EMI Sets Up Its Own Online Store As YouTube Tries Selling Music

from the try,-try-again dept

Lots of folks are trying to figure out new business models in the music space, and here we have two separate big companies testing out ideas that seem unlikely to work all that well. First up is EMI, the big record label that keeps insisting that its going a different route but can't seem to reign in its lawyers from taking the same old route. This time around, it's launching its own music download site, where it's promising lots of extras and goodies -- including some stuff for free. It will be interesting to see how the actual site is set up, but the idea of setting up just a label specific site seems destined to fail. People want a one-stop shop. They don't want to have to know that the music they like is on EMI. Imagine, back when people bought CDs, if they had to go to a different store for each record label. Maybe there's more to it than what's being described, but at first pass, this sounds like more of the same: a big record label sticking a square peg into a round hole, covering it with shiny paint, and talking about how awesome it is.

Then there's Google, which has been struggling mightily to come up with ways to make money off of YouTube. At the same time, record labels have been complaining about how much "music" (accompanied by videos, of course) is available on YouTube, and the folks at Google put two and two together and will start offering options to buy the songs you hear on YouTube at partner sites such as Amazon or iTunes. While it's not a bad idea (why not offer people a chance to buy if they want it), it's hard to see this really getting that much traction. Some people may go ahead and buy out of convenience, but it's hard to see people actually doing that much music "shopping" this way.

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US Government Admits: Data Mining For Terrorists Doesn't Work

from the oops dept

Over the last few years, you probably have noticed multiple attempts by state and federal government agencies to collect more data on people and to share that data more widely. This is troubling for a variety of reasons, often having to do with privacy and questions concerning the quality of data, but those concerns are almost always pushed aside by claims that this data is necessary for fighting terrorism. There's this myth out there that if we just had more data, somehow we'd be able to stop terrorists. The problem is that this is untrue. More data often makes it even harder to find the important data, and now a detailed government report has basically confirmed that data mining doesn't help in finding terrorists.

The report was put together by a bunch of well-respected academics, industry insiders and law enforcement officials on behalf of the National Research Council, and finds that the idea of plugging all this data into a machine and popping out terrorist identities is a myth. The report then lists out a variety of recommendations, concerning the use of any data mining systems, and how to make sure that individual privacy is protected. One key finding that will never be implemented: when using any such system, systematic reviews should be done to see if the systems are actually effective. If there's one thing we've seen with government programs over the years, such attempts to actually review something they've put in place to see if it actually worked are almost never done.

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Judge Lets iPhone Antitrust Trial Move Forward

from the not-such-a-good-day-at-apple dept

Last year, we wrote about an antitrust lawsuit filed against Apple for sending an update that disabled, or "bricked," the iPhones of people who had changed the firmware to accept outside programs. While Apple tried to push for a dismissal of the lawsuit, a judge has denied the motion to dismiss and will let the case carry on. While a full-on antitrust finding seems unlikely, there are elements of the case that may get Apple into trouble down the road -- and it all comes back to Apple's Achilles' heel: its desire to control absolutely everything, even after you've bought it. Depending on how this case works out, Apple may discover that it (legally) needs to learn to loosen the strings a bit.

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Dueling Headlines On The Online Ad Market: Half-Full Or Half-Empty

from the depends-on-who-you-read dept

I just saw a bunch of headlines fly by and the contrast in them seemed worth noting. Here are just a few, with a brief intro based on whether it's a glass half-full headline or a glass half-empty headline:

• Good News!: U.S. Online Advertising Up 15.2%
• Bad News!: US Online Ad Growth Slows in 2008's First Half
• Good News!: Online ad revenue strong first half of 2008: What about the second half?
• Bad News!: As we fill tanks, growth in Net ads slows
• Good News!: Search-ad revenues grow amid market malaise
• Bad News!: Online Ad Growth Declines in First Half 2008
• Good News!: Internet marketing sees "incredible" spending increase

The most accurate may be from the AFP, who notes: Internet advertising revenue up but slowing, and the LA Times: Internet advertising grows slightly, but analysts worry about the future. Basically, the numbers are still up but at a slower pace than in the past. How you interpret that, apparently, depends on whether you're fundamentally an optimist or a pessimist. It seems pretty clear that there's still plenty of money heading into the online advertising world -- and it was going to plateau at some point. You can't keep up ridiculous growth levels at all times, especially when the broader economy runs into trouble. Plus, the fact that a healthy percentage of online advertising was tied to the mortgage/loan/financial services industry -- you'd have to expect some slowing of growth. No matter what you believe the future holds for the online ad market, you have to admit the juxtaposition of headlines is rather amusing.

