Fair Use News & Views

Hard data is arriving from the Radiohead experiment.  I see two lessons here:

Free content does not necessarily kill sales

Fans under a certain age don’t spend money

The unifying them in both of these issues is CONVENIENCE.  Piracy is a tradeoff against convenience not money.  In my day technology piracy involved long distance phone calls.  I know people who didn’t pay for a call for years, but eventually the convenience tradeoff made paying a more attractive choice.  The  price of a long distance call declined also, which made the decision easier.  I talked to someone at CES who told me he was doing focus groups on whether a new music distribution method would be embraced by users under 30.  — save your money dude, the answer is no.   But these freetards will grow up and become lawyers and doctors and getting busted by the RIAA would be embarassing — and extremely unlikely.  If the scheme of distribution is more convenient than piracy, people WILL pay for it.

Yesterday Xerox unveiled their new corporate identity. I have it on good authority that they spent several $M on it’s creation. What message are they sending us?

Possibility 1:

Xerox is about to enter the gaming market (thanks for the X-box logo Microsoft)

Manga printing will be huge (and the only people who don’t hate the comic sans font)

Possibility 2

No one in Xerox management knows there is a gaming market

Hey look at this cool font no one ever uses

You decide.

A panel discussion here at CES proclaimed DRM (on music) as dead   Is it likely that the music trend will soon migrate to video?  This would imply that studios accept the fact that DVDs are rippable.  So far only Fox has an announcement related to this and I don’t expect the trend to continue due to the differences in the way music is consumed.  — video tends to be a one time play environment.

I didn’t really get out onto the floor at CES yesterday. But the mood in the HD camps was palpable. BluRay was a carnival atmosphere and HD-DVD/Toshiba felt like a funeral home. It’s over; BluRay won. Two years ago it looked like having Microsoft was the endorsement of success for HD-DVD and now it looks like the kiss of death. You can bet they are humping to get a HD-DVD into the X-Box 360 so they can do what Sony did with PS3. Microsoft has one bullet left.

Leo Gomes, writing in the Wall Street Journal, reviews the top tech trends of 2007. His list includes:

• Flash Memory
• Hobbyist-Generated Content
• Piracy

Piracy is hardly a business plan, but his message was that the inability of media companies to stamp out piracy is affecting how they do business, with DRM cited as the major issue. I believe that the major appeal of piracy is not the price, but rather the convenience. It lets consumers do what they want with media. I doubt there is a single consumer who likes the idea of DRM because it delivers NO customer benefit.

DRM opponents (who probably include everyone) fall into three main categories:

• • Idealists
  • Anarchists
  • Freetards

The vast majority of people fall into the first category; they see digital media as analogous to traditional media. When purchased, fair usage should be obvious and not interpreted after the fact by the owner. It should not matter when, where or on what it played on, just like a book or DVD. The buyer should have a perpetual right to use it and the right to resell it if he desires. A media company that insists that the DVD, cellphone version and computer version of a movie are three separate products is just asking the consumer to buy one and “steal” the other two. The only thing standing in the way of this concept is the technology and infrastructure to do it. CloakX has solved this problem.

Anarchists (who think there is no such thing intellectual property) and freetards (who think they just shouldn’t have to pay) cannot be satisfied. Would you like to know the name of the VC known as the “top VC in NYC” who says he is “proud to be a freetard?”

The University of Oregon is refusing to cave into the RIAA on a file sharing suit against 17 of its students. The RIAA responds indignantly to the defense mounted by Hardy Myers, Oregon’s Attorney General. It seems obvious that there is an identity issue here , forgetting for a moment about whether the current political mood does in fact support broad extension of policing powers.

Imagine a time when we no longer talk about digital media, and I believe that time is not far away. When the current DRM battle is solved, all media will be bought online. This means that not only will your your surfing habits become a matter of public record. How will we like it when the RIAA (and anyone else) can look at our library of music, films and books? Profiling abuses and the thought police loom large.

The industry MUST acknowledge the need for pseudo-anonymous identity in these matters. It cuts both ways.

AOL has written the final chapter on Netscape by pulling the plug on development.  Netscape started the boom of the commercial Internet, got crushed by Microsoft Explorer and was eventually sold to AOL.  AOl has a talent for buying worthless Internet properties.  Now we await the fate of AOL itself, which has been largely irrelevant for years.  When Jeff Bewkes takes over Time Warner on Jan. 1, it is widely expected he will put a bullet in AOL.  The only thing we can look forward to is the language they use to describe what they are doing.  I expect phrases like “advertising property,  interactive portal” and other mediaspeak.  With any luck, we may get a gem like the one that Terry Semel used two years ago at CES when he talked about how much his daughter used the “Wide Wide Web.”

Wal-Mart has quietly shut down its service for downloading movies. The announcement went unnoticed for almost a week, which certainly speaks to how popular it was. A couple of big companies like Wal-Mart and HP (who supplied the delivery infrastructure) might have been able to figure out that the product offering was DOA from the start. Let’s list the reasons:

•  
  • Operated on a single PC
  • Windows only
  • Price of $13-$20 per movie
  • High speed connection mandatory
  • Played only on Window Media Players (no iPods)
  • Do it yourself connection to a TV

Henry (”Amazon Will Go to $600″) Blodgett lists a lot of smart sounding reasons about branding, etc. to explain why this failed. Any 16-year-old kid could explain it more simply: It was just plain stupid. Any of the reasons above would have spelled trouble; together they were a perfect storm of cluelessness. A service like this is an ALTERNATIVE to buying or renting DVDs. A bad alternative will never be used.

Television networks continue to lose viewers.  Gaming, YouTube, BitTorrent and others provide viewers with alternatives.  Advertisers are looking for other outlets. The television writers are striking for their fair share of new media (pencils down!). Networks seem to think they can set it right by breaking the writers union, but how is that going to recover the audience that is already gone?  Networks think that if they simply embed the advertising into the content and distribute it freely on Hulu et al, then everything should work fine. Personally I don’t look forward to a solution that turns all media into AM radio with an ad in between every song and makes movies into the ones on network TV.  If that is the price I have to pay to keep the music industry and movies afloat, then they can just go out of business.  I am willing to pay for content without ads and so are many others.

I’d be very surprised if that is how things end up.