Broadcasters win one, for now

February 24, 2011 By Terry Heaton Leave a Comment

Of all the disruptions facing traditional forms of media today, none is greater than that which is threatening the value-through-scarcity of the broadcasting/cable arrangement. The broadcasters won one in court this week, when a U.S. District Court in New York issued a preliminary injunction against ivi, Inc. The injunction stops the company from streaming copyright-protected broadcast programming online, creating an online form of cable at much lower rates than cable itself ($4.99/mo).

According to the Associated Press, the court rejected ivi’s reasoning that it is “entitled to the same rights to distribute broadcast programming that federal copyright law automatically grants cable TV operators.” The court found that ivi does not qualify as a cable system.

ivi website

The company is being sued by a host of entities, including local broadcasters in Seattle and New York. ivi said it will shut down its broadcast offerings while it appeals. In a press release following the decision, ivi CEO Todd Weaver sounded a lot like protestors in the Middle East.

“This fight is for the people and their right to choice and control over their own entertainment — and it will continue. The oppressive big media networks must open their doors to innovators or they will inevitably fall. People want responsible choice, not the one-size-fits-all television offerings imposed by powerful media interests.”

ivi argues that this is an issue for the FCC and not the courts under copyright, an argument they have little chance of winning. The content within the signals that ivi retransmits belongs to its creators, not the public. I do think, however, that ivi is right in stating that sooner or later, program creators are going to have to realize that the old model of forced scarcity — and for which they can charge an arm and a leg — can’t last forever. Personal broadcasting — including content marketing by the people formerly known as the advertisers — is on the rise, and if Hollywood (and the National Association of Broadcasters) isn’t careful, it’ll find itself on the wrong end of the public’s attention curve.

Consider that the rapid growth of what Borrell Associates calls “non-ad spending” among advertisers includes their own programming, and that these people would be very happy with any distribution model. They are, after all, the folks with the money that support all this programming in the first place. Here’s what Gordon Borrell told me on the subject:

The onset of digital media has accelerated the trend whereby businesses are spending more on non-traditional forms of advertising. Traditional advertising as we know it has gone flat, while “non-advertising” forms of marketing have increased — like spending money on their own websites, paying for product placement in programs, giving away products and services for free via the Groupon program, paying to have their websites optimized for search engines, etc. The table below shows that businesses spend twice as much on “non-advertising” marketing than they do on traditional advertising. To look at it a different way, you might say that advertisers, like consumers, now have control of the media.

Consider also that all of the forecast models for the future show a dramatic increase in online video usage. Search and unbundled distribution options will rule the roost, not some programmer’s view of what to watch when and where. Google TV and everything like it will have their day. The broadcasting industry must be on the forefront of this and not be fighting every attempt to develop the marketplace. As we learned with music, the people will have their way. Does the NAB have the courage and smarts to lead the way, or will we simply try to stop it in the name of short term results?

ivi’s approach on all this has been bold and in-your-face and, as such, could be seen as almost laughably naïve. “They’ll never get away with it,” is a logical response. The noise they make along the way, however, will resonate with everyday people, and that’s a problem no matter what the courts decide.

Filed Under: Broadcasting, Copyright, Disruptions, Legal

Social media as “shop talk”

January 1, 2011 By Terry Heaton 1 Comment

overworked I went to my local Verizon store New Year’s Eve to check out the Motorola Droid Pro, which I plan to purchase. It was also time to investigate my family account for discounts and and upgrades. We were the only customers present, something that’s very unusual, so I had the attention of all three clerks. They were temporarily out of Droid Pros, but said they could get one and that I could come back today, New Year’s Day.

“You’re open?” I asked.

“Yeah,” a nice young man replied.

“What hours do you have to work?” I probed.

“Well, they’ve sort of messed with us,” he continued, “because we were supposed to be open from 10–6. They just notified us that we’re working until 8 o’clock.”

