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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.

The Information’s Expose on Google’s Hostile Work Environment is a Cry for Corporate Reform

December 1, 2017 2 comments

“All animals are equal, but some animals are more equal than others”

Animal Farm: A Fairy Story by George Orwell

The Information has conducted an extensive review of Google’s apparently hostile work environment and one thing is clear–all the stories we heard about Google’s headman, Eric “Uncle Sugar” Schmidt really have had the predictably corrosive effect.

The romantic relationships within the walls of Google made ideal fodder for gossip columns and magazine profiles.

Co-founder Larry Page dated Google lieutenant Marissa Mayer in the company’s early days, and co-founder Sergey Brin later drew attention for dating Amanda Rosenberg, a younger colleague. CEO Eric Schmidt dated publicist Marcy Simon when she did work for Google. The stories had sex, money and power against a backdrop of one of the world’s largest tech empires. It was like something out of a rebooted soap opera—Dynasty 2.0.

But an examination by The Information found that those interoffice relationships, and others featuring some of the company’s top leaders, have for years been a flashpoint of frustration and anger among Google’s employees. The relationships often violated at least the spirit of a company policy that prohibits superiors from secretly dating subordinates. But employees noted that there had been no apparent repercussions for the powerful, mostly male, leaders who had such relationships.

As a result, many Google employees expressed the opinion that the company’s culture appears to tolerate, or even endorse, such workplace relationships. In interviews with nearly 40 current and former Google employees, many said the issue had tainted the perception of women who earn promotions, created uncomfortable encounters at off-site events and had raised concerns over whether human resources would address inappropriate conduct. Some described their own experiences with sexual harassment at the company.

And it goes on from there.  While you may ask, where was the board, the Google board of directors was actually exactly where Uncle Sugar wanted them to be:  In the words of the Rolling Stones’ classic, under his thumb.

of-all-the-ceos-google-interviewed-eric-schmidt-was-the-only-one-that-had-been-to-burning-man-which-was-a-major-plus

Eric “Uncle Sugar” Schmidt at Burning Man

The Roman dictator Sulla is credited with originating the practice of decimatus from which we derive the word “decimation”.  The practice was military in origin and was a punishment meted on a Roman cohort often for the dishonor of the unit such as mutiny or abandoning the line.  The cohort (about 500 men) was divided into groups of 10 and each group drew lots to identify a single soldier to be killed by the others, usually clubbed to death.

Google practices a kind of reverse decimation as the three Google insiders Eric Schmidt, Larry Page and Sergei Brin are the only Google stockholders who are allowed to hold a class of stock that gives them 10 votes for each share.  And extending the Roman motif, holding this 10:1 voting power over other Google stockholders affords them a kind of co-emperor status–for you Roman Empire fans, think Diocletian and Maximian.  I guess you could say that Schmidt is the senior co-emperor and Page and Brin are the junior co-emperors.

But co-emperors they are indeed with a 10:1 power to decimate the lesser stockholders who dare challenge them.

The futility of stockholder votes at Google is obvious at Google stockholder meetings where ordinary stockholders are routinely decimated by the 10:1 voting power of the co-emperors.  The predictable results of the voting are often announced by David Drummond, the company’s head lawyer, who is himself implicated in The Information’s report.

So when you are reading The Information’s report on the internal workings of Google, just remember that not only were the employees captive to the Google culture, the perpetrators also had complete control of their board of directors.  In addition to the other takeaways from this sorry episode, it should be obvious that not only should Google be broken up, but the Google method of insider control needs to be thoroughly investigated.

Google Sends in the Shills to Dodge Appearing at @SenRobPortman’s Hearing on Stopping Human Trafficking

September 14, 2017 Comments off

U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, will convene a legislative hearing titled “S.1693, The Stop Enabling Sex Traffickers Act of 2017” (authored by Senator Rob Portman and Senator Richard Blumenthal).  The hearing will be at 10:30 a.m. on Tuesday, September 19, 2017–but Google and Facebook won’t be there.

