The economics of piracy

This is fascinating: Internet Regulation & the Economics of Piracy

Suppose the CEO of Wal-Mart came to Congress demanding a $50 million program to deploy FBI agents to frisk suspicious-looking teens in towns near Wal-Marts. A lawmaker might, without for one instant doubting that shoplifiting is a bad thing, question whether this is really the optimal use of federal law enforcement resources. The CEO indignantly points out that shoplifting kills one million adorable towheaded orphans each year. The proof is right here in this study by the Wal-Mart Institute for Anti-Shoplifting Studies. The study sources this dramatic claim to a newspaper article, which quotes the CEO of Wal-Mart asserting (on the basis of private data you can’t see) that shoplifting kills hundreds of orphans annually. And as a footnote explains, it seemed prudent to round up to a million. I wish this were just a joke, but as readers of my previous post will recognize, that’s literally about the level of evidence we’re dealing with here.

The other side of SOPA and anti-piracy legislation

I like Michael Marshall, and his blog post about the other side of the piracy debate is worth your time. Not all anti-piracy sentiment comes from swivel-eyed loons or Disney.

The government is supposed to be on the side of laws, isn’t it? Copyright is a law too. If they don’t defend that law in the new kind of social space that the internet represents, where will the laxity end? What other laws will be let slide on the grounds that they might impede the rights of Internet users to do what the heck they feel like? What about your right to privacy? You care a lot about that one, don’t you? What makes it so desperately important for the government to defend your rights there, but not defend others’ rights to be paid for their intellectual property?

“Long-term there’s no future in printed books”

An interesting post on the appallingly named tech site Pandodaily: Confessions of a publisher, written by an unnamed “industry insider”.

Amazon could probably afford to lose $20 million/year in their publishing arm just to put the other publishers out of business. I think that’s what they’re trying to do–throw money around in an industry that doesn’t have any, until Amazon becomes not only the only place where you buy books, but the only place that publishes books, too.

In which I suggest blacking out Wikipedia doesn’t really change much

Today’s the big protest against SOPA, the latest bit of dangerous anti-internet legislation. I’ve written a wee column suggesting that it won’t change much in the long term, because lobbyists are fighting a long war:

Copyright industries want the net regulated, and they’re willing to spend huge sums to make it happen: SOPA is a battle, but the lobbyists are waging a war.

You don’t fight that by turning sites black. You fight it by supporting the EFF, and the ACLU, and the ORG, and by lobbying your elected representatives, and you fight it it in the ballot box. In the last general election just 55% of 25-34 year olds voted, while turnout for the 18-24 age group was a pathetic 44%.

We need to do better, because the best way to fight bad laws is to stop clowns from getting into power in the first place.

According to somebody on Twitter, that’s akin to telling women of the 1960s to shut up and know their place. I’m a bit baffled by that.

Illegal downloading and Adele

Simon at No Rock’n'Roll Fun has written a typically excellent piece about the BPI’s latest sales figures.

Despite all this “chronic” piracy going on, Adele’s album has sold more copies in a year than any album has ever sold. More than a Michael Jackson album managed in a year, even the good one. More than a Beatles album ever managed to whisk out the shops in twelve months. More, even, than the third Charlatans album sold in a year.

So, how come Adele’s album was not only immune to the chronic piracy, but thrived in a world so stricken? Had there been secret umlauts sewn into the hemlines of the choruses, rendering it impossible to torrent?

Were any of the many pirate-busting measures deployed? Did the pre-release circulate solely on a tape glued into a Walkman? Was every copy watermarked? Did a fleet of fake files get launched onto the internet to foil downloaders? Did Derren Brown hypnotise the world so that if they typed ‘Adele 21 free’ into Google they’d die?

Nope. The success of Adele’s album seems to be nothing to do with avoiding piracy, and more to do with sticking out an album that people liked and wanted to buy.

Worth remembering the next time you see the entertainment industry demanding new laws and filtering to fight the menace of piracy.ikoni

The slippery slope: now BT’s being urged to block The Pirate Bay

It’s not a surprise, but it’s still deeply worrying: BT, the UK’s biggest ISP, is under pressure to block The Pirate Bay. 

The BPI chief executive, Geoff Taylor, said The Pirate Bay was “no more than a huge scam” defrauding the global creative sector.

“We would not tolerate Counterfeits R Us on the high street – if we want economic growth, we cannot accept illegal rip-off sites on the internet either,” he said.

You know this bit already, but it’s worth reiterating: The Pirate Bay doesn’t host anyone else’s content – the torrents it provides are essentially maps that tell your computer where to get content – and not all torrents point to illegally copied content. Oh, and The Pirate Bay isn’t based in the UK, let alone on BT’s servers.

Counterfeits R Us? I lost my favourite headphones – a pricey pair of Sennheisers – the other day and had a look on eBay for replacements. There were dozens of listings, of which the overwhelming majority appeared to be for counterfeit copies. Should ISPs block eBay too?

