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.

Google Can Bite Me

If we’re not supposed to shoot the messenger for bad news, neither are we supposed to give him credit for the message when it’s good news.  As the two-year anniversary of the defeat of SOPA approaches, the folks at Google not only want you to remember the date, but they want to double-down on their arrogance and take more than a little credit for preserving creativity itself.  This is certainly consistent with the recent Google/New Year’s TV spot — and admittedly it’s the one I’d produce — that depicts scene after scene of people all over the world doing extraordinary things, mostly captured in videos we can watch on YouTube. And it’s good marketing to align one’s brand with great acts of charity, kindness, and ingenuity, but it’s also just a little bit bullshit, no?  I mean if Google consistently states that its platforms are just a neutral highway, and we can’t blame that highway for any of the trash, theft, or promotion of criminal activity we find on it, then certainly the same neutral highway doesn’t get credit for creating or accomplishing the good stuff, right?  Surely that’s fair. Not if you want to be the landlord of the digital future and also have the serfs thank you for the privilege of their humble residence, it seems.

Never wanting to lose an opportunity to be bizarrely two-faced, Google is sending around a little graphic today to all you GMail users implying that stopping SOPA in January of 2012 actually enabled creativity to continue to thrive on the Web. Never mind that nothing in SOPA could have stopped you or me or any other would-be creator from uploading our works, ideas, or captured events to the Web; that’s just pesky reality.  But Google isn’t satisfied just to effect public policy in its own interests, it also wants to behave like the abusive and negligent father, who creepily shows up with a smile and a hug when his kid wins an award or becomes famous.  After all, this week isn’t just the anniversary of SOPA Blackout Day, it’s also the week Google received its 100 millionth takedown notice from recording artists who would rather not have their works exploited without permission or compensation.  So, the whole, “we protected creativity together” message just kinda makes the skin crawl.  Y’know?

Believe what you want about SOPA Blackout Day.  Propose it as a national holiday, and watch what happens when the majority of American adults ask, “What’s SOPA?” But while Google wants us to mark the day with reverence and forget what a boon it was to their $300+ billion market cap, we should remember also that these web companies don’t create artists, human rights activists, social reformers, great athletes, virtuoso performers, or just cool kids who do things that rekindle our faith in human capacity.  At best, these companies build tools that enable us to more easily see and share all this activity with one another, and it’s no trivial thing; but it’s important to maintain perspective as to whether we need these companies or they need us.

ADDENDUM:  On a related theme, Justin Moyer asks interesting questions about those Google Doodles.  See story in Washington Post.

Copyright Freak!

There’s a difference between debate and marketing.

Yesterday, the Electronic Frontier Foundation unveiled an online PR blitz called Copyright Week. The campaign’s launchpad is a webpage that asks visitors to consider and support “six principles,” one per day, over six days which happen to lead up to Silicon Valley’s very own independence day, January 18th, 2012, a.k.a. “SOPA Blackout Day.”  The roll-out of this campaign also coincides with today’s new round of hearings in the House Judiciary Committee in the ongoing process to review and potentially revise copyright in the United States.  Specifically, today’s hearing was focused on the scope of copyright, and while the EFF is determined that this debate should happen in the emotional realm of PR and marketing, even a brief viewing of the testimony on Capitol Hill should demonstrate that copyright reform is considerably more complex than the blunt, faux populist scaremongering we see in the EFF campaign.

For example, Carl Malamud, founder of Public.Resource.Org offered testimony that, on the surface sounds like something we can all support. The text of written law must be accessible in a free and open society and, therefore, sites like his, which provide easy access to this information should not ever run afoul of copyright protections.  Makes sense to me.  The law shouldn’t be copyrighted; it belongs to all of us.  But in questioning Malamud, Representative Collins of Georgia asserted that the law is publicly available, but that certain annotations, for instance, remain intellectual property. Eyes rolling the back of your head yet?  I can’t blame you because unless you’re an IP attorney or just like to follow copyright issues like some people follow sports stats, you’re probably going to tune out about here and find any number of more fun diversions.  And that’s cool, but this is what the real debate will probably look like; it’s complex and nuanced and in some cases, kinda dull.

By contrast, the EFF would prefer to manipulate you with a portrayal of an epic battle for the soul of the American dream itself. They would have you believe that copyright is, in our time, a golem destined to destroy the future of all technological advancement and the sacred right to self expression.  Never mind the fact that most copyright holders are the manifestation of self-expression, the Copyright Week campaign would rather distract you with a barrage of references to the international trade negotiation known as the TPP and scary words like secret.  And maybe there are hazards in the TPP of which we should be aware, but I’ll bet it isn’t the copyright provisions. And I say this because the EFF will overreach when its spokespeople say things like “copyright has no business in a trade agreement.”  Why?  If one of our most valuable products is intellectual property, why doesn’t the subject even belong at the negotiating table? Surely, when copyright industries can boast a trillion dollars in GDP, the issue must have a few more shades of gray than that.

The Electronic Frontier Foundation boasts the motto “Protecting your rights in the digital age,” but you might notice that this does not necessarily include protecting your rights from the digital age.  When Google or Facebook revise their Terms of Use policies to encroach ever further on your privacy or claim the right to use your kid’s birthday pictures in a paid ad, the EFF is silent. They are silent on the subject of cyber-mobs, which are an acute and clear infringement on their victims’ right to free expression and have even resulted in physical attacks.  They are silent on Google’s monetizing just about any form of human depravity from sex-slave trafficking to illegal narcotics to abusive and deadly depictions of atrocities on YouTube.  And for all its efforts to leverage our distrust of the American government to mask the agenda of Silicon Valley, the EFF is silent about the deepening influence of these government contractors who are the tech companies they serve.

