Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

Reports of DMCA Abuse Likely Exaggerated

In the last week of March, you might have seen a headline or two announcing that 30% of DMCA takedown requests are questionable.  And since we don’t always read beyond headlines these days, these declarations happened to be conveniently-timed for the internet industry as the April 1 deadline approached for submitting public comments to the Copyright Office regarding potential revision to Section 512 of the DMCA.  This section of the law contains the provisions for rights holders to request takedowns of infringing uses of their works online; the provisions for restoring material due to error on the notice sender’s part; and the conditions by which online service providers (OSPs) may be shielded from liability for infringements committed by their users.

The eye-catching 30% number came from a new study entitled Notice and Takedown in Everyday Practice conducted by researchers at Berkeley and Columbia; and the handful of articles I saw provided little insight into the contents of the 160-page report, which I finally had a chance to review.  The authors, Jennifer M. Urban, Joe Karaganis, and Brianna L. Schofield, cite both qualitative and quantitative data from respondent rights holders and service providers; and the big story that their report produced—the one that will stick in people’s minds—is that rights holders and OSPs have increasingly adopted automated systems (bots) to process and analyze DMCA notices, which naturally leads to a higher error rate.  Thus the narrative that will be repeated is one in which major rights holders are using tools that cannot help but chill expression through error, especially when bots can’t do things like account for fair use.  But this isn’t exactly what the report tells us, and the authors themselves acknowledge that rights holders have only increased their use of automated notice sending in response to unabated growth in large-scale online infringement.

Having reviewed the report, my big-picture observations are as follows: a) it does not justify headlines suggesting that 30% of all DMCA takedown requests are “questionable”; and b) the report especially does not support the larger bias that the types of errors it identifies are tantamount to chilling expression online.  It also should be noted that the authors do acknowledge that the majority of DMCA notices, the supposed 70% which are not flawed, are predominantly filed on behalf of major entertainment industry corporations targeting the “most obvious infringing sites.”  This does not mean errors don’t exist among these notices, but people should not read the 30% number and jump to the typical conclusion that it’s all that damn MPAA’s fault. (In fact, the MPAA provided no data for this study.)  Instead, the report seems broadly to identify some predictable inconsistencies among third-party rights enforcement organizations (REOs), which file automated notices on behalf of rights holders of varying sizes.  While it is of course desirable for all parties that REOs achieve the greatest possible accuracy and maintain best practices, including human oversight, let’s look at some of the “questionable” notices identified by the quantitative section of the report.

The study surveyed just over 108 million takedown requests filed with the Lumen (formerly Chilling Effects) database, and the authors state that 99.8% of these notices were sent to Google Search, which automatically implies a data set different from the takedown scenario most critics tend to cite (e.g. a user-generated work appearing on a platform like YouTube). The quantitative section states that 15.4% of the request notices err because the Alleged Infringing Material (AIM), does not match the Alleged Infringed Work (AIW). In some cases, keyword searches matched material that shared like terms with the wrong works (e.g. House of Usher confused with the artist Usher), while a few other examples of mismatch are a little harder to fathom.

Regardless, while this type of flawed notice may represent inefficiency and waste for the rights holders, it does not get anywhere near the concerns users might have about stifling expression online.  This is because even the errors are exclusively targeting obvious infringement by criminal websites, and the report seems to bear this out.  Even if a percentage of notices contain these types of errors but are sent to links targeting sites that host 99% infringing material, each notice is still targeting an infringing link.  If an REO sends a takedown for Infringing File A when it ought to have sent one for Infringing File B, this may be an indication that the REO needs to improve its game, but it is not a mistake that affects anyone’s expression in any context whatsoever. It’s also not the kind of mistake that tells us much about DMCA beyond the fact that rights holders have to send out far too many notices against a constant blitz of infringements.  The outnumbered zombie-fighter may be less accurate with a shotgun, but if everything he hits is a zombie, no harm no foul.

