Archive for February, 2012

Weekly News Roundup (26 February 2012)

Sunday, February 26th, 2012

Welcome to another edition of the Weekly News Roundup. I’ve just finished writing the PowerDVD 12 review, and it only took me a month! Writing the obligatory PowerDVD review has become a sort of ritual for me, as I’ve been doing it since pretty much version 1.0 of the software (it’s now version 12, not quite 12 years, but close to a decade at least). Over that time, the review has morphed slightly into a “how to” guide, or at the very least, an overview of the major functions. For this particular review though, I’ve completely restructured the review sections so that it’s a bit easier to read. Now all I have to do is to write the review for the comparable WinDVD 11, which is only overdue by 5 month!

Skyrim update: Just managed to get my Alchemy and Smithing levels up to 100, now to get Enchanting up to 100, and to get the relevant perks so I can start making awesome, unstoppable armor and weapons. Had to purchase another house so I could more easily manage my hoarding.

Copyright

We start the week with two stories that I briefly touched upon in the last WNR. First up, federal prosecutors have expanded the case against Megaupload, and revealed that over $50 million in “Mega assets” have been seized so far.

The newly added charges relate to the allegation that when content holders requested a file to be taken down, Megaupload merely removed the specified link to the file, without removing the actual file in question. This is problematic as the same file can be linked multiple times based on the way the Megaupload’s server works, and so Megaupload was doing “just the minimum” (or not even that) when it came to file removal, even though they could (and should) have done more.  It’s a lesson to other file sharing/user generated websites: take removal requests seriously if you want DMCA safe harbor to apply, otherwise, you might as well just ignore the take down request, since you’re not fooling anyone. Pro-active content removal will help to make the case that you do care about copyright infringement, but the law does not require such actions, other than for really obvious cases of infringement. Had Megaupload done what was needed, then the criminal case against them might have been impossible to establish. On an unrelated note, Kim DotCom, the owner of Megaupload, was released on bail this week.

The Pirate Bay

The Pirate Bay sails on as domain changes from .org to .se, to avoid unwanted US intervention

The Pirate Bay has had a busy February as well. Not only are they planning to remove all .torrent files, replacing them with Magnet Links instead, they’ve also changed domain names, from their original .org domain to .se. The reason for the change is fairly apparent – .org domain names comes under the authority of the United States, and so it could easily be seized by the US government (and I’m surprised they haven’t done so). The fact that a Swedish website wants to avoid falling under the jurisdiction of the United States is perfectly understandable to everyone. Everyone except for the RIAA, of course, who came on attacking TPB for blatantly trying to “escape U.S. laws”, the very same laws that doesn’t apply to a Swedish website anyway. The RIAA appealed again to xenophobics, using phrases such as “foreign rogue sites” and blabbing on about “American jobs”, despite music being a global industry, and piracy being a global problem. It’s something ‘Winston’ from The Pirate Bay spoke of when he wrote a response to the RIAA’s latest attacks, that the America-centric view coming from the likes of the RIAA and MPAA, that somehow only US interests are important. Via SOPA/PIPA, the RIAA and MPAA have also started pointing the finger at the rest of the world,  blame “foreigners” for all their copyright woes, despite research showing their own short-sighted greediness (ie. release windows) is at the heart of the problem.

Another thing that Winston touched upon is the disingenuous use of the phrase “creative community” by these trade groups that often only represent a small number of major labels and studios. The truth is that not only are they not the creative community (or any kind of community, as Winston points out), but they’re the ones that are most aggressive at exploiting and profiting from the same community, often at its expense (and that of real artists and real creativity).

And in order to keep exploiting and profiting, the major rights holders have shown they’re willing and capable of doing anything in order to keep the money rolling in. For them, little things like censorship, privacy and the right to innovate, if counter to their own interests, can all be sacrificed. Which is why despite various EU rulings on the possible illegality of web censorship, the music industry is still pursuing, and winning, their case against The Pirate Bay in the UK, and it’s looking increasingly likely that UK ISPs will soon be forced to block access to the website. Not that it would actually stop people visiting, since earlier blocked sites such as Newzbin2 are still being frequented by UK visitors using tools that were quickly developed to bypass the blocking filters – the operators of Newzbin2 says that 93% of their former UK visitors have continued to visit the website thanks to these new tools. There are also all sorts of jurisdictional issues involved, such as whether an UK ISP has the right to block access to a Swedish website to protect the interest of US companies.