Why?  According to the committee website:

S. 1693, sponsored by Sen. Rob Portman (R-Ohio) and 27 additional cosponsors, proposes amending Section 230 of the Communications Decency Act to create new legal liability for internet companies whose sites knowingly facilitate sex trafficking and other crimes through content hosted on their platforms. While it does not affect federal criminal liability, Section 230 of the Communications Decency Act was written to protect internet platforms from civil and state criminal liability for content created by others, including liability arising from the actions of others who post unlawful content or use the platform for unlawful behavior.

As MTP readers will recall, Google has a long history of supporting human trafficking sites like Backpage.com through Google surrogates like the Electronic Frontier Foundation and the Internet Association.  Sending surrogates works best when the people you are trying to deceive don’t figure out that you’re doing it.  Senator Portman isn’t fooled by shillery.  As reported in Politico:

Kevin Smith, communications director for Sen. Rob Portman , told MT that was less than ideal. “Senator Portman has made clear that companies that oppose this bipartisan bill should defend their position publicly and testify,” Smith said. “It’s disappointing that they chose to send up a trade association instead.”

Professor Goldman, a reliable defender of  Section 230, is also testifying.  Professor Goldman teaches at Santa Clara University–which received $500,000 from the controversial Google Buzz class action settlement.  I doubt that this payment had any direct affect on Professor Goldman’s views, however.  To his credit, he does not appear in the current version of the Google Academics, Inc. database, the definitive resource for Google-funded academics.

The incomparable Nicholas Kristof recently wrote an op-ed about Google’s sex trafficking problem in the New York Times:

Sex traffickers in America have the police and prosecutors pursuing them, but they do have one crucial (if secret) ally: Google.

Google’s motto has long been “Don’t be evil,” and I admire lots about the company. But organizations it funds have for years been quietly helping Backpage.com, the odious website where most American victims of human trafficking are sold, to battle lawsuits from children sold there for sex.

Now Google is using its enormous lobbying power in Washington to try to kill bipartisan legislation that would crack down on websites that promote sex trafficking.

It will be interesting to see if either the Internet Association or Professor Goldman tries to take the line adopted by Google lawyer Kent Walker (at the Google annual shareholder meeting) and try to get the Congress to believe that the Congress “was striking a blow for Good Samaritan review by Internet platforms” with CDA 230.  In other words, the Congress wanted to help Good Samaritans that are “quietly helping Backpage.com….to battle lawsuits from children sold there for sex.”

We shall see.  Live video will be on the Commerce Committee website.  You can call your Senator to express your views on the legislation at (202) 224-3121.

Bruce Houghton: Why Didn’t Google Shut Down YouTube-MP3 Sooner? — Artist Rights Watch

September 7, 2017 Comments off

By many measures, YouTube streamripping became the #1 source of music piracy, widening the riff between the music industry and the online giant. But the shuttering of #1 ripper YouTube-MP3 came only after legal action from some injured parties – the major record labels.

via Bruce Houghton: Why Didn’t Google Shut Down YouTube-MP3 Sooner? — Artist Rights Watch

Google and Amazon Leverage Copyright Loophole to Use Songs Without Paying Songwriters

October 15, 2016 4 comments

Two vastly wealthy multinational media companies are exploiting a copyright law loophole to sell the world’s music without paying royalties to the world’s songwriters on millions–millions–of songs. Why? Because Google and Amazon–purveyors of Big Data–claim they “can’t” find contact information for song owners in a Google search. So these two companies are exploiting songs without paying royalties by filing millions of notices with the Copyright Office at a huge cost in filing fees that only megacorporations can afford–an unprecedented land grab in nature, size and scope.

That’s right–Google and Amazon are falling over themselves to use their market power to stiff songwriters yet again. And as I will show, it is not just obscure songs that are affected. New releases, including one example from Sting, are also targets suggesting significant revenue loss to songwriters.  (I go into this in more detail on this series of posts.)

