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How Long Can Reed Hastings Hide Behind Kevin Spacey’s Sarong?

April 30, 2014 1 comment

Netflix is rapidly finding that exclusive original programming is the solution to some of its subscriber problems.  We are kind of enjoying watching these “cutting edge” Silicon Valley “innovators” come to conclusions that are circa 1950 for our business, but glad that they are figuring these things out gradually.  Yes, Mr. Hastings, that’s called a “network.”

But in the Golden Age of Internet, that also means those who pay for the programming also support those who sell advertising to ad publishers who distribute illegal copies of that programming.  When both those who produce the programming and those who sell advertising are Silicon Valley tech companies, that’s an interesting problem of economic interdependence.

Keven Spacey is the star of one of Mr. Hastings most successful programs, House of Cards.  I would bet that Mr. Spacey has a nice piece of the back end on that show, which makes him Mr. Hastings partner for real.  I know it’s kind of tough for a Silicon Valley oligarch to see himself in partnership with a mere actor, but stranger things have happened.

Mr. Hastings has been remarkably quiet about piracy that I’ve seen–correct me if I’m wrong.  Ellen Seidler’s research into advertisers on pirate sites showed Netflix as an early entrant with ads all over Megavideo.  Not surprising since Netflix studies piracy to determine the popularity of shows to pick up in foreign countries–produced by third parties.  Mr. Hastings has clearly sucked down a bunch of Google koolaid, suggesting that what people who steal movies really want is a good legal alternative.  Yes, if only they had that legal alternative, they’d stop stealing.  (This line of argumentation is also known as “blame the victim,” very popular in Silicon Valley.)

In fact, Mr. Hastings claims that Bit Torrent traffic dropped by 50% in Canada after Netflix launched there.  (You don’t mean that uTorrent induces infringement, surely?)

Of course, up until it got into producing original programming, Netflix was only licensing pirated works.  And being pirated a lot is a good way to drive the value down.  The conversation between Netflix and a producer goes like this:  “You want me to pay you to license your movies?  Are you aware that millions of copies of your movies are being stolen on Bit Torrent sites in [COUNTRY]?  You should pay me to launch in [COUNTRY].”

Yes, it’s a bit different when what’s being stolen is your own production that you deficited with your own money.

Mr. Hastings’ business partner Keven Spacey does not seem to think much of the idea that failing to offer a legal alternative excuses bad behavior.  Recently speaking at the Bollywood film awards (held in Tampa, Florida for some reason), Mr. Spacey said:

“‘House of Cards’ is really big in India, I discovered,” Spacey told reporters late Saturday as he walked the ceremonial carpet into the packed stadium.

“Except isn’t it funny that Netflix doesn’t exist there yet. Which means that you’re stealing it,” he said.

And Mr. Hastings said…nothing.

Spacey, who won Oscars for his roles in “American Beauty” and “The Usual Suspects,” delighted the crowd at the Bollywood awards by wrapping an Indian sarong around his waist and trying out dance moves.

Is that Reed Hastings behind that sarong?

Time to make a choice, Mr. Hastings. Are you on the side of companies like Google that profit from piracy or are you on the side of your business partners who produce your original programming and the actors who make your programs come alive.  Are you going to screw this up like Pandora and the National Association of Broadcasters screwed up their relations with songwriters and recording artists, or are you going to do the right thing?

Are you going to stand with those who plan for the future of Netflix or those who destroy it?

Whose side are you on?

 

Pandora CEO says “Pandora is Radio” so Pandora shouldn’t pay artists at all–and CEO Pay is Up 3,882%

April 25, 2014 6 comments

Sometimes it pays to read the transcripts from earnings calls, especially for company’s like Pandora, our latest set of fake “friends” in the tech community.  Always striving to keep their executive salaries high, Pandora’s CEO let their true strategy slip out in yesterday’s earnings call (see the full transcript on Seeking Alpha):

For the landscape around content licensing remains a complex topic. We reached the important milestone related to content cost during Q1, with a decision in the ASCAP trial. In her ruling, Judge Cote, confirmed our longstanding belief that “Pandora is Radio”. An important finding was wide ranging legal implications for our company.

Additionally the court set a rate of 1.85% of Pandora’s revenue for the five years ending December 31, 2015, which was the upper end of our proposed range of rates. And this decision followed the court’s issuance of summary judgment in September 2013 which upheld Pandora’s right to perform more compositions in the ASCAP repertory.