And with the web now an integral part of most people’s lives, nobody wants to see it irrevocably damaged. But even so, I was really surprised to see so many people protesting the controversial ACTA (Anti-Counterfeiting Trade Agreement) treaty in the streets of Europe. And it’s working, with the EU suspending ratification of ACTA until the legal positions are studied in further detail, which should have been the case all along, as opposed to cowardly caving to corporate interests. The usual critics will demean these protests as “freeloaders wanting to keep the free stuff coming”, but people who say that are also devaluing the importance of critical issues of censorship and privacy, issues at the heart of any democracy. I guess in some ways this is a delayed response to the sacrifices that have been made in the last decade to these core issues, due to fears of terrorism. I strongly agree that people who would sacrifice freedom for security deserve neither, but at the very least, that response is an understandable human one (even if it is the wrong one). But sacrificing freedom for the benefit of a select few mega-corporations is just not acceptable, and I’m glad others feel the same way too. Freedom and democracy is worth protecting at the expense of everything else, in my opinion.

High Definition

With this WNR coming in a little bit short, I have a bit more room to share a few recent thoughts about where things are headed in terms of home entertainment.

Amazon VOD

VOD is the future of TV, as once viewers get a taste of the power of choice, they won't want to go back

While I’ve long been a supporter of Internet based streaming, and the benefits of video-on-demand, I’ve not really had much experience using it, since we’re pretty behind the rest of the world here in Australia when it comes to these sort of things. Having got a Kindle Fire to do a bit of development work, I soon became absolutely hooked to Amazon Prime SVOD. It’s really my first taste at what Americans have been enjoying for a while now (and with better services than Amazon Prime, and not having to route it through a VPN), and it completely confirms for me what, up until that point, had largely been a theory – that we’re on the verge of a major revolution in how we watch TV and movies. It’s not so much what we watch, as what we have access to. It feels incredibly powerful and freeing to know that you have access to, for example, every episode of Star Trek ever made (which is available for unlimited streaming on Amazon Prime, as long as you pay the $79 per year membership fee), and the phrase “there’s nothing on” could very well become extinct if the technology continues to advance, and if content holders continue to support innovation in this area. And once you go VOD, you don’t really want to go back to a time where executive in suits determine what you should watch, and when.

And it’s a huge financial opportunity as well for all involved. From an advertising point of view, ads can be targeted, interactive and non repetitive, and the tiered subscription model provides value, as well as ensuring stability revenue wise (compared to a model based purely on ads). That nearly 1 in 3 American households now regularly enjoy streaming content on their TV (so not just something you do on a tablet, or a computer, but in the living room) shows that people want it. It’s now up to the tech companies and the rights holders to knock out a deal that would make the ability to access everything an affordable reality, and I look forward to the day this is all available in Australia.

On that bright note, it’s time to say goodbye to this issue of the WNR. Have a good one, and see you next week.

Weekly News Roundup (19 February 2012)

Sunday, February 19th, 2012

Welcome to the latest edition of the WNR. It’s a shame that the leap day doesn’t fall on a Sunday this year, as it would make an awesome collector’s edition of the WNR – as such, it’s on possibly the most boring day of the week:  Wednesday.

I know I promised the NPD analysis last week, but it turns out there just wasn’t enough data to compile one, thanks to both Nintendo and Sony keeping mum on hardware figures (no doubt because they have crap numbers). Only Microsoft released figures for its Xbox 360 console (the least worst of the bunch). So it seems January 2012’s NPD analysis will have to be replaced with a much shortened version, which you’ll find in the “Gaming” section below.

In terms of news, there were only a couple of interesting ones, and a few late breaking ones that I will cover briefly in this edition, but in more detail in the next. So don’t be surprised at the brevity of this WNR (and it totally didn’t have anything to do with the fact that I’ve now put in 50+ hours in Skyrim).

Copyright

The likes of the MPAA and RIAA have compared web piracy to a lot of things, but I’ve always wondered why they haven’t compared it to some kind of infectious disease, as I think The Piracy Pandemic® has a certain ring to it.

It’s a great comparison not just because the content holder set their hyperbole engine into overdrive by comparing web piracy to something deadly and scary, but also on two other major points. One, just like an infectious disease, piracy spreads quickly, and it does so in poorer countries with greater virulence. And also just like viruses, piracy adapts to any measures you employ to try and stop it, whether it’s a technical measure, or a legal one. The more you try to fight it, the more likely it will mutate into something that’s more resistant.

The latter of these two points was demonstrated, twice, this week. Decentralisation has been a continuing trend in piracy (Megaupload and sites of similar ilk are actually quite a throwback to the early days of piracy, where everything was hosted on centralised HTTP websites), but despite decentralisation being the major driving force behind the creation of BitTorrent, two major centralised components still hold it back from truly being decentralised. The inherent weakness in BitTorrent file sharing is the existence, and the necessity, for centralised trackers and a centralised “indexer” website that catalogues the available downloads, like The Pirate Bay. This website would also host .torrent files, and while these files are small by any standard, the sheer number of them ensures that the total size of the website and database can be quite large. Taking down a tracker can cause downloads to cease to work, as peers would not be able to find each other, and taking down websites like The Pirate Bay would mean that you won’t even able able to find the torrents to get you started. These two weaknesses have often been exploited by content holders, with past lawsuits able to bring down popular trackers, and BitTorrent indexers such as Mininova.