I happened to speak to a representative of one of the mass NOI filing companies after a recent panel in Los Angeles who assured me that the reason that his clients were filing these NOIs was not because they did not want to pay royalties but because they were so worried about liability from a “Jeff Price jihad” and that his clients fully intended to pay royalties retroactively once the song owner became known unlike the record companies who are “thieves”.   I believe that he believes that his client believes that they’re just trying to avoid being sued for not having the rights, but humor this unbeliever.  My bet would be that getting that retroactive payment will take the effort worthy of an act of Congress.

Perhaps literally.

If his new boss clients had a reputation for or history of treating creators fairly, I’d be far more inclined to bet on sunshine and puppy dog tails, but they don’t so I won’t.  The problem would be easy to solve–all they would need to do is issue a press release or even a blog post on the Google Public Policy blog stating that it is the official position of the company to pay retroactively.  Even if you accept his premise that record companies and music publishers are “thieves,” they never filed millions of NOIs.  In the meantime while we’re waiting for that post, I think we have to act as if it is not coming.

The U.S. Compulsory License

Songwriters are the most regulated workers in America. The government sets wage and price controls on most uses of songs and practically everything else about a songwriter’s business–except fulfilling government’s basic role of keeping them safe from piracy and multinational monopolists gaming the system. Congress needs to stop this latest scam.

The latest loophole that Google and Amazon are hacking is uniquely American–the compulsory license for songs. No other country has one. Most songwriters would prefer that the U.S. repeal this legacy anachronism from 1909 that keeps the government’s boot on their throats.

In order to get the government’s license, services only need notify the songwriter (or their publisher) that the service intends to use the song under the compulsory license. Of course, sending this notice of their intention to use the song (called an “NOI”) requires knowing who to send it to, and that is the “hack” that Google and Amazon are exploiting now. Others services surely will follow their market leadership if Congress fails to act.

The hack uses market power to manipulate a loophole in how those NOIs are sent. Common sense tells you that to send a notice, you must know who to send it to, even for a song. But does common sense also tell you that if you don’t know, the law should allow you to exploit the songs without compensation? Particularly if you’re the biggest purveyor of data in human history?

The legacy compulsory license allows services to exploit songs if they decide they can’t find the songwriter–and not pay royalties until the songwriter finds them.

That’s right–Google and Amazon trade on a loophole that allows them to serve NOIs on the U.S. Copyright Office if the song owner cannot be found in the public records of the Copyright Office regardless of what other information is readily available to these services, including their own. And once Google or Amazon serve that “address unknown” NOI, they don’t have to pay royalties and they cannot be sued for copyright infringement–so the millions in filing fees they will spend at the Copyright Office is a kind of insurance premium. This excerpt from the Copyright Act states the rule:

sec-115-noi-unknown
Why Can’t Google Search?

The “address unknown” NOI starts from this premise: Google is supposed to search for the song owner’s contact to send NOIs.

That’s right–Google is supposed to search. Think about that. This 1976 rule was never intended to apply to a music user with Google’s search monopoly. Yet, if Google “can’t” find the song owner after a search, then Google can serve an “address unknown” NOI to the Copyright Office and then exploit the song for free until the songwriter can be “identified” in the Copyright Office records–which may be never.

That registration by songwriters–while prudent–is costly and entirely voluntary. Forcing songwriters to register essentially turns the system into a version of YouTube’s “opt out” debacle, and probably violates international copyright treaties.

But the idea that Google can’t find someone is a remarkable thought. Gmail alone has over one billion users. Google knows everything about everyone and makes billions of dollars from reselling and manipulating that information. Not to mention the fact that Google bought the music licensing service Rightsflow–itself an NOI mill. Not to mention ten years of information Google has scraped from Content ID on YouTube or sheet music on Google Books.

Amazon also has a phenomenal amount of information about music ownership. As one of the biggest CD and DVD retailers, Amazon certainly has a head start in song research.

