April 2002 Archives

just how crap is the CBPDTA/SSSCA? even the anti-piracy goonsquad at the Software & Information Industry Association (SIIA) hate it.

the SIIA (and its evil doppelganger the Business Software Alliance) is no stranger to piracy agitprop -- they even have a piracy snitchline for cybergrasses -- but the spectre of Big Content's paid-for government sock-puppets regulating product design was apparently too much:

The Software & Information Industry Association (SIIA) and its predecessor organizations have been fighting digital piracy longer than any other trade association in the world. During the 16 years we have combated digital piracy we have gained invaluable experience as to what anti-piracy policies are effective and what level and type of Government involvement is appropriate and necessary. Based on our years of experience in this area, we believe that S. 2048, the "Consumer Broadband and Digital Television Promotion Act," is bad policy and establishes unwarranted and intrusive level of Government regulation into the development of technology.

(via Politech)

Big Content supremo Jamie Kellner's mission is to whip Turner Broadcasting into synergistic shape. happily, he sees his success in making life easier for you:

JK:...I'm a big believer we have to make television more convenient or we will drive the penetration of PVRs and things like that...

great! except that he doesn't actually mean what he just said -- he doesn't give a rat's ass about convenience for the viewer:

...which I'm not sure is good for the cable industry or the broadcast industry or the networks.

CW: Why not?

JK: Because of the ad skips.... It's theft. Your contract with the network when you get the show is you're going to watch the spots. Otherwise you couldn't get the show on an ad-supported basis. Any time you skip a commercial or watch the button you're actually stealing the programming.

so, as far as believing in making television more convenient -- not so much for Jamie Kellner.

thankfully, Jamie's not completely psychotic. our compulsive need to urinate (and thus steal from the networks) will continue to be "tolerated":

CW: What if you have to go to the bathroom or get up to get a Coke?

JK: I guess there's a certain amount of tolerance for going to the bathroom. But if you formalize it and you create a device that skips certain second increments, you've got that only for one reason, unless you go to the bathroom for 30 seconds. They've done that just to make it easy for someone to skip a commercial.

creepy.

if Jamie's any indication, Big Content's lost all sight of the fact that every time we indulge in their product, we're doing them a favor.

it's big in Europe

Doc Searls takes a second look at what lefty British journohacks think American capitalists can learn from Eurobusiness. as i look for all the European technology in my house that doesn't say "Nokia" and isn't a coffee maker, i think i'm developing my answer.

what i particularly like is this turn of phrase from Dr Searls (is that PhD or MD?):

Once again we've got an OR story about an AND issue.

i'm going to use more Booleans in my everyday speech -- much more self-explanatory than clichÈs like "zero-sum".

damn...

...i forgot to blog yesterday.

yesterday's testimony before the House Commerce Subcomittee on the Internet provided the expected half-truths and hysteria from Big Content, as they thrash about in a desperate attempt to preserve their creaky, capital-intensive business models.

News Corp COO Peter Chernin opened with a lame joke about "agressively pioneering this Committee's brand-new video conference technology," the coaxial equivalent of "Congressmen, i just flew in from New York and, boy, are my arms tired!" after some unnecessarily complicated, jargon-laden history behind the Broadcast Prodtection Discussion Group (whose activities the EFF has documented here), Chernin gets to the point Rupert Murdoch sent him to make:

it is critical that Congress play an active role in ensuring that the parties reach a consensus on how to solve this problem as quickly as technologically possible.Ý This is an Internet problem that needs to be solved at Internet speed.Ý As with the broadcast flag and analog hole solutions, we will need Congress to codify the solution to the illegal download problem.Ý

in other words, while the BPDG looks and sounds like a non-binding, consensus-based, cross-industry standards group, that just won't do for Big Content. they need their secret conclave's decisions to carry the force of law. AOL Time Warner's Richard Parsons is standing shoulder to shoulder with his Big Content cartel-mate:

the main impetus will come from business, AND WEíre strongly committed to WORKING WITH OUR COLLEAGUES ACROSS THE RELEVANT INDUSTRIES.Ý Yet, itís clear to me -- and i believe thereís a growing consensus across the entertainment, computer and consumer electronics industries -- that at certain critical points our work must be complemented by targeted government action TO SUPPORT PRIVATE-SECTOR solutions. [bizarre emphasis AOLTW's]

