Craigslist Hates (And Loves?) CFAA

In an effort to stop competitors like Padmapper from building complementary or rival services using Craigslist ads, Craigslist has sued under copyright law and CFAA to block them. This wouldn't be so surprising - competitors try to bludgeon each other with IP law all the time - but for Newmark's own animus toward the law his company is invoking:

Reform the Computer Fraud and Abuse Act to reflect the realities of computing and networks in 2013. petitions.whitehouse.gov/petition/refor…

— craignewmark (@craignewmark) January 16, 2013

A court recently threw out Craigslist's copyright claims, but the same court allowed Craigslist to proceed with its CFAA claims. Craigslist should end its CFAA claims. CFAA is an overly broad law that is creating all sorts of unintended consequences, one reason that Santa Clara University law professor Eric Goldman argues that CFAA is a "failed experiment."

It's a bad law, and that's what makes Newmark's implicit support of it so galling.

Hypocrisy By Any Other Name Would Smell As Sour

Newmark is a socially engaged liberal, regularly tweeting on voting, marriage, veteran affairs and other issues. He has also fought against the Stop Online Piracy Act (SOPA) and other questionable technology laws. By many accounts, he's a good person who means well. 

But suing competitors under the same law you're trying to kill? That's called hypocrisy, and it doesn't fit Newmark's character.

Sure, such hypocrisy is par for the course in technology. After all, Microsoft, IBM and Apple complain about the patent regime even as they sue others for patent infringement. Why should Newmark and Craigslist be any different?

The obvious answer is because Newmark has always held Craigslist to a different standard. This is why Techdirt's Mike Masnick hits home when he says:

"If Craig Newmark and Craigslist move forward with this lawsuit, which has the possibility of creating very dangerous precedents concerning both copyright law and the CFAA, it will do tremendous harm to Craigslist's reputation and standing in the wider internet community... Destroying [Newmark's] reputation and acting out just because a couple of sites tried to make Craigslist more useful? It just doesn't make any sense at all."

Craigslist has little to gain and much to lose from proceeding under its CFAA claims. For a company that uses a .org domain to "symbolize[] the relatively non-commercial nature, public service mission, and non-corporate culture of craigslist," perhaps an even better way to underscore Craigslist's mission is to kill its CFAA lawsuit. That would be in keeping with who Craig Newmark is and what he stands for.

Image courtesy of Sierra Communications.

Now the trio want to take on Hollywood - with your help - and mock big-budget blockbusters, such as Twilight and The Hunger Games, in front of a live audience. They also want to help everyone create their own riffs on movies and TV shows.

Movie Rights Are Not Cheap

The tagline for RiffTrax is: "We don't make movies, we make fun of them." But Hollywood doesn't want its movies made fun of, so the RiffTrax crew can currently do their thing only for films that are either in the public domain or whose rights come very cheap. (Owners of really bad movies, not surprisingly, let their works go for very little.)

For flicks like Birdemic or Kingdom of the Spiders (William Shatner's finest performance of 1977), RiffTrax customers download a single file (available in numerous formats), typically for $10, and watch on an iPad or laptop, or burn it onto a DVD. But that won't work for popular films, like Thor or The Avengers, or the Patrick Swayze classic, Roadhouse, whose licensing costs are too high.

For blockbusters, the RiffTrax group records its audio commentary in MP3 format. Users download the file, typically for a $4 fee, then play the MP3 on a laptop or iPod, for example, while watching the movie on a television screen. It's certainly not an elegant solution, so the crew is trying raise enough cash to license more high-profile films.

A highly successful Kickstarter campaign seeking to secure the rights to broadcast Twilight - just so it can be made fun of - netted $265,000 against an original goal of $55,000. The hope, according to Bill Corbett, is that by "backing up the money truck" to Hollywood, RiffTrax can secure the rights to the movies that need mocking most.

Once a deal is signed - it's currently in negotiations - the trio plan to riff the film live and stream the performance (also live) to "hundreds" of other theaters. They also hope to offer a copy of the performance as a DVD or download - film and riff embedded together.

The Riffmasters

To get the inside scoop, I spoke with "riffmaster" Michael J. Nelson:

ReadWrite: Describe RiffTrax to the uninitiated.

Mike Nelson: It's like sitting down to watch a movie with your funniest friends. 

ReadWrite: Why are there no puppets like on MST3K? 

Mike Nelson: RiffTrax is a different animal. We don't own the copyright to the MST3K puppets. Plus, it just wouldn't work for synching commentary tracks to the popular movies." 

ReadWrite: Why start the Kickstarter campaign with Twilight?

Mike Nelson: Twilight's been our single most popular [downloadable] riff to date. We want to do a live riff of the film and stream that to hundreds of other theaters.

ReadWrite: What's the process for choosing a movie to riff?

Mike Nelson: It's hard to make fun of a film that's trying to be funny but fails. It has to be either unintentionally bad or taking itself too seriously. When I first watched Birdemic, for example, I assumed the director had to be joking. He wasn't - that makes all the difference. 

ReadWrite: Do fans help you decide which movies to riff on?

Mike Nelson: Definitely. On Twitter and Facebook, or the user forum on our site. We have a backlog so can't always get to their choice right away, but we listen.   

ReadWrite: Tell me about iRiffs.

Mike Nelson: iRiffs is the section on our site where anyone can upload their movie commentaries. We have minimal requirements - as long as the content isn't deeply offensive, you can offer your riff through the site.

ReadWrite: And you split the revenues with the individual?

MN: Correct. I would like to say that anyone who uploads their riff to our site, please use a halfway decent USB microphone. Too many poor mics have killed some otherwise great performances.

ReadWrite: There were several other people involved in writing and performing for Mystery Science Theater. Why only you, Kevin and Bill for RiffTrax?

Mike Nelson: Kevin, Bill and I were the last in-theater performers when MST3K ended. We all lived near one another in Minnesota, and were doing a lot of projects together. We fell into an easy rapport, so when I started RiffTrax in 2006 it was easy to bring those two onboard. Joel [Hodgson - the original host] wanted to get Cinematic Titanic up and running so it never worked out for everyone to be together." [Cinematic Titanic includes several MST3K performers who similarly offer film riff performances of B movies. The group has said that this will be its final year working together.] 

Finally, I asked riffmaster Bill Corbett if the crew had any plans to make it's own deliberately bad movie:

None. I think it would be surprisingly hard to recreate the magic of an unintentionally bad movie. It would wind up too self-conscious. We've seen a lot of attempts to do that, and they never capture the exquisite fun and weirdness of someone trying in earnest to make a serious movie, and just making a mess of it.

Lead image from Mystery Science Theater 3000 Presents Laserblast.

Picture of the RiffTrax team, from left to right: Bill Corbett, Kevin Murphy, Michael J. Nelson.

But don't get too excited about the possibility for reforms that would safeguard an open and innovative Internet just yet. The legislator in question, House Judiciary Committee Chairman Bob Goodlatte, has been carrying water for Hollywood and other Big Copyright interests for years. In other words, this smells like a trap for reformers.

(See also: The Internet Assault On TV Is Working)

There's no shortage of things to fix in the U.S. copyright system, which was last overhauled back when networking mostly meant dumb terminals connected to a minicomputer or a mainframe. Yet here's where Goodlatte is coming from:

• He supported SOPA, which would have let federal agencies effectively censor alleged copyright infringers from the Internet without due process or much of an appeal;
• He co-sponsored CISPA, which would allow private business to share your personal information with federal agencies without sufficient privacy protections;
• He's generally considered one of the bigger copyright maximalists in the U.S. Congress.

So what's he really up to? Here's what Goodlatte said in a statement:

The Internet has enabled copyright owners to make available their works to consumers around the world, but has also enabled others to do so without any compensation for copyright owners. Efforts to digitize our history so that all have access to it face questions about copyright ownership by those who are hard, if not impossible, to locate. There are concerns about statutory license and damage mechanisms. Federal judges are forced to make decisions using laws that are difficult to apply today. Even the Copyright Office itself faces challenges in meeting the growing needs of its customers – the American public.