Eyes rolled, and I lamented the extra two hours with them, but in the back of my mind, I couldn’t help think that, sooner or later, this kind of corporate behavior is going to have to end. It cannot exist in a hyperconnected universe, because word travels fast. We’ll go through a season of people getting fired, because they complained about this or that on Facebook, but in the end, who will want to work for a company with such practices? It certainly won’t be the best and brightest. Our ability to talk to each other — to complain to each other and find solutions — is what’s really new about today. I suspect we’ll need to strengthen “shop talk” labor laws to include social media in order to eventually protect people from sharing complaints that normally would have been kept at home.

This points to what people like Umair Haque and John Hagel preach: that best business practices for the 21^st Century are very different than those of the Industrial Age. When profit is the fundamental raison d’être, then anything goes in the name of profit. Too bad, employee. You want a job, you’ll do anything and everything I tell you to do, and you won’t complain. But pure profit can no longer be the essential driver of business in a hyperconnected universe. It has to be about creating and maintaining value. If you stand any chance of a quality labor force, you simply must treat people differently, and not just your customers. The smart business person of today is beginning to see that. It’s not all about salary; it’s very much about working conditions. There are big corporations whose CEOs are quite adept at gutting working conditions in the name of profit. They are rewarded for so doing, because that’s how they’re graded by investors. They don’t give a crap about brain drain, because that’s not a part of their compensation, so who cares if employees must endure ungodly hours or manage their own benefits? A manager who practices this for long will soon find herself staring at an empty room where a factory used to be.

This will be their undoing, because what used to be called “shop talk” is now being spread far and wide. It’s only going to get worse for those who worship the bottom line at the expense of human beings.

I love Verizon and have been a faithful customer of theirs for a very long time, but this event has given me pause. What kind of business do you think they’ll do in those extra two hours…on New Year’s Day? What will they have accomplished except piss off their labor force?

Filed Under: Culture, Economy, Legal, Politics

The Feds and the new Prohibition

November 26, 2010 By Terry Heaton 1 Comment

Torrent Freak is reporting this morning that the Justice Department and the Department of Homeland Security are — without due process — seizing domains of sites involved in the practice of bit torrent distribution of copyrighted material, namely music. In seizing the domains, they effectively shut down the business of the sites, although it’s likely they’ll just move elsewhere.

Here’s what it looks like when you go to torrent-finder.com, one of the domains seized.

torrent-finder.com page

This makes me wonder why. Why would our tax dollars be used to help the music industry stop what it believes is killing its business model. Why is this a matter of “homeland security?” Why would the U.S. make such an anti-freedom move on the world stage that is the Internet. Why? Why? Why?

The simple answer is it’s all about money, but like so many other things, this one is actually complicated.

Long ago, when this first began, I wrote a letter to my congressman in Tennessee stating my protest of the federal government’s involvement in such things. He wrote back that copyright is, in fact, America’s biggest export and that we had a duty to protect it. Basically, we entertain the world, and that’s the justification given from Washington.

(I’ve not been able to subsequently document that claim, but let’s just take the congressman at his word. And sorry, but I don’t have the letter and can’t remember his name.)

In the name of a global economy, we’ve let many real value markets slip from our shores, and so the government feels duty-bound to step in and protect this one.

This is, IMHO, horse crap. First of all, Hollywood and its copyright cartel are deep into the pockets of the very legislators who are now helping them, so politics is a big part of it. Secondly, the shotgun approach noted in the Torrent Freak report is distinctly reminiscent of the tactics of the RIAA in suing mom and aunt Sue for downloading music illegally. It’s not so much about actually doing something as it is about scaring everybody while making life difficult for a few. We’ll never know for sure, but you can bet the ranch those same lawyers are advising Uncle Sam. Thirdly, didn’t we form the Department of Homeland Security as a response to terrorism? It takes some serious distorting of reality to turn bit torrent into a form of terrorism.

Folks, we’ve got to do something about this and do it fast. We’ve already proven that prohibition doesn’t work, and we need to have the balls to go back and ask ourselves honestly why people are unbundling and redistributing music. This is something the cartel refuses to examine, because they are solely driven by the goring of the poor ox who’s pulling their money train.