As you may have seen just last week, multiple record companies filed suit against Pandora in the New York State Court, regarding our use of sound recordings prior to 1972.

To be clear, we paid publish [sic] royalties on these spins. But like other similarly situated companies including Terrestrial Radio, we do not pay sound recording royalties. Pre 1972 sound recordings represent approximately 5% of total spins on Pandora.

So note the emphasis here:  First, Pandora is Radio. How do we know that?  Because Judge Cote, the unelected, lifetime appointment judge in the ASCAP rate court says so.  The same judge who is using Pandora as a vehicle to systematically destroy ASCAP through the tool of a 1941 antitrust consent decree with the Department of Justice (that would be the same Department of Justice that allows Google to perfect its monopoly but keeps a tight rein on those dangerous songwriters.)  ASCAP is one of the only examples of a system that is working in the online music licensing world but Pandora is only too happy to do all it can to destroy it–because it thinks that music should be free or near free now that it’s had both an IPO and a follow on public offering–all the while selling one product.  Music.  And of course its insiders are making millions after artists gave them a break to get up and running.

Pandora’s CEO says that Pandora should be compared to terrestrial radio (and of course the whole point of the compulsory license that Pandora enjoys is that it is not like terrestrial radio).  And terrestrial radio doesn’t pay artists for any sound recording performances (pre-72 or otherwise…see the I Respect Music campaign).

So riddle me this:  Why is Judge Cote’s ruling for Pandora in the ASCAP case “[a]n important finding” with “wide ranging legal implications for [Pandora]”?  Why does Pandora latch on to the “Pandora is Radio” phrase?  Perhaps it’s as simple as this: Because they want to believe–as McAndrews clearly does–that “Pandora is Radio” and tried buying a radio station so they could get the ASCAP court to treat them like a terrestrial radio station for song licensing purposes–then double back to get the Congress to treat them like a terrestrial radio station for sound recording licensing purposes?  What would the other “wide ranging legal implications” beyond the ASCAP case be exactly if the plan wasn’t to try to get out of the sound recording royalty altogether?  I’m all ears.

So when Pandora goes back to the well in Congress and introduces Son of IRFA, expect to see the company deliver the coup de gras:  ZERO.  Run to the Nanny State to have it decree that Pandora is Radio and the “wide ranging legal implications” are therefore Pandora should pay artists far less than they do currently, and preferably shouldn’t pay artists anything.  (The rhetorical strategy that Pandora lobbyists and the National Association of Broadcasters tried to run at the IRFA hearing that completely backfired.)

And if that’s not what he meant, then why did he say it to his investors?

UPDATE:  According to Morningstar, Pandora’s CEO compensation (i.e., pay in both salary and stock) is up 3,882.3%….  Now if that sounds high, you’ll need to ask the blue-chip stock watching service Morningstar how they got that number–because as Pandora’s trolls will tell you, Pandora CEO Brian McAndrews “only” makes $500,000 in salary.

Pandora Key Executive Comp Closeup

In the world of Wall Street, that’s considered a “bargain.”  Wow…that’s inspiring, eh?  Makes you want to stand up and salute followed closely by voluntarily taking a cut in royalties.  Maybe you’ll run into him shopping at the thrift store and he’ll buy you some socks.  Because in the world of artists and songwriters, $500,000 a year sounds like an awful lot of money for a guy who doesn’t want to pay for his one product–music.  Not to mention $29,167,388.

Pandora Executive Comp

So it seems like there is one clear answer to why Pandora is doing everything they can to alienate those who create their only product–Pandora’s executive team is doing it for the money.

Or more precisely–they’re doing it for your money.

The Future for Television or Google Wants to Burn Your Remote: More Google Union-Busting

April 21, 2014 Comments off

How little has changed…

Music Technology Policy

Google Backed Net Coalition’s Anti-Union Dirty Tricks Campaign

Google’s Attack on Unions Means the United Message is Working

This flyer was circulated by the Net Coalition lobby shop in Washington recently.  As you will see it clearly refers to a “host of union thugs” who had the temerity to oppose Net Coalition backer Google and other giant consumer electronics companies.  Who is in the “host of union thugs”?  The American Federation of Musicians, the American Federation of Television and Radio Artists, the Directors Guild of America, the International Alliance of Theatrical and Stage Employees and the Screen Actors Guild.  (Net Coalition is the astroturf lobby group managed by well-known Washington lobbyist  Markham Erickson. Net Coalition includes Google and Wikipedia, and a big sponsor of Politico, home to many Google apologists.  To be complete, when they were caught with this flyer, Net Coalition blamed someone who worked for them instead of manning up.)