besides the Subcommittee's token inclusion of DigitalConsumer's Joe Kraus, there was one bright spot from an unexpected source. Philips Consumer Electronics of America CEO Larry Blanford didn't appear to have taken a sip from Big Content's Kool-Aid:

the current direction embodied in the on-going Broadcast Protection Discussion Group addressing ways to prevent Internet Retransmission of digital television broadcasts is not in the interest of sound public policy, is not in the best interest of the affected industries and is certainly not in the interest of the consumer.

this is, after all, a unit of the same company that balked at corrupted audio CDs carrying the Compact Disc logo. (via Washington Post)

Jack likes to portray his Big Content overlords as benign patrons of the arts -- the people who are taking all the risks. this pioneering entrepreneurialism extends, apparently, to the world of consumer broadband:

As we speak, every one of the MPAA member companies is engaged in one or more of several ventures to make online digital video-on-demand a reality. They are moving forward with these ventures even in the absence of a proven market and even with broadband penetration at relatively low levels (and languishing in its growth by some accounts).

what do you want, Jack? a cookie?

let's leave aside for a second the relative risk to Big Content of bringing VoD to fruition compared to, say, starting a software company. the real knee-slapper is the idea of "the absence of a proven market": either people are downloading a petabyte per day of crappy, over-compressed video, or there's no proof of demand -- you can't have it both ways.

Doc Searls took a look at Jack's testimony. the "350,000 downloads" number jumped out at him, too. a friend did some quick figurin':

My friend Arne just ran the math on that, and told me this outfit is claiming 10^15 bytes (a petabyte) per day. Kinda hard to believe.

not so hard to believe when you consider that these are totally fake numbers. (via Doc Searls)

Big Content's busiest mouthpiece says:

It is the Internet, that all-embracing technological marvel, which is putting to hazard our attempts to protect precious creative property. Viant, a Boston-based consulting firm, has estimated that some 350,000+ movies are being downloaded from the Internet every day ñ all of them illegal. [emphasis his]

thanks, Jack.

you can still get the Viant report cited. they proudly note that Jack Valenti used the report ("The Copyright Crusade") in previous scare-mongering testimony before the Senate Foreign Relations Committee.

according to the report, the "350,000 downloads" number was ginned out of a weeklong sample of IRC file-trading activity. the IRC profile was subsequently applied against "self-reporting" P2P networks (like Napster or Gnutella) activity (ie, given x nodes and y files, z files can be assumed to have been traded). the resulting numbers were smoothed out with media reports for the less transparent networks (like Aimster). I admit that this is about as thorough as you can get. it's also probably wildly inaccurate.

of course, the report's author (the guy who would ostensibly be selling Viant's services to some Big Content multinational) explicitly warns his readers about the quality of the figures:

"It has been our intention to present a balanced and educated view of these phenomena, not to rigorously prove any specific metrics for piracy."

yet that's exactly what Valenti does -- present these scary numbers as authoritative proof that digital piracy is a threat to Big Content. I haven't seen statistics abused this badly since I was in my last round of VC pitches ("oh, yeah -- the market's going to be $20 billion within five years. CSFB, Goldman Sachs, and Jupiter all say so!").

I say these numbers are junk, and they're being used irresponsibly by ruthless people.

Jack Valenti, Big Content's Million-Dollar Man in Washington, has posted a transcript of the MPAA's hysteria-driven testimony to the House Committee on Appropriations, Subcommittee on Commerce, Justice, State, and the Judiciary. entitled: "A CLEAR PRESENT AND FUTURE DANGER: The potential undoing of America's greatest export trade prize" it is replete with CAPITALS, boldface, italics, and underlining to emphasize the credibility of Big Content's claims, but it'll take more than typographical tricks to make his most important assertions stand up to examination.

my brain is short-circuiting trying to deal with them all at once, so i'll post a series of Valenti Misinfonuggets as i knock them off, one-by-one.

