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Showing posts with label piracy. Show all posts
Showing posts with label piracy. Show all posts

Nov 7, 2012

Sorry, Internet, SOPA had zero effect on election day results

lamar smith

Blockage of the Stop Online Piracy Act (SOPA) may have served as the Web's defining political moment of the year, but the anti-SOPA movement appears to have had little to no effect on Congressional elections, with 21 out of 23 SOPA supporters hanging on to their seats.

Defeat of the Stop Online Piracy Act (SOPA) was easily the most important political event of the year for the Internet. But it didn’t make much of a difference on election day. Of the 23 House Members up for reelection who co-sponsored or otherwise supported the highly contentious anti-piracy legislation, all but two won reelection on Tuesday. This includes Republican Rep. Lamar Smith, of Texas, SOPA’s author and chief co-sponsor who became the Internet’s Enemy No. 1 after disparaging the SOPA opposition movement late last year.

Even the two Representatives defeated on November 6 – Reps. Joe Baca and Mary Bono Mack, both of California – appear to have lost for much more mainstream reasons: things like gun control and budgets. In short, there is little reason to believe that SOPA had any effect whatsoever on the 2012 election – something that seemed unthinkable among the millions Internet activists who helped push SOPA off the table. The backlash against SOPA became so feared in Washington that “getting SOPA’d” became synonymous with a public revolt against particular legislation.

“Nobody wants another SOPA moment,” Rep. Jason Chaffetz of Utah told Politico in March. “The nerds are more powerful than anyone thought, and the tech industry flexed its muscle like never before.”

If Tuesday’s election was any indication, all that nerd power is gone. Below is a complete list of how SOPA supporters in Congress fared on election day: 

California

Connecticut

Florida

Georgia

Massachusetts

Michigan

Mississippi

North Carolina

Nevada

New York

Ohio

Pennsylvania

Tennessee

Texas

Virginia


Source : digitaltrends[dot]com

Oct 12, 2012

Does the RIAA even want Pandora’s golden eggs?

Does the RIAA even want Pandora’s golden eggs?

The same services that have helped the recording industry stamp out piracy are on the brink of starvation and death… because of the recording industry.

Streaming music services are dying.

I know, I know: By almost any metric you use, the streaming music business is actually booming. Let’s just look at the two biggest examples. Over 150 million people have signed up to hear tunes through Pandora, while another 33 million folks sing in the shower with the help of Spotify. Spotify alone sucked down over a quarter of a billion dollars — that’s billion with a “B — in revenue in 2011. Pandora’s revenues topped $100 million last quarter alone.

That’s a ton of ears and even more moolah, and those numbers should only increase as more and more people move to using mobile devices with limited storage space and free-roaming Internet abilities.

Even still, the streaming music services are dying. That’s because the one metric that matters most just so happens to be the one metric that both companies fail miserably at: actually making money. Despite those millions of customers and hundreds of millions of dollars in revenues, you see, neither Pandora nor Spotify have yet to make a single dollar’s worth of profit. And it’s not their fault.

The streaming music services are dying, choked slowly into oblivion by the overwhelming greed of the music industry.

Looking a gift horse in the mouth

By almost any metric you use, the RIAA and the rest of the American music industry should be swooning over the meteoric rise in streaming music popularity. The streaming music revenue model monetizes listeners who used to download albums off of BitTorrent and LimeWire, converting their once-illegal habits into actual income through the royalties paid by the services themselves. In a nutshell, streaming music services turn nothing into something for the RIAA and co.

Study after study has shown that having free or low-cost legal music options stamps out piracy much more efficiently than dragging illicit downloaders into court ever did. Spotify found raging success in the Scandinavian countries, for example, and those countries have seen music piracy rates drop between 25 and 50 percent since the service launched. The number of pirates continues to dwindle as time goes on.

download statsGiven that the U.S. boasts more music pirates than any other country in the world, you’d think the music industry would want to nurture the blossoming streaming music industry into maturity. And it does: In a 2012 industry report (PDF), the IFPI — International Recording Industry Association — calls streaming music “a fast-expanding business model” and notes one big potential upside. “In the à-la-carte environment, an album or track is downloaded once and paid for. In the streaming environment, a track or album may be listened to hundreds of times, each triggering a payment to rights holders.”

Streaming music is a cow that will never run out of milk. Unless, of course, the cow itself winds up dead. The music industry’s greed could very well end up doing that.