However–it appears that Google and Amazon are not using their own data for NOIs. Instead, they apparently are buying databases from the Library of Congress that tell them whether a song is registered for copyright or otherwise recorded in the digitized Copyright Office files (which songwriters are not obligated to do in order to get the benefits of the compulsory license). Those Library of Congress databases at best only cover copyrights after 1978 for technical reasons, so tens of thousands of jazz, blues and classical compositions created before 1978 are not included, as well as songs from outside the US before or after 1978.

LOC Prices Databases.png

Why buy this data when these giant corporations already have so much information at their fingertips? Because the point for the services is not to find out who actually owns the songs, the point is to find out if the Copyright Office has a record of who owns the songs based on the Library of Congress data.

That is the hack.

Kafka-esque Moral Hazard

In other words–the government allows Google to claim they can’t find the songwriter even if Google’s own data would reveal their identity just because the song owner isn’t included in the Library of Congress database at the time Google searches. And there’s the “gotcha”.

Kafka’s next book is in there somewhere.

Offering all the world’s music all at once presents a licensing problem that no system will be able to solve due to the sheer numerosity and disaggregation of the creative process. How many songs will be written by the time you finish reading this post and how would you find out who wrote them?

So it should not be surprising that the market has offered a few ways to solve for this problem: Direct licenses (bypassing the NOI altogether) and NOI clearance companies that specialize in maintaining song owner information to send out mass mailings of NOIs (sometimes called “carpet bombing NOIs”).

These are two significant methods available to Google and Amazon and my guess is that these monoliths employ both methods for their interactive streaming services (the kind of service that competes with Apple and Spotify).

What’s the Alternative?

If Google and Amazon cannot find the song owner under their direct licenses or through an NOI company, how can they find the song owner? The easy answer is don’t use the song. But that approach is counter to offering all the world’s music at scale by creating supply that is not responsive to demand.

Deciding which songs are right for “address unknown” NOIs requires some Silicon Valley style hocus pocus. Remember–it’s not that Google can’t find the song owner. The loophole requires that they can’t find the copyright owner in the pubic records of the Copyright Office, even if Google has actual knowledge of their whereabouts.

Then you have to believe that Google knows where to get the information for which direct licenses they want, they know how to carpet bomb NOIs, they have a decade of information in Content ID, but when it comes to some songs, Google has to turn to the Library of Congress? And Google’s only choice is to serve “address unknown” NOIs on the Copyright Office?

Once served, the Copyright Office posts these mass filings on their website in large Excel files so that songwriters can sift through the haystack to find their needles. This hit and miss and self-serving process is fraught with moral hazard and should not be the law in 2016.

This is what the filing looks like–but realize that “1 NOI” means “1 NOI With An Excel file with over 40,000 songs on it”.

co-nois-1

Sting Songs Give Some Examples

A spot check of a couple of Google’s filings reveals that Google is not getting it right. Let’s use three Sting songs for an example.

Sting’s recent release “50,000” (coincidentally a tribute to David Bowie and Prince) is on Google’s “address unknown” NOI list. That song is probably subject to a direct license, but the song copyright registration may not yet have been processed. There’s almost always a delay in processing copyright registrations, so new releases will rarely appear in the Library of Congress database day and date with the song’s release. Google will not be paying royalties on Sting’s song, but will be exploiting it.

That’s right–a song that is a tribute to an artist rights advocate like Prince is itself being ripped off.

50000-noi

Google has also filed an “address unknown” NOI for a song entitled “Fragile (Live)”. My bet is that “Fragile (Live)” is “Fragile”, the well known hit song and anthem of the environmental movement.

sting-fragile-google-noi
This likely means that someone at Google seems to think–or wants to think–that “Fragile (Live)” is a different song than “Fragile”, probably because there is a sound recording registered for “Fragile (Live)” in the sound recording metadata but no song registered by that name in the Library of Congress database. And why would there be if it is the same song? We humans have a way to catch this kind of mistake.

