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Anti-Counterfeiting Trade Agreement marching to the tune of lobbyists: consumer groups need not apply

The Anti-Counterfeiting Trade Agreement (ACTA) has been under secret negotiation since 2006 aiming to crackdown on counterfeiting and copyright infringement around the world. Most nations already have many laws against these acts, yet the international community has found the need to establish a completely new trade agreement that officials say will not affect U.S., or other nations’, laws. And as for why it’s being written in secret, that is due to national security, as the Obama administration claims. What counterfeiting and online file-sharing have to do with national security is still top-secret.

I realized I’ve yet to dive into the ACTA controversy on Prodigeek even with my riveted fascination on the subject. Significant documents related to the accord have revealed a scary set of dream proposals written almost exclusively by media companies and those looking for stronger copyright laws. This includes proposals to force ISPs to monitor copyrighted content, instituting a three strikes law banning alleged infringers after 3 warnings, and increasing criminal charges against copyright infringement. Almost no consumer groups have been allowed in the negotiations, and on the rare occasions consumer groups have even been entertained, they have been forced to sign non-disclosure agreements making it very difficult to generate a true public debate. Recently when Mexico opened its discussions, entertainment companies laughed out those who brought up consumer interests. One person who live-Tweeted the event was forced out.

Politicians and media outlets are starting to grasp onto the lack of transparency, but there’s yet to be a public outcry at the content of the trade agreement. The U.S. Trade Representative and lobbyists from media companies continue to claim this agreement will not affect U.S. law while refusing to explain why its needed. What has happened before with TRIPPS and WIPO is exactly that – a trade agreement passes (because it gets less public scrutiny than laws), then Big Content goes around telling countries they have to change their laws to achieve harmony with their international agreements.

Also like TRIPPS and WIPO, the ACTA lacks any concern for consumers and their interests. It’s a trade agreement focusing on protecting powerful industries and supporting their obsolete business models, even going so far as to harm innovation in other industries by increasing penalties  for secondary or contributory infringement (meaning YouTube or eBay would be responsible for what their users do). Don’t believe this will matter, look at South Korea where many of these laws have already been put in place because of, yes, a free trade agreement that is anything but free. Many service providers now ban most music and video uploads for fear of being sued for infringement. Some are being banning advertisements because the advertisement might infringe.

And none of this has anything to do with counterfeiting. Copyright infringement has nothing at all to do with counterfeiting (though the agreement does have some provisions against it, specifically border searches, yay). Counterfeiting, of course, has a much more negative public opinion than file-sharing, hence the bait-and-switch.

So written by lobbyists with little to no public input; the details hidden from the public for unknown national security reasons; major ramifications to U.S. law even though we’re told it won’t; and a trade agreement really all about protecting select industry’s obsolete business models. Sounds like our government at work.

For a more in-depth analysis of the ACTA, make sure to read Michael Geist’s ACTA Guide.


Computer chess revolution

Chess master Garry Kasparov pens a review of Chess Metaphors: Artificial Intelligence and the Human Mind, revealing how computers have changed the game.

Kasparov made headlines in 1997 when he lost to a computer.  IBM’s Deep Blue was a revolution in artificial intelligence, evaluating 200 million chess moves per second. Kasparov considered this inevitable, recognizing now that the average home PC has chess programs able to beat most grandmasters.

The fear of computers rising as chess masters meant few would be interested in the game, but the opposite is happening. With chess a standard program on most new computers, people and especially children can be exposed to the game even in areas where the game is rarely played. Moreover, the computer is influencing the style of the next generation of grandmasters, particularly that of no style (but lots of substance). Kasparov writes:

It is entirely free of prejudice and doctrine and this has contributed to the development of players who are almost as free of dogma as the machines with which they train. Increasingly, a move isn’t good or bad because it looks that way or because it hasn’t been done that way before. It’s simply good if it works and bad if it doesn’t. Although we still require a strong measure of intuition and logic to play well, humans today are starting to play more like computers.

Grandmasters are getting younger and younger, likely thanks to the readily available computer partner.

In the pre-computer era, teenage grandmasters were rarities and almost always destined to play for the world championship. Bobby Fischer’s 1958 record of attaining the grandmaster title at fifteen was broken only in 1991. It has been broken twenty times since then, with the current record holder, Ukrainian Sergey Karjakin, having claimed the highest title at the nearly absurd age of twelve in 2002. Now twenty, Karjakin is among the world’s best, but like most of his modern wunderkind peers he’s no Fischer, who stood out head and shoulders above his peers—and soon enough above the rest of the chess world as well.