Compensation for copyright, digitizing published works, licensing, and cutting through the complexity of existing copyright law — these are all ripe subjects for reform. There's just little reason to think Goodlatte is the right person to craft compromises that offer fair compensation for copyright holders without stifling the development of new digital-media services or crushing individual privacy.

Confederacy Of Dunces

Generally speaking, the odds are against innovation-friendly copyright reform in the current Congress. Democrats have, by and large, been captured by Hollywood when it comes to discussion of copyright terms, digital rights and piracy. in their thinking on this issue. Republicans, meanwhile, have occasionally shown glimpses of original thinking on these subjects — often as not, only to recant them as quickly as Hollywood lobbyists could pick up a phone.

Last November, for instance, the House Republican Study Committee released a position paper debunking various copyright "myths," among them the notions that the current system compensates creators, benefits the public, and promotes innovation. It does no such thing, staffer Derek Khanna wrote; instead, the report called out copyright as an institutional monopoly that crushes new markets before they can prove themselves.

Within twenty-four hours, the GOP had retracted the report, walking the party's position back to the same tired arguments that we had all heard before. Not much later, Khanna himself was out of a job. Techdirt, which has followed the issue extensively, has also noted that Register of Copyright Maria Pallante has suggested that enforcement agencies focus on large-scale piracy (a good idea) but that copyright never inhibited innovation (incorrect).

Absent a SOPA-style revolt by major Internet companies against the current copyright regime, which favors owners over creators and old media industries over the digital world, the best we can probably hope for is that Goodlatte's review doesn't make a bad situation worse.

We don't have any way to independently verify the filmmakers' claim to Swartz's "last" video interview (it was filmed on July 10, 2012). And near as I can tell, the portion of the interview released so far — this clip is about eight minutes long, whereas the entire thing runs "several hours," according to the film's PR rep — doesn't appear to break much new ground.

In particular, it doesn't even raise the federal prosecution of Swartz for surreptitiously downloading — the feds termed it "stealing" — four million academic articles from an academic database called JSTOR, an overzealous pursuit that some critics believe contributed to Swartz's suicide. Unsurprisingly, the interview doesn't touch on Swartz's long battle with depression, either.

But it's still an engaging eight-minute conversation with a handsome and articulate activist who now looms as large — if not larger — in death as he did in life. The best part comes at around 5:00 in the interview, where Swartz waxes philosophical on the threat that copyright maximalism, as embodied in bills like SOPA and the ongoing war against digital piracy, poses to creativity and innovation.

See for yourself.

Update, 9:31am PT: Turns out this video is an eight-minute excerpt of a much longer interview, a fact that wasn't clear from the information the filmmakers' representative initially provided us. I've updated the item throughout to make that clear.

This is absurd. Uploading an entire Prince album to YouTube is one thing. But six disjointed seconds in smartphone camera quality? Something tells me four clips of that nature aren't going to eat into Prince's album sales. 

Prince, who three years ago declared the Internet to be "completely over," is known as a stalwart, sometimes overzealous defender of his intellectual property online. In fact, it was the use of a Prince song in a YouTube video that led to Lenz v. Universal, an often-cited 2008 court decision dealing with copyright and fair use.

In that case, the court ruled in favor of Stephanie Lenz, whose video of her baby dancing to Prince's song "Let's Go Crazy" was the target of a copyright infringement claim by Universal Music. Lenz argued that video constituted fair use and the court agreed that Universal didn't adequately weigh the fair use principle when issuing takedown notices, something it has a reputation for doing rather aggressively. 

Let's (Not) Go Crazy 

Whether or not six seconds of a Prince song in a user-generated video constitutes fair use is something for a court to decide. If it's not, though — if uploading a crappy, six-second video that contains someone's song turns out to be illegal — we have to ask ourselves some pretty fundamental questions about copyright and what it's for. 

Of course, that there's a need to rethink copyright in the 21st century is hardly breaking news. The original framework doesn't work that well for anybody, as has been evident for at least a decade. Last month, the U.S. Copyright Office itself called for a dramatic overhaul of copyright law, with Register of Copyrights Maria Pallante saying "it is time for a new law." 

Whatever replaces the current copyright framework will need to balance the rights and financial interests of creators with the fact that we have a completely new way of creating and sharing culture and media than we did a few decades ago. That will mean changes in how creative works are distributed and monetized, sure, but it also opens up a whole universe of new cultural possibilities, which shouldn't be squashed without a very good justification.

To say that things have changed since Prince recorded "Let's Go Crazy" in 1984 is an understatement. When you consider how dramatically (and mostly for the better) the Internet has changed how we live, work and yes, create and experience culture, the idea of waging an all-out war against tiny pieces of content like this seems, well, kind of crazy. 

With Aereo's second legal victory under its belt, it might be time for broadcasters to focus on Plan B: to start, y'know, innovating like crazy. 

So Aereo Is A Go. For Now

At issue is whether or not Aereo violates the broadcasters' copyrights by retransmitting local, over-the-air channels so its subscribers can access them from smartphones, tablets and an array of smart TVs and streaming set top boxes. When Aereo launched in New York last March, the broadcasters immediately asked a judge to shut it down via preliminary injunction, arguing that indeed, it violates copyright law by generating a legally forbidden "public performance" without paying compensation. 

In its defense, Aereo has argued that the way it's retransmitting broadcasts — using tiny, remote antennae rented by its customers — does not constitute a public performance, since its use by individual viewers was inherently private. Aereo won a first round in court last July. Today, in a 2-1 decision, the Second Circuit Court of Appeals upheld the earlier ruling. 

The networks will undoubtedly continue pushing their case, opening the prospect of a full trial and eventually, a possible Supreme Court ruling. Broadcasters, of course, have every right to pursue a legal case against Aereo. This is yet another example of how technology has evolved faster than the law can keep up and how we, as a society, need to figure this stuff out.

In the meantime, broadcasters should prepare themselves for the possibility that Aereo will win in court, allowing its expansion to continue.  

Why Aereo Exists

Aereo is a pretty attractive service, especially for the cord cutter set. And for those who haven't yet considered canceling their cable subscription, products like this make it more tempting. It remains to be seen how much overall demand there is for Aereo, but the fact that it exists at all is pretty telling.

The legal niceties aside (those will be decided by courts, not blogs), Aereo is doing something innovative that empowers media consumers in a way that wasn't previously possible. That's because nobody — least of all broadcasters — made it possible. Now somebody is.  

When the Internet rose to prominence, newspapers didn't have the luxury of suing its brains out. They had to deal with the ways in which their landscape was shifting, which was ultimately better for consumers. Similarly, broadcasts may not turn out to have that luxury with Aereo. Trying to sue them out of existence is not an unexpected response, but it may not succeed. They need a backup plan. 

Should broadcasters have come up with this idea? It's nice to talk about how industries should disrupt themselves, but that's rarely how things actually work. It would have been totally counterintuitive for broadcasters to band together and develop the type of functionality that Aereo is offering. Smart, yes, but not necessarily a sound business decision within the framework in which these people generally think. 

What Should Broadcasters Do? 

It's a fruitless debate anyway. Broadcasters didn't come up with Aereo. Aereo did. Now the Comcast and News Corps. of the world need to think about what they'll do in the event that the disruptive little startup prevails in court. 

Aereo has already filed four patents that cover the precise technology its using, so it's probably not feasible to recreate its functionality. But what does Aereo do for viewers? It provides cheap, multi-channel, high-definition access to broadcast TV from an array of devices and allows for DVR recording. It lets you do all of this without paying for a cable subscription. 

To their credit, cable companies are already working on ways to bring live TV to tablet and smartphone owners. Comcast's TV Everywhere initiative clearly anticipated trends in the way people watch programs that could threaten their core business model, so they moved on it.

But while services like TV Everywhere and XFinity Streampix are nice, they're add-ons to a cable subscriptions, which some people simply don't want to deal with in the first place. It's unlikely that Comcast or Verizon is going to come up with a worthwhile Internet TV offering that doesn't hinge on their existing models — and the sky-high fees that support them. 