So, assuming I’m reading the data correctly, that’s more than half the 30% of “questionable” notices accounted for, since the 30% is actually rounded up from 28.4%.  So, are mistakes being made? Of course. Are all, or even most, of these mistakes affecting anyone other than rather large rights holders and really large OSPs? It doesn’t look like it.  And let me pause in this regard to remind readers that when Congress passed the DMCA in 1998, it was their expectation that OSPs would cooperate with the major rights holders to develop Standard Technical Measures to address online infringement while protecting these platforms from liability.  The OSPs continue to enjoy that protection while rights holders are still waiting for the cooperation on the infringement thing.

As mentioned, one of the tempting bullet points to be highlighted by a few reporters after the Berkeley/Columbia study went public is that, of course, bots cannot adequately analyze fair use.  This is generally true and could theoretically pose a threat to expression online, but it’s hard to tell what we actually learn on this matter from the study.  The authors state that 7.3% of the notices reviewed were flagged as “questionable” due to “characteristics that weigh favorably toward fair use.”  This does not mean, however, that nearly 8 million notices were analyzed as possible fair uses. That would be impossible–and really boring–and the report clearly states that this was not done.  To arrive at a manageable data set the report states the following:

“Sampling from and coding a pool of 108 million takedown requests required building a custom database and “coding engine” that allowed us to enter and query inputs about any one takedown request. These tools allowed in-depth investigation of the notices and their component parts by combining available structured data from the form-based submissions with manual coding of characteristics of the sender, target, and claim. We also designed a customized randomization function that supports both sampling across the entire dataset and building randomized “tranches” of more targeted subsets while maintaining overall randomness.” 

The percentage of “questionable” notices is based on a random sampling of 1826 notices that were manually reviewed, and I leave it to experts in copyright law and/or statistical analysis to comment on the methodology. *[see note below]* With regard to fair use, the report states, “Flagged requests predominantly targeted such potential fair uses as mashups, remixes, or covers, and/or a link to a search results page that included mashups, remixes, and/or covers.” It also flagged ringtones and cases in which the “AIM used only a small portion of the AIW” or uses in which the AIM appeared to be made for “educational purposes.”’

Because no single factor is dispositive in a fair use analysis—and none of the criteria identified by the report is automatically a fair use—what the study presents is nearly 8 million notices that could be candidates for a proper fair use analysis but which might not provide so much as a single fair use defense that would hold up in court. If that seems unlikely, keep in mind that 8 million is a tiny number when we’re talking about the internet. It’s important to maintain perspective when these kinds of reports generate buzz that we’re seeing a trend toward “censorship” in a universe that comprises trillions of daily expressions, including millions of infringements that for various reasons do not even trigger a DMCA takedown request.  Are there fair uses taken down?  It would be absurd to expect otherwise.  But neither this report, nor any other prior study or testimony of which I am aware demonstrates that this problem is widespread.  And as I pointed out in detail in this post, the user of a work online has the final say (absent litigation) by means of the counter notice procedure in the DMCA.

The Berkeley/Columbia report notes a relatively low rate of counter notice filings, suggesting that users either don’t know they have a right to make fair uses of works or are afraid to assert that right via counter notice because the rights holder might be a big media company with big attorneys wielding big statutory penalties.  This assessment comes entirely from the qualitative section of the report, which comprises interviews with (mostly anonymized) respondent OSPs and rights holders.  The report does not include interviews with users and it does not appear to consider the possibility that the low rate of counter notices might correspond with the high rate of indefensible infringements.

The authors state, “In one OSP’s view, the prospect of sending users up against media company attorneys backed by statutory copyright penalties ‘eviscerated the whole idea of counter notice.’”  But including this statement from an unnamed OSP representative contradicts other anecdotal evidence published in the report, like this observation by the authors: “Several respondents said that the most consistent predictor of a low-quality notice was whether it came from a first-time, one-off, or low-volume sender.” In other words, the most likely senders of “questionable” notices seem to be parties other than the big media companies with their scary attorneys, including entities that have no business using DMCA at all because copyright infringement is not the issue.