Big Content's bringing its greatest hits to Capitol Hill once more, this time to the House Commerce and Energy Committee's Subcommittee on Telecommunications and the Internet. the subcommittee's holding hearings this Friday (April 25) on "Ensuring Content Protection in the Digital Age". this is not promising -- in this face-off between Dick-and-Jane-Voter and Big Content, protecting our rights doesn't even get a mention in the hearings' title.

scheduled to speak are many of the usual suspects, including reliable Big Content moutpieces like News Corp's COO Peter Chernin, and AOL Time Warner supremo Richard Parsons. the consumer electronics industry will be represented by Matushita Electronic Corporation of America CTO Paul Liao and Philips Consumer Electronics of North America CEO Larry Blanford. as for IT, the best we're getting is Real Networks' COO (ex of Ticketmaster, News Corp, and Sony's Columbia Pictures) Larry Jacobson and Asaf Litai, CEO of corporate spyware vendor Vidius. coming in to give voice to the consumer's concerns is Joe Kraus from DigitalConsumer.org.

as an aside, i like what Joe's trying to do here, but i think i'd feel more comfortable if someone from the EFF were there to place this whole thing in the context of our civil rights -- this isn't just about consumption and convenience.

hosting this charming little party is the Subcommittee chair, Michigan Republican Fred Upton. although Republicans aren't generally sock-puppets for Big Content (after all, Hollywood is the New Sodom and Gomorrah) it's hard to ignore the fact that five of Fred's top ten donors for this election cycle are either content owners or broadband companies. in fact, Big Content has become Rep Upton's most generous patron, outstripping the automobile industry (and this guy's from Michigan). (via Politch)

the EFF's Fred von Lohmann puts in print what we all know to be true about Big Content's copy protectionism. Hollywood's dorm-room-piracy-as-Reds-under-the-bed scare tactics ("are you now, or have you ever been, sharing files on Gnutella?") has nothing to do with the clear and present danger of file sharing, and everything to do with protecting an obsolete business model through freedom-eroding legislation.

Why is a content protection system necessary for digital over-the-air television?

Hollywood representatives have, from the beginning, given one answer: a protection system is needed to prevent "Internet piracy," or even "Napster-ization."

There's one problem with this rationale: it's not true.

(via Consensus at Lawyerpoint)

mmm...Aqualicious

Pixeljerk has a neat interface, and icons tasty enough to lick. (via Boing Boing)

Friday nifty Mac news roundup

a few notable Mac-related news items:

  • Jobs to kick off WWDC '02: Apple's CEO will be delivering the keynote at the annual World Wide Developers Conference. the highlight of the show should be a demonstration of Mac OS X 10.2 (aka Jaguar).
  • Adobe ships Photoshop 7.0: the latest version of Photoshop brings the essential design tool to Mac OS X. this should spark a virtuous cycle of upgrades for both Apple and Adobe.
  • keyboards and trackballs and mice! oh my!: Microsoft has posted Mac OS X drivers for its USB hardware products (IntelliPoint yadayada and IntelliType blahdeblah).
  • Microsoft brings Trustworthy Computing to Office v.X: Microsoft releases Office v.X security ¸berpatch to seal two known (and one not-so-known) vulnerabilities.
  • UK code shop brings DirectX to Mac: Coderus has released MacDX, giving Mac game developers the option of linking directly to Microsoft DirectX APIs within their Mac games. the developers of Wipeout2097 for the Mac describe their experience with MacDX here, and it's encouraging reading.
  • Apple tests web interface to mac.com mail: you can now check your mac.com (iTools) e-mail from anywhere using just a browser.
  • check your Software Update system preference: Mac OS X 10.1.4 is waiting to be installed, featuring security enhancements, network performance improvements, and a longer list of supported optical drives.

