The Mind Trap

Is p2p Doomed?

IDG: One executive of a p2p company has said that all file-sharing companies will be forced to change their business model because of the recent Supreme Court Ruling in MGM vs Grokster.
"Speaking at a Senate Judiciary Committee on Wednesday, Sam Yagan said that in order to avoid expensive litigation, file-sharing companies will have to change their models to become similar to iTunes or the new Napster or face expensive legal battles...MetaMachine won't be an exception. "Because we cannot afford to fight a lawsuit--even one we think we would win--we have instead prepared to convert eDonkey's user base to an online content retailer operating in a 'closed' P-to-P environment," he said.
MP3Newswire: Limewire is planning to restrict sharing of audio files unless they are properly licensed...
"Part of the code allows people to attach Creative Commons licenses to their files, and to verify that the people who attach the license are accountable, as far our correspondent was able to tell. Unlicensed audio files won’t show up in shared folders, and will be invisible to search requests by the newer clients."

P2P Sites Caving To Pressure From Labels?

News.com: The suggestion is made that several p2p sites have shut down following a letter from the Recording Industry Assocation of America threatening legal action. While some of them may have been created specifically to allow piracy (I'm not familiar with all the p2p services cited) I'm pretty sure that BitTorrent wasn't, at the least. I doubt -- hope -- that it isn't forced to shut down.

Comments On Kazaa

Weatherall's Law: It's good to have some extensive commentary on the Kazaa case...this blog has the issue covered fairly extensively. The main point? Both parties are going to have to work together under the oversight of the court...that's going to get catty. But if you're interested in the area (file sharing, piracy, the peculiarities of Australian law) this is a good read.

More On Grokster

The decision against Grokster (originally blogged here) is likely to be discussed for quite some time. The original consensus that technology that allowed copyright infringing activity was legal but promoting or inducing copyright infringing activity is illegal has been maintained...although people have vastly differing opinions on what would constitute "inducing" and how clear the court has been in defining the term.
FindLaw: FindLaw has a piece up on the topic, and as usual it is clear and fairly comprehensive. It argues that the decision rescues technology by allowing innovation as long as copyright infringing activity is not promoted, pointing out that "the fundamental characteristics of information technology facilitate copyright infringement".

As important as what the Court said, is what the Court did not say.

The Court did not reinterpret Sony to apply only where the principal use was legal. This new test was what the studios most dearly wanted.

Also, the Court did not hold that a company could be liable because the product could have been designed differently to bar copyright infringement - as for instance, the iPod could have been, by being designed to bar MP3s.

The Court did note that the design of the software was relevant to a contributory infringement claim, but only when there is evidence of inducement.

The record labels apparently wanted the decision to state that if the primary use of a technology was copyright infringing then the technology should be illegal...which would leave Apple in trouble since iPod users have downloaded an average of 25 songs per iPod -- far short of the total capacity, which could be filled with pirated tracks.

No wonder, then, that the risk of chilling invention was very much on the mind of the Supreme Court Justices as they heard oral argument in the MGM v. Grokster case in March. Justice Breyer asked the studios' lawyer: "Are you sure that you could recommend to the iPod inventor that he could go ahead and have an iPod, or, for that matter, Gutenberg, the press?"

Imagine the scene in the Apple boardroom if the iPod were being rolled out today, and the studios had had their way in Grokster:

"Mr. Jobs, are you confident that this device you call an iPod will be used principally for legal songs? I might remind you, Mr. Jobs, that your 60 MB model holds 15,000 songs, costing $14,850 if purchased through iTunes. Do you expect Americans to hold out against the temptation to download illegally to the tune of thousands of dollars?"

And the music industry would go after Apple, it has a habit of trying to kill the goose laying the golden eggs...

LA Weekly: Compares Grokster with a baseball bat...but tends to come down with the view that the decision won't stifle innovation, claiming BitTorrent is immune...

Internet News: This article feels the inducement clause is too vague, and will have a negative impact on innovation. "This won't chill the innovator. But it chills the capital behind the innovator. If a technology company came to us with promising commercial uses for their product, that's a less interesting investment today, and certainly less interesting if the Supreme Court had protected the technology, despite the behavior of their users...You're not going to put your capital at risk if there's a high likelihood of being sued and losing." The article also points out that Google's lawyers will be studying the decision very carefully to determine whether selling advertising next to infringing material constitutes "inducement"... I don't think it does, but obviously Google would want to be very sure. Google is already being sued for copyright infringement...