Based on conversations I have had with pro-copyright experts, the report is fair in suggesting that the language in the DMCA, which contains words like “under penalty of perjury,” can frighten people away from using counter notices, particularly if a takedown request comes from even a mid-size business and the recipient is an individual. In these cases, it is reasonable to imagine the target of a notice might be apprehensive about asserting his/her right to use a counter notice without consulting legal counsel.  This is a valid point for consideration, and surely, well-intended individuals making creative or expressive uses of works should not be frightened into silence by virtue of their financial status.  But it is important to maintain perspective with regard to which segment of the market we’re looking at and what type of players are involved in a potential conflict.  In many cases cited by critics of DMCA takedown procedures, the purposely abusive notices tend to be anomalies, they often occur in foreign markets with weaker civil liberties than ours, or they are often remedied without litigation.

Meanwhile, individual rights holders of limited financial means face their own apprehensions and challenges in asserting their right to protect their works. As rights holders of all sizes have demonstrated repeatedly—and this report even addresses the problem—the ability for multiple, random users to file counter notices and restore clearly infringing material—and for OSPs to monetize those uses with impunity—puts rights holders at a tremendous disadvantage. It should also be recognized that none of these uses (e.g. a whole TV show or unlicensed song uploaded to YouTube) could rationally be defined as UGC (User Generated Content) when the uploaders have not generated anything at all. Hence, even the original intent of DMCA is not being fulfilled when the safe harbor shield continues to sustain these types of infringements.

It would take many more pages to fully delve into the details of the Berkeley/Columbia report, and the authors do fairly cite several challenges faced by rights holders in applying DMCA. Although the study is partly funded by Google, that alone does not disqualify its contents for me.  I cite reports funded by MPAA and other rights holding entities and think a study should stand or fall on its own merits. This one reveals some valuable insight; but it does not seem to adequately support those big headlines about DMCA abuse, which will surely be repeated in comment threads, blogs, and future articles.

*NOTE:  This has been altered from original publication based on comments (see below) from one of the report’s authors, Jennifer Urban. Originally, I stated that the team had used an algorithm to identify notices that may implicate fair use, and this was an error on my part.

Box Office Revenues Say Little About Piracy

Once again the MPAA has announced a profitable year for American motion pictures, and once again some of the usual suspects have seized upon this announcement to declare the studios hypocrites for ever saying that piracy causes real harm to the industry. Certainly, it’s easy enough to keep writing this same, careless article all the time. Cory Doctorow cobbled together a 100-word jab for BoingBoing; TorrentFreak reported essentially the same premise with a little less snark; and Ruth Reader managed to tap out this little sneer on Mic.com, complete with obligatory reference to SOPA, under the unforgiveably misleading headline The Movie Industry Just Admitted Piracy Isn’t Curbing Its Massive Profits.  

I know this may be hard to imagine, but the question of piracy’s harm to the filmed-entertainment industry overall is considerably more complex than a measurement of how the top-grossing motion pictures are doing at the box office.  But before expanding on this subject (again), let me repeat the following theme as a matter of principle:  Whether piracy siphons $100 or $100 million out of the legitimate market, it’s money that belongs to the people who do the work. Sadly, this is not a sufficient rationale for many, so we have this silly conversation instead, speculating about how innocuous piracy is or isn’t.

The annual report released by the Motion Picture Association reveals worldwide box-office sales of $38.3 billion, up 5% from 2014.  And that’s good news.  But the only thing we can actually  conclude from the information in this report is that audiences around the world—and especially in Asia-Pacific—are going to theaters in numbers large enough to make the big movies profitable regardless of piracy. This isn’t all that revelatory, of course—unless you actually thought nobody would go to the theater to see the new Star Wars—but to the the above-named pundits and their ilk, these revenues appear to make the studios out to be Chicken Littles.  How can they be so aggressive about piracy when they’re clearly doing just fine?  But if anyone took the time to look at the report and to learn something about the whole industry, they could not justifiably jump to the conclusion that piracy is fundamentally harmless.

Ruth Reader notes that MPAA CEO Chris Dodd, in an address to CinemaCon this week, stated that the industry projects a $1.5bn estimated annual loss at the box office due to piracy.  This number may seem negligible next to $38 billion, but it’s worth noting that this estimate applies only to US box office, which makes the number considerably more significant relative to the $11.1 billion in sales for the US and Canada.