Music led the cultural revolt against “the man” during Vietnam, and it has always been on the cutting edge of change. Some writers are the prophets of today, and rather than listening to them, we’re too busy making money off of them to care. So big is was the money, that those in charge have systematically tried to remove the prophets and replace them with guaranteed, albeit homogenized, hit makers, whose sameness is a pathetic ghost of music past. And, of course, a part of the hit making recipe is to package one decent tune with 11 pieces of garbage, and demand we buy it that way.

So the music industry must look itself in the mirror, if it wants a real seat at tomorrow’s music table, for even now, writers, singers and musicians are finding alternative paths to fame.

I voted for Barack Obama, because I felt a real need for change, and that’s what he promised. That this is happening on his watch isn’t so surprising (the campaign contributions) as it is just plain sad. I don’t blame the music industry for its complaints, but I do blame our government for its complicity in this unAmerican activity.

Finally, here’s a warning from an old guy to all of you young people. If this is allowed to continue, the law of unintended consequences will some day rear its ugly head. If the government is permitted to tamper with the essential structure of the Web — as in the seizing of domains — where will it stop? Human greed of one form or the other will take over, and all that we hold dear will be at stake. I’m not advocating chaos; I’m merely stating that when we take such drastic legal steps against anybody for anything, they must be granted due process. Otherwise, we’re a nation of jack-boot wearing automatons serving at the whim of our master, the guy or gal with the guns.

Filed Under: Culture, Disruptions, Legal

Senator Rockefeller’s folly

July 28, 2010 By Terry Heaton 1 Comment

Be Afraid! Politicians love an issue that allows them to appear on the side of the little guy against the bad guys. Their love affair with such blinds them to the truth, but in politics, there’s no need for truth, if it gets in the way of a good soundbite.

Witness the sad rantings of Senator Jay Rockefeller (D-W.Va.) during a hearing of his Senate Commerce Committee on the subject of behavioral tracking online. Sensing political mileage, Senator Rockefeller wants “do-not-follow” legislation that would help the FTC in its battle against advertising online.

This is one of those issues that just makes me mad, because the matter cannot possibly get a fair hearing when loons like Rockefeller are out there making noise. Here, thanks to an article in Broadcasting & Cable, is the rapier quick mind of Senator Rockefeller:

“Imagine this scenario,” said Rockefeller. “[Y]ou’re in a shopping mall. And while you’re there, there’s a machine recording every store you enter and every product you look at, and every product you buy. You go into a bookstore. The machine records every book you purchase or peruse. Then, you go to the drugstore. The machine is watching you there, meticulously recording every product you pick up — from the shampoo to the allergy medicine to your personal prescription. The machine records your every move that day. Then, based on what you look at, where you shop, what you buy — it builds a personality profile on you. It predicts what you may want in the future — and starts sending you coupons. Further, it tells businesses what a good potential client you may be — and shares your personality profile with them.”

Rockefeller said that scenario is playing out “every second of every day.”

This is idiotic demagoguery, and that’s being kind. “The Machine.” Oooo. Be scared!

Well, imagine this scenario, Senator Rockefeller. A man or woman walks into a mall wearing a hat on his or her head, a mask over his or her face and gloves. He or she walks into a store, apparently looking for something, and proceeds up and down every aisle, touching everything. He or she enters the bookstore and demands that all of the staff turn their backs as he or she scans the shelves, again, apparently looking for something or perhaps just killing time. Upon leaving, the workers are permitted to return to their work, which we assumes means helping people find what they’re looking for. But wait! Everybody is wearing masks and hats and gloves! Now multiply this scenario by thousands of shoppers similarly attired, wandering the mall, drifting in and out of shops, and you have exactly what is hoped for by the absolute anonymity legislation that prohibits tracking.

We need policing, of course, and the industry is well aware of the need for self-governance here, but proponents of new laws are only using the issue to better themselves politically. A browser-level “do-not-follow” is a bad idea in an era when privacy itself needs an honest debate.