Union bashing…

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Did Google Flacks Use A Journalist’s Glass to Try Censoring the News?

April 20, 2014 Comments off

Matt Labash is one of the great journalists writing today.  His extraordinarily insightful piece, Through A Google Glass, Darkly is yet another example of why the guy should write a longread.  (You know, a book.)

Labash documents his initial experience with Google Glass as a “Glass Explorer” and it is both funny and sad which of course makes the funny parts even funnier and the insightful parts even more meaningful, kind of like Studs Terkel meets H.L. Mencken in a movie based on a William Gibson novel directed by Stanley Kubrick.

But–and no MTP reader will be surprised by this–the part of Labash’s piece that really caught my eye was this encounter with a Google flack:

Weirdly, my own trust rating already seems to have taken a hit with Google. In the middle of reporting this piece, I get an unsolicited email from Chris Dale, who heads Glass’s communications shop. He says he “heard through the grapevine” I was working on a story, and would love to help out. Fair enough. I’ve had proactive flacks do that before. But a week later, when I email him to ask some anodyne questions about the mechanics of the Explorer program, he expresses concern.

His concern is “that some folks who ran into you while you were wearing Glass out in public remarked that they felt you were being obnoxious and confrontational and a little evasive in terms of who you were and what outlet you were representing.” Strange. I thought nearly all of my interviews were friendly. And even if I partially played the role of the Glasshole, I nearly always let people know who I am and what I was up to. But even if I didn’t​—​how does he know? I didn’t speak with anyone in the field who worked for Google. Who would go through the trouble of tracking down some flack in Mountain View, Calif., to report me? And anyone to whom I was being even marginally “confrontational” likely would have seen it that way because I’d sometimes argue on behalf of their privacy, even as they seemed perfectly willing to abdicate it.

Like a principal summoning a wayward student to the office, Dale, who in addition to heading Glass’s communications outfit seems to think he’s my editor, asks me to call him. I pass, telling him I’d just as soon keep our exchange in print, so I have a clear record of what gets said. After disabusing him of whatever he is “hearing second-hand” (his words) and explaining my reporting style, I ask him six more questions about Glass. But not before telling him I’d also love to hear who his “mysterious second-hand informer” is, while he should keep in mind that “I likely have better documentation of what was said than they do.” Unless, that is, Google has hacked my Glass. Have they? No, they wouldn’t do that. Especially not after two researchers at Cal Poly came up with an app that would allow others to hijack your camera, just to see if they could. That seemed to displease Google, so I don’t think Google would do that, I jab (sending Dale a link to the Cal Poly story).

But the truth is, Google wouldn’t have had to hack my camera. Could they have seen a testy interview that I taped on Glass? Wouldn’t they have access to that data, the same way they have access to my Gmail account, to my search requests, to God knows what else? Were they spying on me? All interesting questions. But it doesn’t look like I’ll ever know the answer. Even weeks later, Dale hasn’t responded. [Emphasis mine.]

Well…you know what I think.

Here’s a trick I learned from a friend who uses Google Voice with an Android phone.  Say “Machu Picchu” about 10 times while wearing Glass.  Then log into your Google account on your laptop and time how long it takes before travel ads for Peru start showing up.

I want to wish all those Glassholes happy exploring.

And remember: If you have something you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.

The Ethics of the Unethical Google Glass: @stopthecyborgs Makes A Great Argument for Ethics Class at Computer School

April 18, 2014 1 comment

If you do a review of computer science and electrical engineering classes at leading universities, you will find many interesting classes.  One you will not find is the ethics of technology.

We are now told that “wearables” are inevitable and if you question the ethics of products like Google Glass, you get the usual epithet that’s soooo 1999:  “Luddite” or the trendier “Neoluddite”.  This line of thinking is based on a long, uninterrupted training that utterly fails to question itself that can be summed up as “the technology made me do it” or “if it can be done, it ought to be done.”

