On @POTUS this Memorial Day

As this Memorial Day marks the end of the week in which President Obama christened the @POTUS handle on Twitter; and the pundits and the halfwits have all weighed in, with observations from the former and racist threats from the latter; I thought I would repost one of the more thoughtful excerpts from former President Dwight D. Eisenhower’s “Cross of Iron” speech from 1956.  Probably no president spoke with more authority on the holistic cost of modern war.  Regardless of your own views on Eisenhower or his warnings against the military-industrial complex, I would ask if anyone thinks these words might inspire any greater introspection doled out 140 characters at a time across the frenetic threads of social media.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron….Is there no other way the world may live?”   – Dwight D. Eisenhower –

There’s nothing particularly wrong with @POTUS on Twitter, and the platform itself is a fine vehicle for distributing links to material worthy of our time and contemplation.  But let’s not ask too much of the individual tweets by any president. At the end of the day, they’re just sound bites that don’t even leave room for grammar.

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Florida “Origin” Bill a bit of Sanity

Quick, name a place where you can be in business without providing basic information like your name and address.  Let’s see. Criminal organizations, corrupt nations, and the Internet.  In a refreshing nod at sanity, the Florida legislature has passed a bill called the “True Origins of Digital Goods Act,” which now awaits signature by Governor Scott.  Basically, if a site owner intends to sell, rent, or publicly provide music as a substantial portion of the content on his website, he’s going to have to provide … wait for it … contact information! I know. Draconian, right?

Well, Google (wait, I mean The Center for Democracy and Technology) has already responded to the proposed bill by saying it will threaten the value of anonymity on the Internet.  To this, any thinking person’s response ought to be, “Uh, whatever.”  Because of course in a free society it’s absolutely essential that a musician, a music blogger, or a music retailer maintain his anonymity.  Because, y’know those roving mobs of atonal neo-fascists, who might storm the gates or something.

I’m having a hard time tracking the Internet industry on this stuff.  They want transparency, they want anonymity.  They want to promote exposure, they want to promote hiding in the shadows.  One might almost get the idea they’re making this stuff up as they go along.

Read OpEd by musician Monte Rosa here.

Posted in Law & Policy | Tagged | 4 Comments

DCA Releases New Report on Ad-Supported Piracy

The Digital Citizens Alliance, has released its second annual report on the for-profit, ad-supported media piracy trade.  In collaboration with MediaLink, the report titled Good Money Still Going Bad studied 2014 data to reevaluate the central questions posed in the research done with 2013.  How profitable are these pirate sites, and where does the money come from? The macro view is much the same as the prior year.  Piracy is still big business, and brand advertising represents the lion’s share of the revenue.  Several sites that were operating in 2013 were gone, while new sites came online.

Overall, revenue ($209 million) for the sites studied appears to be relatively flat, but there are some new trends apparent in the 2014 data, notably a shift among users from illegal download portals to illegal streaming portals.  This is significant because video ads are more valuable than banner ads and can be embedded into streams so that viewers are forced to see them.  But let’s take a step back for a moment and understand what reports like this one from DCA and MediaLink tell us about the revenue streams for pirate sites, regardless of scale of the enterprise or delivery platform.  Because for all the ersatz intellectuals who tread the boards on TEDx to talk about “sharing” and piracy as some sort of socially or ideologically progressive revolution, it’s important to remember that this black market simply would not exist without the money that is available exclusively in a bottom-feeder’s strata of trade. Revenues for these sites are generated by essentially three drivers, in the following ascending order:  malware, affiliate marketing, and advertising.

Malware

Of the 589 sites studied for this report, at least one-third contain bogus links that offer to “update players” and other options designed to fool users simply into thinking they need to go through such steps in order to watch a program they’ve selected. The site owners are paid for every click, and the bogus players and plug-ins users think they’re downloading install malware that is typically used to facilitate identity theft and other data abuses tied to profitable criminal activity.  I discuss this in more detail in this post regarding another report released by DCA in collaboration with NetNames.

