Category: Economics

Facebook for Business:  Use at Your Own Risk?

COVID-19 shutdowns naturally affected some businesses more acutely than others, and many who felt the sting turned to entrepreneurism. Some saw new ventures as their only options, while others viewed the crisis as a forced opportunity to try something they had long dreamed of pursuing. No matter what motivates people to take that career leap, it’s a safe bet that nearly every entrepreneur will make more extensive use of internet platforms like Facebook to promote and/or directly sell their products or services.

The opportunity for low-cost, DIY entrepreneurism has always been one of Big Tech’s most effusive promises. And in fairness, many self-starters, from jewelry designers to storytellers, do successfully use free platforms to attract fans and customers without the need for intermediaries or costly infrastructure—or even a unique website in many cases. But what the major Silicon Valley companies failed to mention, of course, is that the ways in which they built their platforms and their business models on a laissez-faire approach to online moderation also created new opportunities for entrepreneurs in hacking, identity theft, piracy, and scams.

In a recent example, I know of one an old school friend (we’ll call her Sally) whose storefront business was critically affected by COVID shutdowns, and among the choices she made in response was to launch a podcast series. Whether she expects the podcast itself to eventually generate revenue, or simply to be a vehicle that will keep her in touch with the market while she rebuilds the original business does not really matter. It was a new venture, and people started tuning in, and like any self-starter, she would see where the podcast might lead.

But a few weeks ago, Sally announced that both the Facebook page she had created for the podcast and the page for the original business were hijacked, apparently by foreign actors. The hackers took over the admin for Sally’s pages, renamed them, and (it appears) began promoting a completely unrelated line of products to a foreign market. Why the hackers slaved her pages, which did not have thousands of followers, rather than create their own Facebook presence is unclear, but what is clear is the remedy Facebook was willing to offer when Sally contacted them for help:  not a damn thing.

To put it bluntly, Facebook told Sally she wasn’t a big enough deal for them to do anything for her, and the implications of this Emperor’s New Tech Support should be chilling to every entrepreneur on the platform, whether they’re small retailers or artists. Facebook informed Sally that they could have helped her if her page were “verified,” which does not seem to mean much because bullet point Four under the requirements to receive a “verified” badge is that the user must be “Notable: Represent a well-known, often searched person, brand or entity.” So, a big deal then.

Facebook makes a fortune from the commercial uses of its platform, and it promotes those features to everyone, but apparently without any obligation to support everyone. Why the hell not? A company with the computing power and influence of Facebook ought to be able to at least shut down a hacked page, if not fully restore it to its rightful administrator. And if this really cannot be done, the company should be required to post a warning label for less “notable” users informing them that they’re basically on their own when it comes to security.

Meanwhile, I have seen friends put in “Facebook jail” for making jokes its moderators (or algorithms) don’t understand. In fact, my colleague David Lowery made a Bugs Bunny reference about “Killing the Wabbit” in one of his posts, and some Magoo flagged it for inciting violence and gave David a time out to think about his behavior. It seems to me that if Facebook can screw up so exquisitely and with such granularity that it homes in on a single Looney Tunes reference, the company has the ability and obligation to help the Sallys of the world recover their pages from hackers.

In no other context would consumers tolerate a company declaring that it has built a system too big to manage. Nowhere in Facebook’s promotion of its commercial services do we see bold, red warning signs that say Use at Own Risk. The reasonable expectation in the market remains that when a company sells something, it bears certain obligations to its customers. My bank has tens of millions of customers worldwide, and I am by no means a “notable” customer. But if a fraudulent use of my card were to occur, it will be immediately and effectively addressed, and the bank will even eat the fraudulent charges. So, really? Facebook can’t help victims of hackers get their pages back? Really?

Illustration by: VIGE

YouTube Adpocalypse is No Surprise

YouTubers call it the adpocalypse.  It’s a word is used to describe the steady erosion of YouTube’s support for small and independent creators by demoting or demonetizing their channels in favor of more traditional, mainstream material.  Julia Alexander at the The Verge wrote in April of this year …

“Between 2011 and 2015, YouTube was a haven for comedians, filmmakers, writers, and performers who were able to make the work they wanted and earn money in the process…. In 2016, personalities like Philip DeFranco, comedians like Jesse Ridgway, and dozens of other popular creators started noticing that their videos were being demonetized, a term popularized by the community to indicate when something had triggered YouTube’s system to remove advertisements from a video, depriving them of revenue.”

While not directly related to copyright, I would include the adpocalypse in a chapter about the broader copyright debate because one of the underlying premises of the “copyright is obsolete” narrative is that the new opportunities created by the internet could replace traditional licensing regimes with legacy “gatekeepers.”  With an evangelical zeal, some of the loudest copyright critics sermonized that the internet was replete with untapped sources of revenue for creators, and YouTube was their Zion—a place where creators could slough off tired notions of ownership, share their work with the world, and earn a living from Google’s advertising machine.  

