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I wlll be appearing as the featured guest speaker at a roundtable discussion at Fordham Law School in NYC on Wednesday, October 14th at 8:45-10:00 am. We’ll discuss the state of algorithms for monitoring online services and detecting possible copyright infringements, and what effect the recent decision in Lenz v UMG might have on them. I’ll be providing some background on the relevant technologies and industry practices. The event is part of the Fordham Center for Law and Information Policy (CLIP) monthly roundtable series.
This event is by invitation only, so if you’re interested in attending, please email me.
Forbes: The Myth of Cord Cutting February 8, 2015Posted by Bill Rosenblatt in Business models, Uncategorized, United States, Video.
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In my latest piece in Forbes, I examine the idea of “cord cutting” in light of recent announcements from Viacom, Time Warner, and DISH Network of over-the-top (OTT) streaming video services that enable people in the US to watch pay TV channels without a pay TV subscription. Cord cutting means cancelling one’s subscription to cable or satellite TV and just getting TV programming over the Internet (or broadcast).
My research turned up two findings that were surprising (at least to me) and support a conclusion that cord cutting is mostly a myth. The first finding is that most people are unlikely to save money on programming if they pay for the increasing number of subscription OTT video services at their expected monthly prices. The second is that most American broadband subscribers get their TV and Internet services from the same company, and there isn’t really such a thing as a broadband Internet company that doesn’t also provide TV; therefore “cord cutting” in most cases really means “calling your cable or phone company and changing to a cheaper service plan.” I also conclude that, economically, cord cutting is a wash for everyone involved, particularly if the FCC is unsuccessful in its new attempt to pass meaningful net neutrality regulations.
As always, I eagerly welcome your feedback.
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I’ve just published another piece in Forbes in my series on the emerging market for “high-res” audio, reflecting the recent surge in activity in this space as both the major record labels and consumer electronics companies see opportunity in expanding the market for high-quality digital audio beyond the audiophile niche. This piece is about new codec technologies — an area that hasn’t seen much innovation since a decade ago. As always, your feedback is most welcome.
As a postscript to that piece, it continues to amaze me — in a positive way — that vinyl is making such a comeback. Our favorite indie music store in Western Massachusetts recently got rid of all of its CDs and is now selling vinyl exclusively. Even Barnes & Noble is now selling a small, mostly highbrow selection of vinyl LPs. Most amazing of all? They’re flying off the shelves at an eye-opening $22 apiece. And everyone used to complain about the $16 CD — which didn’t scratch, took up less space, was easier to play, etc., etc.
My New Forbes Blog November 17, 2014Posted by Bill Rosenblatt in Uncategorized.
I’m pleased to announce that I have been invited to join Forbes, a leading American business publication, as one of its Media & Entertainment blog contributors. I will be publishing pieces there that are of broader interest than the ones I publish here about developments in rights technologies, copyright law, and so on. I’ll write short teasers here for the Forbes pieces I publish, so that those of you who are on this blog’s distribution list can be alerted if you aren’t regular Forbes readers.
It’s been an ambition of mine for some time to write articles for a more general tech/media business audience. I’ve done it occasionally in places such as PaidContent, GigaOM, and Slate, but this will enable me to write as frequently as I can think of things to write about — and to take advantage of Forbes’s prodigious reach and state-of-the-art toolset.
My first Forbes piece is an adaptation of a previous article I wrote here about Apple’s attempt to cut the price of on-demand digital music services in half from $10 to $5 per months, and the disruptive implications of that change — if it happens — for the digital music landscape. I hope you enjoy it, and I welcome any feedback you may have.
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President Obama recently signed into law a bill that allows people to “jailbreak” or “root” their mobile phones in order to switch wireless carriers. The Unlocking Consumer Choice and Wireless Competition Act was that rarest of rarities these days: a bipartisan bill that passed both houses of Congress by unanimous consent. Copyleft advocates such as Public Knowledge see this as an important step towards weakening the part of the Digital Millennium Copyright Act that outlaws hacks to DRM systems, known as DMCA 1201.