The growth of computer’s computational power is fascinating. As summarized by Kasparov, “Before 1994 and after 2004 these [computer versus human] duels held little interest. The computers quickly went from too weak to too strong.” A computer program is has broken down checkers to become unbeatable (either outright win or tie, but it will never lose) and it’s creator has now set his sights on poker. Chess’ complexity likely means an unbeatable computer is many years away, but that only makes the challenge more exciting.

Just to add another layer of analysis, several human/computer chess teams were pit against each other finding that a great chess player with a simple computer can best the best computer, but amateur chess players with an okay computer and an excellent process of analyzing that data can beat a great chess player with an even better computer. Computers, it seems, are yet to make the human mind obsolete, but rather can best supplement our reasoning skills to make us smarter or more efficient.


How’s that paywall going Newsday?

Newsday made the bold (and some, like me, might say, silly choice) to lock its online content up behind a $5 per week paywall. Cablevision, who purchased the newspaper for $650 million in 2008, offers its website to Optimum Cable subscribers and Newsday subscribers for free, but charges anyone else $5 per week, and three months in, the numbers are starting to leak out.

First, how many people have signed up for $175 per month Newsday website? 35. Yes, 35 people. So that extra $9,000 a year must really make up for the estimated 50 percent drop in web traffic. At least they don’t have to pay famous columnists who want people to actually be able to read and share their work.

Now I look at these numbers and see evidence that paywalls might not be a great idea to make money. Even assuming the vast majority of Long Island (which Newsday targets) have free access as Optimum Online users, erecting the paywall means more costs like paying for more customer service and accountants, while even print newspapers find going free both saves tons of money and increases circulation (because they don’t have to pay for as many customer service agents or accountants).

Less traffic, tiny amount of money after spending tons (even to buy the paper). Maybe they’ll eventually learn their lesson that paywalls don’t work and end it like the New York Times did. And then forget and bring it back years after.


Sad state of U.S. broadband gets sadder

The U.S. has been trailing much of Europe and Asia in both broadband penetration and speed for years, ceding this major technological and competitive edge. Rather than invest fully in a national broadband strategy like Japan and Australia (to name a few), the U.S. is actually dropping in overall numbers while the rest of the world rockets forward with faster speeds and lower prices.

The U.S. ranks 12th in broadband penetration (speeds above 5 Mbps) with 24 percent, an 8.8 percent drop compared to last year according to Akamai. Speeds were also down 2.4 percent, ranking the U.S. 35th in the world. This puts the U.S. farther behind South Korea, Japan, and the Czech Republic who continue to invest in connecting their population recognizing the competitive edge they will have in the years to come.

Even with our slow speeds (if you can even get them in your area), U.S. customers pay about $40 per month for our average of 3.9 Mbps, almost the same price France gets 20-30Mbps with HDTV and DVR included. Only a tiny fraction of the U.S. even gets those speeds and pays more than $100 for it.

The culprit here is a total lack of competition. ISPs and telecommunication companies lock down areas, often leaving even major cities with only one or two choices for their internet connection. Governments in Australia and Japan have taken charge of their broadband strategy, providing loans, grants, and true competition among internet providers to increase speeds and penetration. The U.S. could easily do the same thing, but would rather pay the same companies who refuse to grow and innovate to continue to not grow and innovate.  So we continue to watch prices increase as service drops.


Shocking news: People scan lots of headlines

On the proverbial eve of the New York Times’ return to paywalldom (has everyone forgotten the Times already dropped its pay wall once because it didn’t work), a research firm posted a study showing 44 percent of Google News visitors scan headlines and don’t click through.

They think this is high. I’m shocked it’s so low.

Analyst Ken Doctor says: “Though Google is driving some traffic to newspapers, it’s also taking a significant share away. A full 44 percent of visitors to Google News scan headlines without accessing newspapers’ individual sites.”

What is Google taking away? If I read all the newspaper and magazine headlines at the newsstand, am I taking something away? No. It’s the newspaper’s job to convince me to “buy” or, in this case, click. Google is providing a huge amount of free advertising for these newspapers and converting 56 percent of that traffic. Any marketer will tell you a 56 percent conversion rate is astronomically high. It is up to those newspapers to turn that traffic into loyal readers.

For Rupert Murdoch and others looking to block Google because it’s taking so much for itself, they are just going to leave that 56 percent for the thousands of other news sources willing share in free advertising. And if they really learn from this study, they’ll figure out how to write better headlines and better stories to convert the other 44 percent.


Difference between price and value: An iPhone App Store case study

Game developers have frequently lamented the drive for lower cost games on the iPhone.  “The push to 99 cents is the single most frustrating and terrible thing about App Store pricing,” says Nathan Vella, co-founder of Capybara, makers of Critter Crunch. “Since it became ‘expected’ by consumers, it forces a lot of developers, specifically indies, to devalue their game and significantly increase the number of sales needed for developers to get back their investment.”