(via MacMinute, MacInTouch, and MacNN)

me on April 12:

the Wall Street Journal (paid registration required) on April 18th:

kudos to me for getting there first. kudos to the Journal for deciding to use a GIF (JPEG for a graph? what was i thinking?). once again, blogaritaville wins 1:1.

me on April 10:

in other words, Merrill's media darlings (like Henry "Amazon @ $400" Blodgett) would publicly be giving the thumbs up to companies like 24/7 Media, while privately calling the stock "a piece of shit." the juicy details are available in an affidavit Spitzer filed in support of their request for a court order.

the Economist on April 17:

One company, 24/7 Media, was rated a ìshort-term and long-term accumulateî by Merrill. Privately, Henry Blodget, Merrillís star analyst of Internet shares, more succinctly judged it a ìpiece of shitî. Merrill says the e-mails were ìtaken out of contextî.

kudos to me for getting there first. kudos to the Economist for spelling Blodget right. i win, 1:1.

blogging makes you smarter

i learned two things recently: one, my hosting provider can take the combined effects of a Slashdotting, a Winerizing, a Good Morning from Silicon Valley, and a Boinging in good stride and, two, blogging makes me smarter because the people who read what i write are smarter than i am.

first, Jenny the Shifted Librarian picked up my story on the major labels' price-fixing shennanigans. this, in turn, drew Glenn Fleishmann's critical eye -- i hadn't adjusted my figures to account for inflation over the period. that, it seems, pushed Dr Bonzo over the edge, into a fit of statistical analysis designed to settle some of these issues. his conclusion:

Compared to the 1996-97 decline in CD sales, which appears to be strongly correlated with the end of a steady real-dollar decline in CD prices (both effects appearing also to be associated in time with the labels' alleged price-fixing), the relatively small decline in sales in the 2000-01 period, far from presenting dramatic evidence of the costs of "file sharing," appears to us to be a combination of a leveling-off in the number of family/individual "consumer units" and ongoing stability (read: lack of natural decline) in CD prices.

interesting: a smaller total market will buy less of a product it doesn't want at a price that doesn't appear to decline over time (ie, gets unnaturally more expensive). by totally screwing up their pricing and product mix at the same time as the number of people buying shrank and the economy contracted, the members of the RIAA managed to become their own worst enemies.

so, now we have several ways of slicing and dicing this data, and somehow none of it seems to point to the internet as the root of Big Content's current situation.

major labels' CD remix a failure?

while the major labels' price-fixing has drawn the attention of the government in the past and appears to have hurt sales, it seems that the record companies have compounded their misery by killing off the single.

both the RIAA's own numbers and comments from music retailers seem to indicate that the labels have been killing other formats to drive music purchases away from cheaper singles and towards the more expensive and profitable full-length CD.

the president of the National Association of Recording Merchandisers, Pam Horovitz told an audience:

"This lack of understanding of consumer needs is playing out in other strategic decisions as well. For example, we have been in a song driven marketplace for a number of years and yet the availability of singles continues to decline in what retailers believe is a frequently misguided attempt to drive CD sales. When there is no way for the consumer to purchase just the one song they want, why are we all surprised that they take advantage of the widely available alternative ñ which is a free copy from one of the various file sharing services?"

the RIAA's numbers support Ms Horovitz' argument: since 1997, shipments of CD singles have free-fallen from over 66 million units to 17 million -- they now represent less than one percent of the total dollar value of all CDs sold. had CD singles represented as much of the overall market as they did in 1997 (the peak of the format, with 66.7 million units shipped), the major labels might well have seen a modest increase in music sales compared to 2000, rather than a drop.

with the increasing evidence the evidence that a botched major-label money-grab of bad pricing and foolish product mixes was responsible for recorded music's woes, it becomes harder and harder to accept Big Content's party line that "the internet dunnit".

since 1995-96, when both the FTC and 28 states' Attorneys General maintain that the major record labels colluded to fix prices for compact discs, the RIAA's figures show a steady increase in the average price of a CD. the numbers also reveal that while the labels were engaged in price-fixing the overall sales of CDs slowed relative to the preceding period of aggressive price competition.

from 1992-96, a period that saw cut-throat price competiton from discount retailers like Best Buy and Target, sales of CDs grew 371 million units (from 400 million units to nearly 780 million units). once the labels started to enforce "minimum advertised pricing" (MAP) on the retailers, that sales growth started to slow. the RIAA reports that from 1996 to 2001, annual sales went from 780 million to 880 million units, an increase of only 100 million CDs in five years.