Perhaps much more interesting, however, is this analysis of what happened to the advertising market during the Great Depression. It found that while some companies shied away from advertising, the ones that did well focused in on more effective advertising, which worked wonders. So the advertising market itself didn't collapse, it just got more focused, and those who used it wisely ended up doing quite well.

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Apple Forgets About the Moron In A Hurry Test, Threatens School With An Apple In Its Logo

from the comparing-apples-and-oranges dept

It was just a few years ago when Apple used the moron in a hurry test to defend itself against a trademark suit, but their own legal department seems to have forgotten about it already. Apple has sent a cease and desist letter to the Victoria School of Business and Technology for the use of a blue and green apple element in their logo. The Canadian school has created a comparison page on their website in an attempt to highlight the differences between the logos, hoping to dissuade Apple from launching a lawsuit by building public support. The page also contains the legal correspondence to date, including a letter in which the school's president asks if Apple is "suggesting that anyone using any variation of an apple for technology education related use is infringing on Apple's trademark."

The legal question is really about consumer confusion, as the Canadian Supreme Court has understood in the past. Trademark law doesn't grant the holder an exclusive right over every use of a mark, just the right to prevent confusing or misleading use of it. The school is a technology school, but they're also a school -- an apple is a pretty common symbol for education. It seems like "even a moron in a hurry" would recognize the difference between the two logos, especially since the acronym "VSBT" is part of the school's. The real problem here seems to be the requirement of trademark law that the holder of a mark actively polices its use. This requirement encourages these sorts of cease and desist letters, even if it seems like a comparison between apples and oranges.

Blaise Alleyne is an expert at the Techdirt Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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Forget Net Neutrality Laws; Just Strengthen Privacy Laws

from the interesting-idea dept

Here's an interesting idea from law professor Paul Ohm, suggesting that rather than focusing on net neutrality laws, if we just had stronger privacy laws, ISPs would be barred from doing any kind of deep packet inspection, since it would violate your privacy. This seems a lot more reasonable to me than focusing on new telco laws. While I support the principle of net neutrality, and believe it's important for the internet to thrive, I'm quite scared of any new telco regulations that hand more regulatory authority over the internet to a government agency. Plus, you know the legislation will create loopholes. But, more general privacy legislation could be much more interesting and could effectively guarantee net neutrality, without a special "net neutrality" law.

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If You Really Want To Understand How The Financial Crisis Happened...

from the listen-here.. dept

In my initial post on the financial crisis, I suggested listening to an older episode of the radio program This American Life, where they described how the mortgage bubble happened, called "The Giant Pool of Money." It's a great way for non-financial types to understand the basic issues involved in the mortgage industry and how things spun out of control. I also mentioned that the guys who did that show have been working on a daily blog/podcast for NPR called Planet Money, which is also fantastic. They also put together yet another show for This American Life this past weekend to explain what happened over the last few weeks and why it is a Really Big Deal, rather than a situation where we should just "let the banks fail." I finally got a chance to listen to it, and it's great. It's called Another Frightening Show About the Economy, and it gets into even greater detail, peeling backing the complicated onion of our financial system, layer by layer, in a way that non-financial types should mostly understand. It is simplified -- no doubt -- but it's by far the best explanation I've heard anywhere. If you're trying to understand concepts like leverage, credit default swaps and the commercial paper market, go take a listen. If you already listen/read Planet Money, there are some repeat clips, as well as some new ones, and the whole show pulls a lot of stuff together from the last couples weeks of Planet Money.

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If The Google-Yahoo Deal Is Bad For Advertisers Or Publishers, Isn't That Just An Opportunity?

from the what's-the-problem? dept

I recognize that in times of financial crisis, it may seem more difficult than ever to imagine unique and innovative opportunities cropping up -- but it's often in such times that the most innovative businesses are formed. How quickly we forget, for instance, that Google's own business model was formed during the barren years following the last dot com bubble burst. Yet, for some reason, people seem to think that today's offerings are the be-all and end-all of innovation. That's why we get these articles worrying about how a Google-Yahoo ad deal will be bad for advertisers and publishers. Yet, there's little evidence to actually support that. The article linked above cites the easily disproved anecdote from the NY Times last month about one guy who had a spammy site that Google punished. That was the guy's own fault, not Google's.