But what Vella thinks as devaluing is really basic economics. Competition, the healthy and rewarding heart of capitalism, encourages makers of goods to try to one-up each other, whether by lowering prices or offering a more compelling product.

The App Store, with more than 100,000 applications, 13,000 of which are games, competition is pretty fierce. It is to be expected that price will be pushed down. Most game makers have stayed around 99 cents, so if someone really wanted to stand out, maybe they should sell at 98 cents. Or there’s lots of free games and that soon might become “expected”. Not even including truly free apps, estimates (which I strongly question) claim 75 percent of apps are pirated meaning Vella and game developers have more to fear from free than 99 cents. If Vella thinks 99 cents devalues his games, how will he feel when he’s forced to sell it for free?

iPhone developers, like many in the media industry, forget that price and value are two different things. Value is subjective. I, as a consumer, value a game a $10. As long as the price is less than $10, I will buy the game, even if it is $2. The developer chooses the price that will make them the most money, specifically by setting the price low enough as to attract the largest number of buyers. The $2 price in no way devalues the game. While I might have paid more, 10 other people might not have. Meaning the developer attracted more purchases and made more money over all. This is known as price elasticity.

We see evidence of this in many digital services. The PC game Left4Dead took 50 percent off its price and jumped 3,000 percent in sales. Variable pricing on iTunes led to lots of $1.29 songs and very few 69 cent songs. Those higher priced songs have seen enough of a drop in unit sales that overall revenue is lower. Maybe at 69 cents, they’d actually make more money.

For game developers, it seems the App Store just has too much competition to make it easy for anyone. There are so many games vying for attention, thanks to the low cost of entry (until traditional gaming consoles), that its a major challenge to get the attention of enough consumers willing to pay the 99 cents (or even pirate it). The benefits of the Long Tail in the App Store necessitates better search and organization to help people find the apps they want (the App Store does lack this robust a function). But game developers can look for their own solutions to stand out by using social media, pricing, and excellent games to build the buzz. It’s not Apple’s fault, it’s not consumers fault, piracy’s fault, or other developers faults. It is up to each developer to give consumers a reason to buy their game.  If consumers don’t pay, then change what you’re doing. That’s innovation and competition makes sure it happens.


Online privacy expectations, reality, and the secrets in between

Facebook CEO Mark Zuckerberg called up Tweet-storm over his comments that the Age of Privacy is over.  Zuckerberg tells TechCrunch:

When I got started in my dorm room at Harvard, the question a lot of people asked was ‘why would I want to put any information on the Internet at all? Why would I want to have a website?’

And then in the last 5 or 6 years, blogging has taken off in a huge way and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.

But the internet has made privacy more complicated rather than vanquished it completely. The issue for both Zuckerberg’s Facebook and online users is that our expectations of privacy and the reality are far separated. The truth is we are just as private as people. But the internet changes the scale.

Expectations for privacy often revolve around the good intentions of the companies we give information to. Facebook and Google will keep our data secret, for our use only.  One study found that most people, rather than reading a website’s privacy policy, assume that if a website has one, it means they will keep the data protected.

Of course, this is far from the trust. Even the best intentioned websites have security breaches or mistakes that leave users open to privacy violations.  Several of my family members are still petrified to use their credit card online, not concerned by the dozens of credit card and social security number leaks done because some employee lost a laptop.

On Facebook, privacy concerns focus more on our personal data, like interests, pictures, and relationship status. Talk about a widespread case of narcissism. No one cares about every little college student’s love of the Big Lebowski or how they’ll take “whatever they can get”. My rule, if I don’t want people to know something, I don’t put it online because once its online, it’s up for grabs. Even if I deleted one of my old blog posts, there would still be ways to find them.

Shockingly, several studies show people will give out personal information, including passwords and income levels, if you simply ask or if you’re nice, offer them a chocolate bar.

And the data many expect to be private, or to use the buzzword, anonymized, but would be surprised to know how easy it can be for an intrepid researcher, like Latanya Sweeny, a computer science professor at Carnegie Mellon University who showed that just gender, zip code, and birth date are unique for about 87 percent of the U.S. population.

So expectations – people and companies want and keep data private (and apparently lots of people want your information too) but the reality is tons of data leaks out all the time, most people are unaffected because there’s so much data and yours isn’t that important, and it takes just a tiny bit to figure out who you are (even the stuff you feel safe sharing).