The Pirate Bay Magnet Links

The Pirate Bay will remove .torrent files by the end of this month, encouraging users to use Magnet Links (show above with the little magnet icon) instead

This week, The Pirate Bay announced steps which will mitigate these two risks, although the actual technical measures used to solve these two problems have existed for some time already. The Pirate Bay, at the end of this month, will remove .torrent files for any torrents that has over 10 peers and will use Magnet Links instead. A Magnet Link is simply a web URL, a string of text that once loaded into your BitTorrent Client of choice, will give the client just enough information to be able to download the actual .torrent file from users that are already sharing the torrent. And using the DHT (Distributed Hash Table) technique, Magnet Links don’t need trackers in order to download the .torrent files (and the actual download most likely won’t need trackers as well, thanks also to DHT). But for The Pirate Bay, the best thing about switching to a Magnet Link based website is the fact that they no longer need to host .torrent files (well, not as many as before, anyway), and this allows the hosting, and bandwidth, requirements of The Pirate Bay to be reduced to the point where the entire website can probably fit onto a small USB thumb drive (removing all .torrent files, a user has already demonstrated the ability to reduce The Pirate Bay’s Magnet Link database to only 90MB). This will help more TPB mirrors to be set up, and to allow the website to be moved from host to host more easily, thus making the website more resilient to take-downs. There’s also something quite perverse about being able to “download” the entire Pirate Bay to your hard-drive.

And even in the event of The Pirate Bay finally being taken down, there’s now a plan B. A new BitTorrent client, Tribler, aims to remove the any need for websites like The Pirate Bay, and remove the one last centralised component of the largely decentralised BitTorrent download process. Tribler does this by moving the torrent indexing component into the BitTorrent swarm itself, and allow you can search for torrents right within the client. Even things like reviews, comments, and the obligatory removal of fake torrents, can all be done within the client. Tribler, developed by researchers at Delft University, is also open source, and that makes it more resilient, as if one variant of the client is taken down by authorities, others will pop up almost instantly (and probably with more features). What this essentially means is that BitTorrent, via Tribler, is now unstoppable. Or to put it even more succinctly, and to quote the head of the Tribler project, “The only way to take it down is to take The Internet down.”

Tribler

Tribler - the new BitTorrent client that claims to be unstoppable

Now, just because BitTorrent downloads cannot be stopped, it does not mean that you can’t be forced to stop using BitTorrent, as the major flaw in Tribler is that it still allows authorities, and those seeking to profit from (anti) piracy, to track your IP address. So the next evolution of BitTorrent, in my mind, will be one that allows peers to communicate anonymously – that is, to allow sharing without making the IP addresses public at any point in the process. The external pressure heaped towards downloaders, from law firms such as US Copyright Group, and also the rights holder’s push for graduated response, will no doubt have already pushed clever developers into tackling this very problem, and I don’t expect we’ll have to wait too long for this next evolution. And once it arrives, BitTorrent will be anonymous, unstoppable, and it will spell “game over” for both technical and legal methods to stop the downloading.

This scenario both scares me, and excites me. It scares me because, with no way to stop downloaders, things could get out of hand very quickly. But it also excites me because, without any technical or legal recourse, content holders might finally have admit to the need to compete with piracy, and we may finally see the entire industry put everything behind innovating their way out of the problem. Consumers will be the main beneficiary, and I look forward to new and brilliant ways to consume content, legally. Of course, this should have been the way forward since the first torrent was uploaded, and it would have been easier to compete back then, compared to a time when BitTorrent may have become truly unstoppable.

Going back to the point I made earlier about Megaupload being an outdated way of hosting pirated downloads, the closure of R&B/hip hop blog RnBXclusive this week shows why centralisation is dangerous. But what’s more dangerous is the pattern that’s emerging with law enforcement actions against websites suspected of copyright infringement – the fact that law enforcement agencies appear to be acting as the private police force for the entertainment industry without questioning the one-sided evidence presented to them – evidence that has often not stacked up in court. Time and time again, websites were taken down with the full force of the law, but still managed to be difficult to prosecute, or in the case of the similarly themed DaJaz1 (taken down by US Homeland Security as part of Operation In Our Sites), the case might not even end up in court. This is why due process exists and why it’s needed, for the evidence to be tested in a court of law before guilt is determined, and action is taken.