For those of you who might be scratching your heads wondering what jailbreaking your iPhone or rooting your Android device has to do with DRM hacking, here is some background. Last year, the U.S. Copyright Office declined to renew a temporary exception to DMCA 1201 that would make it legal to unlock mobile phones. A petition to the president to reverse the decision garnered over 100,000 signatures, but as he has no power to do this, I predicted that nothing would happen. I was wrong; Congress did take up the issue, with the resulting legislation breezing through Congress last month.
Around the time of the Copyright Office’s ruling last year, Zoe Lofgren, a Democrat who represents a chunk of Silicon Valley in Congress, introduced a bill called the Unlocking Technology Act that would go considerably further in weakening DMCA 1201. This legislation would sidestep the triennial rulemaking process in which the Copyright Office considers temporary exceptions to the law; it would create permanent exceptions to DMCA 1201 for any hack to a DRM scheme, as long as the primary purpose of the hack is not an infringement of copyright. The ostensible aim of this bill is to allow people to break their devices’ DRMs for such purposes as enabling read-aloud features in e-book readers, as well as to unlock their mobile phones.
DMCA 1201 was purposefully crafted so as to disallow any hacks to DRMs even if the resulting uses of content are noninfringing. There were two rationales for this. Most basically, if you could hack a DRM, then you would be able to get unencrypted content, which you could use for any reason, including emailing it to your million best friends (which would have been a consideration in the 1990s when the law was created, as Torrent trackers and cyberlockers weren’t around yet).
But more specifically, if it’s OK to hack DRMs for noninfringing purposes, then potentially sticky questions about whether a resulting use of content qualifies as fair use must be judged the old-fashioned way: through the legal system, not through technology. And if you are trying to enforce copyrights, once you fall through what I have called the trap door into the legal system, you lose: enforcement through the traditional legal system is massively less effective and efficient than enforcement through technology. The media industry doesn’t want judgments about fair use from hacked DRMs to be left up to consumers; it wants to reserve the benefit of the doubt for itself.
The tech industry, on the other hand, wants to allow fair uses of content obtained from hacked DRMs in order to make its products and services more useful to consumers. And there’s no question that the Unlocking Technology Act has aspects that would be beneficial to consumers. But there is a deeper principle at work here that renders the costs and benefits less clear.
The primary motivation for DMCA 1201 in the first place was to erect a legal backstop for DRM technology that wasn’t very effective — such as the CSS scheme for DVDs, which was the subject of several DMCA 1201 litigations in the previous decades. The media industry wanted to avoid an “arms race” against hackers. The telecommunications industry — which was on the opposite side of the negotiating table when these issues were debated in the early 1990s — was fine with this: telcos understood that with a legal backstop against hacks in place, they would have less responsibility to implement more expensive and complex DRM systems that were actually strong; furthermore, the law placed accountability for hacks squarely on hackers, and not on the service providers (such as telcos) that implemented the DRMs in the first place. In all, if there had to be a law against DRM hacking, DMCA 1201 was not a bad deal for today’s service providers and app developers.
The problem with the Unlocking Technology Act is in the interpretation of phrases in it like “primarily designed or produced for the purpose of facilitating noninfringing uses of [copyrighted] works.” Most DRM hacks that I’m familiar with are “marketed” with language like “Exercise your fair use rights to your content” and disclaimers — nudge, nudge, wink, wink — that the hack should not be used for copyright infringement. Hacks that developers sell for money are subject to the law against products and services that “induce” infringement, thanks to the Supreme Court’s 2005 Grokster decision, so commercial hackers have been on notice for years about avoiding promotional language that encourages infringement. (And of course none of these laws apply outside of the United States.)
So, if a law like the Unlocking Technology Act passes, then copyright owners could face challenges in getting courts to find that DRM hacks were not “primarily designed or produced for the purpose of facilitating noninfringing uses[.]” The question of liability would seem to shift from the supplier of the hack to the user. In other words, this law would render DMCA 1201 essentially toothless — which is what copyleft interests have wanted all along.