It’s called listening.

This pattern repeats with “Brand New Day (Cornelius Mix)”, also included on Google’s “address unknown” NOI. Again, a version of the sound recording, not the song. The song remains the same.

sting-brand-new-day-mix

It is highly likely that the songs “Fragile” and “Brand New Day” were registered with the Copyright Office long ago. That’s probably why the “Live” and remixed versions of the sound recordings show up in Google’s NOI filing for the songs and the original versions do not.

In this case, not only are these songs likely covered under a direct license with Sting’s publisher, but even if they are not, the song owner’s information is identified in the public records of the Copyright Office. The loophole does not apply, but Google takes it anyway and the cost of checking up on a multinational media company falls on the songwriter.

And given that it’s Google, the songwriter will probably have to sue them to a final non-appealable judgment in order to fix the mistake that should never have been allowed to happen in the first place.

The Congress Must Act

The government’s compulsory license has become distorted by rent-seeking behavior by multinational media corporations. It should be stopped or substantially modified. If Google is allowed to use this loophole to profit at the expense of songwriters from its considerable influence peddling and litigiousness, that will be crony capitalism writ large.

Despite the assurances of the mass NOI filing agent, my view is that until I see it in writing, I have to assume that Google and Amazon took this route because it not only offered an opportunity to react to Jeff Price or David Lowery who have the temerity to speak up on behalf of song owners, it had the added bonus of actually stiffing songwriters. The reason I think that is so is because that’s what they chose to do rather than taking the obvious alternative–just not using someone’s property if you decide you can’t find the owner.

Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

September 29, 2016 Comments off

Google, Amazon and MRI are reportedly filing “millions” of NOIs with the Copyright Office after buying data out the back door of the Library of Congress–all to avoid paying statutory royalties.  This takes “carpet bombing NOIs” to a whole new level of hurt for songwriters, and forces the Copyright Office to be complicit in the wholesale rip off.

via Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

@amassembly Astroturf “Study” a Case Study for How Google Launders Money

April 7, 2016 Comments off

If you read the Notice and Takedown in Everyday Practice “study” that was at the center of the controversy over the attack on the Copyright Office comment page on regulations.gov, you’ll greatly appreciate the irony in this clear and concise acknowledgement (at p. iv) of exactly how Google launders money through real or created nonprofits to produce “studies” that appear to be academic and objective.  You know…astroturf:

This work would not have been possible without both data and funding resources for the coding effort. We thank Adam Holland [of the Google-funded Berkman Center] and [former lawyer for Google-funded EFF] Wendy Seltzer of [Google-funded] Lumen (formerly Chilling Effects) for facilitating access to the Lumen data, which [is 99.4% Google data] forms the basis for our quantitative work. We are grateful for funding support from Google Inc. as a gift to The American Assembly and from the Sloan Foundation for its support through the Berkeley Law Digital Library Copyright Project.

If you have any questions about the extent of Google’s influence, I highly recommend the excellent Public Citizen report (which is not astroturf) “Mission Creep-y: Google is Quietly Becoming One of the Nation’s Most Power Political Forces While Expanding Its Information Collection Empire.”

We expect that Google will run its money through the EFF, the various Samuelson-Glushko forward operating bases around the world, but it is a surprise that the venerable American Assembly (founded by President Eisenhower–Mr. Military Industrial Complex himself) would allow itself to be manipulated by corporate interests to such a degree.

Unfortunately for the American Assembly, they are the perfect target for astroturfing by defense contractors like Google.  It sure looks like somebody or maybe several somebodies decided to shill for Google.  Easy explanation?  When Google was asked to buy “the American Assembly,” somebody must have thought they meant the Congress of the United States political science education being what it is with STEM workers in Silicon Valley.

Maybe they’ll rename Boston Dynamics something suitably semiotically Goo-Goo-Googlely like “Porridge”.

google-android-3-gingerbread

 

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