But, really, the most important point ignored in most of these discussions is that if Google really does make ad prices higher and share less with its AdSense publisher partners, that would create a huge opportunity for others, whether large incumbents or small startups, to step into that breach. If I had to bet, I'd say that there are already companies working on solutions that are more interesting and more valuable than Google's advertising plays. There are companies who are recognizing that "advertising" is not necessarily the best model, and they're working on better solutions that won't even seem like advertising at all -- but will start to take advertising dollars away from traditional ad companies. Just as Microsoft couldn't see the threat of Google for many years, Google won't even notice these companies on its radar, and while everyone's fretting a Google "monopoly" in search ads, the next revolution will be bubbling up somewhere else entirely.

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Apparently The Financial Crisis Is The Fault Of Flickering Computer Screens

from the say-what-now? dept

From Paul Kedrosky we find one of the most idiotic theories on where the whole financial crisis came from, out of a laughably stupid interview with author Tom Wolfe. Apparently, the problem wasn't complex securities, massive leverage, unsupportable subprime mortgage giveaways or anything of the sort. No sir. It was all those flickering screens on computers that make financial types not want to pay attention:

The whole thing, starting with the subprime, is the fault of the computer. I was just talking to a banker the other day, and not that long ago, 20 years ago, an investment banking house, let's say, Lehman Brothers, when it got a package of mortgages, they would go through every mortgage, every single one, and they'd throw out the ones that just seemed absurd, they just wouldn't accept them. Things used to arrive on paper. Today things arrive on a screen, and a screen is back lit, and one of the biggest pains in the neck is trying to read something dully written and complicated on a computer screen. It will drive you nuts -- I mean, try it sometime. Now they say, "Oh, to hell with it," and they just accept the whole package. And if it hadn't been for that, they'd be going over each loan. What's happened is the backward march of technology.

So, now you know.

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Australian Artists To Get Paid Multiple Times For Their Artwork

from the wouldn't-that-be-nice dept

We've discussed in the past how various countries have been putting in place a ridiculous resale right for artists, that allow them to collect a royalty every time their artwork is sold. In other words, this removes the important right of first sale, that says when someone buys a piece of artwork, they actually own it. Instead, these "resale rights" let various artists collect a "royalty" every time the art is resold. That would be like saying you need to pay Honda a royalty after you sold your used car. Reader madlep points out that Australia has now gone down the same road and instituted a 5% fee on any resold artwork for the artist.

The Arts Minister who supported this is apparently Peter Garrett, who some of you may recognize as the lead singer of the popular rock band Midnight Oil (who I saw in concert many, many years ago). He claims that: "It's a really, really good day for Australia's artists," but that betrays a rather troubling lack of understanding of basic economics. Adding this resale right, actually serves to significantly depress the market for these artists that he's supposedly trying to protect. Because any buyer now knows that there's an additional tax on any resale, meaning that they're less willing to purchase in the first place (or only interested in purchasing for a lower price). It also makes them a lot less willing to sell the piece, because the selling price now needs to be even higher. On top of this, it will encourage more sales to be to foreign countries, where this "right" does not apply.

Garrett is also confused in saying: "Why should artists not have had the opportunity for some copyright protection of their work, or equivalent rights that writers, for example, have?" There's a very easy answer to that. Copyright protection is designed to deal with the issues of copies, not the original works. When it comes to these artists, they're selling original works. And, when I put my old Midnight Oil tapes and CDs up for sale, I'm certainly hoping that Garrett doesn't expect to get paid again for them. That would just be silly. He already received the money when I purchased them originally -- just as these artists received their money when their artwork was purchased.

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Disney Used Anonymous Online Quotes In Ads

from the as-good-as-made-up dept

You've all seen movie advertisements that include snippets of glowing quotes from critics. "Marvelous!" "Best Movie of the Year!" etc. There's been some controversy about these quotes in the past. There was an investigation into studios taking movie critic quotes completely out of context, and even a lawsuit against Sony Pictures for making up a critic and his quotes for movie ads. It appears that Disney has now been caught trying out a new tactic: using quotes from anonymous internet commenters on IMDB. These "commenters" could be, for example, Disney employees, but go under usernames like "Theedge-4" and "Mjavfc1." Apparently, that's good enough for Disney to quote them in their ads. While there's something to be said for tapping into a wider group of folks than just the big name "professional" movie critics and reviewers, this one seems pretty questionable and open to abuse -- especially given the industry's documented history of made up reviews.