So, by all means, if you care about the future of copyright from any perspective, I encourage you to follow the nuts and bolts of review in the coming year (if you can possibly stay awake through it all).  But failing that, at least don’t freak out because an organization like the EFF says  you should.  After all, it isn’t the Hollywood studios who can scan your emails, manipulate the flow of information on the Web, or might one day help develop an autonomous weapon. Pour a glass of wine, take a breath, and ask yourself a very simple question:  If you had to guess who has the greatest capacity to adversely affect your civil rights today, would it be the copyright holders or the data collectors? Cheers.

Pandora’s Westergren Offers Odd Valuation of Music

Last week, Pandora CEO Tim Westergren, appearing on a forum called PandoMonthly, said a strange thing while defending against criticisms streaming services received in 2013 from name-brand artists.  He said the following:  “The industry has for a long time been propped up by a product where you’re paying $20 for something you really wanted to pay $1 for.  Maybe you could argue that the bad guy was the one who made it possible?  That’s a little bit of an unfair label I think.”

It’s one of those statements that, on the surface, sounds reasonable but not so much after a moment’s thought. What I hear him saying is that at some point in the pre-internet past, let’s pick circa 1988, we consumers felt ripped off by music prices and we can now thank technologists like him for driving the market to reflect prices more demonstrative of honest value. It should be stated that it is very difficult to assess consumer appreciation for products whose value is unavoidably skewed by the gravitational pull of a black market (a.k.a. piracy), but let’s assume Westergren is comparing apples to apples (i.e. paying customers to other paying customers) and not referring to those who value music at zero dollars.

I will also assume that the 20:1 ratio to which Westergren refers is not a mathematical error — we rarely paid $20 for a whole album and never paid that much for a single track — but that he’s echoing a 1990s-era complaint that fans felt “forced” to buy a whole album of songs they didn’t like in order to get one or two tracks they wanted.  To the extent that this complaint is valid, it is one about the music itself and not the consumer’s instinctual sense of the correct price point for a song. Although iTunes has more or less established the face-value for a track at between $1 and $1.29, how much has the consumer’s perceived value of the music he buys really changed since pre-internet days?

In real-dollar terms, factoring only for inflation, a single that would have cost $1.50 in 1988 should cost about $3 today.  While we can certainly give some credit to the low cost of digital distribution for pricing the average single at 1/3 of what inflation says it should be, there are other factors in the market that affect what people are willing to pay for discretionary items.  Globalization, for better or worse, is why we pay less for a toaster at WalMart than we probably should; and raw marketing is why we pay more for a latte at Starbucks than we probably should. But what makes a latte that lasts fifteen minutes worth more than twice the price of a song the consumer gets to theoretically keep forever?  If anyone knows the answer to that, there’s an economics prize in his/her future, but suffice to say that the consumer’s sense of value can be tough to assess, with or without certain technology’s influence.

I believe it’s also relevant to look at wages and the perceived value of income in a pre and post internet market.  If ten bucks was easier to come by in 1988 than it is today, which is the case for many 20-somethings, and the cost of living is higher, then the price for a discretionary purchase like music is logically a more significant psychological barrier than it was 20 years ago. And again, technology has almost nothing to do with it.  Digital downloads and streaming music services afford us the opportunity to preview new work before buying it, an opportunity to buy on a whim, or the option of buying one song in lieu of a whole album; but this legal, digital distribution alone cannot claim to have dramatically affected the value we paying customers place on the music we want.  Moreover, if in fact, money is more dear to certain consumers, one could argue that the social value of music for the paying customer is greater than it was in more flush times; and the fact that the paying customer opts not pirate when he could get away with it also suggests that his purchase reflects a very strong personal value being placed on the music.

Whatever role legal, digital distribution has played in the prices we now pay for music, it’s a strange, time-traveling leap for Westergren to insist that that today’s prices are the prices we all had in mind 20 years ago.  The face value we’re paying today is actually about the same as it was in 1988, so prices are only lower if we factor for inflation; and I’m reasonably confident Westergren wasn’t doing this math in his head when he made his somewhat cryptic statement.

We are taught that when technology makes processes more efficient or products more widely available that prices must go down.  And while this is true to an extent, the principle is not easily applied to products like entertainment media, particularly because their production requires skilled labor that cannot be replaced or replicated by technology.  Also, we see a market in which production costs have almost nothing to do with purchase price.  A ticket for a $100 million-dollar movie is the same price as a ticket for a $1 million-dollar movie; and this phenomenon is generally true for music, where the consumer can expect to pay between a buck and a buck fifty for a popular song no matter what it cost the artist to produce it.  Despite this relative uniformity in pricing, dramatic differences in sales from one creator to another make it clear that music is not a generic commodity with uniform value.  Regardless, technologists tend to homogenize all media with the term content and then propose the economic principle that more volume must lower prices as though music were like mineral deposits or crude oil.

In essence, I would argue that, among paying consumers, the value we place on music today is not that different, and may even be greater, than it was more than twenty years ago.  Additionally, it is ironic that as Tim Westergren attempts to claim credit for the price points, he overvalues Pandora’s role in the market.  His streaming service is pretty cool, and Spotify is a little cooler in my opinion, but both can be replaced in the blink of an eye by a competitor, and consumers won’t really care.  Seriously, if we lost sleep every time a tech company went down . . .  So, before making such unconsidered statements about the value of music, Westergren should remember that it’s the musicians who have the fans, not Pandora.