In a thoughtful Salon article,  “The Bay is burning!  Google Glass, techno-rage and the battle for San Francisco’s soul,”  Andrew Leonard addresses the ethics of technology.  If you’ve seen the “Stop the Cyborgs” stickers around and about posted by restaurants, bars and stores letting the public know that Google Glass is not welcome in their establishments, you’ll have seen manifestations of the “techno-rage” that accompanies Glass in particular (hence the pejorative “Glasshole”) and at least in San Francisco, Google in general.

Leonard’s article includes his interview with a member of Stop the Cyborgs who sums it up:

I contacted StopTheCyborgs by email and asked them how they responded to being called “neoluddites.”

“If ‘neoluddism’ means blindly being anti-technology then we refute the charge,” said Jack Winters, who described himself as a Scala and Java developer. If ‘neoluddism’ means not being blindly pro-technology then guilty as charged.”

“We are technologically sophisticated enough to realize that technology is politics and code is law,” continued Winters. “Technology isn’t some external force of nature. It is created and used by people. It has an effect on power relations. It can be good, it can be bad. We can choose what kind of society we want rather than passively accepting that ‘the future’ is whatever data-mining corporations want.”

“Basically anyone who views critics of particular technologies as ‘luddites’ fundamentally misunderstands what technology is. There is no such thing as ‘technology.’ Rather there are specific technologies, produced by specific economic and political actors, and deployed in specific economic and social contexts. You can be anti-nukes without being anti-antibiotics. You can be pro-surveillance of powerful institutions without being pro-surveillance of individual people. You can work on machine vision for medical applications while campaigning against the use of the same technology for automatically identifying and tracking people. How? Because you take a moral view of the likely consequences of a technology in a particular context.” [Emphasis added.]

And this is exactly the point:  How is it that Google made Glass without taking safeguards into account–or perhaps not making it at all.  Because someone else will so why shouldn’t Google make the money?

Pretty much.

That is also pretty much what all of Google’s problems boil down to–they could have made a choice not to get down into the muck of the Internet but they didn’t.  The kind of thinking that drove them to produce a device whose very purpose is to surveil, that appeals to the voyeur, that clearly endangers the public as much as texting and driving.  The kind of thinking that allows them to justify selling advertising for illegal products and keeping the money, promoting the sale of illegal drugs to children and being the leading inducer of piracy in the known universe.  Building YouTube so that they can’t keep the rape videos off of it or the “how to shoot heroin” lessons.

Or using $500,000,000 of the stockholders money to keep their senior executive team out of jail.

They did not ask themselves whether they ought to do something that technology enabled them to do.

Everyone has a voice in their head that is the voice of their mother, father, priest or rabbi, teacher, sergeant or chief petty officer–that’s the voice that tells you “Don’t do that because it is wrong.”  It is this voice in your head that keeps society together.  Not the police and not the prosecutors.  The law derives from this voice, not the other way around.  This voice is the shared values of thousands of years of human moral development.  That voice doesn’t give you a pass on the consequences of a machine you build whether it is a Ford Pinto, a search engine or a “wearable”.  That’s what the Luddites were largely about.  And it would be nice if universities taught the ethics of technology before they turned these people loose on the world.

In the irony of ironies, Bill Gates is on the team that recently filed a patent for an “UNAUTHORIZED VIEWER DETECTION SYSTEM AND METHOD”:

ABSTRACT

A system for detecting and responding to an intruding camera. The system includes an electronic media display device having a screen configured to display content, a sensor, and a processing circuit. The processing circuit is configured to obtain information from the sensor, analyze the information to determine a presence of a camera, and edit any displayed content in response to the presence of the camera.

In other words, Neoglass.

YouTube Still Serving Ads on Hate Rock Videos.

April 17, 2014 Comments off

The Trichordist

In the wake of the Jewish Community center shootings Sunday we would just like to remind everyone that YouTube/Google is still serving ads on hate rock and neo nazi videos.  Maybe there is a case for free speech here, but there is no excuse for profiting from this garbage.

Also many of these video channels are actively engaged in recruiting members for hate groups.    You can verify this yourself.   Here is a list of Hate Rock bands compiled by the ADL.  Search Youtube for these bands videos and then look at what is going on in the comments.