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Airline Threatens To Sue Betting Site For Taking Bets On When It Would Go Out Of Business

from the what's-illegal-about-that? dept

Apparently, a Scottish airline, Flyglobespan, has threatened to sue an online betting site because it was taking bets on what airline would be the next to go out of business, and had odds on Flyglobespan. The site did stop taking bets, but says it was due to a lack of interest, rather than the threat of a lawsuit. However, it's not clear what law it would be breaking to offer such a bet. You can understand that the company is concerned that potential passengers might think the airline is at risk, but it's not clear that's enough to stop any such bets.

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It Appears People Liked The Seinfeld Ads A Lot More Than The 'I'm A PC' Ads

from the great-moments-in-advertising dept

We were among those who were quite surprised that Microsoft gave into the online criticism of its "buddy" ads starring Jerry Seinfeld and Bill Gates. As we noted, the ads were getting a ton of people talking, and set up plenty of opportunities to later plug Microsoft products. But, initially, they were just entertaining (if slightly awkward) content that did a good job bringing in viewers. Instead, Microsoft replaced it with the somewhat boring "I'm A PC" spots, that directly respond to Apple's "PC vs. Mac" ads. While the original critics claimed that these new ads were a lot more effective, I'd disagree. They're somewhat boring and what you'd expect. They're easy to tune out. And it appears that lots of people agree. A quick analysis has shown that the Gates-Seinfeld ads received many, many, many more online views than the new campaign. Obviously, that's not the only metric to use in measuring success, but it certainly suggests that Microsoft may have overreacted in pulling the plug so quickly.

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Verizon Gets Smacked Down For Its VoIP Patent Suing Spree

from the so-much-for-whacking-cable-competitors dept

Verizon was one of the last players to the VoIP party. Cable companies had been offering VoIP for years, and then Vonage, AT&T and a variety of other startups really built the market before Verizon even bothered to enter the space with an overpriced, uninspiring "me too" product that the market made clear it didn't want. Yet, somehow, Verizon was able to get some patents on the technology, despite a ton of rather clear prior art that showed Verizon's patents should never have been granted.

So, with those patents, Verizon began suing -- and it started with the lame duck in the VoIP space: Vonage. The company has been struggling for a variety of reasons, and a bunch of patent holders swept in to sue the firm that actually made VoIP a viable product in the market. Vonage came under massive pressure from shareholders to get rid of these lawsuits, so it settled rather than deal with a lengthy court room battle.

Verizon interpreted this as a validation of its patents and set off to find others to sue. Its next target was Cox Cable for its digital telephony solution. The plan was clear. After beating Cox, it would turn its legal guns on the big boys like Comcast and Time Warner. Except, it appears the courts have tossed a wrench into those plans by siding with Cox in pointing out that the company doesn't violate Verizon's patents. While Verizon will most likely appeal, this should be seen as a pretty big win for Time Warner Cable and Comcast, who may not even have to defend themselves against Verizon's questionable patent claims at all.

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Why Was The Restraining Order On RealDVD Kept Secret?

from the questions,-questions,-questions dept

Monday morning, we wrote about how a judge had issued a temporary restraining order against RealDVD until he had time to review the details and rule one way or the other on a pre-trial injunction. In our comments, one of our readers suggested this story was incorrect, as there didn't appear to be an actual restraining order on file -- suggesting that Real Networks may have pulled the software on its own. Yet, it turns out that, yes, in fact there was a temporary restraining order, but the judge ordered both sides to keep it secret. This is quite odd, as almost everyone immediately figured it out from Real pulling the software, and then it was confirmed by Real in a filing responding to the court. But all this does is raise a simple question: what could possibly be the rationale for keeping the temporary injunction secret?

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Piracy Is A Part Of The Market

from the it's-not-the-enemy...-and-it-may-not-be-competition dept

Out-law.com has an interesting discussion with a so-called "anti-piracy expert" where he tries to make the point that pirates are not the "enemy" but are "competition." This is a step in the right direction -- though, one ignored by many industries threatened by unauthorized file sharing. As the MySpace Music offering shows, very little thought is given to actually competing with piracy. Most of these solutions simply try to pretend it doesn't exist -- which is a pretty difficult way to compete.

But it's important to recognize that the market shift goes further than just seeing unauthorized file sharing as competition. To succeed in the marketplace, it shouldn't even be viewed as competition, but as a tool that can be used to your advantage. The business models that embrace file sharing and use it to drive business to other parts of a business model are doing great, realizing that file sharing isn't the enemy and isn't competition, but is a great, efficient distribution mechanism that reaches a lot of people very quickly and effectively. Ignoring ways to make use of that seems pretty dangerous.

