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Not Very Bright: Things are out of hand at YouTube, just they way they planned it

December 29, 2019 Comments off

To paraphrase “Deep Throat” from All the President’s Men, don’t believe the myths the media has created about Google.  The truth is, these people are not very bright and things got out of hand.

Bloomberg’s and  have written one of the most revealing stories yet about just how out of control YouTube really is and just how incompetent YouTube CEO Susan Wojcicki is to handle it all (“Inside YouTube’s Year of Responsibility“).  (How Susan W came to have the YouTube job I’m sure has nothing to do with being the ex-sister-in-law of Google founder Sergei Brin.)

It boils down to this:  Google has been caught out.  YouTube was founded on the usual Google bedrock principle–steal everything.  Beg forgiveness if you get caught and emote about innovation, free speech, and any other hackneyed shibboleth that contributed to your D grade in freshman English comp from those teachers who didn’t understand your true brilliance.

Those “principles” may work for the Boys Who Wouldn’t Grow Up whilst inside their Mountain View bubble, but it was only a matter of time before the public began to catch on.  And the apocalyptic algorithm is that more the Google scaled, the more likely it was that the public would catch on like an appointment in Samarra.  When that happened, somebody may find out how bad it really is behind that curtain.  Because the truth is, these Googlers are not that bright, and things definitely got out of hand at scale.

So it was only a matter of time.  This is important because Google’s YouTube is the largest video search platform in the world and is the second largest search engine–right behind Google.com.  Unless you want that corrupting influence being piped into your children’s brains, you may want to think about how to stop it.

That ticking clock resonates in one of the most telling quotes in the Bloomberg post from YouTube CEO Susan Wojcicki:

“If we were held liable for every single piece of content that we recommended, we would have to review it,” she said. “That would mean there would be a much smaller set of information that people would be finding. Much, much smaller.”

Ms. Wojcicki just described both the essence of the value gap and why YouTube is nothing like television no matter how many times Googlers aspire for it to be true.  YouTube is not “disrupting” television; rather it is corrupting television.  YouTube is television’s distorted mutant.

When Ms. Wojcicki says there would be a “much smaller set of information that people would be finding,” the clear implication is that there would be much less content for YouTube to sell ads against if YouTube took responsibility for everything on their platform.  You know, take responsibility like TV does.  (YouTube’s endless braying about “fair use” is misplaced–the issue is about taking responsibility before you get to the infringement that leads to the fair use defense.)

Ms. Wojcicki’s statement does not mean that just because the YouTube offering would be smaller it would be worse, which is the implication it seems she would like you to draw.  It doesn’t mean the status quo is “better” either, it just means that in an accountable future YouTube would take responsibility for YouTube being an honest broker.  It also doesn’t mean that anyone would be “censored” unless you think enforcing standards and practices on the digital equivalent of the public airwaves is “censorship” or you think artists protecting their rights impermissibly restricts speech.

Ms. Wojcicki’s statement also provides some insight into YouTube’s current crisis involving children using the service.  Because at Google, small is not beautiful–scale is beautiful.  And the consequences be damned.  Bloomberg observes:

[In addition to copyright infringement, currently] YouTube’s biggest challenge is kids’ privacy. In September, the FTC fined Google for illegally tracking children for its ads business, forcing significant changes to YouTube’s operations….The FTC is now rewriting its COPPA rules [the US law that protects children online] and has invited public comment. In a filing, Google told the agency it was worried about any laws forcing it to “identify and police” videos aimed at kids. The company was, in effect, arguing it couldn’t know for sure the age of its audience and shouldn’t be punished for that.

Let’s understand something–illegally tracking children for ads has nothing to do with standards and practices.  It has nothing to do with innovation, free speech or fair use.  Tracking kids for ads was not an algorithmic glitch, either.  This problem is entirely human-made and is entirely the result of choices made by humans who work for Ms. Wojcicki, if not Ms. Wojcicki herself.  The problem is made by the people who are supposed to be in charge, who stockholders task with making good choices for the company (in this case, Larry Page and Ms. Wojcicki’s ex-brother in law, see my NY Daily News op-ed on Google’s dual class voting stock).