The FTC would better serve consumers by cleaning up existing matters — like spam of all sorts (including telephone and regular mail) — than sticking its nose in an artificial scenario from the mind of a politically-motivated U.S. Senator.

Filed Under: Advertising, Culture, Legal

Living by your own rules

July 6, 2010 By Terry Heaton Leave a Comment

I’m enjoying this morning the story of popular deal site Woot and its comical busting of The AP over lifting quotes from its site. Woot was purchased by Amazon last week for $110 million, and in its story about the purchase, The AP pulled quotes from the blog of Woot CEO Matt Rutledge. This is a violation of the rules by which The AP restricts bloggers (and others) from lifting quotes from its own stories, and Woot is calling them out on their hypocrisy by asking for payment.

So, The AP, here we are. Just to be fair about this, we’ve used your very own pricing scheme to calculate how much you owe us. By looking through the link above, and comparing your post with our original letter, we’ve figured you owe us roughly $17.50 for the content you borrowed from our blog post, which, by the way, we worked very very hard to create.

The post goes on to offer The AP its deal of the day instead and closes with the scolding, “Don’t force us to pass this matter to a collection agency.” LMAO.

It’s stuff like this that reveals how impossible it is to try to keep feet in both worlds as the disruption to one of those worlds rolls on. The AP’s rules were an effort to end the wholesale copying of its content by a few, but the chilling effect on everybody else was an obvious and deliberate consequence. By getting caught with its pants down on this, The AP will have difficulty in pursuing anybody who violates its rules.

And that’s the problem with rules. If you’re going to make them, then you have to live by them. Lifting quotes from Rutledge is what any reporter would do, which is why these particular rules are so bogus on their face.

Filed Under: Associated Press, Blogging, Disruptions, Legal

NYT lawyers play RIAA

June 8, 2010 By Terry Heaton 1 Comment

You just can’t make this stuff up.

In a mystifying move that only benefits the pockets of the lawyers involved, the New York Times has caused the popular iPad RSS reader, Pulse, to be pulled from the Apple system, because the reader pulls material from the newspaper’s RSS feed. That’s right. Since Pulse is a paid application, the Times figures they are benefiting financially from Times content. Hence, the cease and desist.

Where to begin?

Firstly, the Times — unlike other publishers — provides only links and a sentence in its RSS feeds, so who are we kidding here? Content? This outrageous legal bullying is based in a bullshit, pedantic argument that is contrary to the concept of feeds in the first place. If you don’t want people using your damned feeds, then don’t publish them.

Secondly, because the Times publishes nothing in its feeds, the best Pulse can do is provide visitors to the Times site? Kara Swisher has images of what Times content looks like in Pulse, and I encourage you to go on over and take a look. W. T. F.? Is not Pulse doing the Times a favor? Of course it is; that’s the economy of the link.

Thirdly, if this is the tact that the Times truly wishes to pursue, it’s path to irrelevancy is certain. Pay walls are an understandable reaction to revenue declines from print, but the Web is not print, and this is an attempt to extend the pay wall concept to distributed media via licensing. It will not and cannot work, because the Web won’t allow it. The Times may be within its rights (we’ll see), but closing doors to those who would distribute content closes doors to users, too.

I have been saying for the past ten years that, sooner or later, the lawyers who represent the status quo would attempt to restore things to the way it used to be and that this battle would be long and ugly. Media companies should take a lesson from the RIAA, who ended up suing its own customers in a similar tact. That will likely be next for the Times.

The absurdity of all of this flows from the illogical notion that we don’t “buy” content anymore; we only pay for the right to read, watch or listen to it. This will explode in the faces of those trying to protect their “rights,” because nobody has asked the people formerly known as the customer if this was acceptable.

The New York Times took an enormous step backwards with this move. I wish them well.

UPDATE: Staci gets a response from Robert Christie of the Times, who says the app violates their terms of use (of RSS). Staci rightly suggests we haven’t heard the last of this.