And to add insult to injury, visitors to rnbxclusive.com were initially threatened with messages that mentioned “an unlimited fine” and “a maximum penalty of up to 10 years” in prison for anyone who simply downloaded some songs from the website. A Big Brother style warning of the “capability to monitor and investigate you” was given an extra dimension of fear, by displaying the visitor’s IP address on the home page (a simple enough thing to do in php, but still scary enough for the less technical minded). These threats have since been removed from the website, no doubt due to complaints about the potentially misleading statements which could get SOCA (UK’s Serious Organised Crime Agency), the organisation that took charge of seizing the website, into trouble. But it’s the kind of hyperbole we’re used to seeing from the entertainment industry, the most likely ghost writers behind the now removed messages.

One of the entertainment industry’s tactic is to portray everyone who does something against their interest as criminals, even if it’s something as simple as ripping your own legally purchased DVD. I reported a couple of months ago on the efforts by public interest group Public Knowledge to make DVD ripping legal. They argued that due to the increasing number of devices that don’t play DVDs, such as tablets and smartphones, consumers need to be given the right to rip their own legally purchased movie discs. The fact that everyone who wants to do it is already doing it, means that making DVD ripping illegal under the DMCA is pointless at best, and at worse, criminalizes an activity that falls under fair use. With PK having made their submission to the US Copyright Office, which reviews submissions for exemptions to existing copyright laws every three years, the MPAA has just responded with quite an absurd argument *for* keeping DVD ripping illegal: it gives consumer more choice!

RealDVD

If Public Knowledge manages to get a DVD ripping exemption from the US Copyright Office, then it's still too late to save innovative software like RealDVD, which was sued into oblivion by the MPAA

What the MPAA is saying is that since consumers don’t have the legal option to rip their own DVDs, then the legal option to get the movie you already paid for, on other devices, is to simply re-purchase the movie again. And again and again. Consumers can “choose” to pay for the same movie on their iPhone, “choose” to pay for the same movie again on Android, and then “choose” to pay for the same movie once more on their PS3, for example.

Far from being a convincing argument, this is precisely PK’s argument for making DVD ripping legal, that consumers shouldn’t be made to fork out money for the same content over and over again, due to a legal measure designed to do something else. This is a perfect example of piracy laws being misused by content holders, for their own financial benefit, to take away a consumer’s rights. The fact that many movies are not even available on legal platforms further destroys the MPAA’s false arguments about “choice”.

I sincerely hope the US Copyright Office does the right thing and extends the exemption for CD ripping to cover DVDs and Blu-rays too. The reason that The US Copyright Office even asks for submission of exemptions is to prevent exactly this sort of thing – short sighted copyright laws that harm fair use and innovation.

The Megaupload case has also had some new developments in the last few days, although nothing that bodes well for Mr DotCom. More charges have been laid, and $50 million in Mega assets have been seized so far. Without insider knowledge, it’s hard to tell if this is an attempt to shore up the fed’s case before going to court, or if it’s some kind of tactic designed to force a favourable settlement. Copyright cases are not always easy to prove, see Viacom vs YouTube, and given the theatrics that has transpired so far, losing the case is not an option for federal prosecutors.

Meanwhile, the Pirate Bay and RIAA have been engaged in verbal warfare, with The Pirate Bay responding to an article by the RIAA that called it “one of the worst of the worst”. More on both of these late breaking stories next week.

Gaming

As mentioned earlier, due to Sony and Nintendo withholding hardware figures for the PS3 and Wii, I don’t have enough data to write up a full NPD analysis, so you’ll have to put up with a simplified version here.

NPD January Comparison

NPD January 2008 to 2012 Compared - things are bad across the board, it seems (January 2012 figures for PS3/Wii estimate only)

Microsoft was the only one brave enough to release data, with the Xbox 360 selling 270,000 units, down 29% from a year ago. Microsoft also mentioned that it held 49% of the current-gen console market. A little maths then tells us that the PS3 and Wii sold a *combined* 281,000 units. With the PS3 and Wii selling in similar numbers usually, that’s around 140,000 units for each, which is way down compared to the previous January’s 319,000 (Wii) and 267,000 (PS3).

These companies can only hope that January was a fluke, and that sales will pick up again.

Game sales were just as bad, with the number one selling title, Modern Warfare 3, only shipping 386,000 units – at the same stage of sales, Black Ops managed 750,000 (although MW3 sold more copies in the preceding months, it’s now flat in terms of sales to Black Ops), and Modern Warfare 2 managed 658,000 during its January period. And considering MW3 was the top seller, it means the other titles in the top 10 were much worse.