Zuckerberg is right that our concept of privacy is changing. When I first went on the internet, my mother forbade me from telling anyone my name or where I live, but now I post that all over. I regularly meet people in person that I first talked to online. I often recommend people buy the domain of their full name and build some kind of web presence for in case they get Googled (better the first link is something you know and control).

This is not because we keep less private. Just more people know. Like everyone who wants to. You had no problem telling a room full of strangers at a party what you do, where you live, and how you like your steak. Now, it’s incredibly easy to tell a world wide web full of strangers.

Privacy still matters. And more than an effort, it should at least be a challenge for bad guys to get good data. But now we’re not just teaching our kids (and adults) to not talk to strangers. It’s about common sense online. Knowing that anything you share can be shared again. And again and again. And it might never ever go away.


Netflix’s geographic data put on interactive map

Netflix sits on a mountain of movie interests and rental habits, and slowly geeks are getting to enjoy the fruits of this data mining. The New York Times (yes, print media has done something awesomely interactive) has compiled  a map of the most popular movie rentals by zip code (near a major city). Roger Ebert wants to know how much we can guess about a zip code’s demographics by its movie preferences. I want to know why Curious Case of Benjamin Button is so popular everywhere.


Copyright and Shakespeare

While today’s book publishers, movie makers, and music producers claim the entire creative industry would end without copyright, history proves the opposite. The first copyright statue was introduced in 1710 in Great Britain, several thousand years after the invention of the written word, and almost a full century after Shakespeare produced some of the most influential creative works in history.

Shakespeare wrote 38 plays, 154 sonnets, and several other poems, made a substantial living, and is still widely read, performed, and praised without any copyright protection. Even in the age of copyright, Shakespeare has made more than 420 films, making him the most filed author in any language. This year alone, more than 1,200 editions of Shakespeare’s works have been published, 445 within the last 90 days (according to Amazon).

How, if copyright is so vital to the creation of creative works, did Shakespeare accomplish what he did? And if copyright is even more important now, than why do filmmakers and publishers still reproduce Shakespeare’s works?

Shakespeare, as a genre and even industry unto himself, shows how copyright adds little to no incentive to creating new works, but rather can be seen as an impediment to such creation.

First, let us remember the time Shakespeare wrote in. In the 16th century, writers were valued for their language and style rather than originality. In fact, originality for storytelling is a modern value.  Almost everyone of Shakespeare’s plays was obviously copied from another creative work or historical subject. Groklaw counted more than half a dozen cribbed sources in King Lear that when looked at with modern copyright would have cost the Bard hundreds of thousands of dollars in fines and possibly criminal prosecution. Yet we praise King Lear as a masterpiece, not as an illegal piece of piracy.

Shakespeare made glorious new works by copying other works, both past and present, something he could easily do without copyright. Today, he would need permission from each and every source – permission he might not even get.

Today, we still praise new works that are purposefully based on Shakespeare’s plays, yet innovate in some new way.  West Side Story (Romeo and Juliet), Lion King (Hamlet), Kiss Me Kate (Taming of the Shrew), and Forbidden Planet (Tempest) for example. Or Rosencrantz & Guildenstern are Dead which uses  side characters from Hamlet to tell a new story within Hamlet itself.

Because all of Shakespeare’s plays are in the public domain, a massive amount of creativity can happen building on what Shakespeare. Shakespeare productions and publications compete with each other, encouraging more creativity, whether in casting, interpretation, or other radical approaches. That’s why you can see a musical Romeo & Juliet, a full-text, four hour Hamlet, and a female (Helen Mirren) Prospero (known as Prospera) in this year’s Tempest.

You might think Shakespeare is an anomaly, someone who transcends copyright. That, of course, ignores that Shakespeare’s contemporaries, many of whom were more famous at the time, also wrote without the benefit of copyright (since copyright wasn’t to be invented for another 100 years). And Shakespeare isn’t the only author Hollywood and publishing loves to reproduce. There’s Hans Christian Anderson, the Brothers Grimm, Homer, Charles Dickens, Jane Austen, Mark Twain, and all of mythology and the Bible to name a few.


DVD rentals make more money at lower price

Even as DVD sales plummet, DVD rentals rose 4.1 percent to $6.5 billion in 2009.  This rise happened even though 3.2 percent fewer rentals happened in video stores. Rather, the increase is most likely attributed to the 94 percent increase at rental kiosks like Redbox, which has been under attack by movie companies for siphoning their business with cheap $1 rentals. Those $1 rentals (and low-priced used DVD sales) added up to $1 billion in revenue for Redbox. So lower price, more money. Maybe movie companies will recognize the basic economics at work and stop fighting successful business models for people willing to spend money on their movies.