Google wants all of the benefits and none of the burdens of operating a media business.  Their justification is that they do it online.  If kids or artists or advertisers get chewed up in the process, they’d have you believe that it’s not their fault.

In one sense, they have a point.  Regulators have allowed them to get away with a host of travesties for 15 years all based on a tortured reading of two safe harbors (Section 230 of the Communications Decency Act and the DMCA).  You can’t really blame Google for thinking that having established a business model based on corruption that has made a lot of people filthy rich, they should be allowed to continue to get away with the free ride.

YouTube profits from chaos and the sheer scale of so many harms to the society from a tortured expression of the important values of fair use to blatant child endangerment.  YouTube executives supposedly serve society, at least according to the nepotism of Silicon Valley royalty.

But if you expect them to meaningfully disrupt the highly profitable situation that they’ve let get out of hand at scale, the current executive team will disappoint if left to their own devices.

Is YouTube The Lyor Show?

June 21, 2018 Comments off

MIKE

Christof, let me ask you, why do you think that Truman has never come close to discovering the true nature of his world until now?

CHRISTOF

We accept the reality of the world with which we’re presented. It’s as simple as that.

from The Truman Show, written by Andrew Niccol

You’ll hear a lot of trash talk about Lyor Cohen, but credit where it’s due–he gave an interview that interested me about how he sees his role at YouTube.  I actually think he’s got some old school ideas that may be fundamentally sound, but are not connected to the Google reality.

I submit that his problem is that either he’s getting paid so much money he doesn’t need to be attached to reality or he doesn’t understand that Google does not give a rip about us.  Or maybe it’s a little of both.

Lyor’s main problem is that he either doesn’t understand or chooses to ignore Google’s exploitative business model.  MTP readers will recall a prescient 2008 book review of Nicholas Carr’s The Google Enigma (entitled “Google the Destroyer“), by antitrust scholar Jim DeLong that gives an elegant explanation of Google’s mindset:

Carr’s Google Enigma made a familiar business strategy point: companies that provide one component of a system love to commoditize the other components, the complements to their own products, because that leaves more of the value of the total stack available for the commoditizer….Carr noted that Google is unusual because of the large number of products and services that can be complements to the search function, including basic production of content and its distribution, along with anything else that can be used to gather eyeballs for advertising. Google’s incentives to reduce the costs of complements so as to harvest more eyeballs to view advertising are immense….This point is indeed true, and so is an additional point. In most circumstances, the commoditizer’s goal is restrained by knowledge that enough money must be left in the system to support the creation of the complements….

Google is in a different position. Its major complements already exist, and it need not worry in the short term about continuing the flow. For content, we have decades of music and movies that can be digitized and then distributed, with advertising attached. A wealth of other works await digitizing – [music,] books, maps, visual arts, and so on. If these run out, Google and other Internet companies have hit on the concept of user-generated content and social networks, in which the users are sold to each other, with yet more advertising attached.

So, on the whole, Google can continue to do well even if leaves providers of its complements gasping like fish on a beach.

And that was the truth in 2008 and its still true of Google ten years later because that’s their business model.  So when Irving Azoff says of Google that YouTube doesn’t pay artists and songwriters adequately–even the top songwriters in the world who are members of Irving’s Global Music Rights–that’s entirely consistent with the predatory business model Jim DeLong identified.

And when Lyor tries to flatter and deflect his way around Irving’s criticism, he’s missing the point entirely which is not surprising given that he works there.  But it doesn’t change the fact that Irving is right—Google is built on an exploitative business model that depends on using the DMCA safe harbor to undermine basic private property concepts and complete one of the biggest income transfers of all time to the great detriment of artists and songwriters.

MTP readers will also remember my 2007 post, The DMCA is Not an Alibi, now called “the value gap.”  That was the one that really started criticisms that I had a Google problem.  I can’t tell you the number of times that people have come up to me and confessed that they didn’t see what I was driving at until years after.  Not that it matters, but important years were lost when people in positions to marshal resources to combat them simply failed to do so.