Overall, it’s the worst January since 2004.

The results are so bad that analysts are still debating the whys of it, with Wedbush Securities analyst Michael Pachter even questioning the validity of the data.

Maybe people are playing too much Skyrim to have time to buy any new games, just a thought!

And on that sour note, we come to the end of another WNR. Hope you enjoyed it, and see you next week.

Weekly News Roundup (12 February 2012)

Sunday, February 12th, 2012
Skyrim Screenshot

I might be spending way too much time playing Skyrim ...

Week 2 of my Skyrim adventure sees me fighting a dragon, two wolves, two bandits, a conjurer and a bear, all at the same, inopportune, time. It also saw an incredibly laborious trek at walking speed (thanks to having to carry too much dragon bones and scales), from the site of my latest dragon slaying, to my horse, which was “parked” quite a distance away at the nearest watchtower. Yes, I could have dropped a few items and fast travelled back home, but I’m a level 46 hoarder in the game, so I must loot everything (and I mean everything, as my prized collection of forks and plates will attest to).

Wait, what? WNR? Oh yes, that. Um, yeah I guess I better get started, not that we have much to go through since, well, as you can see I had a lot of other things to do during the week.

Copyright

Following up on last week’s story about Ubisoft’s DRM foolishness – apparently, the server migration didn’t go as smoothly as Ubisoft had hoped.

Gamers soon reported that games that were supposed to be unaffected by the server outage, like Driver: San Francisco and Anno 2070, were somehow being affected as well.

It seems to be me that game publishers are happy to burden paying gamers with ridiculous levels of DRM, forcing them to jump through hoops just to play the games they’ve already paid for, but aren’t willing to step up the plate to make any sort of guarantees in regards to the uptime of authentication servers. I think publishers may find that paying for authentication servers with 99.99% uptime, an industry norm, and having to keep them running for the life cycle of the game (say 8 years), might actually cost a lot more than not having DRM, considering the actual DRM may require a licensing fee as well if it isn’t developed in-house. And since the DRM doesn’t stop piracy anyway, I do wonder how these companies even justify the expenditure to their shareholders.

And the problem with online based DRM is that you’re really at the mercy of those who control the DRM servers. When the publisher decides that it’s no longer in their financial interest to keep the DRM servers running, then your games will simply stop working. And if you try to remove the DRM yourself, you could fall foul of the DMCA.

Now, I love Steam, and I free admit I have purchased way too many games from them in the various sales. But the greatness of the Steam platform sometimes makes me forget that, in the end, it really is just another form of online DRM. Sure, they do have an offline mode, and Steam makes the authentication part mostly invisible, and then makes up for it by giving gamers more value-added features. But it also means a catastrophic loss if you’re unable to access your Steam account, if it was stolen by a hacker for example, or having it banned by Steam. And this is exactly what happened to Russian gamer gimperial, who had his Steam account banned for no apparent reason, and only managed to get it re-instated after the story of his plight made headlines. The thing is, had gimperial purchased his games the old fashioned way, on DVDs from retail stores (and those games didn’t use Steam), it’s unlikely that just a single ban of an online account would result in all of his games being unplayable.

There are several things Steam could do to alleviate the potential suffering of gamers. They should start by investing some of their vast amounts of revenue into having a telephone support line, as it’s much better to deal with a real person in real-time to resolve problems such as an unwarranted account banning, then via email. They should also outline clearly which specific offences can lead to an account banning, and when accounts are banned, the user should be notified of the reasons (so at the very least, they know not to make the same mistake the next time). And then top it up by having a transparent appeals process. And it’s not just Steam, but all online services should really have something like this (I’m looking at you Google), because losing any of your online accounts these days can be a traumatic event that creates extreme difficulties for your professional, and personal, lives.

ACTA Protest

Europeans are protesting the controversial ACTA treaty, which will force countries to adopt harsh measures to combat online piracy

While the hoopla over SOPA/PIPA is dying down, our friends in Europe (and elsewhere) have not been resting on their laurels, and protests continue as I type, in Poland, the Czech Republic, France, England, Croatia, and many other places, against the controversial ACTA copyright treaty. Thousands of people are protesting what they’re calling an unprecedented level of surveillance the treaty will encourage member countries to adopt, something many haven’t seen since the days of the communist bloc. But instead of being watched by Big Brother for the benefit of the ruling party, it’s now surveillance to help (largely) American corporations, which is a little bit better I suppose, but also a little bit worse (for example, it’s impossible to overthrow a foreign corporation). And just like with SOPA/PIPA, victory is possible, now that Germany has already distanced itself from signing the treaty. The message seems to be clear – “It’s not acceptable to sacrifice the rights of freedom for copyrights,” words spoken by Thomas Pfeiffer of the German Greens party.