From a pragmatic perspective, this law could lead non-dominant retailers of digital content to build DRM hacks into their software for “interoperability” purposes, to help them compete with the market leaders. It’s particularly easy to see why Google should want this, as it has zillions of users but has struggled to get traction for its Google Play content retail operations. Under this law, Google could add an “Import from iTunes” option for video and “Import from Kindle/Nook/iBooks” options for e-books. (And once one retailer did this, all of the others would follow.) As long as those “import” options re-encrypted content in the native DRM, there shouldn’t be much of an issue with “fair use.” (There would be plenty of issues about users violating retailers’ license agreements, but that would be a separate matter.)
This in turn could cause retailers that use DRM to help lock consumers into their services to implement stronger, more complex, and more expensive DRM. They would have to use techniques that help thwart hacks over time, such as reverse engineering prevention, code diversity and renewability, and sophisticated key hiding techniques such as whitebox encryption. Some will argue that making lock-in more of a hassle will cause technology companies to stop trying. This argument is misguided: first, lock-in is fundamental to theories of markets in the networked digital economy and isn’t likely to go away over costs of DRM implementation; second, DRM is far from the only way to achieve lock-in.
The other question is whether Hollywood studios and other copyright owners will demand stronger DRM from service providers that have little motivation to implement it. The problem, as usual, is that copyright owners demand the technology (as a condition of licensing their content) but don’t pay for it. If there’s no effective legal backstop to weak DRM, then negotiations between copyright owners and technology companies may get tougher. However, this may not be an issue particularly where Hollywood is concerned, since studios tend to rely more heavily on terms in license agreements (such as robustness rules) than on DMCA 1201 to enforce the strength of DRM implementations.
Regardless, the passage of the mobile phone unlocking legislation has led to increased interest in the Unlocking Technology Act, such as the recent panel that Public Knowledge and other like-minded organizations put on in Washington. Rep. Lofgren has succeeded in getting several more members of Congress to co-sponsor her bill. The trouble is, all but one of them are Democrats (in a Republican-controlled House of Representatives not exactly known for cooperation with the other side of the aisle); and the Democratically-controlled Senate has not introduced parallel legislation. This means that the fate of the Unlocking Technology Act is likely to be similar to that of past attempts to do much the same thing: the Digital Media Consumers’ Rights Act of 2003 and the Freedom and Innovation Revitalizing United States Entrepreneurship (FAIR USE) Act of 2007. That is, it’s likely to go nowhere.
The International Digital Publishing Forum (IDPF), the standards body in charge of the EPUB standard for digital book publishing, puts on a conference-within-a-conference called IDPF Digital Book inside the gigantic Book Expo America in NYC each year. Various panels and hallway buzz at this year’s event, which took place last week, showed how book publishing is developing regarding issues we address here. I’ll cover these in three installments.
First and most remarkable is the emergence of Wattpad as the next step in the disruption of the value chain for authors’ content. The Toronto-based company’s CEO, Allen Lau, spoke on a panel at the conference that I moderated. Wattpad can be thought of as a successor to Scribd as “YouTube for writings.”
There are a few important differences between Scribd and Wattpad. First, whereas Scribd had become a giant, variegated catchall for technical white papers, vendor sales collateral, court decisions, academic papers, resumes, etc., etc., along with more recently acquired content from commercial publishers, Wattpad is focused tightly on text-based “stories.”
Second, Wattpad is optimized for reading and writing on mobile devices, whereas Scribd focuses on uploads of existing documents, many of which are in not-very-mobile-friendly PDF. Third and most importantly, Scribd allows contributors to sell their content, either piecemeal or as part of Scribd’s increasingly popular Netflix-like subscription plan; in contrast, Wattpad has no commerce component whatsoever.
In fact, the most remarkable thing about Wattpad is that it has raised over $60 million in venture funding, almost exactly $1 million for each of the company’s current employees. But like YouTube, Facebook, Tumblr, and various others in their early days, it has no apparent revenue model — other than a recent experiment with crowdfunding a la Kickstarter or Indiegogo. There’s no way to buy or sell content, and no advertising.
Instead, Wattpad attracts writers on the same rationales by which YouTube attracts video creators (and Huffington Post attracts bloggers, etc.): to give them exposure, either for its own sake or so that they can make money some other way. For example, Lau touted the fact that one of its authors recently secured a movie deal for her serialized story.