Broadcast networks might not be able to rent out tiny antennae, but they don't need to, either: They already have much of the infrastructure in place to provide live Internet TV signals and make them available from mobile devices and connected TVs. If they band together and offer enough programming, they could charge a small subscription fee. Think Hulu for live broadcast TV. In fact, yes, just tack this onto Hulu for a couple extra bucks. Bingo. 

There may be sound business reasons why broadcasters wouldn't consider doing this. Their relationships with cable providers may not allow it. But that rigid, no-we-mustn't mentality is exactly what created the void that allowed Aereo to crop up in the first place. It might be time to change that mindset.

Lead photo by schmilblick

Speakers included Andrew Bridges, partner at Fenwick & West LLP, Margot Kaminski, the executive director at the Information Society Project at Yale Law School, Wendy Seltzer, policy counsel at the World Wide Web Consortium (W3C), Derek Khanna, a former Republican Study Committee staffer, and surprise guest Ben Huh, the chief executive of Cheezburger. All have been influential in speaking out against and litigating civil liberty cases pertaining to ACTA, SOPA and PIPA.

After the panel, ReadWrite spoke one-on-one with Bridges, whose 30-year career has included representing clients like Google and MasterCard in cases involving copyright, trademark and unfair competition. Bridges spoke on the lessons stemming from the hour-long panel:

ReadWrite: You have lots of criticisms of the copyright system. Can you explain your objections?

Andrew Bridges: Copyright is elevated to a level of importance in our society and our politics that it does not seem to deserve. If you actually took some copyright policies and extended them into other arenas, the consequences would seem absurd. Let's say we decided to apply the Six Strikes principal. Say you send out one of those mailers for a subscription to Time Magazine. And you check the box that says bill me later. Let's say that they start sending you Time Magazine, and after 2 or 3 issues they send you the bill, and you never pay. But in the meantime you have 6 or 8 issues before they cut you off for not paying. My proposal is let's adopt Six Strikes and knock somebody off the postal system. You don't pay for it, you don't get to use the postal service any longer. Or let's say somebody blows through a toll plaza 6 times, does that mean you don't ever use the highways anymore? In the world of DMCA take-down notices, the copyright holder sends 6 wrongful take down notices, maybe they should lose access to the copyright system itself. Why is this limited to occasional, or amateur or individual persons who induce copyright infringement and why are they subjected to these type of penalties?

ReadWrite: How is copyright disruptive to technology?

Andrew Bridges: New technologies do disrupt existing business models. They do disrupt current expectations of profits and revenues. Actually copyright law itself has its own disruptive function. The function of copyright law as it has evolved is indeed to disrupt innovation and to disrupt new technologies that threaten the interest of copyright holders. Frankly all copyright legislation has been in reaction to new technologies that are developed. And copyright law has sought as its purpose, interfering with, limiting, pampering and indeed disrupting innovation of technology, business plans, even disruption of consumer choice.

ReadWrite: For example?

Andrew Bridges: It's illegal to operate a business where you rent CDs out. Under copyright law, it's illegal to watch on your DVD player, a DVD that a Greek friend of mine brings over as a present, because it has region coding. That's a disruption of a user experience, by copyright law. We talk about disruptive technologies, but I think we're talking about both disruptive technologies and disruptive law. I think if we have to look at rival disruptions,  on the one hand [disruption] of business models and our expectations, and the other side [disruption] of technological developments and innovations and consumer choice, then I tend to cast my allegiance on the side of those who are disrupting older business models. That is how an economy grows, by creative disruption. That's exactly how innovation enriches our culture and gives us the progress of science and the useful arts.

If other laws were proportional to copyright law, the fine to jump a NY subw turnstile ($2) would be $370K. Thx @andrewbridges! @sxsw #ftmsx

— Flip The Media (@flipthemedia) March 10, 2013

ReadWrite: How out of whack are the penalties for copyright violation?

Andrew Bridges: A woman in Minnesota got hit with a jury verdict of $1.5 million for downloads without any evidence that she actually shared anything with anybody else. That law allows statutory damages, which I call fictional damages because they [are] divorced from any proof whatsoever. The law allows fictional damages of $150,000 per work infringed. And that includes $0.99 downloads. So the ratio between penalty and loss revenue is excessive... 150,000 to 1. Let's put copyright in the broader context. If I jump the turnstile of the New York City subway, If the copyright proportionality damages applies, it would be OK for that penalty fare to be $370,000. It's as ridiculous in copyright law as it is in subway law.

ReadWrite: So who's at fault here?

Andrew Bridges: People are focusing on Congress, [but] that's misplaced... after SOPA. Because things don't have to happen in Congress for bad things to go off. Even though SOPA failed, SOPA is now in some respects the law of the land. Because we now have Soft SOPA. We have the government putting pressure on advertising networks and putting pressure on payment processors, unofficially, to take the same measures that SOPA was going to require them to [do]. But now it's a sort of 'if you know what's good for you, could you pretty please, wink-wink' method.

ReadWrite: Can you give an example of that pressure?

Andrew Bridges: There are payment processors notifying companies that they are no longer willing to process payments for them. It's happening. It happened with three of my clients. It's part of what the administration calls its 'voluntary cooperation initiative,' which the Intellectual Property Enforcement Coordinator Victoria Espinel describes in her annual report. And we have advertisers blacklisting certain sites, and telling sites. 'We're not going to place advertising on your site because people tell us you're not a good site.' So that's happening. And it's being done as "Oh it's just a private decision." But it's no secret that the government is encouraging these private decisions. So that's why I call it Soft SOPA.

Photo courtesy of Wendy Seltzer.

It's the new "six strikes" plan against alleged pirates, formally known as the Copyright Alert System. It's been slow to get off the ground, having first been scheduled for launch last July, and then again last November. It may amount to little more than a wrist slap for copyright violators. But it is exactly what the Center for Copyright Information (CCI) and five major ISPS – Verizon, Comcast, AT&T, Cablevision, and Time Warner Cable – are apparently finally launching this week to try to scare you out of sharing pirated material.

The plan, backed by ISPs and Hollywood studios, has been a running joke in some quarters due to the internal tensions of its backing coalition and the general toothlessness of its sanctions. The CCI itself insists its system is intended to educate consumers, not punish them. Online chatter about this new system depicts it as less "big brother" and more as a big bother.

But we should care about Six Strikes, because it's likely to slow down the Web for some, subject others to burdens such as "mandatory" online educational courses, and widely violate the privacy of Web users – whether they're really pirating movies and music or not.

Bark Or Bite?

Back in November, leaked documents reported by TorrentFreak revealed that Verizon would monitor BitTorrent users and respond to alleged copyright violators in a staged fashion, starting with two email warnings. Should users continue their alleged infringing activity, Verizon will push out third and fourth warnings in the form of intrusive popups that force users to confirm receipt. If that doesn't do the trick, the ISP would slow down Internet connections to roughly dialup speed for 14 days.

But that's just Verizon – every ISP will be free to tailor restrictions. Last October, TorrentFreak likewise reported that AT&T will block users until they complete a copyright course, and in November relayed that Time Warner will temporarily disrupt service.

Here's the service in action, in a soothing video produced by the CCI:

What To Expect

Major ISPs actively monitoring and "trolling" our usage remains a major privacy issue, even if so far the modus operandi isn't as nefarious as it might sound. The simple fact that third-party outfits can identify the IP address of someone sharing or distributing copyrighted material and then report them to the ISPs is likely to alarm many users once these alerts start going out.

The new system doesn't force ISPs to shut off Web service to repeat offenders, but you can probably count on ISPs sharing the identities of alleged violators with copyright owners to pursue legal action. In the above video, the CCI says it won't give out customer information, but if the backers of the program – many of them the creators themselves – lean hard enough, ISPs will probably cave.

As it stands now, Six Strikes won't stop piracy. On the one hand, it's just too easy to get around – widely available VPNs, proxies and similar measures all bypass the kind of monitoring that's central to the system. Committed users can also just ignore the notifications, since there are apparently no sanctions past the sixth warning at ISPs like Verizon.