Affiliate Marketing

The estimated total revenue earned by the sites studied is $209 million.  Of that total, I am told by Mark Berns of MediaLink that roughly $60 million is generated via links to affiliate marketing. Affiliate Marketing is a generic term for advertising that links directly to services and products in which an actual transaction takes place between consumer and some third party with something to sell. Not everything sold via affiliate marketing is a scam, but it is a great platform for all manner of scams, from get-rich-quick promises to bogus “dating” services to nine zillion secrets to six-pack abs.  So, if a user ends up buying Guru Gus’s Great Guide to Getting Gorgeous Girls, Gus is happy to pay the pirate site owner who attracts that sucker with ads that provide click-through to his e-commerce site.  And of course on many pirate sites, some of the ads are even more unsavory with possible ties to sex tourism that may be directly linked to human trafficking.

Brand Advertising

Such unappealing associations, along with the exploitative nature of piracy itself, have led the major advertising community to begin looking for ways to extricate their brands from  the piracy business.  The $149 million in advertising revenue indicated by the report represents media budget dollars that we might say fall through the cracks of the online media buying system. As explained in other posts, the major brand advertisers do not intentionally seek to place their ads on these sites; the ads wind up there as remnants via secondary or tertiary media placement companies. And while no advertiser likes waste, the truth is that $149 million spread across the media budgets of even just a few hundred major brands does not represent massive waste in hard dollars relative to other forms of waste in traditional advertising.   But, as the report points out, “Legitimate brands take a double hit when their ads appear on content theft sites. Their reputations suffer by association with content theft itself and with the illicit services whose ads also appear on the sites. In addition, they are being defrauded. The money they spent to advertise on legitimate sites is instead fueling content theft, and the impression counts are being boosted by bots and other fraudulent means.”

GoodMoney_Infographic3a

Regardless of any attempt to measure exactly how many dollars are wasted, what both advertisers and advertising professionals have begun to take most seriously, is the damage done to brand value (which represents billions in investment) when their brands are associated with sites that are both criminal in function and sleazy in nature.  Tiffany doesn’t want to be associated with Guru Gus’s Guide just like Bank of America clearly doesn’t want to be associated with a site that feeds people malware that can result in identity theft.  And in an effort announced this past February, major advertising organizations launched a new program designed to create a kind of Good Housekeeping Seal of Approval (in this case Digital Advertising Assurance Providers or DAAPs) to give advertisers insight they can use to protect the integrity of their brands.

The 2014 data in this report reveals a slight drop ($18 million) in total revenue overall since the study of 2013 data, but that is not an indication that the profitability of piracy is trending downward. For one thing, the dynamic ecosystem in which sites continuously disappear and reappear means that the revenues will vary depending on when the data are collected. Moreover, the aforementioned rise in illegal streaming is the one category that appears to be growing. As stated in the report:  “Video Streaming Host Sites segment was the only one in which revenue grew from 2013 to 2014, fueled by higher video CPMs and a 40% increase in the number of sites. Average site revenue more than doubled for sites in the segment, and aggregate revenue was up 68.2% to $46.2 million.” Illegal streaming poses a significant threat to both the media producing and the advertising communities, particularly as it offers a much easier user experience than Bit-Torrent or cyberlocker portals. In all likelihood, this report reveals the start of growth in the illegal streaming market rather than a plateau.

Ultimately, reports like this are most meaningful to major advertisers whose coffers very clearly, however unintentionally, provide 75% of the revenue that supports these exploitative sites.  It’s time for that to change.  Having been around advertising people my whole life, I believe the brand managers and ad professionals are predisposed to want to make that change, and I hope good-faith efforts continue in that regard.  And just think, if the advertisers are able to starve content thieves of enough revenue, a really cool byproduct might be that we don’t have to listen to any more idiots on TEDx tell us how piracy is all about freedom.

Posted in Copyright, Piracy | Tagged , | 2 Comments

Is Transparency Even Possible Anymore?