The fact that Hollywood, one of the key backers behind ACTA, seems to be targeting Europe shouldn’t come as a surprise to anyone. Hollywood will claim the focus is due to the fact that piracy rates in Europe are much higher than say in the United States (after all, it is home to The Pirate Bay). But a new study seems to suggest that it may very well be Hollywood’s own fault for the higher than normal piracy rates in Europe, and it’s all down to something called a “release window” (or really just a fancy way of saying “delayed releases”). The reasons for the delays varies. Sometimes it’s due to short term greed, the delay in negotiating better distribution deals (if the movie or TV show becomes a big hit in the US, then studios are in a much better position to negotiate if they wait), and having multiple release windows (eg. one for Blu-ray/DVD, one for subscription TV, one for free-to-air TV) allows studios to have tiered licensing rates. Sometimes it’s also due to localization issues, subtitles and dubs and the like. But it’s mostly, entirely avoidable. The new study found that the longer the release window, the higher the financial loses that the industry has largely blamed on pre-release piracy.

More importantly, pre-release piracy seems to have little effect in the US, suggesting that people are not choosing pre-release pirated versions (usually poor quality) over the cinematic experience, which makes sense if you think about it. And it also suggests there’s less urgency in the US to be able to watch a movie before it is officially released, whereas the urgency seems to be much more, um, urgent in international markets, especially if the movie has already been released in the US.

And I think the Internet is largely to blame for this urgency. The good old watercooler discussion has now moved online, and it’s now global, so the need to be able to join in online conversation about the latest movie, or the latest episode of a hit TV show, or even the latest game (Skyrim!), means people need the content, and they needed it yesterday. If they can’t get it legally, in the time-frame they want or at the price they can afford, then they’ll seek alternatives. And it just happens that piracy is the most available alternative there is. I believe there’s a huge, untapped market that can be exploited if content creators removed the artificial barriers for international releases, and by providing localization as quickly as possible. Or basically what Valve’s Gabe Newell said a couple of months ago, with proof of the success of this strategy in the fact that the notorious piracy market that is Russia is now Steam’s second largest market in Europe. Content creators should strive to make content available cheaply and quickly, before they go trampling on people’s basic rights to enact laws that will do very little to combat piracy in the long term.

There also exists the potential to monetize piracy, and while the industry might want to hold the moral high ground, at some point, they have to accept that piracy, no matter what you do, will always exist. And you might as well make money off it. As usual, Apple are pioneering the way forward, at least with the music industry, via iTunes Match. The service aims to “convert” pirated downloads into legitimate copies, all for the small price of $25 per year. And with license holders getting a share of the cash, they’re largely happy to get something that they wouldn’t have got before.

And I also think there exists a third potential revenue source – getting people to pay for thing they didn’t think they wanted, by presenting something that appears to be really good value. Steam makes this work via sales and relying on stupid people like me to buy crap games, yes even games like Duke Nukem Forever, just because it’s cheap. But not all cheap games are crap, and some have even become my favourites, leading me to buy sequels (albeit also at discounted prices). Steam, and the publishers that take part in sales, know that cheap games have promotional value, especially if a sequel is just around the corner, and so cheap games becomes a sort of discovery incentive. Piracy also enables discovery, with the incentive being that it’s all free.

Amazon Prime Instant Videos

An Amazon Prime membership, for $79 a year, gives you unlimited access to a library of 15,000 titles

What’s my point? Well, after getting a Kindle Fire and getting hooked on the free content that the free one month trial of Amazon Prime offered (with 15,000 movies, documentaries and TV shows on offer, unlimited free steaming for Prime subscribers), I recently signed up to a year’s membership for $79. Most of the content on there I wouldn’t consider buying, nor would I consider piracy (although some probably would) – but having had access to it for a month, I determined that $79 per year is good value for what I’m getting. That’s $79 content holders would never have gotten if they hadn’t made the content available for “free” on Prime. And on a related note, the fact that people paid for premium Megaupload accounts so they could download more pirated content suggests that even pirates are willing to pay, as long as you present them with something that’s is seen as having good value.

Speaking of Megaupload, with the file hosting industry still scrambling to ensure their own safety, it’s interesting to note that RapidShare, a leader in the field, has been calm throughout. After all, why wouldn’t they be, as they were removed from the RIAA/MPAA’s “notorious markets” list last year having been on it the previous year. So what exactly is RapidShare doing right, that Megaupload and other websites have not done? Education and enforcement, seems to be key. Education means educating those in positions of power about what RapidShare’s business model is all about (ie. not about piracy), and RS’s lobbying activities in Washington won’t have gone unnoticed. It also means actually ensuring their business model is not dependant on piracy, so no rewards program for major uploaders or referrers.