I understand why the BPI and its pals are annoyed, but “the global creative sector” can go after The Pirate Bay in the courts. That may be difficult, expensive and ultimately pointless, but that’s the global creative sector’s problem, not ours.

In which I compare Internet Explorer to Sugababes

Oh yes.

On the face of it, Internet Explorer doesn’t have much in common with Sugababes: IE isn’t beautiful, doesn’t sing and isn’t likely to dress in a primary-coloured PVC dominatrix outfit to perform at G-A-Y.

However, they’re not as different as you might think.

Column: here come the internet police

BT has been ordered to block newzbin2, a Usenet archive site largely devoted to sharing movie rips and other infringing content. I don’t think this can end well.

The BT ruling is worrying because it turns ISPs into censors, and of course copyright infringement isn’t the only kind of content people would like to block.

We’ve had calls to ban sites that espouse extreme political views, sites that promote anorexia, sites that discuss ways to commit suicide. If BT can block Usenet archives, why can’t it block everything that anybody thinks is unpleasant or undesirable – like WikiLeaks, or anti-Scientology sites, or anything that isn’t appropriate for under-fives?

икони

The magic of MetaFilter

It’s MetaFilter’s anniversary today, so here’s something I wrote about it on its tenth birthday, two years ago.

Remember the song Stuck In The Middle With You and the line about “clowns to the left of me, jokers to the right”? That’s a pretty good description of the Internet. When you spend as much time online as we do it’s hard to believe that the Internet isn’t entirely populated by loons, goons, spammers, scammers and people who shouldn’t be given crayons, let alone an Internet connection.

Thank God, then, for MetaFilter.com.

MetaFilter is ten today. That means it’s spent ten years being our happy place, the site we go to when the sheer idiocy of most of the online world gets us down. MetaFilter members – MeFites – consistently rise to the challenge of posting things that are “interesting or enlightening”, and peer pressure of the best kind – that is, pressure to make posts as interesting as possible – means that every day, it’s a banquet for the brain. As I write this, the front page topics include terrible library books, Ireland’s new blasphemy law, various important political stories, some daft Flash stuff and proof that cats really are messing with us.

What makes MetaFilter really special, though, is the discussions – the comments on posts, and the free-for-all conversations on Ask MetaFilter. Where other sites often revolve around people spouting off about things they barely understand, MeFi discussions tend to be much better informed. That’s partly because the kind of people who hang around MeFi aren’t post-first think-later blowhards, and it’s partly because MeFites appear to have infiltrated everything interesting on the planet. If the thread’s about newspaper scandals, you’ll find newspaper people sharing their insight. Science? Scientists. Bad sound on CDs? Professional sound engineers. Religion? We’re pretty sure that God’s been a member for years. The stuff that ruins other community sites, such as endless posts about nothing in particular, sock puppetry, astroturfing, trolling and so on, simply doesn’t happen.

As founder Matt Haughey writes in the site guidelines, “I trust that you’ll act in a civilized manner, that you’ll treat others with opposing viewpoints with absolute respect and that you’ll contribute in a positive way to the intelligent discussions that take place here every day.” On any other website, people would read that bit, ignore it and start pimping products or throwing verbal rocks at the other members. On MetaFilter, people try to live up to it – and they’ve been doing it for a decade. That means MetaFilter isn’t just a website: it’s a miracle.

“Sign up with Groupon if you’re going bankrupt”

I wrote a column a few months ago where I suggested that any economy that reckons Groupon is worth $5 billion is about to go pop. In the few weeks since I wrote that, its valuation has skyrocketed past $30 billion (those are American billions, but still…) Most of the reporting of Groupon so far has concentrated on its explosive growth, but a few sites have been looking beyond the attractive numbers – and they don’t like what they see.

This Techcrunch post, Why Groupon is Poised For Collapse, is fascinating.

In many cases, running a Groupon can be a terrible financial decision for merchants. Groupon’s financials also raise questions about its ongoing viability. Buying Groupon stock could be as bad a deal for investors as running a Groupon offer is for merchants.

The author argues that the shakier the business, the more useful Groupon becomes.

Assume that you’re a business that is unscrupulous and you’re looking to make a quick buck. You could create a wildly generous deal that would sell like crazy. In about 30 days, you’ll have 2/3 of your share of the deal. Then you shut down operations.

It also works for businesses that are just having a tough time. As critical as I am of Groupon, the slam dunk case is to sign up with Groupon if you’re going bankrupt. I strongly encourage every business that is about to go under to call Groupon. (Don’t tell them Rocky sent you.) It makes total financial sense—as a Hail Mary play. If you’re lucky, the upfront cash will be enough to help you stay afloat. If not, well, you were already going out of business. It may be your best option. In the short term, you’re actually helping Groupon because they’re being valued on revenue and no one is taking into account risk.

As one commenter puts it:

I can’t remember who posted it, but I read a comment a week or so ago that nailed the current bubble: for fear of missing the next Google, people are valuing everything on the assumption that it’s the next Google.