The other day, a meme was haunting my Facebook feed with a photo of Senator Elizabeth Warren and a quote attributed to her saying that the TPP negotiations are too secretive, even beyond the scrutiny of Congress.  Now, I really like Senator Warren, and she’s one of the few pols who is likely to earn the benefit of my doubt.  And assuming the quote is accurately attributed, I’m open to the idea that this unprecedentedly large and complex trade agreement is being negotiated in an unprecedentedly secretive manner, though that may not be the case.  As stated in earlier posts on this subject, trade negotiations are historically pretty close-vested affairs out of necessity; it’s either that or no trade deals at all.  But setting that specific debate aside, whether it’s the TPP or any number of other initiatives meant to be conducted by elected and appointed representatives, I have to wonder about the prospect of an effective measure of transparency in the digital age.  After all, even today, it’s still newsmakers who shape public opinion. But who are the newsmakers?

Let’s imagine for the moment that the daily doings of the TPP were made publicly available in real time, at least in the U.S.  Based on comparable data measuring political involvement, let’s assume that 50% of Americans will not only not care, but would say, “The TP-what?” if asked for an opinion.  And let’s go crazy and say that a full 20% of Americans would get so involved that they watch the negotiations like sports fans, parsing all the language, arguing about it on social media, and making a real hobby out of Tradespotting.  Setting aside whatever we might assume about individuals who have this kind of time on their hands, the odds are quite high that these most ardent Tradespotters are also going to be the most entrenched in their views, predisposed to dislike global trade agreements, but all for different reasons.  Because the people who fit that description includes a pretty diverse range — from NGOs who seriously study global economics and real matters of social justice to anarchists who don’t know anything, but really like to show up at WTO summits and set stuff on fire.  In either case, this category of watchdogs is likely too small collectively to have much political influence and too fragmented as a segment to represent a collective in the first place.

So, that would leave 40% of us who care about a deal like the TPP but cannot possibly spend our days scrutinizing, let alone understanding, the fungible details of a multi-lateral trade agreement.  Still, we like transparency, we’ll call ourselves open to all sides, and we are a big enough, engaged enough population to have political influence on our representatives.  Historically, I think it’s a pretty fair portrayal of the engaged American citizen to describe him as someone who cannot engage first-hand with every issue but who looks to experts — journalists, trusted elected representatives, experienced analysts, etc.  And this is where I believe the proverbial wheels have come off in the digital age.  Because not only have many of the traditional information filters lost credibility (in some cases deservedly so) in our digitized times, but they are also often outnumbered and outspent by commercial entities that are in a position to buy public opinion on trade or any other issue in which they have a vested interest.

I’ve accused organizations like the EFF of scare-mongering on behalf of the Internet and electronics industries with regard to the intellectual property components of the TPP. Agree with that example or not, what I think is important is that The Koch Brothers, the pharmaceutical industry, the bankers, or any other powerful interest can all avail themselves of the same, low-cost, manipulative tools that can sway pubic opinion either for or against a particular initiative. And against is always easier.

On social media manipulation can look an awful lot like transparency when it is in fact corporate PR disguised as public advocacy. Because you’ll likely never see a meme or an article with the headline “Pfizer says XYZ trade deal will make the world a better place.”  Instead, you’ll see The Global Outreach Center for the Benefit of Mankind and Kittens says, “XYZ  trade deal will make the world a better place.”  And lo, it turns out The GOCBMK just happens to be funded by the pharmaceutical industry.  So, for us 40% of Americans who try to be engaged in the traditional manner of seeking wisdom from middle-man sources, and who now get most of our leads from social media, it is entirely possible that we are looking through much more opaque filters than we were 20 years ago.

Sticking with the example of trade agreements, these are initiatives that naturally affect hundreds or thousands of business interests.  So, if we were to make the language of ongoing negotiations publicly available, it’s the wealthiest corporate interests that have both the time and the resources to launch social media campaigns design to scare people about whatever it is they might want to kill in the deal.  That kind of PR is not new, but it is cheaper,  faster, and potentially more effective in a climate that has devalued and fragmented the authority of traditional, disinterested commentary. So, one unintended consequence of seeking greater transparency in our times is that the information, which sill won’t be accessed by most citizens, does provide free grist for the PR mill of any vested interest that wants to manipulate that information.