Nothing has changed since Jim and I wrote those pieces and nothing will change until there are tectonic shifts in how Google is permitted to operate and the loopholes it relies on.  We’re thankful of the victory in Europe, but as one loophole closes in Europe, another opens in the US through the Music Modernization Act’s inexplicable and likely unconsitutional reachback safe harbor.

In a recent Billboard interview, Lyor said:

“Prior, [YouTube would] make a deal with the industry, go away for a few years and then come back. And that, to me, is where misunderstandings happen,” he explains. “It’s really hard to find an artist and break that artist — I mean, it’s almost impossible. So if Google and YouTube understand how difficult it is, maybe they could think about ways to improve that part of the business….”

How did you alleviate the disconnect between YouTube and the music industry?

Just going back to back with them. Demystifying our intent. Understanding how hard it is to break artists and to go to work on behalf of the creative community and the labels.

I think Lyor is essentially correct in his old school assessment of Google’s “new boss” problem, but he’s treating the wrong symptom.  It’s not that Google doesn’t understand anything, they understand just fine how hard we think it is to break an artist in the music business.  They just don’t care and to the extent they think about it at all, they think that we don’t understand because they think they “break” YouTube “stars” when those “stars” get corporate sponsorships.

And that is because their business model is based on manipulating loopholes and not on “breaking artists,” if “breaking artists” means establishing artists as able to have successful careers apart from YouTube.  And that dependency has become clearer in the years since Jim wrote his “flopping on the beach” post which makes Google’s commoditization even more insidious.

So while we’re happy that the Europeans have seen the light on the “value gap,” the DMCA is still not an alibi–unless the U.S. government continues to fail to address the underlying cause of the new algorithmic Darwinian music business that is gradually asphyxiating artists and songwriters.

And while we can appreciate Lyor’s old school view of his role in the Google Nation, no one should be persuaded that his approach will change anything as long as one of the largest corporations in commercial history is allowed to weaponize the DMCA safe harbor.  The artists Lyor is focused on “helping” aren’t just flopping on any beach, they are flopping on Google’s beach, one way or another.

@scleland: The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy — Artist Rights Watch

April 16, 2018 Comments off

[Editor Charlie sez: Scott Cleland takes an excellent deep dive into the “leechonomics” of the safe harbors afforded to the special people who are members of the Internet Association and the Digital Media Association. This corporate welfare was most recently replicated in the punitive Music Modernization Act retroactive safe harbor bolstering profits from copyright infringement for the special people which passed the House Judiciary Committee on the same day that the Congress cut back the CDA 230 safe harbor for many of the same special companies and cut their profits from sex trafficking.]

via @scleland: The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy — Artist Rights Watch

Will Congress Bring Songwriters a Lump of Coal or Justice?

October 17, 2017 3 comments

It is axiomatic that as government expands, liberty contracts. Songwriters are among the most highly regulated workers in America, so on the continuum of liberty, guess where songwriters score? Most people are surprised by that unadulterated, and rather bleak, fact. After all, songwriters don’t make anything toxic or build in places they shouldn’t or dump chemicals in a waterway. Songwriters don’t have monopoly power. Songwriters don’t even get to set their own prices—the government largely does that in a very expensive and Kafka-esque process. They just write songs.

Not only are songwriters highly regulated workers and are forced by the government (or to use a term from political theory, “the Sovereign”) to bend a knee, the Sovereign has abdicated the enforcement of the laws protecting songwriters to the songwriters themselves except in rare criminal cases. Not only has the Sovereign failed to afford songwriters the same level of protection as the desert tortoise, the Sovereign actually requires songwriters to enforce the laws themselves. Sounds like a reality show.

So rather than getting even more government, songwriters are due for either getting the Sovereign out of their commercial lives, or if justice fails them yet again, at least getting the Sovereign to actually enforce the law.

Why is this important now? Because the Congress has conducted a “review” of the laws affecting songwriters and it’s possible that the Congress now is about to actually do something in the waning days of the current session of Congress. For songwriters, the holiday season is a good time to remember the most terrifying words in the English language: I’m from Washington and I’m here to help.