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Hollywood Illegally Demanded Payments From Irish Kindergarteners

from the and-this,-kids,-is-what-we-call-a-shakedown dept

It's no secret that the entertainment industry believes that it deserves to be paid (often multiple times) every time anyone accesses, views or listens to any of its content. That's resulted in some really bad policies that limit the potential for future growth, but also some ridiculous scenarios like the one described over at TorrentFreak, concerning the Motion Picture Licensing Company, who illegally demanded 10 euros per child (later reduced to 3 euros) from Irish kindergartens, for the right to watch DVDs in class. It turns out that the whole thing was illegal, as it violated a copyright act in Ireland by not filing for a license to collect royalty revenue (it has since filed for the license). In the meantime, the folks who run these schools are a bit annoyed by the whole thing, noting that they rarely, if ever, show DVDs anyway and don't see why they should have to pay a fee per student. In fact, one educator noted that the only time they showed DVDs was when they would "pretend" to go to the cinema -- and even that would likely lead kids to eventually want to go see more movies.

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Sorry, But The Current Financial Crisis Has Nothing To Do With Naked Short Selling Or A Wikipedia Edit War

from the please dept

For quite some time, Overstock's CEO, Patrick Byrne, has been on something of a... campaign against the practice of "naked short selling." Byrne isn't known for holding back his opinions on just about anything, and his complaints about naked short selling resulted in a rather massive Wikipedia edit war -- with folks on every side pointing fingers and arguing with each other over supposed dirty tactics by folks on the other side. Now, with the whole financial collapse thing happening, The Register (one of few publications to take Byrnes' side most of the time, often due to its irrational dislike of Wikipedia) is claiming that Byrne has been "vindicated," first on the evils of naked short selling, and second on the Wikipedia edit wars.

If only it were so simple. As this excellent Alex Blumberg/Planet Money podcast makes quite clear, while naked short selling may be sketchy, it's impact is minimal, if anything. And, as anyone with a most basic understanding of markets can tell you, short selling (naked or otherwise) doesn't drive down the price of a stock. The Register also suggests that Byrne was vindicated in the Wikipedia edit war, by noting proof (that is not shown, and was only provided to The Register by Byrne) that a reporter who had formerly denied taking part in the edit war, actually had been involved. That's not exactly a huge smoking gun either. It may be that this guy had a personal vendetta against Byrne, but it's got little to do with the financial crisis going on today. There are lots of things that created this mess: but naked short selling (even if the SEC came out against it, in part) is currently a minor scapegoat, not the cause.

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Is A Conviction Constitutional If It's Based On Evidence From An Unconstitutional Search?

from the buttle-or-tuttle? dept

In a case where the legal implications should thrill any fans of Terry Gilliam's movie classic Brazil, the Supreme Court is set to examine if it's constitutional to convict someone, based on evidence that was only collected due to bad data in a government database. There's no question that a search of someone due to bad data in a database is unconstitutional, but the question is whether or not what's found in that search can then be used to charge someone. In this case, a bad (obsolete) database entry in a county database resulted in the search of an individual's car, where drugs and a firearm were found. This resulted in a conviction and jail time, but the search itself wasn't constitutional, because the data was incorrect. The appeals court let the conviction stand, oddly arguing that throwing out the conviction wouldn't put much pressure on governments to keep their data clean. The court also argues that anyone convicted as a result of such bad data, should simply file a separate, civil, lawsuit against the government. Of course, it seems like the bigger issue should simply be on the constitutionality of using any unconstitutionally obtained evidence in a lawsuit.

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Slate: Dump MySpace Music, Bring Back Muxtape

from the i-second-that... dept

As we had suspected, the early reviews of MySpace Music make it sound like a dud. It sounds, not surprisingly, like the focus was on appeasing the big record labels, rather than actually making a service that's fun and easy to use. Farhad Manjoo, over at Slate, makes the argument clear, contrasting MySpace Music to Muxtape, the small indie site that the RIAA shut down when it couldn't own a big chunk of it. As Manjoo notes, Muxtape was fun, it worked well, and people liked it. MySpace Music, on the other hand, is just not that compelling. He notes that it doesn't offer anything other sites haven't offered for a while, and on top of it, makes the whole interface cluttered and confusing, while limiting what you can actually do. Once again, we see the RIAA shut down a useful service and put up a dreadful competitor.

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