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If Google Can Successfully Lobby the FTC on Antitrust, Just Think What They Think They Can Do To Us

April 15, 2014 Comments off
“You asked me if I am in the Meth Business or the Money Business. It’s neither. I am in the Empire Business.” – Walter White – See more at: http://www.top-ten.tv/usa-tv-series/top-ten-best-quotes-from-breaking-bad/#sthash.4sE4yQ5b.dpuf
“You asked me if I am in the Meth Business or the Money Business. It’s neither. I am in the Empire Business.” – Walter White – See more at: http://www.top-ten.tv/usa-tv-series/top-ten-best-quotes-from-breaking-bad/#sthash.4sE4yQ5b.dpuf

You asked me if I am in the meth business or the money business.  It’s neither.  I am in the empire business.

Walter White, Breaking Bad

Right after Jeff Bezos bought the Washington Post last year, Timothy B. Lee joined the Dot Com version of the venerable paper to write a blog called The Switch.  Almost immediately, Mr. Lee got into hot water with the Columbia Journalism Review for failing to disclose conflicts of interest in a blog post promoting the views of Google as expressed by Jerry Brito of the Google-funded Cato Institute.

The Columbia Journalism Review immediately posted a story on Mr. Lee that called attention to a few major holes in Mr. Lee’s “story”, holes that Mr. Lee could have himself caught had he engaged in a practice called “fact checking”, well-known to the pre-Bezos Washington Post.

In its front page story from the Sunday edition, the Washington Post redeemed itself from Mr. Lee’s Google+ Hangout (aka the ash heap of history).  Yes, while the Post‘s feature story, “Google, once disdainful of lobbying, now a master of Washington influence” by Tom Hamburger and Matea Gold, restores faith that the Post wishes to distinguish itself once again with hard hitting reporting on the latest attack on the Republic if not democracy itself. The Cato Institute–a bastion of democracy, just ask them–seems to have sucked down the Koolaid and asked for more.  According to the Post:

Cato was not always in sync with Google’s policy agenda. In previous years, the think tank’s bloggers and scholars had been sharply critical of the company’s support for government rules limiting the ways providers such as Comcast and Verizon could charge for Internet services….[But] like many institutions in Washington, Cato has since found common ground with Google.

And the think tank has benefited from the company’s investments, receiving $480,000 worth of in-kind “ad words” from Google last year, according to people familiar with the donation.

And the thing about the “in-kind” donations of Adwords to Cato or, oh, say a political campaign–Bitcoin is easier to trace.

While one must pity the young journalists who work on The Switch with Mr. Lee and hope that they have not been metastasized themselves, the Post seems to have made an editorial decision to redeem itself after Mr. Lee got such an early start on tarnishing its reputation.  So we can all breathe a little easier–until Bezos fires the current editors and puts the like of Mr. Lee in charge.  The over under is 24 months in–you know–Internet time.

But in order to fully grasp the implications for artists of the Post‘s story of Google’s massive influence peddling, a quick review of some highlights from the recent past is in order.  And where better to begin than with the nasty case of Google drugs–the closest that Google has come to completely unraveling.

The Old News, or Walter White Goes to Washington

Yes, Google is a lot more like the Breaking Bad story line than you might think.  It’s no news that Google got a wake up call after it was investigated for selling ads for illegal drugs and had to pay $500,000,000 of the stockholders’ money to keep its executive team (then including Sheryl Sandberg) from being indicted for violating the Controlled Substances Act.  The largest fine in U.S. corporate history, it was still cheap at the price for the magnitude of the crime Google had gleefully committed based on the available evidence and to which the company admitted in its nonprosecution agreement.  (See Wired, How a Career Con Man Led a Federal Sting that Cost Google $500 Million.)

This case was a very near miss, and resulted in a substantial grand jury investigation during which Google produced over 4,000,000 documents–which themselves became an issue in one of the many shareholder suits over how Google was able to use corporate cash to pay a fine more properly paid by their executives in their individual capacity.  Particularly since those executives were accused of crimes that were outside the scope of their authority.  (But since Google is actually run as a closely held organization by the voting power of the executives most prominently accused of crimes, perhaps the easier explanation is that a large part of Google is a racketeer influenced corrupt organization.  You know–RICO.)

This large cash payment was paid shortly before the SOPA burnout.  I have always viewed SOPA in the larger historical context of the drug payment.  Ask yourself–who do you think is running the sites that Google sold advertising for that got it into the sights of the Food & Drug Administration, the Bush Department of Justice, the Internal Revenue Service and the Federal Bureau of Investigation?  Probably the same people that Interpol investigates in its Operation Pangea.  These are not misguided college kids selling Ambien hits from their mom’s medicine cabinet.