Apparently Wattpad has become a vibrant home for serialized fiction, fan fiction, and stories featuring celebrities as characters (which may be a legal gray area in Canada). It has also become a haven for unauthorized uploads of copyrighted material, although it has taken some steps to combat this through a filtering scheme developed in cooperation with some of the major trade publishers. Wattpad has 25 million users and growing — fast.
This all makes me wonder: why isn’t everyone in the traditional publishing value chain — authors, publishers, and retailers — scared to death of Wattpad? It strikes me as a conduit for tens of millions of dollars in VC funding to create expectations among its youthful audience that content should be free and that authors need not be paid.
There’s a qualitative difference between Wattpad and other social networking services. Copyright infringement aside, TV networks and movie studios didn’t have much to fear from YouTube in its early days of cat videos. Facebook and Tumblr started out as venues for youthful self-expression, but little of that was threatening to professional content creators.
In contrast, Wattpad seems to have crossed a line. Much of the writing on Wattpad — apart from its length — directly substitutes for the material that trade publishers sell. Wattpad started out as a platform for writers to critique each others’ work — which sounds innocuous (and useful) enough — but it’s clearly moved on to become a place where the readers vastly outnumber the writers. (How else to explain the fact that despite the myriad usage statistics on its website, Wattpad does not disclose a number of active authors?)
In other words, Wattpad has become a sort of Pied Piper leading young writers away from the idea or expectation of doing it professionally. Moreover, there are indications that Wattpad expects to make money from publishers looking to use it as a promotional platform for their own authors’ content, even though — unlike Scribd — it can’t be sold on the site.
By the time Wattpad burns through its massive treasure chest and really needs to convert its large and fast-growing audience into revenue from consumers, it may be too late.
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The BBC has discovered documents that detail a so-called graduated response program for detecting illegal downloads done by customers of major UK ISPs and sending alert messages to them. The program is called the Voluntary Copyright Alert Programme (Vcap). It was negotiated between the UK’s four major ISPs (BT, Sky, Virgin Media, and TalkTalk) and trade associations for the music and film industries, and it is expected to launch sometime next year.
Vcap is a much watered-down version of measures defined in the Digital Economy Act of 2012, in that it calls only for repeated “educational” messages to be sent to ISP subscribers and for no punitive measures such as suspension or termination of their accounts.
In general, graduated response programs work like this: copyright owners engage network monitoring firms to monitor ISPs’ networks for infringing behavior. Monitoring firms use a range of technologies, including fingerprinting to automatically recognize content that users are downloading. If they find evidence of illegal behavior, they report it to a central authority, which passes the information to the relevant ISP, typically including the IP address of the user’s device. The ISP determines the identity of the targeted subscriber and takes some action, which depends on the details of the program.
In some cases (as in France and South Korea), the central authority is empowered to force the ISP to take punitive action; in other cases (as in the United States’ Copyright Alert System (CAS) as well as Vcap), ISPs take action voluntarily.
Assuming that Vcap launches on schedule, we could soon have data points about the effectiveness of various types of programs for monitoring ISP subscribers’ illegal downloading behaviors. The most important question to answer is whether truly punitive measures really make a difference in deterring online copyright infringement, or whether purely “educational” measures are enough to do the job. Currently there are graduated response programs in South Korea, New Zealand, Taiwan, and France that have punitive components, as well as one in Ireland (with Eircom, the country’s largest ISP) that is considered non-punitive.
Is America’s CAS punitive or educational? That’s a good question. CAS has been called a “six strikes” system (as opposed to other countries’ “three strikes”), because it defines six levels of alerts that ISPs must generate, although ISPs are intended to take “mitigation measures” against their subscribers starting at the fifth “strike.” What are these mitigation measures? It’s largely unclear. The CAS’s rules are ambiguous and leave quite a bit of wiggle room for each participating ISP to define its own actions.
Instead, you have to look at the policies of each of the five ISPs to find details about any punitive measures they may take — information that is often ambiguous or nonexistent. For example:
- AT&T: its online documentation contains no specifics at all about mitigation measures.