Still, this is interference, big time, from ISPs of a sort that Americans haven't previously experienced. Even in attenuated form, Six Strikes could have unexpected consequences, such as killing public Wi-Fi. (Though the CCI denies that coffeehouse hotspots are in any danger.) And it's not at all unreasonable to think that the sanctions could get more Draconian, given Hollywood's well-known history of pushing for ever-stronger restrictions once the camel's nose is under the tent.

So mind your bits and torrents, folks. This could get nasty.

Photo courtesy of Shutterstock

Why? Well, avoiding billion dollar lawsuits like the one Viacom filed (unsuccessfully) a few years ago would be nice. But Google also wants to be on good terms with the music and movie industries so it can strike content deals that will help products like YouTube, Google Music and Google TV to thrive. The company still gets the majority of its revenue from search ads, a reality it knows won't last forever. 

The changes started off small but are now getting more serious as content becomes a more important focus for Google's business. Still, even after some of the most significant changes, the record industry and Hollywood tend to fire back complaining that they don't go far enough. That happened again this week when the RIAA put out a report questioning the effectiveness of Google's search results tweaks. 

As our own Brian Proffitt demonstrated with some test searches, the RIAA might have a point.  But Google is trying. It has a delicate balance to strike between the interests of copyright holders and the users who generate more than a trillion search queries every year. It's eager to please the content industry, but has to roll these changes out gradually to avoid a mass user freakout. 

So how has Google altered its search engine and other products to cater to big copyright? Here are four notable recent examples: 

1. Blacklisting Terms From Autocomplete and Google Instant

In January 2011, Google started blocking certain terms from its Autocomplete and Google Instant features. Rather than undertaking the full-blown search results censorship the entertainment industry wanted, Google decided to meet them half way and at least stop recommending piracy-related search terms to people. 

Since then, the list of forbidden terms has grown. Even Megaupload is still blocked from Autocomplete, even though that site was seized by the U.S. government over a year ago. 

Overall results are mixed. If I type "hurt locker torrent" into the search bar, it doesn't show me instant search results (nor did it attempt to autocomplete the phrase). But "torrent hurt locker" is another story. That returns links to torrents for the popular movie, followed by an article about how the film's makers sued thousands of BitTorrent users. Careful!

2. Streamlining The Copyright Takedown Process (SometimesTo A Questionable Degree)

When you run a user-generated content site as massive as YouTube, you have to be capable of handing potentially millions of copyright complaints. To keep up with the never-ending flood of complaints, Google has progressively made it easier to file them. Its Content ID feature lets copyright owners supply YouTube with audio or video reference files that the system then uses to automatically identify infringing content and flag it for further action.

 As you can imagine, Content ID has resulted in some highly questionable takedown requests. So last year Google implemented an appeal process to help minimize frivolous takedowns. Of course, even with protections in place, eyebrow-raising takedown requests are still granted from time to time.  

Google also now claims to be responding to copyright takedown notices within 24 hours, a promise it made to the content industry a few years ago. 

3. Tweaking Actual Search Results To Discourage Piracy 

The content industry has long wanted Google to not just tweak search suggestions, but to actually remove and downplay results that lead to infringing content. For years, Mountain View was unwilling to tinker with the secret algorithm that bulldozes billions of dollars into the company every year. As big content companies become more valuable potential allies, Google has warmed up to the idea. 

Google is constantly bombarded with requests to removed URLs from its search results on copyright grounds. In 2012, the company pulled 50 million infringing links from its index. In the last few months, the number of requests have skyrocketed, so it's likely we'll see even more links de-indexed in 2013. 

Granting DMCA takedown requests is one thing. What the content industry has wanted all along was a deeper, algorithmic change to Google's search results. In August, they got their wish. 

In its most radical anti-piracy move yet, Google added copyright takedown requests to the more than 200 signals it uses to rank and index search results. That is, if a site gets a high number of "valid copyright removal notices," it may wind up taking an SEO hit as a result. Not surprisingly, the RIAA was quick to cry "not good enough!" only six months after the admittedly measured changes were made. 

4. Next Up: Defunding Piracy Sites 

To quell any remaining doubts that it's serious about piracy, Google is about to cave into another long-held entertainment industry wish. According to the Telegraph, Google is currently in talks with MasterCard, Visa and PayPal to cut off funding to sites that engage in copyright infringement. The report is short on details, but presumably such a tactic would be reserved for some of the worst offenders, especially those who dodge takedown requests or operate in other jurisdictions. This is an unconfirmed report, and one that reveals only discussions, not action. If Google does proceed with this one, it's anybody's guess what the timeline might look like. 

Of the changes that have been implemented, each one is decidedly measured. Google can't quite afford to go nuclear with its antipiracy efforts, much to the chagrin of the industry. This is going to be an evolutionary and thoroughly imperfect process. As the business incentives and industry pressures mount, expect to see Google make increasingly aggressive moves. And, like clockwork, expect the RIAA's complaints to keep coming. 

In a blog post on the RIAA site yesterday, Steven M. Marks, EVP & General Counsel, RIAA made it clear that the music copyright association thinks that Google, despite making some headway, remains a day late and a dollar short.

"We recognize and appreciate that Google has undertaken some positive steps to address links to illegal music on its network," said Steven M. Marks, the RIAA's executive vice president and general counsel. "Unfortunately, our initial analysis concludes that so far Google's pledge six months ago to demote pirate sites remains unfulfilled. Searches for popular music continue to yield results that emphasize illegal sites at the expense of legitimate services, which are often relegated to later pages. And Google's auto-complete function continues to lead users to many of those same illicit sites."

(This isn't the first time: see also RIAA Slams Google's Anti-Piracy Efforts, Demands Even More Unreasonable Measures.)

Testing The Claims

I wanted to see if the RIAA might be overstating its concerns, something that they've been known to do before. So I performed a little one-man experiment, using the song "Some Nights" by Fun. as the guinea pig. Your mileage may vary, of course, but my quick-and-dirty test revealed that the RIAA may have some valid claims.

A search for "Fun. album" returned a first, second, and third page of results that were absent of any results that would seem to contain illegal downloads, with the bottom of the third page containing three DMCA takedown notices that point to the Electronic Frontier Foundation's ChillingEffects.org for more information.

But down in the "Searches related to" section of all of the results pages, "fun. some nights download" was among the listings, and a click-through pulled in the plenty of links to aggregate MP3 download sites, mixed with a few legitimate sites, like iTunes (#3), Amazon (#7) and the official video on YouTube (#8).

As for the RIAA's claim that Google's AutoComplete will suggest search terms that could lead users to sites containing unlicensed copies of songs, I found this was indeed true. By the time I typed "fun. some", Google had filled in four results:

fun. some nights
fun. some nights lyrics
fun. some nights meaning
fun. some nights mp3

On a whim, I turned on SafeSearch to see if that would make a difference. Results did differ on some search results, such as "fun. some nights download", where legitimate sites (like the Wikipedia entry for the album) were moved up slightly on the first page of results, but the sketchy download sites were still in full-glory display.

I should also note that the RIAA did not take Microsoft's Bing service to task, even thought the same experiment on Bing yielded very similar results, even in the auto-complete results. Type in "fun. some" on the Bing home page and you get these helpful suggestions:

fun. some nights lyrics
fun. some nights
fun. some nights meaning
fun. some nights torrent
fun. some nights video
fun. some nights album download
fun. some nights mp3
fun. some nights review

Search Engines As Police?

Based on these (admittedly quick) search tests, it seems like the RIAA has a point, and Google is failing to block apparent pirate sites on its search results, and its demotion policy announced in August 2012 isn't really working all that well, either.

But let's be clear: Google has said all along it wasn't going to block site results from any site unless it receives a specific copyright removal request from the rights owner.

"Only copyright holders know if something is authorized, and only courts can decide if a copyright has been infringed; Google cannot determine whether a particular webpage does or does not violate copyright law. So while this new signal will influence the ranking of some search results, we won't be removing any pages from search results unless we receive a valid copyright removal notice from the rights owner," senior vice president of engineering Amit Singhal wrote back in August.