But in the course of the shareholder suit, something happened that confirmed what many believed, but that foreshadowed the extent of the disclosures in the Washington Post.  The Wall Street Journal raised a question based on a statement made by Google’s lawyer Boris Feldman in open court (“Did DOJ Apologize to Google for US Attorney’s Comments?”):

“The U.S. attorney in Rhode Island went off the reservation and gave a long interview about all the evidence [a reference to the 4,000,000 documents that Google produced in the grand jury proceeding] and why it was he was so excited about the case,” lawyer Boris Feldman told the judge at a Delaware state court. “It ended up being so far off the reservation that the Justice Department apologized to Google for it and muzzled him.”

Given what the Post tells us about Google’s cozy relationship with law enforcement agencies, it is entirely believable that the Justice Department would have apologized to Google for one of the US Attorneys having the brass to actually prosecute Google for anything that ended up in any kind of meaningful punishment for Google.  However, the Wall Street Journal reports that the Justice Department (i.e., “main Justice” in Washington) denied apologizing:

Maybe the Justice Department apologized on his behalf? “We did not apologize,” a department spokeswoman said.

And the reaction from Rhode Island (which kept about half of the $500,000,000 to offset law enforcement costs in the state)?

“The U.S. attorney has never issued apologies to anyone in this matter,” a spokesman said. “As far as the suggestion that the U.S. attorney has been ‘muzzled,’ I can only point to the fact that we recently held a widely attended press conference” at which he answered media questions about the case.

For its part, Google declined to comment, saying: “Google does not comment on its discussions with regulators.”

I bet they don’t.  Google didn’t comment on the Washington Post story, either.

Google would have you believe that its interest in Washington came out of fighting against censorship for user rights.  That’s bullshit.  How did Google gloss over its unprecedented $500,000,000 fine for really nasty stuff?  Through political connections, of course.  And if you’ve read the Post story, all of this will sound very familiar to you.

Manipulating the People’s House

Google’s nonprosecution agreement was signed by Google on August 17, 2011.  Given the magnitude of this case and the fine involved, it’s likely that by December 2010 Google had a pretty good idea that they were going to buy their way out of a criminal trial, and perhaps jail time for their senior executives. Before a U.S. Attorney can bring an indictment, particularly against a company that is as well-connected as Google, the U.S. Attorney must send a memo justifying the indictment up the chain to at least the Deputy Attorney General, or more likely in this case, Attorney General Eric Holder (who succeeded Jamie Gorelick in the Clinton Justice Department–Gorelick being the former Deputy Attorney General who has represented Google particularly in Google’s negotiations with Mississippi Attorney General Jim Hood.)

Attorney General Eric Holder presided over a December 14, 2010 meeting at the White House requested by Google during the DOJ’s drug investigation into Google’s bad acts.  What, if anything, did this meeting have to do with the prosecution of Google?  Did the Attorney General find it appropriate to make this statement while at the same time prosecuting Google, a participant in the very White House meeting at which he was speaking?

[W]e successfully prosecuted a defendant who was selling fake cancer medications to patients in the United States, Canada, the United Kingdom, Belgium, and the Netherlands. The drugs – which he marketed as a rare, experimental treatment – were manufactured in Canada, but advertised and sold globally over the Internet. With assistance from Canadian and German authorities, this individual was apprehended and extradited to the United States. He is now behind bars and has been sentenced to almost three years in prison.

Given that at the time of the White House meeting (December 14, 2010), Google executives were no doubt close to being criminally prosecuted themselves, don’t you think that news of Google’s prosecution would have been relevant and surprising to participants in the White House meeting?  Particularly since the Attorney General of the United States was giving a speech about the very crimes of which Google was accused, a speech made at a meeting held under the auspices of the President of the United States concerning the very subject of that prosecution?

When the Google plea bargain was announced a few months after the December White House meeting (reported in the Wall Street Journal on May 13, 2011), would it not have been reasonable for the public to be at least a little surprised if not shocked by the Attorney General’s comments or lack thereof?

As CNET reported on May 19, 2011 (six months after the White House meeting at which General Holder spoke):

No one may have been more surprised than Victoria A. Espinel, the U.S. intellectual-property enforcement coordinator. Just six months earlier, Espinel, who’s leading the Obama administration’s efforts to thwart rogue pharmacies, commended Google’s help in the battle at [the December 14] White House meeting.