But assuming the $1.5 billion is accurate and still seems trifling to some readers, let’s look at it from a slightly different perspective that considers all of the 708 films included in the report.  Of these, 561 films were non-MPAA member, independent features.  And let’s imagine that 10% of that $1.5 billion could have been divided among the best 100 of those indies. That would be $1.5 million per movie, which any independent filmmaker will tell you can be life-and-death money.  In fact, Adam Leipzig of CreativeFuture used exactly that expression in this article when he noted the conservatively estimated $1.83 million the film Boyhood lost to piracy last year.  Of course, we cannot definitively say where money not spent might have gone, but by the same logic, it doesn’t make sense to blithely assume that because Jurassic World and Inside Out did great, piracy isn’t an issue across the broader market.

The fact is we can’t know exactly how much is lost due to piracy, but we can conservatively project that a relevant portion of the illegal market would be recaptured if piracy did not exist. Out of a universe of hundreds of millions of pirate site visits every month, if just 20 million consumers worldwide were to switch from illegal home-viewing channels to legal ones and spend just $13/month on filmed entertainment, that would add up to about $8 billion per year. And to put that in perspective, the top 25 grossing films of 2015 earned about $6 billion at the box office.  Or spread $8 billion across 500 idependent titles, and it would be $16m in sales per title.  I’m not suggesting revenue spreads evenly like that; of course it does not. But that’s the point. The top-grossing products may consistently earn enough to overwhelm the effects of piracy, but the smaller products—indie features, TV programs, documentaries—which operate on smaller margins are naturally going to be affected more acutely by any loss.  In fact, producer Martha De Laurentiis recently made a pretty good case for saying that piracy may have played a role in cancelling the popular series Hannibal.

Still, I realize that the pundits’ main premise, however unexamined it may be, is that the studios are the big whiners who want to fight piracy, and the studios are the ones who seem to be doing well.  But even if that logic were sound, readers should not be fooled into thinking it’s exclusively the studio execs who have a problem with piracy.  They’re just the ones who make the headlines, the ones who have the resources to try to address piracy, and the ones who are the most frequently vilified in this context. The indie filmmaker who loses money to piracy feels quite strongly about the issue, too; she just doesn’t have the muscle to do much about it.  As such, the indie filmmaker’s best hope for mitigating large-scale piracy is the costly effort being made by the studios. This is one of many reasons why “fans” cannot presume to separate the individual filmmakers from the major companies; they are co-dependent in a variety of ways.

Finally, while the temptation to bash the studios on the piracy issue will remain SOP for the lazy reporter, at least the peanut gallery might consider its own hypocrisy when criticizing these companies for producing exactly the films that consistently top the Most Pirated lists year after year.  Of the few words Cory Doctorow could be bothered to share with us on this subject, he spent some of these accusing the studios of clinging to “high-risk tentpole economics”.  In other words, the studios’ making money with tentpole films is grounds for calling them hypocrites about piracy, but then the studios should also be lambasted for making tentpole films, which is partly a response to piracy.  I know I’ve raised this issue before, but a threat of any loss in value to any commodity will drive investors to safety.  So, if you promote piracy and at the same time blame investors for producing the kind of big-spectacle fare that can earn revenue in spite of piracy, you kinda sound like you don’t know what you’re talking about.

Paywalls, vinyl, and other dead issues.

It’s been a longstanding bias of mine that the generation we call digital natives—the kids who’ve grown up practically hard-wired to the network—will steadily gravitate toward classic, analog, and tangible media and experiences, not merely as a fadish expression of hipsterism, but as a natural result of maturing tastes and dwindling leisure time.  One of the first posts I wrote for this blog, What I’d tell my own kids about piracy. Why scarcity is a good thing. made a case for the value of limiting one’s choices rather than indulging in a kind of media gluttony implicit in the presumed need to seek out illegal channels as though the legal ones had nothing to offer.  People shared that post a fair bit, homing in on the assertion that whatever is worth your time is also worth your money.