At the time, what Google said it would do was add a new signal to how it ranks search results.

"Starting next week, we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results," Singhal stated.

The RIAA is contending in its statement this week that Google has failed to live up to that promise.

One has to wonder, though, if trying to keep up with the sheer number of sites that provide access to unlicensed media content is comparable to spitting on a forest fire. If the signal for page ranking depends in some way on number of takedown attempts, perhaps the RIAA and other rights holders are not sending enough signals. Or maybe these sites know who to game other ranking signals to boost their status on Google and Bing search results.

It is very easy to point fingers at Google and Bing and accuse them of not doing enough to keep people away from pirated media. If you forget, of course, that this not their job.

Complaining about the auto-completing results would seem to be a more valid concern, until you remember that there could be legitimate results for "download X."

The RIAA wants to protect the rights of its artists and producers, a valid concern. But it is not clear at all that Google, Microsoft and the other search engines should be relied upon as key allies in the recording industry's ongoing quest to stomp piracy. Search engines' missions are to provide data, not analyze that data for legality.

Despite what they're asking for here, I suspect even the most vehement anti-piracy activists would not care for some of the implications of a world where search engines were to undertake that goal.

So are intellectual property lawyers. 

Before long, many of us will be able to print physical objects as easily as we once burned DVDs. And just as the Internet made trading MP3 music files and ripped movies a breeze, downloading 3D images to print on your shiny new MakerBot printer will be as easy as torrenting "The Hurt Locker." 

3D Copyright Takedown Notices Begin

Last week, HBO sent a cease-and-desist letter to Fernando Sosa asking him to stop selling a 3D printed iPhone dock he modeled after the Iron Throne chair from the popular HBO TV series Game of Thrones.  Even though Sosa designed the dock himself in Autodesk Maya, HBO owns the rights to the show, its characters, and apparently the inanimate objects that appear onscreen. 

It has been two years since the first known Digital Millennium Copyright Act (DMCA) takedown notice for a 3D printable object was sent. After 3D artist Ulrich Schwanitz created a printable version of the famous Penrose triangle optical illusion, another modeler mimicked (not copied) the 3D rendering necessary to print his own. Schwanitz sent a copyright infringement complaint, but then later rescinded it and released his design into the public domain. 

In that case, the dispute involved two individuals. Now bigger, better-funded copyright owners are getting involved. As user-generated 3D model marketplaces like Thingiverse and Shapeways grow, expect to see them flooded with creations based on trademarked and copyrighted material. And expect to hear about more takedowns, lawsuits and new legal precedents.  

Copyright and 3D Printing: It's Complicated 

Unlike music and movies, the relationship between copyright and physical objects is not always straightforward. In general, non-artistic objects - that is, items intended to be used rather than admired for their aesthetic value - do not typically fall under the scope of copyright law. Certain objects can be patented, as long as they're not overly generic. Try as you might, though, you can't patent a chair, for example, unless you've designed an entirely new type of chair. 

But what if you design a chair with a very unique ornamentation on the armrests? If you download my chair design and print yourself out a version of the chair for your very own, can I sue your brains out, RIAA-style? 

When it comes to copyright and objects, courts try to apply what's called a "severability" test. That is, can you "sever" the artistic part from the useful part? If so, the artistic part is typically protected by copyright. The strictly useful part is not. 

In a recent white paper titled "What Is The Deal With Copyright and 3D Printing?" Public Knowledge explored these issues, but came up short on clear answers. Precisely how copyright law applies to 3D printing will be established only as the technology grows and lawsuits get filed. 

In the meantime, expect the intellectual property disputes to proliferate, almost as rapidly as the technology itself. 

Lead photo by Creative Tools. 

Grandiose Declarations

This grandiose declaration came via Twitter on Tuesday, where Dotcom announced some quick figures on his new site's growth. After one month, Mega has hit 3 million users, with 125 million files uploaded. This is certainly nothing to scoff at, and more evidence that this guy is not slowing down, despite the best efforts of the U.S. Department of Justice, which has brought charges of copyright infringement, racketeering and money laundering against him.

Mega, the rebirth of file-sharing service Megaupload, which was shut down by U.S. authorities in January of 2012, has been gradually working its way into headlines since its lavish January 19 launch, where Dotcom staged a fake FBI raid to blaring techno music, among other wild antics. Notably, the service hit 1 million users in the first 24 hours, and Dotcom announced through Twitter last Saturday that Mega would be accepting bitcoins as currency.

Dotcom has also announced that mobile Mega apps are on the way, which bodes well for those looking for almost completely unrestricted on-the-go file storage options for iOS and Android. In case you were wondering, Mega's international traffic rates rank France, Spain, Brazil, Germany and the U.S. as the top five, in that order.

Mega's Perks & The Cloud Storage Battle

Dotcom is also making the news for his service's massively disruptive pricing. Mega offers 50GB of cloud storage, free. A Pro Membership package, with tier-1 offerings of 500GB of storage and 1TB bandwidth rate, costs £9.99 (or roughly $13) per month. Tier-2 quadruples the storage and bandwidth amounts of the previous tier for $26 per month, while tier-3 doubles all of tier-2's offerings for $39 per month. 

Mega's free option alone beats out the storage offerings of Dropbox, iCloud and Google Drive combined. The additional perk is, of course, the privacy. Dotcom's service ensures that users' files are completely protected from peeking by way of an encrypted key. So unless you supply them with access, even Mega staff cannot access your files.

Mega: Privacy vs. Piracy?

It remains to be seen whether the service will become another source of rampant copyright infringement. Considering Dotcom's history, and the enormous amount of freedom Mega hands to users, that possibility certainly looms large. Being able to share anything and everything is great for privacy, but not so much for content owners hoping to keep file sharers from unauthorized dissemination of every new song, movie and TV episode. 

(See also Is Kim Dotcom's New Site, Mega, the Wild West of Piracy?)

In March authorities will rule on whether Dotcom will be extradited from New Zealand to the U.S. to face his numerous charges. Until then, he seems to be enjoying his new site's steady climb to the top of the file-sharing and cloud-storage leaderboard.

No matter where you stand on copyright issues, it's hard to argue that the current system is working. In few places are the flaws of modern copyright law more apparent than when it comes to Digital Millennium Copyright Act (DMCA) takedown requests. 

Sure, plenty of legitimate DMCA are received and honored by sites like YouTube, Rapidshare and Grooveshark all the time. But every now and then we hear about a takedown notice that leaves us scratching our heads: Is that really a copyright violation? If not, why was the content removed? Is the system that easily gamed? Oh, it was a violation? How weird. 

Even the legitimate takedowns tend to lead a cat-and-mouse game and may not have a meaningful impact on the piracy they're intended to thwart, research suggests. But either way, some of the headline-grabbing copyright-related content takedowns we've seen raise major questions about the state of copyright law, the DMCA and digital piracy. 

Five prominent examples are listed below, but there are undoubtedly others. If you've heard of an outrageous Web content takedown request, let us know in the comments section.  

1. Buffy vs. Edward vs. Bogus Takedown Notices

In 2009, Jonathan McIntosh posted a video to YouTube that seemed ripe to go viral. "Buffy vs. Edward: Twightlight Remixed" riffed on two popular vampire-related entertainment franchises by cleverly mashing up scenes from both into one cohesive, six-minute video. Sound like a copyright violation? It's not. In fact, the U.S. Copyright Office cited the remix video as a shining example of fair use. 

In October 2012, McIntosh received an email from YouTube explaining that his video had been pulled due to a copyright complaint from Lionsgate Entertainment, which owns the rights to the Twilight movies. McIntosh challenged the takedown on fair use grounds and a frustrating back-and-forth between YouTube, Lionsgate and McIntosh ensued. At one point, McIntosh was even locked out of his YouTube account and forced to take lessons in copyright infringement from Google. 

As of today, Buffy vs. Edward is back online. For now. 