The Royalty that Time Forgot

The Sovereign compels songwriters to license their songs in two principal ways: The compulsory license for “mechanical” copies (Section 115 of the Copyright Act) and the rate courts (under a 1941 consent decree for ASCAP, the longest running consent decree in history, and a comparable one for BMI dating from 1964). The government set the mechanical royalty rate for the compulsory license at two cents per song per copy in 1909 and then forgot to raise it until 1976 when in its largesse, the Sovereign raised the rate to 2.75 cents per copy—inflation alone would have put the mechanical at 12 cents in 1976. That shadow of that injustice has dogged songwriters ever since and to this day.

Imagine for a moment if the Sovereign had set any other wage in 1909 and then forgotten to raise it for 67 years.

Today that same rate is 9.1 cents where it was set and forgotten in 2006—eleven years ago. So songwriters live in the shadow of that “minimum” statutory rate for which they never got relief from the Sovereign.

The Current Landscape

The main threats to songwriters from Washington come from one bill and the failed administration of two agencies: The Copyright Office and the Department of Justice. All these threats emanate from what is likely the largest lobbying cartel in history, the “MIC Coalition” an organization created for one purpose in my view: to crush songwriters once and for all. The MIC Coalition seems devoted to fixing prices for songwriters at zero or as close to zero as they can get them as far as I can tell.

The bill in Congress is the proposed Transparency in Music Licensing and Ownership Act (HR 3350) which is fully backed by the biggest of big businesses (MIC Coalition) to the detriment of the smallest of small businesses (songwriters). This legislation would impose yet another formality on songwriters by creating a massive database that would supersede the current copyright registration system for one purpose—denying songwriters the right to sue for statutory damages and attorneys fees in cases of copyright infringement. According to this legislation, if your song is not on the government’s list, then you can’t use the one big stick to drive compliance with the Sovereign’s own rules governing compulsory mechanical licenses.

Why is that? Because you are most likely to be suing a member of the MIC Coalition, or more precisely suing a member of one of the several trade association members of the MIC Coaltion—the DIgital Media Association (or “DiMA” in the logo above). The Digital Media Association is comprised of Amazon, YouTube, Apple and Spotify among others and has long been a stake in the side of the creative community. That’s right—one trade association member of the MIC Coalition represents three of the biggest corporations in the commercial history of the United States.

One alternative to statutory damages would be for the Department of Justice to assume a greater role in the enforcement of the copyright law. But the MIC Coalition has no intention of allowing that. No, no, no. The plan is to create a Gargantuan “gotcha” in order to take away statutory damages and attorneys fees as a right of any copyright owner to sue and replace it with….nothing.

Agency Failures

It is well to remember that the U.S. Copyright Office is a pre-New Deal legislative branch agency that has none of the civil or criminal enforcement powers we have come to associate with post-New Deal regulatory executive branch agencies. While the Copyright Office issues regulations, the Sovereign predominately leaves the enforcement of these rules to creators, publishers and labels to enforce at great expense. This is the one place that the Sovereign seems to want the market to work—the part where the Sovereign abdicates its primary purpose, that of protecting the people. Like I said, the desert tortoise fares better than the songwriter.

The Copyright Office does have power to affect the market by refusing or failing to act, however. For the last two years or so, the Copyright Office has permitted over 50 million and counting “address unknown” notices to be filed on compulsory song licenses using a backwater loophole of the Copyright Act. The loophole deems a song owner to be “unknown” if the owner’s contact information and song ownership is not available in the public records of the Copyright Office. This means that unless you have gone through the expensive and lengthy formality of registering with the Copyright Office for all your songs, you are “unknown”. If a cover recording of your song appears on a digital music service, then rather than track you down before using the song, the service can simply file—at great expense—an “address unknown” notice with the Copyright Office. This has resulted in approximately $5 million in filing fees to the Copyright Office to date according to an estimate from Paperchain.