Why aren’t streaming music services making money?

It’s simple: they pay too much money out in royalties.

Pandora differs from most streaming music services in that it’s more accurately called an Internet radio station: It plays whatever music it wants, then gives the artist a royalty payment in line with what’s mandated by a government statutory license, which also imposes limits on on-demand listening and the number of times a song can be played in a set time period. The license fee works out to the greater of $0.02 per listener per hour or 25 percent of the company’s revenues.

It’s that “whichever’s greater” part that’s killing Pandora. That line forces Pandora to pay out over half its revenue in royalties, a completely unsustainable long-term business model.

spotify premiumBecause of that, the company is lobbying hard for Congress to pass the Internet Radio Fairness Act, a bill that would allow Internet radio royalty rates to be set by a panel of judges who adjust royalties based on their commercial value, similar to what’s done for traditional cable and satellite radio. The move could drop Pandora’s royalties down to 8 to 16 percent of total revenues, a much more sustainable amount. Our Geoff Duncan already tackled the complex subject in-depth.

Conversely, the music industry backs a competing bill called the Interim FIRST ACT (PDF) that would force traditional broadcasters to pay the same high royalty rate as Internet radio stations.

Spotify and the other on-demand music streaming services handle things a bit differently. They’ve negotiated individual licensing deals with the music labels that have the services paying agreed-upon rates for streaming music. The exact amounts haven’t been disclosed, but they’re definitely steep: Spotify CEO Daniel Ek has said that 70 percent of revenues go “back into the industry,” but a recent leak of the company’s 2011 financials suggest royalty-related costs could consume a whopping 97 percent of the company’s revenue.

Streaming music: Shining brightly, but destined to fade?

No company can survive those kinds of content costs. Even more incredulously, several artists have complained that services like Spotify still don’t pay them enough, although TechDirt’s Mike Masnick — a noted intellectual property journalist — says that when a royalty collection agency studied the numbers, it found that Spotify pays a much higher royalty rate per-listen than iTunes or traditional radio.

Some analysts have suggested that running more ads would reduce the royalty burden and increase revenues for streaming music services, but as anyone who’s ever listened to the free version of Spotify can tell you, the service runs an abundance of ads — and it’s still losing money hand over fist.

It’s a complicated subject, to be sure, and it’s similar to the struggles other content providers are facing in an Internet-connected world where most digital content inevitably moves towards no cost for the end user. But here’s the rub: The music industry has already been there. Piracy ran rampant in the previous decade in the form of file-sharing, and that specter still looms large over the U.S. music scene.

Low-cost streaming music services offer artists salvation, having already proven that they can turn today’s bleak piracy-filled landscape into a profitable revenue stream for the future. But if the music industry can’t check its greed and hash out a royalty scheme that works for artists and streaming services alike, it could very well snuff out the golden egg-laying goose for good. If the two brightest streaming music stars can’t sustain, none of the services can.

But hey, look on the bright side! If Spotify and Pandora go down, there’s always BitTorrent.


Source : digitaltrends[dot]com

Sep 14, 2012

What you need to know about the new Copyright Alert System

Big-Brother-shutterstock

Major U.S. ISPS are supporting the Copyright Alert System of escalating strikes when Big Content makes piracy accustations. What do you need to know before it arrives?

Some of the biggest U.S. Internet service providers are getting ready to embrace the Copyright Alert System, a policy of escalating alerts and “mitigation measures” that ISPs will force on their customers when copyright holders accuse them of pirating content.

The Copyright Alert System is often described as a “six strikes” policy — with the implication that if someone’s accused of piracy six times, they’ll lose their Internet service. That’s a misrepresentation. First, it’s a system of four to six alerts — some folks might get six, but others will get fewer. Second, the system doesn’t actually have a stage where users lose their Internet service — as always, that’ll remain solely at the discretion of ISPs, who can turn it off anytime they like for any reason.

So what is this thing, and do you need to be worried about it?

What is the Copyright Alert System?

First, the Copyright Alert System is not a law. It’s a series of escalating notices and educational materials that ISPs will voluntarily present to subscribers allegedly distributing or consuming pirated digital content. The initial emphasis will probably be on movies, television shows, and music, but it can apply to anything. Content owners — movie studios, publishers, record labels, and the like — will give ISPs specific IP addresses and times that users on their networks are allegedly engaging in piracy. ISPs will then start sending notices to users.