2. Rumblefish And Birdsong

This one was just an honest mistake and didn't actually lead to a takedown, but it still shows how things can go wrong with the current system. Somehow YouTube's Content ID system got confused and thought that the sound of a bird singing in the background of a video about a man making salad was the same thing as a song called "Birdsong" that was recorded by an artist whose songs are licensed by Rumblefish, a music licensing company, and send a "music claim" to the confused salad man. Content ID is a system that automates the process of spotting copyrighted work that's been used without permission. If your video gets flagged for copyright violation, you can dispute that, which is what the salad-maker did. Rumblefish reviewed the dispute but "mistakenly reinstated the claim," its CEO later explained. Still, the video was never actually taken down. Nevertheless, salad man made a stink in the press, and the story went viral. Two days later Rumblefish realized the mistake it had made in reinstating the claim, and released the claim. The whole thing was a misunderstanding. But to be clear: Salad man never had to take down his video; it remained up through all of this, and still is up; and no takedown notice was ever issued.

A spokesperson for Rumblefish says there were two mistakes. First, Content ID screwed up. Second, Rumblefish "did a poor job of reviewing the video manually." The issue, she says, is that there are more than 5 million videos online that use Rumblefish songs, and keeping up with so much material is a huge challenge. Bottom line: Rumblefish's CEO owned up to the error and the video remains online, but the affair raises some questions about the manageability of the copyright enforcement system. [This item has been updated from its original version.]

3. Universal Targets Pro-Megaupload Video Just Because

A few weeks before the now infamous raid that took down Megaupload and its top brass, Kim Dotcom was involved in yet another copyright-related dispute. Shortly after the music video for "Megaupload Song" was uploaded to YouTube, it was taken down due to a copyright complaint from Universal Music Group.  This was despite the fact that the song and video were original, non-infringing content. UMG apparently didn't like the fact that a video promoting Megaupload featured on-camera cameos by major label mega-stars like Kanye West, Mary J Blige, P Diddy and Will.i.am. 

4. Universal Goes Crazy Over A Prince Song

When Stepahnie Lenz uploaded a short clip of her kids dancing to "Let's Go Crazy" by Prince, the last thing she expected was a copyright takedown notice. Apparently, 26 seconds of low-quality audio was too much for Universal Music Group, which owns the copyright to Prince's catalog. The resulting legal case, Lenz v. Universal, established a precedent stating that copyright owners would need to take the parameters of fair use into consideration before issuing DMCA takedown notices. 

5. Minecraft + Gangnam Style = Copyright Violation?

Taking two things beloved by the Internet and mashing them up is often a surefire recipe for a viral video. It's also apparently an open invitation for accusations of copyright infringement. YouTube user CaptainSparklez learned this the hard way after he uploaded "Minecraft Style," a video that parodies the world's most viewed YouTube Video by merging it with the ever-popular Minecraft video game. 

After being yanked from YouTube, "Minecraft Style" returned in mid-December, only to be pulled again. The jury is still out on whether this video falls under the fair use exception to copyright law. Either way, it's hard to imagine a clever mash-up parody video eating into the massive success wrought by PSY since his bizarrely catchy song went viral. 

Images courtesy of Shutterstock.

Even if you've never downloaded copyrighted content in your life, the policy may put a damper on your Web surfing at the local cafe. 

Verizon hasn't formally announced its "six strikes" plans yet, but TorrentFreak got its hands on leaked documents that lay everything out in plain English. 

First off, for those who aren't familiar with "six strikes", the major ISPs in the U.S. have agreed to start issuing warnings to customers who use their services to pirate content over peer-to-peer networks. Details have been sparse, but a newly formed organization called the Center For Copyright Information (CCI) will send emails, voicemails and Web-based messages to alleged pirates. After six warnings, their ISP will take still-undefined punitive actions, which could include a slowing of network speeds (but never a total loss of service). 

How Verizon Will Warn Pirates

Verizon's alert system will start with an email and automated voicemail. After continued infringement, it will redirect your browser to a Web page containing another alert and an educational video about piracy. If that doesn't stop you from downloading Game of Thrones episodes and Skrillex albums, you'll get another warning and Verizon will temporarily slow down your Internet connection. If you do it again, it will actually leave you alone. The goal is apparently to spook enough people to put some kind of a noticeable dent in overall copyright infringement. With all the major ISPs on board, they'll probably succeed in doing so. 

One detail about Verizon's policy that should raise eyebrows is the fact that it will apply to business customers. If people pirate content using the free Wi-Fi at the cafe down the street, the owner may wind up getting copyright alerts and then see its network speed reduced. Even if some guy walks into the cafe with BitTorrent running in the background on his laptop and continues downloading files he queued up from home, the business and its other patrons could wind up getting penalized for it. 

Collective Punishment?

Even if it's only temporary, that could wind up hurting the business in what would effectively amount to a type of collective punishment for copyright infringement. For some remote workers, the interruption in service could be enough to change their cafe preference. For other types of public Wi-Fi, the whole thing could just lead to a generally crappier experience for people. 

It remains to be seen how Time Warner, Comcast and other big Internet providers will approach this, but the ISPs will presumably try to keep their policies largely similar since otherwise customers could jump from one provider to another in search of a piracy-friendly experience. 

For now, the "six strikes" scheme appears to be effectively toothless - in the long run. It doesn't affect the Internet in a deep and fundamental way, as SOPA threatened to do.

But it could still cause unforeseen problems by screwing with public Wi-Fi networks. 

Lead photo by mviramontes.

Aereo uses tiny, remote antennas to grab broadcast signals and convert them into video formats that can be transmitted over the Internet and watched from any device and recorded for later viewing. It's a brilliant idea, but one that immediately won the ire of the TV industry, who responded with a lawsuit. In July, a federal court ruled that Aereo did not violate copyright law in the way broadcasters alleged, allowing the service to continue operating as a larger legal battle looms. 

In its corporate rhetoric, Aereo very deliberately positions itself alongside the VHS tape and DVR, two technologies whose core functionality was challenged by the content industry on copyright grounds. The company and its supporters are hoping that the courts see the similarities as well. (For more insight, see Is Barry Diller Stealing Broadcasters' Content? Patent Application Says Maybe Not.)

Aereo's fate is far from firmed up, but that's not stopping the company from pushing forward with its expansion into new markets. Specifically, it will launch later 2013 in Boston, Miami, Austin, Atlanta, Chicago, Dallas, Houston, Washington, DC, Baltimore, Detroit, Denver, Minneapolis, Philadelphia, Pittsburgh, Tampa, Cleveland, Kansas City, Raleigh-Durham (NC), Salt Lake City, Birmingham (AL), Providence (RI), and Madison (WI).

For $8 per month - the price of a Hulu Plus subscription - users can tune into whichever over-the-air broadcast channels are available in their area. It's the same stuff you can get with a digital antenna affixed to your TV, but Aereo makes it available across devices and has built-in DVR recording functionality. 

Will people really want to drop $8 monthly to access broadcast TV more conveniently? Aereo is banking on it. Even combined with a Hulu Plus subscription, users would pay only $16 per month for access to a huge selection of content, some of which is live - including many live sporting events. That beats cable's hefty monthly bill, but it still won't get you Game of Thrones or the latest episode of Breaking Bad. 

If Aereo manages to survive its legal challenges (and the company just raised $38 million to fund its expansion and pay its legal bills), it's yet another step toward making the cord-cutting lifestyle a viable alternative. Of course the Cable/Satellite industry isn't sitting still: on Monday Time Warner Cable announced a limited deal to make some of TWC content available on Roku set-top boxes - although users will still have to have a cable subscription.

See Is Cable TV Tuning In Its Own Obsolescence?

In the week ending December 30, 55.74 million digital songs were purchased. The week following Christmas is typically a prosperous time for digital media and mobile platforms, as gadgets and gift cards are exchanged during the holidays. This year's spike was the biggest since the same week in 2008, when consumers bought 47.73 million songs.

These new numbers show that, when given a way to easily and conveniently do so, many, many people will pay for digital music. In this case, the growth appears to have been fueled by the exchange of holiday gift cards to services like iTunes and Amazon.