another interesting fact: the years with the steepest price increases also corresponded with declines in the number of CDs sold. 2001, the year that the RIAA's been trying to make the "Year of the Peer", saw the largest average price increase since the price-fixing began (around $.62 per CD).

update: ever wonder why you can't just buy the songs you like rather than the whole album? because the record labels don't want to give you that option. see how their strategy might have contributed to their lousy year.

according to an August 2000 lawsuit launched by 28 states' attorneys general (and the commonwealths of the Northern Marianas and Puerto Rico), the major record labels colluded with the major music retail chains to artificially maintain the price of compact discs. this is not, in itself, news. in fact, the Federal Trade Commission found much the same thing, although the labels were not required to admit to any wrongdoing or pay any penalty.

what's interesting is that the states' complaint (it's a PDF) asserts that a period of vicious price competition around 1995 saw the average price of a CD drop from $15 to $10. OK. let's take that number and map it against some of the RIAA's CD price-trend figures. the RIAA will have you know that:

Clearly there are many costs associated with producing a CD, and despite these costs the price of recorded music to consumers has fallen dramatically since CDs were first introduced in 1983. Between 1983 and 1996, the average price of a CD fell by more than 40%.

so, the RIAA says that the price of a CD fell more than 40% in 13 years. the states' attorneys general cite CD prices as dropping from $15 to $10 in about a year. that would seem to indicate that 80% of the RIAA's vaunted price drop happened in the last couple of years of the period they cite, when discount merchandisers like Best Buy, Circuit City, and Target touched off a CD price war. in other words, CD prices didn't drop until some cowboys came along and screwed with Big Content's cozy little arrangement -- you can guess what happened next.

coincidentally, the RIAA doesn't post any figures on the average price of a CD since 1996, right about when the FTC and the states say the RIAA's members started their price-fixing scheme.

update: i've also posted a story (complete with numbers and pretty charts) about how the major labels' price-fixing caused the slow-down in CD sales that the RIAA is trying to blame on file-sharing.

New York State Attorney General Elliot Spitzer has slapped the plutocrats at Merrill Lynch with a court order requiring them to disclose banking relationships with companies covered by their "analysts".

the AG says his office conducted an investigation that turned up "dramatic" evidence that "the firm's supposedly objective investment advice was tainted and biased by the desire to aid Merrill Lynchís investment banking business."

in other words, Merrill's media darlings (like Henry "Amazon @ $400" Blodgett) would publicly be giving the thumbs up to companies like 24/7 Media, while privately calling the stock "a piece of shit." the juicy details are available in an affidavit Spitzer filed in support of their request for a court order (it's a PDF).

Elliot might also want to ask why Merrill Lynch thought Enron merited a "neutral" rating (remember, "neutral" is supposed to mean "could go up or down 10% -- we don't know") 30 days before it went chapter 11?

ahh...

things finally percolated through to my ISP. a week without blogging -- and i lived to tell the tale!

welcome back?

as you may have noticed, the site's been down recently. i'm in the middle of a botched transition to a new web host. the DNS changes must be filtering through to a few of you by now (but, unfortunately, they haven't made it to my ISP's DNS servers), so i thought i'd say "hi".

a few things are still a little broken. sorry -- my bad. but welcome back, anyway.

this Reg/Computerwire article reinforces my belief that Sun's positioned itself to become the Xerox of web services -- the company that had all of the potential to dominate, but reaped none of the rewards.

i won't repeat everything i've said, but i guess it comes down to the fact that web services is a battle for software developers, and Sun's a hardware company. they may manage to provide all the tools and services necessary, but the bottom line is about moving boxes. that kind of indirect revenue generation strategy puts the web services people within Sun below the box guys on the priority list when Scott McNealy has to face his shareholders.

stop reading this...

...and start reading this.

it's the EFF's Broadcast Protection Discussion Group blog -- the only way you and i get a look inside this "open" process for determining your right to privacy and fair use, right in your living room.

the BPDG is a "consensus-building" body of Big Content heavyweights and technology companies working on ensuring Hollywood survives the transition to digital television with its century-old, scarcity-based revenue model intact. their recommendations will become the sneaky, back-door, undemocratic way that legislation like the SSSCA/CBDTPA comes into being. (via bOingbOing)