The system was supposed to go life in July of this year, but is now expected to roll out with major ISPs by the end of 2012.

Where did the Copyright Alert System come from?

Illegal Downloading

Right now, most ISPs have their own set of policies and procedures for dealing with digital piracy — and they’re usually pretty hands-off. ISPs generally do not want to act as copyright police — they view that role as tremendously costly (with no upside), and a slippery legal slope that could alienate customers. As a result, most ISPs pursue  anti-piracy policies in the name of network management — think of bandwidth caps that limit the amount of data subscribers can send or receive, with penalties for going over those limits.

Movie studios, record labels, publishers, and other representatives of the content industry aren’t happy with that situation. When they believe an Internet user is engaging in piracy, they can contact that person’s ISP and present their evidence, but the ISP isn’t under any obligation to do anything about it. After all, the report doesn’t carry any legal weight, and enforcement represents a burden. Most ISPs will warn users (or, sometimes, eventually disconnect them), but the policies are inconsistent and sometimes even non-existent. For the content industry, the Copyright Alert System means a more consistent response to reports of digital piracy — and, more importantly, that participating ISPs have agreed to participate.

For the content industry, the Copyright Alert System is also less likely to blow back on them. If there’s one thing the content industry has proven, it’s that threatening to bring legal action against all fire-sharers they believe might be engaging in piracy is costly, embarrassing, and largely unsuccessful (even with a recent re-instatement of a $222,000 penalty against Jammie Thomas). Groups like the RIAA and MPAA would rather work with ISPs — quietly and directly — than get lawyers involved.

The two groups hammered out the basics of the Copyright Alert System in mid-2011; their memorandum of understanding is filled with legalese but remains the most detailed articulation of the system to date. The system is being shepherded by the Center for Copyright Information, headed up by former People for the American Way executive Jill Lesseris.

What are the alerts?

fuzz alert

There is no fixed system of alerts, but ISPs participating in the Copyright Alert System will probably implement four to six stages.

The first time a user’s account is accused of piracy, the ISP will send an alert (probably via email) that their account has been accused of distributing copyrighted material, perhaps as the result of misuse. The notices will point out that piracy violates the ISP’s terms of service and potentially subjects users to malware and other security risks. The notice will also point out legal ways for users to get the digital content they want.

If the alleged behavior doesn’t stop, the notices will escalate, but how remains up to the ISP. One path might be to send another notice, or perhaps send notices via postal mail or with return receipt technologies if the alleged abuses continue. From there, ISPs can move on to “mitigation” measures, like throttling a user’s Internet service, redirecting Web browsers to a landing page telling users they’ve been accused of piracy, or forcing them to watch educational videos before letting them resume full Internet access.

The Copyright Alert System does not mandate any fixed number of “strikes” that will cause users lose their Internet access. Any decision to terminate Internet service is completely in the hands of individual ISPs, just like it is today. In fact, it actually has some protection systems for users built in. Any mitigation actions taken by the ISP cannot terminate email service, voice services (like calling 911) or things like home security and health equipment monitoring services.

What ISPs are involved?

Right now, AT&T, Cablevision, Comcast, Time Warner Cable, and Verizon have all agreed to participate in the Copyright Alert System. Combined, the account for about three quarters of all residential Internet service in the United States.

Who is doing all this “alleging”?

The two main organizations representing the content industry in the Copyright Alert System are the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA). Both organizations already employ organizations to track and identify systems engaged in digital piracy, usually over peer-to-peer file sharing networks.

How will accusations work?

Accusation (Shutterstock / lenestan)

Record labels and movies studios hire companies (like Peer Media or DtecNet) to sniff out pirates. Once they identify a torrent or other pirated content that they believe infringed on their copyrighted content, they can collect quite a bit of information, including the IP addresses of other users connected to a torrent, whether to upload or download the content. In the industry’s eyes, all those people are conducting or at least enabling piracy. Sometimes, the companies will even bait pirates by seeding torrent sites and other peer-to-peer services with blocks of data that purport to be hot new content items… and then seeing who nibbles.

