DVDGuy’s Blog @ Digital Digest

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.

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.

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.

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 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.

Welcome to this Chinese New Year(’s eve) edition of the Weekly News Roundup – the CNY(e) ed. of WNR, if you will. The alphabet soup continues, with more news on SOPA, PIPA, and a big one about MU, so with little time left in the year of the Rabbit, let’s get started.

In another week in which the copyright related headlines dominated the news, we start with reaction to last week’s White House statement on SOPA. The reaction from none other than media mogul Rupert Murdoch.

The controversial media owner wasn’t afraid to be controversial when it came to talking about the SOPA/PIPA controversy, accusing Obama of being beholden to his “Silicon Valley paymasters”, and calling Google a “piracy leader”. But for many, the fact that Murdoch is supporting SOPA/PIPA, is probably enough to push them to the other side of the debate.

Wikipedia, and thousands of other websites, blacked out their content for most of January 18 - a protest that got the attention of DC politicians

Which is probably why so many joined in on the January 18th day of action, which saw websites, including this one, black out their content to protest the votes on the controversial bills scheduled for 24 January. Even the newly obtained Righthaven.com, obtained via court appoint receiver auction last week, joined in the fun with a hilariously redacted letter to the MPAA (still not quite sure what the squid is all about). While thousands of websites joined in, the website that had the most influence on proceedings was probably Wikipedia. The website took the unprecedented step of blacking out all of their English language pages for 24 hours. When it was all over, and with everyone realising just how important Wikipedia has become in their lives, many also found out just exactly what SOPA was and what it could do. Some have criticized Wikipedia for participating in online activism, when the online encyclopaedia is supposed to be position neutral. This may be true, but when the very environment under which Wikipedia exists, and its own existence comes under threat, then there may be a need for a bit of activism. With people flooding elected official’s websites, emails, phone lines, calling on them to not support SOPA/PIPA, the power of the Internet was on full show.

And the protest seems to have had an almost instant effect, with key supporters of both SOPA and PIPA pulling out, and it became apparent pretty aoon that both bills were, in effect, dead in the water. With the 24 January deadline coming ever closer, the two sponsors of the bills, Rep Lamar Smith (R-Texas) and the senior senator for Vermont, Patrick Leahy, decided to postpone both bills, indefinitely. It was a political necessity, as they would say, for now at least. Chances are, the same bills with only minor changes, and very likely with different names, will be reintroduced at some later point when the heat dies down, but for now, this was still a major political victory for the Internet. The tech sector, who have largely stayed out of the political arena, may have also realised the power of lobbying – whether this is a good thing or a bad thing, that remains to be seen. It’s an unfortunate reality in today’s political environment that political lobbying is so effective, but for too long, politicians have only been hearing one side of the story, and perhaps this will help even things up a bit.

Of course, the MPAA was fairly incensed at both the blackout, and the fact that their bill, and I’m using “their” correctly and intentionally, was sunk. Chris Dodd, who has had a difficult learning period as the new Chairman of the MPAA, came out attacking the blackout as a “dangerous gimmick … designed to punish elected and administration officials who are working diligently to protect American jobs from foreign criminals”, obvious inferring that politicians against SOPA/PIPA are negligent in their duties in stopping criminals, and playing to the xenophobic crowd, added the quantifier “foreign” just in case. Dodd also attacked the decision to pull the bills, again using all the right keywords, describing the entire Internet as a “safe haven for foreign thieves”. And showing his experience as a Washington player, Dodd warned his former colleagues not to “ask me to write a check for you when you think your job is at risk”, demonstrating in one sentence the undue influence of money in US politics, and the entertainment lobby’s masterful manipulation of democracy through it.

MegaUpload's domain has been seized on order of Federal prosecutors, who say the website engaged in racketeering and money laundering

But before the champagne bottles had emptied, an even bigger story broke, as it was revealed that Megaupload, one of the web’s largest properties, had been shut down. In a simultaneous, multi-national, law enforcement action, involving FBI agents in the US, and law enforcement in the Netherlands, Canada and New Zealand, servers were seized, offices raided, an the founder of Megaupload and some of his employees were also arrested. In the court documents filed so far, incriminating emails (that were obtained, somehow) showed that the people running Megaupload were well aware of the nature of their service, in that it was being used by pirates, and sought to continue to profit from the activities. But then, only an idiot, or maybe a DC politician, won’t have known what Megaupload was all about just by searching for a few MU links on Google.

I’ve not had a look at all the emails, only some of the more serious ones being posted here and there, but to me, this whole MU case strikes me as a civil matter, not a criminal one. For example, what makes MU different enough to the ongoing MPAA vs Hotfile trial – if anything, Hotfile appears to be even more “guilty”, as they were paying pirates directly based on the popularity of their uploads. And as for incriminating emails, we’ve seen it all before in the Viacom vs YouTube case – despite the existence of these so called  ”smoking gun” evidence, as Viacom liked to call them, Google/YouTube eventually won the case on DMCA Safe Harbor grounds. So for those that are saying the government’s case against MU is rock solid, I think it might be a bit too early to judge, as the legal documents revealed at this stage only shows one side of the story, the government’s side. When MU provides their version of events, things might no longer be as black and white, and their lawyers might just cloud the issue enough to make the most serious criminal charges (like the racketeering and money laundering charges) go away.

And their version of events might just include testimony from the many that used MU’s service legitimately, and most are pretty angry at the excessive amount of force and haste the government seems to have used in taking down MU. You cannot deny that MU had substantial non-infringing uses, and that could provide MU protection under the Betamax verdict, but it all depends if the infringing aspects are enough to negate MU’s legitimate uses, and how complicit the owners and operators of MU were.

I also think part of the strategy here is to scare the rest of the online storage industry into taking copyright enforcement more seriously, even if the government doesn’t ultimately win the case against MU. With SOPA/PIPA on hold for now, online storage services will need to take a good look at the DMCA, and make sure their compliance is genuine. That should be enough to keep the FBI away, for now, while most likely, tons of pirated content would still exist on these sites.

So a lot happening, and perhaps too much to digest in such a short period, but I’m sure both SOPA/PIPA, and MU, will be occupying the headlines for a while yet.

And on that note, we come to the end of this rather short WNR. Nothing left to say except, Xin Nian Kuai Le, Gong Xi Fa Cai (Happy New Year , Congratulations and be prosperous).