Digital Music Challenges Remain

Things started looking up in 2011. That's when IFPI reported that the industry saw its first year-over-year growth in music sales since it started tracking the business in 2004. That growth was only a measly 1.4%, but it sure beat the 13% decline seen in 2010. As 2012 unfolded, the outlook for digital music sales continued to brighten. 

But although the bleeding appears to have stopped, the music industry remains a long way from recapturing its former prosperity. From 1999 to 2009, music industry revenues imploded by 56%. Even with the more recent promising trends, nobody expects the music business to return to its heyday any time soon. 

Contrary to popular perception, though, compared to other traditional media industries disrupted by the Internet, music has fared relatively well in the digital age. According to the IFPI (which, somewhat ironically, stands for the International Federation of the Phonographic Industry) 32% of music industry revenue came from digital in 2011 (a number most expect to have increased in 2012). For newspapers, that number is closer to 5%. The digital transition for book publishers is similarly slow and precarious. 

Why Digital Music Is Growing

So why is music growing? Services like iTunes have been aggressive about expanding globally. The biggest digital music services more than doubled their global reach in 2011, with iTunes alone launching in 16 Latin American countries.

The proliferation of connected music devices have also helped drive music revenues. As consumers snatch up millions of smartphones and tablets, many are heading straight for the digital storefronts of Google, Apple and Amazon to load them up with their favorite songs. Meanwhile, streaming music services like Spotify, Rdio and Deezer (which is aiming for a U.S. launch in 2013) are also exploding, with mobile access being the key selling point for their premium subscriptions. While it's perfectly feasible to pirate the latest albums and load them onto your tablet or phone, it's finally becoming easier to just type in a credit card number. 

The global fight against piracy also appears to have had an effect. Draconian anti-piracy laws like SOPA and PIPA may have failed in the U.S. Congress, but other initiatives have succeeded in driving down piracy. For one, Google has grown more accommodating to copyright owners, nixing piracy-related terms from auto-suggested search terms and making DMCA takedown requests easier (some would say too easy). 

There's also early evidence that the availability of legitimate music services can help reduce the rate of piracy. Sweden saw a 25% drop in illegal filesharing after the public launch of Spotify, according to one study. There are now 500 legitimate music services available worldwide, according to the IFPI. As streaming services and MP3 marketplaces expand across the globe, it shouldn't be surprising that people feel less inclined to download music without paying for it.

A Smaller Industry, But A More Level Playing Field

The music industry may never return to what it looked like 15 years ago. But maybe that's okay. Today's playing field is far more level and the tools to create and distribute music are cheaper and easier to use than ever before. Artists still face major challenges, but the Internet has loosened the grip of the record labels and opened up new possibilities in terms of financing the creation of music projects - including crowdfunding and selling music directly to fans via platforms like Bandcamp or via digital distribution platforms like TuneCore and CDBaby.

Maybe the Internet isn't killing the music industry after all. Sure, the Net upended the old business model and irreversibly changed how music gets distributed to consumers. But clearly all is not lost. 

Lead image courtesy of Don O'Brien.

The service's recent terms-of-service update trouble me greatly, but it's not quite a deal-killer for me as an amateur photographer. Plus, I'm hopeful that, after today's massive backlash, the company will rethink the wording of its new policy. If not, Instagram is about to get noticeably crappier. 

Under the new policy, Instagram is free to license photos to third parties without paying the users who created them. The shift paves the way for Facebook to get a return on its huge investment by monetizing Instagram. That's something the company has every right to do, but how it's going about the process - and the degree to which it appears to infringe on users' intellectual property rights - has sparked an enormous backlash and a deluge of "I quit!" rage tweets (see ReadWrite's Jon Mitchell on Why I Quit Instagram And Am Moving To Flickr). Even Anderson Cooper is pissed. 

When Facebook bought Instagram last year, everybody worried that the giant social network would ruin the photo sharing service. I thought that was an overreaction. Maybe I was wrong. If Instagram doesn't reverse course, this move could water down the experience - and hurt Instagram's growth and engagement metrics. 

Are millions of people really going to quit Instagram? Probably not. The service's absurdly rapid growth might slow down a bit, but those trend lines will keep heading north.

Instagram Hinges On Quality, Believe It Or Not

In response to today's news, lots of people are making the same joke: Do they really think they're going to make money from filtered photos of my lunch? LOL. Sure, there's a lot of garbage on Instagram (just as there is on Twitter and Tumbler), but there are also a lot of really high-quality, beautifully composed photographs. As social networks go, Instagram's user experience is uniquely hinged on the quality of the content published on it. The company knows this. Just look at the company blog. 

But even if 98% of Instagram users stay put, those who stick around will probably see a drop in the quality images. That's because the people most likely to jump ship are the people producing the best content: serious photographers.  

And who can blame them? People who make a living taking photographs already face a daunting landscape in the age of Google Image Search and stock photography. Many photojournalists and other pros had trouble warming up to Instagram in the first place, assuaged only by its rapid rise and guarantee of a sizable audience. It's a great marketing tool for photographers, but ceases to be worth it once Instagram starts monetizing their work without compensating them. 

I use Instagram constantly. Its icon occupies one of four coveted slots on my iPhone's dock and I open it almost as much as I open Twitter, and certainly more than Facebook. I use it to take and share photos, but most of the time I spend with Instagram is spent looking at images. Of all the photos I see everyday, most of my favorite ones come from people whose job it is to see, frame and snap good photos. Yes, tools like Instagram democratize photography and amateurs can produce some amazing work. But the most jaw-dropping things I see on Instagram come from newspaper photographers, documentarians and other pros. 

Neal Santos is an unbelievably good photographer. The Philadelphia-based photojournalist recently landed on Instagram's suggested user list, leading to thousands of new followers. Today, he has more than 18,000 Instagram followers, which is a promotional goldmine for somebody who makes images for a living. But Santos is now considering deleting his account.

"It's crazy to me how their blog features stunning photographs from professionals and artists who take time and put out high quality content," says Santos. "Their featured users list always has incredible working photographers listed."

It's precisely those hard-working, high-quality content-producing users - such as Santos himself - that Instagram stands to lose as a result of this change.

If that happens, everyone on Instagram is going to see a lot less of the "beautiful, original content" that Instagram is supposedly all about. The amateur food porn, on the other hand, will keep coming. 

UPDATE: Instagram CEO Kevin Systrom responded to the outcry by attempting to clarify the company's intended approach to advertising ("We do not have plans" to use photos in advertisements) the selling of photos ("It is not our intention to sell your photos") and intellectual property ("Instagram does not claim any ownership rights over your photos.") Systrom says they plan on updating the language of their terms to better reflect this. It remains to be seen if Instagram's first Facebook-style policy change freakout will have any impact on their usage. 

The company also announced a significant update to its service, which will aid in music discovery and make it more social overall. Like Twitter, Tumblr and now SoundCloud, the new version of Spotify will let you follow friends, artists and other influencers whose music tastes you trust. This should be a lot more useful than just seeing what everybody you know is listening to in real-time, all balled up into one stream. 

Spotify is also adding a "Discover" tab, which sounds like it will borrow a page from some of the service's third party add-ons, displaying music recommendations based on listening history and social data. Digital music discovery is a notoriously tough nut to crack, so we'll have to wait and see how effective these recommendations are. Other promised features include mobile push notifications for new releases and - at long last - the option to add music to your collection without starring it or adding it to a playlist. 

The new features will roll out in a desktop app update within weeks, while cross-platform availability is due next year.

Metallica's Stamp Of Approval Is A PR Win For Spotify

The Metallica deal is a significant win for Spotify, not just because the popular heavy metal band has long been a stubborn hold-out from subscription streaming services, but because of the PR coup it represents for the company. Since launching in the U.S. last summer, Spotify and similar services have faced criticism from some artists who bemoan its low royalty payments and fear that making their music available there could further cannibalize album sales. 

In response, Spotify has argued that its payouts aren't as paltry as some of the early checks make them seem and that, at any rate, the service is still new and needs to build up its subscriber base to bring in more revenue. Today, the company announced that it has paid out $500 million to rights holders (mostly record labels). It now hase 20 million total users around the world, about 5 million of whom pay for the service. 