Once the IP addresses of alleged infringers have been identified, they will be passed along to the ISPs — with timestamps, which ISPs need for this information to be meaningful. Under the Copyright Alert System, the ISPs will initiate (or escalate) alerts or mitigation steps applied to the identified subscribers. Under the content alert system, the ISPs will not be sharing users account information with the MPAA, RIAA, or each other, nor will they be sharing the lists of IP addresses accused of piracy. If the MPAA or RIAA wants that information to initiate potential legal action, they’ll still have to get it the old-fashioned way: by filing a suit and doing discovery.

But I’m not pirating anything!

The content industry doesn’t care whether the alleged sharing is deliberate or inadvertent. Under the Copyright Alert System, they’re out of the loop once they’ve reported infringement to the ISPs — any enforcement actions are solely in their hands.

There are plenty of scenarios where someone could be accused of piracy without committing it. For instance, if you run your wireless network without security, or it has simply been compromised, anyone in range could be using you Internet connection (and IP address) to download or upload pirated content.

Small businesses are another great example: Lots of cafes, coffee shops, book stores, restaurants, bars, hair salons, grocery stores, and even offices offer free Wi-Fi as a convenience to patrons or clients. Despite their lack of control, they will find themselves subject to the Copyright Alert System. And, although it’s rare, the technosavvy can pretty easily crack passwords on many Wi-Fi networks. That quiet kid in the apartment down the hall might be doing all his torrenting on your Internet connection, rather than his own.

If users believe they’ve been unfairly or inaccurately accused of piracy, the Copyright Alert System does allow folks to request an independent review to be conducted by the American Arbitration Association — starting the process will involve a $35 fee.

More insidiously, the Copyright Alert System has no “watchers for the the watchers.” ISPs will take groups like the RIAA at their word that they’ve reliably determined an IP address is engaging in piracy. If those reports are wrong — whether through a technical errors or deliberate fraud or harassment — it looks like everyday Internet users paying the price.

Do “strikes” carry over?

Nobody knows yet, but right now the indication is “no.” The Copyright Alert System is set up so ISPs don’t share account data or IP address lists with the content industry or each other. In theory, that means a user accused of piracy while using one ISP wouldn’t have those black marks on their record if they switch to another ISP.

So how can I protect myself?

security password login

Most everyday Internet users will never notice the Copyright Alert System — especially if they’ve locked with their Wi-Fi networks. The content industry is generally learning that making media easily available via legitimate channels — like iTunes, Netflix, and other mechanisms — is the best way to deter piracy. So, the simple way to avoid being dinged by the Copyright Alert System is probably not to engage in piracy. Mistakes may happen, but that should keep most users clear.

Folks who do engage in file sharing — which is not in itself illegal — can take steps to protect themselves. Using encryption technologies in file-sharing client software probably won’t do much to protect users: Sure, ISPs won’t be able to peer into your traffic, but ISPs generally don’t want to peer into your traffic anyway. However, other users of the file-sharing service will be able to see what you’re doing, and some of those users work for RIAA and MPAA. And they know how to work around things like PeerBlock that claim to keep spying eyes off your file sharing.

The cleanest way for file-sharing users to protect themselves is probably by using VPN (to encrypt data transiting your ISP’s network) or proxy services. A proxy will effectively mask a user’s IP address from other users on a peer-to-peer network; a VPN establishes an encrypted connection for all network traffic to and from your computer. Neither are foolproof (or necessarily easy to set up), but they represent the best, easily available technology to stay out of sight of the Copyright Alert System.

Should I worry?

The Center for Copyright Information is right about one thing: most users will probably never need to know the Copyright Alert System exists. Folks who watch movies via Netflix, download some stuff from iTunes, and watch videos on YouTube have nothing to worry about. For the time being, the MPAA and RIAA are mostly concerned with peer-to-peer file sharing through services like BitTorrent, and particularly, folks who make copyrighted content available on those services.

The thing is, serious content pirates are already used to working around piracy reporting systems like this. They encrypt their traffic, set up seed sites outside the United States, and generally know what they’re doing. The Copyright Alert System is not going to stop them or even slow them down.

The real question is how smoothly — and competently — piracy sleuths and ISPs can manage this system. If piracy reports are very accurate and ISPs actions on them consistent, the Copyright Alert System will at most be a minor annoyance for folks who are inadvertently participating in piracy, and just “business as usual” for serious pirates.

If the system is inaccurate or causes users to unfairly lose Internet access — particularly in areas where there’s little or no competition for Internet service — then the Copyright Alert System could become another albatross on the content industry’s shoulders — just like DRM and claiming sharing 24 songs on a file sharing network was worth $1.5 million in damages.