The December White House meeting was also the occasion to announce the formation of the Center for Safe Internet Pharmacies.  Again, according to CNET:

There are plenty of others surprised by the news. At that same December meeting at the White House, Google was joined by Microsoft, Yahoo, Go Daddy, and a few other companies in announcing the creation of a nonprofit organization called the Center for Safe Internet Pharmacies. The purpose of the group is to share information about illegitimate online pharmacies in order to root them out and shut them down.

“It was a surprise to me because I didn’t know the investigation was going on and because a half a billion dollars is a big number, even for Google,” said Christine Jones, general counsel, executive vice president, and corporate secretary at Go Daddy, the giant domain registration and Web hosting company that spearheaded the Center for Safe Internet Pharmacies effort.

The formation of the Center for Safe Internet Pharmacies is one of Google’s customary defenses to why the company isn’t simply running a RICO-predicate criminal enterprise–and it is a type of ruse that Google uses repeatedly as described in the Post‘s reporting.

As recently as April 19, 2013, John Burchett, one of the legion of revolving door types in Google’s Washington DC in-house lobby shop, cited Google’s participation in the Center for Safe Internet Pharmacies in response to Mississippi Attorney General Jim Hood’s inquiry into Google’s compliance with the DOJ plea deal.  (See page 13, AG Hood Exhibits.  Burchett joined Google in 2007 (“Google: As Cool as it Seems and More“) just before Eric Schmidt received a prophetic letter from Joseph A. Califano, Jr. warning that Google was inducing the sale of drugs to kids.  Burchett is a board member of Andean Health and Development and is the former Chief of Staff for Michigan Governor Jennifer Granholm.  Governor Granhom was an Obama campaign debate surrogate you will recall from many, many appearances on Sunday shows during the 2012 presidential campaign.  Before joining the staff of Harvard Law School classmate Granholm, Burchett “worked as a business consultant to governments across the country” including Detroit’s Little Caesar’s.)

Very Googlely.

Getting into the Center for Safe Internet Pharmacies industry group apparently was–and continues to be–a very important strategic move for Google.  (Or what good Catholics will recognize as an “indulgence” for their sins.)

It also must have been important to Google that their motives for joining the group be concealed and not tainted by the fact that Google–at the very time they were being deceptively portrayed in the People’s House as one of the good guys–was either being criminally prosecuted by the US Government at the time, or was then currently negotiating a way to pay a $500,000,000 fine with the stockholders’ money and be handed a get out of jail free card by the US Government.

Imagine if instead of having this political plum handed to them on a silver platter inside the People’s House (albeit in the dark and without the knowledge of all–well, nearly all–the participants in the White House meeting) the press instead was all about why Google was allowed to join the group without at least disclosing its own felony prosecution for the very crimes at issue in the meeting.

Now remember–Google’s response to brand sponsored piracy driven by search is to form up with the Internet Advertising Bureau to develop “best practices”.  Best practices that are even more complex and whack a mole than the DMCA notice and shakedown.  And Google has done the same for human trafficking and many other areas of vulnerability for them.

Make no mistake–like Walter White, Google is in the empire business.

The New New Thing and Why This Matters for Artists and the Music Business

Given that Google is both ripping us off through search, jamming us on essentially unauditable royalties on compulsory and direct licenses, and outspending the music, movie, book and probably broadcasters on lobbying money soft and hard, it’s important to understand the kind of people we are dealing with when we are forced to deal with Google.  It’s also important to realize that the people who we think are in our corner may well be taking the king’s shilling–for shilling for the King of the Internet.  Let’s take another look at Timothy Lee’s debut at WaPo (remembering that Lee himself worked for Google until 2010 and gets his own section in the Google shill list.)

Timothy B. Lee debuted his WashingtonPost.com blog with a story that was pure Google–“Hollywood” (whoever that is) brought its piracy problems on itself.  While that may have been true in 1999, it’s really just unadulterated bunk today.  This ridiculous post did not go unnoticed by the Columbia Journalism Review (A Piracy Defense Walks the Plank by Ryan Chittum):

There are many problems with Timothy B. Lee’s Washington Post blog post on Hollywood’s supposed culpability for the theft of its own movies, beginning with the morally unserious jujitsu deployed in arguing that Hollywood is culpable for the theft of its own movies.

