaliation, including threats of retaliation, particularly if you had antitrust concerns of your own. When Big Evil is already stealing your lunch money from you, it doesn’t take much to believe that they would steal your entire book bag.
I think it’s fair to say that if you’ve dealt with Google, you’ll understand why you shouldn’t believe them if they told you the Sun rose in the East–without checking. This isn’t even trust, but verify–it’s trust only what you can verify. And as the group of people who have dealt with Google grows larger, it is easier for people to understand the reality of dealing with the company–they stonewall, obfuscate, and lobby their way around the law. Since the company is obsessed with secrecy there’s very little to verify so even less to trust. (And after the NSA debacle, it’s easy to understand why Google is obsessed with secrecy.)
Eventually, it will get easier to get people to agree with the logical extension of that reality, an extension that is also true: Google does not really accept the concept of the nation state. The Internet is their country and users are their serfs, and if there’s anyone who is the king of the Internet (or the top dog in the cartel-like oligarchy that Eric Schmidt calls the Gang of Four), it is Google. So when you understand this, all becomes clear.
In the case of Joaquin Almunia, the European commissioner in charge of competition policy who has been dealing with Google’s monopoly position in Europe for a couple years, it might be helpful to understand that when it comes to the Internet, the reason he is having trouble with Google is that–from Google’s point of view–he’s getting in the way because he thinks he has authority over Google. From their point of view, he doesn’t. But they have to pretend that he does–for a while.
Mr. Almunia is now experiencing Google’s special combination of the love hug followed by the rope a dope. First, understand this: Google knows they are monopolists, probably to a higher degree than anyone on the outside would ever expect. Google comes into Mr. Almunia’s investigation pretending to be cooperative, interested in compromise, having learned from their “corporate predecessors” (which means Microsoft, in case you were wondering).
But Google never intended to present serious proposals, never intended to actually accomplish anything with settlements and is fully prepared to litigate with the EU until the end of time. In this way, they have learned nothing from anybody, much less Microsoft.
What happened with Mr. Almunia is that the company sends in Eric Schmidt for the love hug. Schmidt wraps Mr. Almunia in a charm offensive with his offensive charm. Google starts to create an alternate reality for Mr. Almunia and his staff by a hypnotic dance of smarm and squid ink. Yes, we are going to put proposals on the table in a spirit of compromise and fairness. You will see how fair minded we are–because, you know…don’t be evil and all that.
As anyone knows who has dealt with Big Evil such statements are…how you say in your language? Utter crap.
Google plays on the idea that, well no one would have the brass to think they could dupe the European Commission, that’s crazy talk. Eric Schmidt wouldn’t…well…lie to Mr. Almunia. Big Evil would want you to feel that you would have to be nuts to think such bad things.
Actually not so much. You only think that if you believe that Google accepts the authority of the nation state to control them.
What is actually happening in Europe is this. Google has managed to run out a lot of the clock on Mr. Almunia by delaying and obfuscating in a dance about wanting to make proposals to satisfy Mr. Almunia’s objections. What clock you say? The current commission’s term is up in 2014. Google is betting that having delayed the day of reckoning on their antitrust investigation to this point in time, they can run out the clock and delay the investigation until Mr. Almunia’s term expires. They will take their chances with being able to influence Mr Almunia’s successor, which I would bet they are already working on.
And a word to Mr. Almunia: You probably don’t know half of what Google is up to. Ask around the music business, particularly around YouTube and Google’s recent shakedown…sorry, investment…in a near majority interest in Vevo a company that may appear to be a YouTube competitor but is actually dependent on YouTube. Follow closely what happens if the multichannel networks have the temerity to try to withdraw from YouTube and compete with it head to head. You might be surprised at what you find out. It’s enough to make a body file an anonymous brief.
So some unsolicited advice for Mr. Almunia is this: The European Commission is going to litigate with Google. The only question is do you want to do it from a position of strength now–by filing what’s called a Statement of Objections at the EC–or do you want to do it later after Google has dragged it out until your term is about to expire. Or has expired.
They want to play you for a fool with their rope a dope tactics. Don’t let them. File the Statement of Objections now and don’t wait for the inevitable. Or suffer the perception that you are simply kicking the can down the road for your successor.
No more Mr. Nice Guy.