In some ways, Spotify isn't all that different from Napster, at least from the consumer's perspective. It's a place you can go, search for music you want to hear, click a button and get access to it. One difference is that on Spotify, you can't download the tracks and keep them. More importantly, the Swedish startup has crafted a business model that allows it to pay music labels and other rights holders, a detail Napster never bothered to worry about and which ultimately led to the service's demise. 

Crafting that model - and getting buy-in from artists and labels - hasn't been easy for Spotify. That's why it took the service so long to secure deals and finally launch in the U.S. Even now, as it grows in leaps and bounds, the company struggles with artists threatening to jump ship over the royalties issue. 

That's why the endorsement of Lars Ulrich is a huge deal. Here's one of the most prominent, most vocal critics of Napster and unauthorized file-sharing giving a very public nod to streaming services. Ulrich is essentially acknowledging that this might in fact be the future of the music industry, or at least a central part of it. 

There's no word on how much Spotify had to fork over to get the rights to stream Metallica's music (nor should listeners hold their breath for The Beatles or Led Zeppelin to show up soon). But whatever the price tag, it's a big deal for Spotify to simultaneously assuage artist concerns and nab a few more listeners in the process. 

Since the raid that saw Megaupload shut down and its founder arrested last last year, RadidShare and similar services have been taking measures to reduce piracy on their networks, in many cases limiting their functionality and potentially sacrificing the overall user experience. If it means avoiding the fate of Megaupload, even drastic changes are worth it to these companies.

On November 27, RapidShare will start putting a tight cap on outbound downloads for its free users. Paid members will still have 30 gigabytes in outbound downloads per day, but everybody else will be capped at one gigabyte. This will apply to public downloads, whereas direct Dropbox-style sharing between users won't be affected. The change is expected to further deter pirates from using RapidShare to distribute copyright material on a large scale.

An Ongoing, Newly Urgent Battle

The download caps are just the latest in a list of anti-piracy moves the company has made, as Chief Legal Officer Daniel Raimer outlined in a presentation at the Future of Music Summit in Washington, D.C. earlier this week. Those earlier efforts include a three-strike policy for repeat infringers and Web-crawling technology that helps RapidShare find links to illegal content so it can take corrective measures with those accounts. 

"That's really helpful to delete a lot of accounts in a short amount of time and to get rid of a lot of piracy that happens on a large scale," Raimer told ReadWrite in an interview after his talk. "It's kind of hard to identify guys who do piracy on a very low level, like some Norwegian kid who has a music blog with very low traffic. Sooner or later that guy is going to be detected."

Earlier this year, RapidShare published a document titled "Responsible Practices For Cloud Storage Services" (see below), which outlines an anti-piracy framework for cyberlockers like to use in dealing with DMCA (Digital Millennium Copyright Act) takedown requests to remove allegedly pirated content and policing activity on their services.

RapidShare Handicaps Itself To Save Its Own Life

In the case of RapidShare, the association with piracy is difficult to shake. For years, links to RapidShare pages containing movies and albums have littered the Web. According to Google Trends, the second most closely related search term to "RapidShare" is "Megaupload." Included on the list of top-ten related search terms are "rapidshare movies" and "rapidshare crack." It's this close association with piracy that RapidShare is hoping to change with its download caps, three-strike policy and Web-crawling technology. 

The company has already seen a substantial drop-off in traffic as a result of the company's existing anti-piracy measures, Raimer said. Their goal is to make using RapidShare as unpalatable as possible for copyright infringers, and the initial response to its anti-infringement measures suggest that the strategy is working. The pirates are not happy. 

RapidShare isn't the only company taking these kinds of precautions. In the aftermath of the Megaupload shutdown, FileSonic and FileServe stopped allowing users to download files uploaded by other users, and MediaFire went on a PR offensive in an attempt to draw a line between itself and Megaupload. 

This is an odd and risky position for a business to be in, deliberately handicapping its own product in a bid to shoo away some users while hoping to cling to enough members to avoid a detrimental drop in revenue.  

RapidShare is trying to strike a very delicate balance. How effectively it's able to do that depends, in part, on how much of the content on RapidShare infringes on copyrights, and how much does not. That's a difficult thing to measure, but no doubt the company's crawlers and other anti-piracy technology is starting to illuminate. Come November 27, the picture will start to get even clearer. 

SF #5383794 v2 Responsible Practices

The patent application, applied for on November 1, is titled “Content distribution regulation by viewing user.” The patent, assigned to Kathryn Stone Perez, Alex Aben-Athar Kipman and Andrew John Fuller, describes a “content presentation system and method allowing content providers to regulate the presentation of content on a per-user-view basis”.

Although the patent goes on at some length, the concept is fairly simple: the patent assumes a future in which a content provider (Microsoft or a third-party studio) licenses content like a movie or game to be played. The difference that the patent suggests is that the content would be licensed on a per-user-view basis, so that, for example, a maximum of four people could watch a movie.

The patent goes on to suggest that the computing device itself enforce limits on the number of people that could view the movie or game. If the number of viewers exceeds the limit, the viewers could be asked to re-license the movie - paying more for the privilege, one can assume - or risk it being blocked or shut down.

Or as the patent application suggests:

“Once the presentation begins at 326, the users in the field of view may change over the course of the presentation. Users may enter or leave the display area of a display device, for example. At 328, the display area for the display device is re-scanned. At 330, a determination is made as to whether the consuming user count has changed. Again, the content provider based on information provided to the content provider by the display device may perform step 330. In such embodiments, the content provider performs step 330. At 332, a comparison of the user count and any view or performance limitation against that allowed by the license is again made. If the license is exceeded, the process moves to step 338 to offer an opportunity to change the license terms. If the count has not changed, a determination is made at 334 whether performance of the content has been completed. “

The numbers refer to specific components of the patent itself.

Kinect Is Watching You

Although the computing device in question could be any number of things, including a camera-equipped mobile phone, one of the drawings attached to the patent includes a television screen with a pair of cameras mounted upon it. Although neither the patent nor the drawings name it specifically, the suggestion is that the Xbox Kinect sensor could be used to identify users and determine if their presence, including moving in an out of the room, would be enough to warrant a license warning.

“Individuals may be specifically identified and the amount of their consumption of the content tracked relative to their specific use,” the patent application reads.

Microsoft clearly recognizes that its Kinect peripheral offers it the chance to take living-room computing in new, revolutionary directions, from peripheral displays that can project “holodeck”-like scenery on the walls to mounting it on your computer monitor to enable Minority Report-style gestures. The patent also specifically mentions eyeglasses - most probably the Fortaleza augmented reality glasses that previously leaked documents detailed - that could be used to view real and virtual objects. Microsoft representatives did not return requests for comment.

Pay-Per-View Impact

Still, the use of Microsoft hardware to enforce copyrights could have more of a real-world impact on things like sporting events, all of which carry taglines similar to those used by Major league Baseball: “Any reproduction, retransmission or rebroadcast without the expressed, written consent of Major League Baseball is strictly prohibited.” 

For a baseball game, the rights to watch it are essentially free, paid for by a user’s cable or satellite license. (Baseball, like other sports, charges more for the rights to see out-of-town games or to watch games online.) But bars, restaurants and other businesses have to buy a special business TV subscription that allows them to broadcast sports to larger groups of people, such as this one from Cox. The price might not be that high - a Cox salesman told ReadWrite that an expanded HD package would run $80 per month - but the special events are where a business will pay more.

The price for watching a pay-per-view bout at home might be $50, while businesses typically pay $1,500 to $3,000 or more depending on the size of the venue, according to J&J Sports President Joseph Gagliardi, as quoted by Bloomberg. Some bar owners attempt to tap into the residential signal to broadcast the pay-per-view mixed-martial-arts matches, and should pay more to broadcast football games. 

But while Kinect-equipped bars might be relatively rare, on any given Sunday living rooms across the nation might be packed with family and friends. And if the NFL, MLB or NBA decided that too many people were watching the game, the video feed could suddenly be cut off. And that would truly be game over. 

Image source: Microsoft.