- Cablevision (Optimum Online): its policy is ambiguous, stating that it “may temporarily suspend your Internet access for a set period of time, or until you contact Optimum.” Other language in Cablevision’s policy suggests that the temporary suspension period is 24 hours.
- Comcast (Xfinity): Comcast’s written policy is also ambiguous, saying only that it will continue to post alert messages until the subscriber “resolve[s] the matter” and that it will never terminate an account.
- Time Warner Cable: also ambiguous but suggesting nothing on the order of suspension or termination, or bandwidth throttling. It states that “The range of actions may include redirection to a landing page for a period or until you contact Time Warner Cable.”
- Verizon: Verizon’s policy is the only one with much specificity. On the fifth alert, Verizon throttles the user’s Internet speed to 256kbps — equivalent to a bottom-of-the-line residential DSL connection in the US — for a period of two days after a 14-day advance warning. At the sixth alert, it throttles bandwidth for three days.
In other words, the so-called mitigation measures are not very punitive at all, not even at their worst — at least not compared to these penalties in other countries:
- France: up to ISP account suspension for up to one year and fines of up to €1500 (US $2000), although the fate of the HADOPI system in France is currently under legal review.
- New Zealand: account suspension of up to six months and fines of up to NZ $15,000 (US $13,000).
- South Korea: account suspension of up to six months.
- Taiwan: suspension or termination of accounts, although the fate of Taiwan’s graduated response program is also in doubt.
[Major hat tip to Thomas Dillon’s graduatedresponse.org blog for much of this information.]
In contrast, Vcap will be restricted to sending out four alerts that must be “educational” and “promot[e] an increase in awareness” of copyright issues. Vcap is intended to run for three years, after which it will be re-evaluated — and if judged to be ineffective, possibly replaced with something that more closely resembles the original, stricter provisions in the Digital Economy Act. By 2018, the UK should also have plenty of data to draw on from other countries’ graduated response regimes about any relationship between punitive measures and reduced infringements.
Announcing Copyright and Technology London 2014 April 25, 2014Posted by Bill Rosenblatt in Europe, Events, UK, Uncategorized.
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I’m pleased to announce that our next Copyright and Technology London conference will take place on Wednesday, October 1, at the offices of ReedSmith in the City of London. This is the same beautiful venue as our conference last October, with 360-degree floor-to-ceiling views of the city. Music Ally is producing the event. Now in our fifth year, the mission of the Copyright and Technology conferences is to bring together a diverse group of lawyers, technologists, policymakers, and business people for education and intelligent dialog about the nexus of copyright and technology. The London conference focuses on issues of particular interest in the UK and the rest of Europe but also offers international perspectives from the US, Australia, and beyond.
At this point, I am soliciting ideas for sessions. What are the hot issues for people concerned with copyright in the UK, Europe, and beyond? As in past Copyright and Technology conferences, the agenda will consist of plenary sessions with a keynote speaker in the morning, and afternoon breakouts into Technology and Law & Public Policy tracks. Please feel free to suggest session topics that will appeal to technologists, law and government professionals, or all of the above. Also feel free to put forward names of speakers for sessions.
We plan to have a working agenda in place by June, so please send me your session proposals by May 16.
As in the past, sponsorship opportunities are available. Copyright and Technology London 2014 is a great opportunity to connect with top-tier decision makers from law firms, media companies, technology vendors, service providers, and government. Please inquire if you are interested in learning more.
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We have added another panel session to the Copyright and Technology London 2013 conference, which will take place next Thursday (17 October). The most important recent copyright litigation in the UK at the moment is the case of Ministry of Sound v. Spotify, in which the record label is objecting to Spotify making playlists available that mimic the compilation albums for which the label is best known. The case has broad implications for the limits of copyrightability in the digital age, at least under UK law.