And who is filing these notices and paying these fees? Google, Spotify, Amazon, iHeart, Pandora—all members of the MIC Coalition price fixing cartel. Think that’s a coincidence? Using this loophole, these corporate giants pay a zero royalty for their compulsory licenses. Hence, the cartel attempts to fix the price for songs at zero or as close to it as they can.

The Copyright Office permits these filings to occur and to my knowledge has raised no objection to it. They are unmovable on this point while they watch songwriters burn down. (I have a longer article on this “address unknown” issue here.)

The Department of Justice is currently engaged in a massive charade called “100% licensing”. This new and abrupt change in the way the DOJ interprets the ASCAP and BMI consent decrees was brought about under the auspices of a former outside lawyer for Google who was installed as a senior official in the antitrust division of the DOJ. What this interpretation means is that on co-written songs, the longstanding practice of each songwriter on a co-write administering their share of the song is thrown out the window. Instead, each songwriter is required to license 100% of the song, including their co-writer’s share. (Recall that Irving Azoff challenged Google by forming Global Music Rights and requiring a separate license for his writers who withdrew from the government-regulated PROs.)

The BMI rate court judge ruled against the DOJ—but the Sovereign is now appealing that ruling. The DOJ’s handling of the situation was so bad that songwriters actually sued the DOJ.

What is to be Done?

First—the DOJ should drop the appeal of the BMI rate court ruling against 100% licensing.  It’s a waste of time and creates substantial hostility among songwriters.

Second—the Copyright Office should stop accepting address unknown filings and refer the matter to the Congress to close the loophole. Digital services could also refuse to post recordings for which they have no publisher information, which is action most likely to produce unknown information from the market.

Most importantly—the Congress should not introduce yet another distortion in the market with some unicorn database that will never work.

As we approach the season of hope, it is well to echo what songwriters and publishers have told Congress for years: Songwriters need more liberty, not less.

@hneidig: Yelp accuses Google of violating FTC settlement

September 13, 2017 Comments off

Yelp is accusing Google of violating a 2012 settlement with the Federal Trade Commission in which the internet search giant agreed to stop passing off third-party content as its own.

Luther Lowe, Yelp’s vice president of public policy, sent a letter to acting FTC Chairman Maureen Ohlhausen on Monday saying that Google has been scraping images from Yelp to include in search results for certain local businesses.

“Google should be held accountable and subject to remedies sufficient to ensure its anticompetitive conduct does not continue to harm competition and consumers,” Lowe wrote.

An FTC spokeswoman confirmed that the agency had received the letter and would study it carefully, but declined to comment further.

The letter, which was also sent to all 50 state attorneys general and Margrethe Vestager, the EU’s competition chief, was first reported by The Wall Street Journal.

Read the post on The Hill

@davidclowery: Does Google Use Dominance in Search to Steer Traffic to “Unofficial” YouTube Videos? — The Trichordist — Artist Rights Watch

July 2, 2017 Comments off

Admittedly this is an unscientific sampling. But it sure seems like Google search (especially in ex-USA markets) seems to return top search results for UGC (User “Generated” Content) videos instead of official videos. Often no royalties are paid on these UGC videos, and in the cases where royalties are paid, they are paid at a […]

via @davidclowery: Does Google Use Dominance in Search to Steer Traffic to “Unofficial” YouTube Videos? — The Trichordist — Artist Rights Watch

YouTube Censors “YouTube Star” Who Google Invited to Interview European Commission President — Artist Rights Watch

September 19, 2016 Comments off

Reuters reports that European Commission President Jean-Claude Juncker gave a series of live interviews on YouTube last Thursday to young social media celebrities, including French vlogger Laetitia Birbes who said that “YouTube’s idea was to do in Europe what they’re already doing in the U.S. with President Barack Obama.” But Birbes got an hidden camera recording of a YouTube employee threatening her career on YouTube if she asked tough questions–and Reuters left out the fact that the EC has three open multi-billion Euro antitrust investigations against Google.  That’s three more than the U.S. has.

via YouTube Censors “YouTube Star” Who Google Invited to Interview European Commission President — Artist Rights Watch

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