We are, of course, seeing some trends toward “old” experiences, like a renewed interest in vinyl records, which will not likely replace streaming and digital downloads but may indicate that fans are discovering (or rediscovering) that there can be more to enjoying recorded music than just hearing it.  Even the process of browsing in a store for LPs is one that I always considered a satisfying sensory experience prior to the invention of the CD. Like turning pages in a large picture book, with each album displaying about 160 square inches of cover art in contrast to the squinty 25 afforded by a CD jewel case.  I always liked that flipping through albums was a mostly silent activity other than faint woofs of air as one leaned each record forward. By contrast, the grating clack-clack of sorting through small plastic cases always sounded and felt to me more like work.

Once home with a new vinyl album one must perform a few steps in collaboration with a mechanical object, some motion which beg a gentle touch that imbues the preparation with an almost ritualistic quality, complimenting the sense of time set aside to listen actively to new music.  For all the convenience of digital access, it doesn’t always satisfy the human need to experience life beyond the perfunctory.  Fast food is convenient and cheap, too; but there’s a reason it doesn’t replace fine dining just as there is a reason a fine meal assumes a certain presentation and atmosphere to complement the meal.  And for experiences—yes, even content—that are truly desirable, people are willing to pay when that is the only way to have them.

Certainly, The New Yorker magazine is fine-dining as publications go, and it turns out that its readers are very much willing to pay for it—even online.  According to Jeffrey A. Trachtenberg at the Wall Street Journal, when The New Yorker began experimenting with a paywall that would go up once a visitor had accessed a limit of six free stories in a single month, readership increased rather than declined.  “Instead of deterring readers, the number of unique visitors rose to 9.7 million in October 2015 from 5.5 million a year earlier, the month before the paywall was implemented, …” reports Trachtenberg.

I can’t say I’m surprised that, despite the conventional free-culture “wisdom” that’s been shouted at the market for nearly two decades, we find evidence that consumers are not only capable of recognizing the qualities they want in “content” but are even willing to pay for it.  Granted, the readership of The New Yorker is a devout audience that has been cultivated for more than a century, and it is currently the only property in the Condé Nast portfolio to so far experiment with a paywall. But for the same reasons a new vinyl store opened in my local mall while other retail is shuttering, the market may yet prove that there is no one new, digital model that entirely disrupts and replaces all that has come before.  Just maybe the producers and consumers of high-value journalism, music, film, TV, etc. will be best served by various combinations of new and old that are a little more complex than just putting stuff out there, signing up for an digital ad service account, and selling merch on the side.

In contrast to The New Yorker, the equally venerable publication The Atlantic was the first to “go digital”, according to this 2011 article by Lauren Indvik for Mashable.  In January of  2008, The Atlantic dropped its paywall and developed a holistic, digital strategy for both publication and advertising.  As Indvik describes, the The Atlantic’s history as a platform for editorial made it a natural for the web, but the road to profitability involved a comprehensive and creative strategy to develop advertising “experiences” for premium brands across print, digital, events, and mobile.  “Digital has proved tough terrain for many traditional advertisers, who have been forced to compete against highly targeted search and display networks, such as Google’s,” writes Indvik.

Of course, the success of both The New Yorker and The Atlantic are entirely dependent upon the quality of the work on the page, even if the two entities commoditize distribution through different models.  And the only way to maintain that quality is either a sustainable high-value ad strategy or direct sales to consumers, or some combination of the two.  This was true before the free-culture rhetoric disrupted common sense, and it’s still true.

As New Yorker editor David Remnick says in the WSJ article, “Information doesn’t want to be free, it wants to get around freely.”  Or, as may be inferred from the renewed interest in the vinyl experience, maybe the creative and informative experiences consumers value cannot be described so homogeneously as “information” the way many tech-utopians chose to interpret part of Stewart Brand’s famous quote in order to justify devaluation of the work itself. Maybe consumers don’t demand that everything be free, just that it be good.

In a related story (as reported in The New Yorker of course), Kodak drew considerable crowds at this year’s Consumer Electronics Show in Las Vegas with the introduction of a contemporary version of the Super 8 camera.  Amid a bevy of entrepreneurs offering “smart” devices that consumers may prefer to leave “dumb”, Kodak’s debut of a new way to make old home movies on celluloid is an unexpected move that may actually work. Read the full story here.