And possibly more important is the need to show content holders the site’s copyright policies aren’t just for show. RapidShare has a well staffed abuse department, that not only aims to deal with takedown requests in a timely manner, but also seeks out and removes infringing content pro-actively. Does RapidShare still host pirated content? Of course they do. But they have a business model based on legitimate usage, and they have a working anti-piracy policy, and that’s all that’s required really from a legal point of view – nowhere in any law, except for the failed SOPA/PIPA, does it say that a website has to ensure that it’s 100% clean of pirated content, an impossible tasks these days due to the user generated nature of website content.

Gaming

Gaming wise, the NPD figures for January are out, and they don’t make good reading. In fact, it’s so bad that analysts are even questioning the validity of the data. I haven’t had time (I know, I know) to fully digest (I know, I know) all the figures yet, but I’ll do that and write up the analysis as usual early next week.

Despite not wanting to write a lot, and not having much to write about, I’ve somehow gone over the 2000 word mark, so I think that’s as good a time as any to stop writing. See you next week.

Weekly News Roundup (5 February 2012)

Sunday, February 5th, 2012

Welcome to another edition of the Weekly News Roundup. So nearly 7 days and 25 more hours of Skyrim later, I have come to one conclusion: Skyrim is horribly, terribly, addictive! Which is just as well, as it hasn’t exactly been a busy news week (it’s funny how the slow news weeks always coincides with weeks in which I’ve been pre-occupied with other stuff).

Copyright

We start with some disappointing news. Last week, a petition was set up on the White House’s own petition website asking for MPAA’s chairman, Chris Dodd, to be investigated for bribery after the former Senator’s controversial statements (Dodd has threatened to stop writing cheques for politicians who dared to oppose SOPA, live on Fox News).

With the petition getting the required number of signatures to warrant a White House response, in only a week, everyone was waiting to see what the response would be. Unfortunately, the White House’s early response was not what everyone was hoping for. The White House’s only response was a refusal to comment because the petition  “requests a specific law enforcement action”, and the site’s policy wouldn’t allow that. So unless someone can reword the petition as to not request a specific law enforcement action, but merely to seek comments on whether it is acceptable for the head of an influential lobby group to be making these kinds of statements, the White House, and Dodd, looks to be spared of public embarrassment on a technicality.

With most of focus these past few months on the appropriateness, or inappropriateness, of the legal solutions to the web piracy problem, perhaps one key point has been forgotten: has piracy actually hurt the industries that are spending millions to lobby for the new laws? Even some of the key anti-SOPA campaigners often stress the need to take action against the web piracy problem (just not agreeing with SOPA/PIPA), but if you look at the creative landscape today, and the business opportunities all around, are things really that bad?

The Sky Is Rising Infographic

A new report says that a decade of web piracy has not hurt creativity at all, far from it

And this is exactly what a new report (or infographic for those that don’t want to read), titled The Sky is Rising, is looking into – the actual impact that a decade of web piracy has had on the creative industries – books, video games, movies and of course, music. And the results may be surprising, at least to those calling for tougher action on the web piracy “problem” with the aim of protecting the “incentives” for creativity. But far from the doom and gloom that the lobbyist have been telling politicians, it seems this has been a decade *for* creativity. More books are being produced than ever (not a surprising conclusion, thanks to online services that now allow anyone to sell their books), and thanks to services like iTunes and Netflix, the average consumer can get access to more movies, TV shows and music than ever possible. Even the video game boom of the 2000’s has somehow managed surpassed the great video game boom of the 80’s and 90’s, if not in quality of games (Skyrim and a few others excepted), than at least in quantity and revenue. Smartphones have revolutionized the way software is sold through small, cheap apps that almost any developer can publish and profit from (yours truly included) , and thanks to the Humble and other bundles (and Steam), the indie game industry have never had it better. And then there’s YouTube, and the hours upon hours of original videos that are uploaded every second to the site. Of course, a lot of the benefits from this particular boom time has not benefited the traditional gatekeepers of content, your major movie studios and music labels. Which is not necessarily a bad thing. To say that what’s bad for your Universal’s would be equally bad for the artists that continue to create, would be at the very least simplifying the issue at hand, if not an outright lie.

Now, I wouldn’t go as far as saying that web piracy has enabled all of this. In my opinion, web piracy provides benefits to creativity, by allowing content to be consumed by more people than ever, but it does have a negative financial impact too. But to cripple the Internet and to use drastic measures to attempt (but ultimately fail) to solve the web piracy problem, may end up hurting creativity, and providing little if any financial gains. Internet based platforms that empower individuals to publish original content may very well be the ones hurt most by draconian copyright laws, and so solutions that herald themselves as saviours of creativity, may become its worst enemy. The strange thing is that if this happens, if creativity on the Internet is killed off by the likes of SOPA and PIPA, it’s the traditional gatekeepers that may be the beneficiaries, despite not having actually stopped the web piracy problem. And maybe this is what they were hoping for all along.