The Mercatus- and Cato-connected editor of the Washington Post tech blog that aims “to be indispensable to telecom lobbyists and IT professionals alike, while also being compelling and provocative to the average iPhone-toting commuter” also had a major correction that undermines the entire premise of the piece and reveals its one-sided reporting….

Lee based his argument on bad data from PiracyData.org, which was co-founded by a couple of researchers at the Koch [yes, that Koch]-funded anti-government think tank the Mercatus Center to document whether “people turn to piracy when the movies they want to watch are not available legally.”

Left unmentioned: That Lee himself contributed a chapter to a Mercatus book with the researchers (at least one of whom is his friend) called “Copyright Unbalanced: From Incentive to Excess.” That would have been worth disclosing in the post. Readers would have had more reason to be skeptical….

So what about those additional comments from the MPAA Lee refers to in his correction? This is how his rewritten post now ends (emphasis mine):

But [MPAA comms director Kate] Bedingfield counters that films get heavily pirated even when they’re made available in online formats. “The Walking Dead was pirated 500,000 times within 16 hours despite the fact that it is available to stream for free for the next 27 days on AMC’s website and distributed in 125 countries around the world the day after it aired,” she says. “Our industry is working hard to bring content to audiences when they want it, where they want it, but content theft is a complex problem that requires comprehensive, voluntary solutions from all stakeholders involved.”

Finally, Bedingfield points out that the Mercatus Center counts Google among its funders.

Boom.

The Washington Post now seems to have taken Mr. Chittum’s critique to heart, and provides us with some hard hitting journalism in contrast to whatever it was that Mr. Lee wrote.

In May 2012, the law school at George Mason University hosted a forum billed as a “vibrant discussion” about Internet search competition. Many of the major players in the field were there — regulators from the Federal Trade Commission, federal and state prosecutors, top congressional staffers.

What the guests had not been told was that the day-long academic conference was in large part the work of Google, which maneuvered behind the scenes with GMU’s Law & Economics Center to put on the event. At the time, the company was under FTC investigation over concerns about the dominance of its famed search engine, a case that threatened Google’s core business.

In the weeks leading up to the GMU event, Google executives suggested potential speakers and guests, sending the center’s staff a detailed spreadsheet listing members of Congress, FTC commissioners, and senior officials with the Justice Department and state attorney general’s offices.

Google’s practices are not, of course, limited to using political influence to stop legal processes against them at the regulatory level.  This business of sponsoring conferences through intermediaries should be quite familiar to everyone in the music business.  Think of all the places that Google or one of its surrogates (or, like the Nashville-based astroturf group “Creator Freedom”, a surrogate of a surrogate) shows up as a sponsor of a music industry event.  Most recently, we had a sudden and out of character appearance by Google General Counsel Kent Walker (and nonprosecution agreement signer) scheduled for the Entertainment Law Initiative luncheon during Grammy Week, replaced by an executive from YouTube, the well known Google affiliate and curator of ad supported music video ripping software, rape videos, steroid reseller testimonials and sex tourist home movies.

Then there was the rather odd participation of Google in the World Creators Summit, and of course the Future of Music Policy Summit where Google went from a major named sponsor in 2012 to sponsoring a dinner in 2013.  The sponsors for the 2012 summit were New America Foundation (of which Google’s Eric Schmidt is a director), the Open Technology Institute (which shares a website with the New America Foundation), Google itself, Public Knowledge (which is funded in part by Google as Google acknowledged on the now famous Google shill list) and the Consumer Electronics Association (of which Google is a member).  There are other sponsors, like Pandora, for example, but one is struck by just how many Google connections there were to the main conference event.

Those connections were largely gone by 2013 except that Google hosted part of the FMC “honors” dinner:

google FMC

But Google may find that a bunch of disgruntled musicians are not going to bend over and take it–YouTube executives were booed at MIDEM and are generally having a rough time this year.  That’s nothing compared to the reception YouTube will get once artists realize that Google’s participation at any music conference is part of a colossal shell game of influence peddling.

Ask yourself how many times you’ve seen Google surrogates listed on panels or trying to tell you that the sky is rising?  If it’s any consolation, the Washington Post has confirmed it’s not just us.  Although, the Post didn’t focus on the fact that it’s not just the United States, either.

Google’s influence peddling is global.

More in Part 2.

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