Archive for the ‘Copyright’ Category

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 (29 January 2012)

Sunday, January 29th, 2012

Welcome to another edition of the WNR. I hope you’ve had a good week, that the FBI hasn’t stormed your home, seized your prized car collection and that you haven’t had bail denied by a judge. Me? I’ve somehow talked myself into getting a (admittedly cheap) copy of Skyrim (on the PC, of course), despite knowing that I really don’t have the time to play a game that has managed to destroy millions of hours of productivity since it was released. But curious as to what the hype was all about, I  talked myself into playing “just a few minutes”. 20 hours of Skyrim later …

Quite a bit to get through, and with the steel ingots and leather strips not making themselves into armor and requiring my urgent attention, let’s get started!

Copyright

The fallout from the Mega story last week continues, as file hosting websites scramble this week to “clean up” their services, or simply to shut up shop.

This is probably what federal prosecutors, and the content holders urging them to take action, had been hoping for. With thousands of illegal download links now put out of commission, some permanently, it does seem like a major victory in the war against web piracy. Although whether this actually leads to any revenue increases, the whole point behind stopping piracy, time will tell.

For the music industry, this is the second major breakthrough against web piracy in just over a year, along with October 2010’s closure of LimeWire. But it appears that despite what the NPD calculated to be a 46% decline in the number of downloaders shortly after the LimeWire closure, and with less songs downloaded per individual when comparing to the same period a year ago, music revenue for 2011 hasn’t actually increased much at all. In fact, it remains 3% down compared to 2010, when LimeWire (up until October at least) was fully operational. The rate of decline has slowed, but you would think that with such a dramatic decline in piracy rates (nearly half of the people downloading pirated music were using LimeWire to do it just before it was closed down), and the RIAA’s warning of billions upon billions of damage caused by piracy, that it would have at least helped the industry get back into growth. So it will be interesting to see, now that piracy through file hosting services has decreased, what effect it actually has on revenue.

Record label vs artists profits

Apparently, only $23 out of every $1000 made on music sales actually goes to the musician, on average (source)

This is of course assuming the main aim behind the targeting of Megaupload was in fact to do with piracy, as it was noted this week that Megaupload was already making plans to take on the music industry head on, in plans that could cause the major labels more damage than piracy ever could. The plan involves a new website called Megabox, which allowed unsigned artists to completely bypass music publishers, and market directly to music fans, with 90% of the revenue going back towards the artist. Even free (ie. pirated) downloads would generate money for the artists, as Megaupload promised to share the very income, earned from downloads, that got them into trouble last week. And if Megabox works, then it would have been a big blow to the majors, and would have seriously questioned their relevance in the age of the Internet, when “naturally” generated hype is more valuable than any kind of promotion that labels could come up with. And with technology enabling artists to sell directly, without having to invest a lot in infrastructure (or they can leave it to tech companies to handle that side of things), artists no longer have to see a majority share of their revenue going to record labels. If there’s one thing the labels fear more than web piracy, it’s this, and while it might require one to be wearing a “tin-foil-hat” to think that this was the only reason behind the Mega take-down, it’s probably a nice little bonus the record industry got out of the whole thing. But while the likes of the RIAA can stop Megabox, they can’t stop innovation and progress, not forever, and a major shift in the way content is packaged, sold and distributed is on its way, if it isn’t here already.

While the Mega stories were very much dominating the headlines, the temporary demise of SOPA was still on people’s minds. One of those minds was EMI’s VP of Urban Promotions, Craig Davis. In a Q&A session with the Reddit horde, Davis expressed largely personal views that seemed to differ quite a bit from the general line of thinking coming out of the music industry these days, in that legislation is the only way forward to deal with the web piracy problem. Perhaps highlighting the internal divisions within the music industry on how to handle the web piracy problem (something we don’t usually get to see, with the RIAA’s loudspeakers drowning out all other opinions), Davis personally opposes SOPA, and says that piracy is more of a service issue, than a pricing one, mirroring what Valve’s Gabe Newell said a few months ago. In fact, Davis specifically mentions Newell as having the right idea when it comes to fighting web piracy. By focusing too much on the pricing issues behind piracy, major content holders often come to the conclusion that there is no real way to “compete” with pirated downloads, as they could not offer their content for free (although I would argue that piracy itself carries a cost, in terms of legal risk, technical and safety issues, and a moral cost, and so for legal content to compete, it does not have to be free, it only needs to be seen as good value). But by concentrating on service, innovation, basically by making legal options more attractive in more ways than just on price, then “legit” could compete with “free”. And perhaps Newell’s Steam could offer guidance to the music, and movie industries as to how to best leverage the positive aspects of the Internet, and how to compete with piracy – Steam’s legendary sales, it’s active community of gamers, and value added features, all help it not only compete effectively with pirated downloads, but also traditional retailers.