Here is the panel description:
The Limits of Copyright in the Digital Age
The litigation that Ministry of Sound recently started against Spotify will test whether playlists on compilation albums have copyright protection. It will be played out in the context of the debate about to what extent we as a society are prepared to pay for curation. The same issue faces news-disseminating organisations over their headlines and sports reporters over game highlights. Does our society value the editorial/quality control/validation role that they play? This panel will explore the boundaries of what is – and should be – protected by copyright in the digital age and suggest what directions legal decisions in the future may take.
Although the case was only filed a month ago, we have been able to pull together an excellent group of authorities on both the legal and content aspects of the matter, thanks to the tireless efforts of Serena Tierney of Bircham Dyson Bell, the panel chair and herself an authority on copyright in the digital age. Panelists will include:
- Jeff Smith, Head of Music at BBC Radio 2 and 6; former Director of Music Programming at Napster
- Mo McRoberts, Head of the BBC Genome Project at the BBC Archive
- Lindsay Lane, Barrister at 8 New Square Intellectual Property and co-author of the standard copyright treatise Laddie, Prescott and Vitoria on The Modern Law of Copyright and Designs
- Andrew Orlowski, Executive Editor of The Register, who has covered this case.
This means that we will have a packed day of exciting sessions from all around the world of copyright. Places are still left, so register today!
Copyright and Accessibility June 19, 2013Posted by Bill Rosenblatt in Events, Law, Publishing, Standards, Uncategorized.
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Last week I received an education in the world of publishing for print-disabled people, including the blind and dyslexic. I was in Copenhagen to speak at Future Publishing and Accessibility, a conference produced by Nota, an organization within the Danish Ministry of Culture that provides materials for the print-disabled, and the DAISY Consortium, the promoter of global standards for talking books. The conference brought together speakers from the accessibility and mainstream publishing fields.
Before the conference, I had been wondering what the attitude of the accessibility community would be towards copyright. Would they view it as a restrictive construct that limits the spread of accessible information, allowing it to remain in the hands of publishers that put profit first?
As it turns out, the answer is no. The accessibility community, generally speaking, has a balanced view of copyright that reflects the growing importance of the print disabled to publishers as a business matter.
Digital publishing technology might be a convenience for normally sighted people, but for the print disabled, it’s a huge revelation. The same e-publishing standards that promote ease of production, distribution, and interoperability for mainstream consumers make it possible to automate and thus drastically lower the cost and time to produce content in Braille, large print, or spoken-word formats.
Once you understand this, it makes perfect sense that the IDPF (promoter of the EPUB standards for e-books) and DAISY Consortium share several key members. It was also pointed out at the conference that the print disabled constitute an audience that expands the market for publishers by roughly 10%. All this adds up to a market for accessible content that’s just too big to ignore.
As a result, the interests of the publishing industry and the accessibility community are aligning. Accessibility experts respect copyright because it helps preserve incentives for publishers to convert their products into versions for the print disabled. Although more and more accessibility conversion processes can be automated, manual effort is still necessary — particularly for complex works such as textbooks and scientific materials.
Publishers, for their part, view making content accessible to the print disabled as part of the value that they can add to content — value that still can’t exist without financial support and investment.
One example is Elsevier, the world’s largest scientific publisher. Elsevier has undertaken a broad, ambitious program to optimize its ability to produce versions of its titles for the print disabled. One speaker from the accessibility community called the program “the gold standard” for digital publishing. Not bad for a company that some in the academic community refer to as the Evil Empire.
This is not by any means to suggest that publishers and the accessibility community coexist in perfect harmony. There is still a long way to go to reach the state articulated at the conference by George Kerscher, who is both Secretary General of DAISY and President of IDPF: to make all materials available to the print disabled at the same time to sell structured settlement, and for the same price, as mainstream content.
The Future Publishing and Accessibility conference was timed to take place just before negotiations begin over a proposed WIPO treaty that would facilitate the production of accessible materials and distribution of them across borders. The negotiations are taking place this and next week in Marrakech, Morocco. This proposed treaty is already laden with concerns from the copyright industries that its provisions will create opportunities for abuse, and reciprocal concerns from the open Internet camp that the treaty will be overburdened with restrictions designed to limit such abuse. But as I found out in Denmark last week, there is enough practical common ground to hope that accessibility of content for the print disabled will continue to improve.