Supreme Court Rules Against p2p, Sort Of

Well, the Supreme Court in the United States has ruled on the Grokster Vs MGM case, and came down unanimously against Grokster...but not against p2p technology. From the general discussion it appears that the judges ruled that peer-to-peer technology is legal but promoting that it be used for infringing copyright is illegal. The Court Opinion is here as a PDF, and states: "The record is replete with evidence that from the moment Grokster and StreamCast began to distribute their free software, each one clearly voiced the objective that recipients
use it to download copyrighted works, and each took active steps to encourage infringement."
Some Opinions:
BillboardPostPlay: Todd Beals joined the conference call put on by RIAA and MPAA, which labeled the decision "commonsense" and indicated they may now be prepared to work with filesharing technology...apparently having realised that its a far better distribution system than anything they've come up with and will be of enormous benefit to them.
InternetNews.com:Obviously, Grokster and StreamCast are unhappy with the decision, describing it as "Orwellian". Their main beef seems to be that it is not clear what constitutes "inducement to infringe copyright" and this murkiness will lead to the record labels becoming the "thought police". "What the court did today was to write a set of standards whose most notable immediate feature was their lack of clarity," says Rich Taranto, a partner with Farr and Taranto who argued the case for Grokster. (quote taken from the following article)
BillBoardRadioMonitor: Tech companies across the board are troubled by the ruling, apparently due to the same lack of clarity that Grokster complained of. "We do have those concerns," says David Pakman, eMusic COO. "We don't think that stings us down the road based on the current service we have. But we constantly look at new features that we can deploy that may have a combo of infringing and non-infringing use. We now have to question if we can offer a feature that can be used legally by our users but illegally by others, are we liable? That puts a cloud over development activities over innovating new features."..."It's not that we're worried about bad conduct being caught," adds Black. "It's that a whole lot of benign and ambiguous content is now subject to challenge with all the heavy burden that entails."
PC Mag: Lawrence Solum, John E. Cribbet Professor of Law at the University of Illinois College of Law, thinks the decision is a big win for p2p companies -- other than Grokster and StreamCast, of course. "The court laid out what should be avoided in internal memoranda and advertising," Solum said. "With this information, P2P services and software developers can easily figure out how to immunize themselves from prosecution." He seems to be by himself with this claim...
Corante:A cadre of lawyers debating copyright is going to keep talking about this for weeks...or longer...but there are a lot of good things here to read if you want to go into a lot of depth.
As a side note, my old stomping ground ZDNet Australia has reported that two sys-admins for an Australian ISP are being sued for copyright infringement because of actions of the ISPs customers..."The labels allege Swiftel's senior systems administrators Melissa Ong and Ryan Briggs ignored calls to remove Web sites that were in breach of copyright, and instead "treated the infringement notices like spam."

Piracy Is Good For TV Producers?

Mindjack Part 1
Mindjack Part 2
Mark Pesce (writer of The Playful World: How Technology is Transforming our Imagination) gave a talk at the Australian Film Television and Radio School in Sydney about the future of television in a digital age characterised by 'hyperdistribution' -- his phrase for the sort of distribution found with programs such as BitTorrent.

His argument is a bit confused at times, for example arguing that hyperdistribution has killed the prerecorded television show before suggesting that the high ratings for the latest Battlestar Galactica were due to pirated copies circulating the internet and creating good word of mouth. He also claims that people won't pay for television, stating that DVDs of TV shows appeal to a core fan group who buy them to express their fan status rather than to watch TV.

Despite this he does make a very good case for television producers to embrace hyperdistribution as a business model. The key to selling advertising space in a show with no ads is the "bug", that transparent station logo that has appeared in the corner of just about every program.

There's nothing to stop advertisers putting their logos or ads here, and it would be difficult to remove them without destroying the program. This sort of thing already goes on with sports shows (I suspect because the broadcast rights have become so hideously expensive).

"The idea of an advertising payload attached unobtrusively to the television program has a certain appeal; it can be ignored, but it's always present. The audience can't edit it out of the program without destroying the content of the program. Audiences will learn accept them — so long as the advertisements aren't too busy, distracting, or otherwise obnoxious. (Consequently, there will be a lot of work going on in the next decade to determine just how obnoxious such an ad can be before the audience objects to it.)"

The biggest problem with this scenario is that the advertisements can't be localised at all. Walmart ads won't be relevant in Australia, Telstra ads won't be useful outside Australia and so on. The only companies that are likely to get the best out of this system are huge multinationals like Coke and Nike. I'm sure there's a way around this once some creative people get on the case.

The important thing is that creative people DO get on the case...which will require the producers of television programs to embrace the model from the beginning rather than simply try to shut it down -- which after all has completely failed to help the music or movie industry. He advocates promoting programs by "actively encouraging fan communities - social networks which spread the word about the show".

Finally, he predicts a change in the way TV shows are made because they will be watched on mobile phones, playstation portables and similar devices..."Freed from the tyranny of the box, people will be watching more TV, and more different kinds of TV, than ever before...Audiences are growing fond of the idea of on-demand TV, available wherever they are, whenever they want to watch it. Television viewing has become a multitasking activity; you might watch a short program - something like the 11-minute "Adult Swim" episodes pioneered on the Cartoon Network, or the 3-minute "mobisodes" being rolled out by various wireless carriers. You can dip in, watch something, then go on to something else."

This is a good outline of where prerecorded television production is headed and a way for everyone (except the broadcasters) to be happy with it. The problems that I pointed out can be solved...it's good that someone's made a start.

Interest In Filesharing At All-Time High

Slyck: "Although the mainstream media tends to report there is a decline in P2P and file-sharing usage, it appears this is largely incorrect. Quite the contrary, the interest in P2P and file-sharing networks appears to be at an all time high, with no end in sight." The stats they present support that statement, and there are a couple of good-looking graphs to make the trends even easier to see... while there's a steep decline in the months after RIAA first started suing file-sharers in April 2003 the dip only lasted for a couple of months before numbers surged back to the previous level. In fact, the numbers of file-sharers have almost doubled in the past two years, a clear indication that the scattergun legal strategy adopted by RIAA hasn't been successful in reducing use of p2p software (which they consider synonomous with copyright infringement).

Maybe the labels should try a different approach, such as making their content easily available at a reasonable price in the format consumers want... (via BillBoardPostPlay)

File-Sharing And The Clash Of Technology And Copyright

An interesting article by a professor of business, economics and information management at the University of California, Berkeley, comparing the current battle between music labels and p2p companies with similar battles in the past.

"The critical lesson from the history of the VCR is this: If consumers have ways to share content, either via rental markets or via the Internet, you will have to set low prices to induce them to buy. But low prices may well stimulate enough volume to make up for the lost revenue."