But innovation always carries a risk, a risk that, historically, the music and movie industries havn’t been willing to accept. Whenever something new hits the block, whether it’s home audio taping, or VCRs, these industries have resisted change and has tried to sue their way out of the problem. Eventually though, they did accept that change was inevitable, embraced innovation, and has come out better for it. But what’s different this time though is the incredible power lobbyists now hold over elected officials and the systemic corruption in D.C., and this now offers entrenched major content holders another “solution” – to legislate their way out of trouble. Most in D.C. have  gotten so used to using money to buy policies, that they no longer sees anything wrong with it. Which is probably why former US Senator, and current MPAA head, Chris Dodd was so transparent in his attack against political opponents of SOPA, literally threatening to stop writing checks for them come election time. That he simply didn’t see any problem with the head of a lobby group threatening to stop paying politicians if a favourable law wasn’t passed, shows just how “comfortable” the Washington crowd has gotten with the way things are done over there (or it may just be because Dodd is stupid). But while Dodd may not have felt that there was anything wrong with his statement, others did, and using the same tactic that has already worked against SOPA, people are signing a new petition on the White House’s “We the People” petition website to ask for a full investigation of Dodd for bribery. With 25,000 signatures required within 30 days for the White House to officially issue a statement on the petition, 30,000 signatures were promptly recorded in just a week (that’s the Internet for ya). The fact that the White House will now have to issue on statement of Dodd’s alleged improprieties, regardless of what the statement actually says, should be hugely embarrassing for the MPAA Chairman. Or it could be much much more serious.

Anno 2070 Screenshot

Anno 2070 looks great, but just pray that you don't need to change your GPU, or the game's DRM could lock you out

With so many big issues being discussed, trust Ubisoft to still somehow steal the headlines via yet another incident with one of their controversial DRM choices. When review site Guru3D went about using Ubi’s Anno 2070 in a hardware benchmark test, they found that the 3 PC activation limit also applied when the GPU was changed, and so having barely started their test, they had used up all of their activations. Having calculated that they would need 7 copies, or 21 activations, to finish their testing, Guru3D contacted Ubisoft about this potential “bug” with their DRM, but Guru3D were promptly told that not only was this normal and intentional, Ubisoft wouldn’t be providing the 7 copies needed to finish their testing. So Guru3D did what any self respecting website would have done – they published the entire detail of their ordeal for the Net public to judge, and the expected public backlash eventually forced Ubisoft to back down and allow for GPU changes. Ubisoft came out with the usual statement saying that very few people were affected by this particular problem with their DRM, which is probably true considering the game only came out in November, and I don’t think many would have changed their GPUs twice during this period. But the problem with DRM is that it’s forever, so were Ubisoft really expecting PC gamers, of all people, to not frequently change their GPU or other parts of their hardware? Or maybe they just didn’t think their games were that good for people to be still playing it for more than a couple of month. For now though, while GPU changes are exempt from requiring new activations, other hardware are still being included, and so don’t be surprised if this problem pops up again at a later date.

Gaming

And on that note, we move to gaming. For some reason, all the Xbox 720 rumours decided to out themselves this week.

Of course, there cannot be an Xbox rumour without mentioning Blu-ray, and the next Xbox (which I hope will be more imaginatively named than “Xbox 720”) will apparently have a Blu-ray drive. Whether it plays Blu-ray movies or not, remains to be seen though, since the Wii U will have a “Blu-ray like” drive, that won’t play movies.

Xbox 720 Mockup

Just one of the many Xbox 720 mock-ups floating around the net

On the GPU front, a Radeon 6000 series chip might be used. This actually feels too “new” of a chip for a console that’s supposed to be released next year, since the Wii U is only using a Radeon 4000 series. The reason why console manufacturers use older chips, other than the maturity of the product line, is due to the time it takes to engineer an existing off the shelve solution for a game console, the cost involved in using the state-of-the-art GPU, and the fact that optimizations mean console GPUs don’t need to be as powerful as their PC counterparts.

The most controversial rumour involves Kotaku’s reveal that the next Xbox could ban the playing of second hand games. Publishers have long complained that second hand games are cannibalising sales, as gamers can “share” the same copy and game stores profit from each transaction – only one payment from these transactions is made to publishers, right at the start. Publishers have come up with various ways to solve this problem, for example, a voucher system (but that don’t really works for limiting the multiplayer component of games). So if Microsoft really wanted to please publishers, and get them to release more exclusives for the platform, then having a system that ensures second hand games won’t work will do the job. Although I think this will backfire and hurt sales, and the platform, in the long run.

Nothing much more happening this week, at least no in the real non-Skyrim world, so we come to the end of another WNR. See you next week.

Weekly News Roundup (22 January 2012)

Sunday, January 22nd, 2012

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.

Copyright

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 Blackout

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 Seized

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).