So where do we net out? With something like trade agreements, I’m betting we wind up more or less where we started.  We elect a president, and whoever he or she is appoints trade representatives to negotiate treaties that have to be ratified by Congress.   We hope these deals do more good than harm, knowing full well that any two Americans will likely disagree on the definitions of good and harm.  As it ever was, we remain as good or bad as the people we elect and appoint. Meanwhile, what seems different today is this notion that digitized transparency cuts out the middle-man, but I believe this is illusory.  More typically, I think social media platforms create a kind of power vacuum in which sober, expert voices are often drowned out by the circus of new middle men who know how to dazzle or frighten an audience.

This is a particularly acute matter to consider this week as we watch some of the major news organizations enter into the Instant Articles deal with Facebook. In this new arrangement, readers will no longer have to leave the walled garden of Facebook to read the full text of a piece produced by, for example, The New York Times.  That’s convenient for the reader, but as writer Chris Cillizza points out in this piece for The Washington Post, such arrangements radically alter the relationship between the content of journalism and the advertising that supports it.  The traditional disconnect between advertisers in a newspaper and any individual story in that paper is conducive to the overall integrity of the many stories being published.  But when individual stories are each valued by their popularity and advertised against by specific sponsors, this changes the relationship and brings sponsor and “news” closer than ever.  “And what does that reality mean if the long-term business model of Instant Articles for media companies is centered primarily around sponsored content?” asks Cillizza.  Good question.  To me, the answer doesn’t sound like it leads to greater transparency about anything.

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Read Jonathan Taplin: “Sleeping Through a Revolution”

I know I’m a little late to the party in featuring this article by Jonathan Taplin, but anyone who has not yet read “Sleeping Through a Revolution” should find time to do so. Taplin is a former motion picture and music producer and has for the last 12 years been Director of the USC Annenberg Innovation Lab. This article is certainly among the best summaries of the challenges posed by the digital age — creative, economic, ideological, social, and existential.  As others have done, Taplin emphasizes the point that the creative class is merely the proverbial canary in the coal mine, already passing out in an increasingly poisonous economic climate. Citing some chilling data, like the fact that wealth consolidation among the 1% is now more acute than it was immediately before the Great Depression, Taplin very efficiently paints us a comprehensive mural depicting the state of affairs. Unfortunately, it’s kind of like “Guenerica” if all the figures were holding smart phones. Writes Taplin:

“… within 20 years, starting with Peter Thiel’s cohort at Stanford University, the organizing philosophy of Silicon Valley was far more based on the radical libertarian ideology of Ayn Rand than the commune based notions of Ken Kesey and Stewart Brand. Thiel, the founder of PayPal, early investor in Facebook and Godfather of the PayPal Mafia that currently rules Silicon Valley has been clear about his philosophy.

He stated, “I no longer believe that freedom and democracy are compatible”, his reasoning being that “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.”

One theme I’d like to highlight from Taplin’s article is the way he introduces the piece, citing a period in the late sixties when he says the most “critically acclaimed movies and music were also the best selling.”  This has been a big theme of mine since starting to write about these issues.  Because my own opinion is that Hollywood’s real golden era occurred between the late sixties and roughly the catalyst we call Star Wars. This was a transformative time when the movies that had the big runs, made the most money, and earned all the award nominations were the kind of films that today we would describe as “indie.” Obvious examples would be Woody Allen’s Annie Hall or Martin Scorcese’s Taxi Driver.  It was a time when mainstream, American film dealt with sophisticated material in a way that created great works of art that also dominated at the box office.

Hollywood studios and audiences moved steadily away from that kind of mainstream fare, which is not to say that everything big studios produce today is “bad,” but it’s certainly different.  The many reasons for the shift in material, at least initially, have little to do with the post-Napster market forces that have since exacerbated the problem by devaluing works across the board.  But I think the point Taplin is making is not to decry the fact that today’s Annie Halls aren’t box-office leaders, but that they face limited opportunities to survive at all.  And we can easily imagine that destructive model replicating across multiple sectors, as what used to be the middle of the economy is subsumed into the struggling 99%.  In keeping with Taplin’s sleeping metaphor, I find it interesting that the “revolution,” which gave us the shorthand 99% and 1%, was typical of our times — just a little trend that made money for social media companies but that anyone in power could safely ignore.

Read “Sleeping Through a Revolution” by Jonathan Taplin on Medium.

Posted in Digital Culture, Economics | Tagged , | 2 Comments