[Big Brother image via Shutterstock / Benjamin Haas
Accusing image via Shutterstock / lenestan
Accusing image via Shutterstock / Mario7]


Source : digitaltrends[dot]com

Aug 20, 2012

The RIAA appears to be dying, tax records show

The RIAA's revenue has dropped

 RIAA logo tiltThings aren’t looking so good for the Recording Industry Association of America (RIAA), one of the primary groups behind anti-piracy efforts like the Stop Online Piracy Act and the ‘six strikes’ deal with Internet service providers.

As  TorrentFreak giddily points out, the RIAA’s most recent tax filing shows that the group’s revenue for the period that ended on March 31, 2011, has fallen 44 percent over the two years prior. Chances are, the financial outlook is even more grim for 2012.

RIAA revenue for the period topped out at $29.1 million, a significant fall from the $51.35 million the group brought in two years ago. The number of employees also plummeted during the same period, diving from 117 to just 72.

The reason for the fall in revenue is primarily a result of a drop in dues paid by the major record labels that serve as RIAA members. In its filing from two years earlier, the RIAA reported member dues of $49.8 million, reports Digital Music News. The group’s most recent filing shows that number now clocks in at just $27.9 million.

Interestingly, the first half of 2011 was one of the best for the music industry as a whole, according to Nielsen SounScan. The first six months of the year delivered a modest 1 percent rise in total album sales — the first gain the industry saw in six years.

Despite the drop in revenue and member dues, RIAA executives are stilling laughing all the way to the bank. Former RIAA Chairman and CEO Mitch Bainwol received $1.75 million, the most of any RIAA employee. Current Chairman and CEO Cary Sherman (who was the group’s president at the time) received the second highest salary, $1.36 million. The nine other highest-paid RIAA employees all received salaries between $309,000 and $715,000.

The amount of money the RIAA spends on lobbying the U.S. government has remained about the same over the past few years, at a steady $2.3 million annually.

Fortunately for Web users, the amount of money the RIAA has collected in legal fees has dropped significantly, falling from $16.5 million to $2.34 million thanks to the group’s decision to stop going after individual file-sharers in court, reports TorrentFreak.

View the full 2010-2011 RIAA IRS filing here.


Source : digitaltrends[dot]com

Aug 13, 2012

Google piracy penalty: YouTube, other user-generated content sites not in danger

Google's new anti-piracy search filter will not exclude Google-owned YouTube -- but probably won't hurt it much either.

Despite reports to the contrary, Google-owned YouTube will not be spared from the Internet giant’s ambiguous anti-piracy filter of search results, the company told Search Engine Land. However, Google does not believe YouTube, nor a number of other “popular,” user-generated websites, including Flickr, Twitter, Tumblr and others, will be severely affected by the new so-called piracy penalty.

Announced late last week, Google’s new anti-piracy measures will apparently weed out websites that are repeatedly slapped with “valid” copyright infringement claims. Sites that receive a large number of these notices “may appear lower in our results,” said Google in a blog post. This, says Google, will help better direct Web users toward “legitimate, quality” sources for content — i.e. not websites that feature access to pirated content.

While certain sites may be immune to the new page rank signal — or, at least, resilient against its effects — Google says this does not mean they are on some “list” of favorite sites. Rather, Google’s search algorithm will take into account other factors that will likely outweigh the anti-piracy signal.

The ambiguity surrounding the anti-piracy signal has brought it under fire from free speech advocates who fear the piracy penalty gives rights holders too much power to determine Google search results — and thus, the content Web users can readily access.

“In particular, we worry about the false positives problem,” wrote the Electronic Frontier Foundation in a blog post. “For example, we’ve seen the government wrongly target sites that actually have a right to post the allegedly infringing material in question or otherwise legally display content. In short, without details on how Google’s process works, we have no reason to believe they won’t make similar, over-inclusive mistakes, dropping lawful, relevant speech lower in its search results without recourse for the speakers.”

The entertainment industry — specifically, the Motion Picture Association of American (MPAA) and Recording Industry Association of America (RIAA) — has praised Google’s new anti-piracy measure, which appears to be the most robust such effort by the company thus far.

The new anti-piracy measures will begin affecting search results sometime this week.


Source : digitaltrends[dot]com