It’s always worth remembering that the main principle behind copyright is not to protect profits, and certainly not the profits of license holders and gatekeepers who are usually not the creators of content. Copyright has always been about protecting innovation, the public’s need to be able to participate in cultural and informational exchange, and the encouragement of creativity. And the Internet, even including the unsavoury elements, have largely helped this cause, even if the likes of Sony and EMI have not been the primary beneficiaries of these changing times.

And so this brings us to two stories that somehow bring together the odd pairing of Neil Young and Angry Birds, but both carrying the same message, that maybe the positive effects of piracy can outweigh the negative effects. Neil Young spoke at the D: Dive into Media conference about the effects of web music piracy, and it appears the the music legend is not at all concerned (and more worried about the poor quality of said illegal downloads, than anything else). Young theorizes that web piracy is basically the new radio, a new way for music lovers to listen to new songs for free, and a great way for musicians to promote their new music. There are parallels in history that supports Young’s theory, in that the music industry was very much up in arms against radio when it was first introduced, just like they were up in arms about people making mixtapes when cassette tapes was first available. The technology may be new, but the music industry’s response isn’t.

Before web piracy, the choice for someone may have been to consume (listen, play, read, watch …), or to not consume – based on what they can afford, and what they think they like. Promotional activities back then were all about getting people to choose to consume, and these promotions usually involved a huge financial cost to buy air time, ads, generate hype and the like.

In the Internet era, and thanks to piracy, consumers now longer have to make this sacrifice – they can get it for free, if they can’t afford it, and if they hear bad reviews about something, they can still check it out without the need to be an idiot and pay for it. And promotions and hype are generated organically as a result, for good stuff, or stuff so bad that it becomes good.

But my point would be that as long as people are still spending money and spending more every year (and by all accounts, courtesy of The Sky Is Rising report, this has been the trend), then does it really matter how much they’re getting for free? Or rather, it does matter, because this is perhaps when piracy actually becomes a discovery tool, helping people to discover things they never thought they would like, and eventually encouraging them to spend money on things they never thought they would.

Angry Birds

Angry Birds developer says piracy isn't a problem as long as it helps build the brand and win over fans

And if publishers really want to get pragmatic about web piracy, then it should all be about weighing the positives against the negatives, the potential loss of short term revenue, versus the potential discoveries made by people that probably never intended to buy – in other words, does it help to build the brand? And according to the developers of Angry Birds, Rovio, this is exactly why piracy may be helpful. Rovio’s chief executive Mikael Hed makes a great point about differentiating between “customer” and “fan”. A fan may not have been a customer (thanks to piracy), but it does not mean they won’t be a customer in the future. And similarly, just because someone buys something and become a customer, it doesn’t mean they will continue to be one if you put out inferior product after inferior product, all glued together by a botched DRM, for example. And Hed concludes that by growing the fanbase, even if some of it is done via piracy, will help to grow the business. Lose those fans, through ridiculous pricing, DRM, attempts to coerce legislators into passing new draconian laws, and see you business crumble.

Hed does mention that Rovio learnt a lot from the music industry about what *not* to do in regards to piracy, but I think maybe there’s another company that’s more closely related to what Rovio does, that they can also “learn” from. Ubisoft will next week put on a public demonstration of just why their DRM sucks and sucks so hard, as the company’s planned move of web services from a third party provider, to their own infrastructure, will mean a lot of their games, including single player ones, won’t be available during the transition. Almost all of their online based games will be affected, and half a dozen games, including Assassin’s Creed, Splinter Cell Conviction and Tom Clancy’s H.A.W.X. 2, will be totally unplayable, online or offline, thanks to the DRM requirements.

So not only were Ubisoft short-sighted to not see the need, from the get go, to have their own web service infrastructure despite the overuse of web based DRM, they apparently does not possess the technical knowhow to offer a smooth, disruption free, transition either. If this is what a planned outage is like, I would hate to see the kind of damage an unplanned outage can do – even Amazon took a week to completely fix their cloud services outage last year, and they actually knew what they were doing. As expected, people with pirated versions won’t be affected at all – has there been a game company that has done more to promote piracy than Ubisoft? The Pirate Bay should give them an award or something …

Unfortunately, talking about games has only made me think of Skyrim, and I’m afraid I will need my fix again pretty soon. So on that note, see you next week.