The fact that people were making a business out of being YouTubers—ranging from profitable side-lines to multimillion-dollar payouts for a handful of stars—was sufficient anecdotal evidence to bolster the talking point that concepts like copyright were anachronistic and regressive.  The lecture at old creators was a general theme that they should stop “whining” about lost sales, piracy, devaluation and embrace the unprecedented prospects before them.  

This theme was even reiterated in Steven Johnson’s too-ebullient 2015 New York Times Magazine Feature, The Creative Apocalypse That Wasn’t.  More sober than most, Johnson still cited the YouTube opportunity as evidence that the post-Napster market is rosy for creators, despite what they may be saying.  In my long rebuttal to that article, I stated that Johnson “… can only see the short-term empowerment of some creators via these new technologies, but not the long-term, predatory nature of a brand new group of extraordinarily powerful, corporate masters.”  

That was a theme my fellow luddites kept reiterating—that YouTube will “empower” new creators until it is no longer in its business interest to do so, at which point the company will change the rules without warning or transparency.  That was the underlying absurdity of the entire line of argument against creators’ rights—the illusion that a company like YouTube was liberating new creators, even making them feel a sense of ownership in the platform itself and that this apparent symbiosis would last indefinitely.  “The golden age of YouTube — the YouTube of a million different creators all making enough money to support themselves by creating videos about doing what they love — is over,” writes Alexander.

Perhaps.  But I wouldn’t think of it as the party is over so much as a party to which most YouTubers were never going to be invited in the first place.  The promise of millions becoming YouTube entrepreneurs was never attainable, or at least sustainable.  “96.5 percent of all of those trying to become YouTubers won’t make enough money off of advertising to crack the U.S. poverty line,” stated a 2018 article at Fortune.com. YouTube was always a casino, and Google is the House.  Yet, this did not stop the pundits and tech-utopians from insisting that it is restraints like copyright the “stifle” the potential growth of YouTube—or even more naively, imaginary platforms that might one day compete with the Google-owned giant. 

More than a few of my fellow luddites have mentioned that YouTube’s monetization in not about creators, and never has been.  As composer Kerry Muzzy describes in a sit-down interview with Neil Turkewitz, “So far I have identified 97 million views of videos with my music in them, representing 303 million minutes of watch time. Those 97 million views happened before Content ID located my music in them and under YouTube’s policies, I can’t monetize them retroactively — so YouTube and the uploader made a small fortune in ad sales on those videos, but I got nothing.”

This post is not a gloat.  I legitimately empathize with most creative people, and YouTubers are no exception; but one thing the “old” creator can tell the “new” is that very few favorable tides last a lifetime, which is one reason owning copyrights in successful works can be so critical for so many creators.  Like the aging jazz musician whose royalties in a pre-1972 sound recording just might be her medical bills for the year.  

With that in mind, the comment I found most striking in Alexander’s article was not really about revenue so much as it was how YouTube’s opaque policies for demoting or demonetizing was making YouTubers feel.  “These perceived, secretive changes instilled creators with a distrust of the platform. It also led to questions about their own self-worth and whether the energy they were spending on creating and editing videos — sometimes north of 80 hours a week — was worth it.”

Self-worth connected to the labor of creative expression and the value placed on that labor.  Sound familiar?  To the cynics who say that copyright is merely a mechanism of commerce, Alexander’s observation above may be one of the most on-point rebuttals I have read to date.  And perhaps the new creators (if not the pundits) might begin to understand how it feels to have work uploaded and monetized by a giant tech platform without permission and to have the value of that work diminished as a result.  

When YouTube was bought by Google in 2007, the platform had grown to scale on a very large volume of piracy.  In 2012, when Viacom v. YouTube was reviewed at the Second Circuit Court of Appeals, 60% of the material on the platform was copyrighted work, of which 10% was licensed.  In 2017, Canadian singer/songwriter Miranda Mulholland delivered a speech reporting the 82% of YouTube users access the platform for music, a large volume of which continued to be uploaded without license.  So, the “old” creators know how the “new” creators feel, especially because YouTube’s capacity to monetize the “new” was built on the backs of the “old” without permission or compensation.

Yes, money is a very big piece of the puzzle for anyone—we all have to eat—but as Alexander describes, having one’s work devalued is personal and ontological in any context.  This is precisely why, throughout copyright’s history, and despite many disputes over its mechanisms, the foundation of its existence remains a matter of first principle—that what one creates is one’s property.  And the way the YouTubers are apparently being made to feel about the adpocalypse suggests that this principle is no more obsolete in the digital age than in any previous era.   

Online Copyright Enforcement Is Not Just About “Artists”

Most conversations (i.e. arguments) about copyright tend to revolve around artists in the traditional sense—musicians, authors, filmmakers, photographers, etc.—wanting to make a living from their work.  To those types of creators, the often dismissive responses from the tech-funded intelligentsia range between feigned sympathy and unvarnished antipathy for any author who would presume to earn her living making “art” in the first place.  

Somewhere among those personal opinions, creators have been offered a litany of unsolicited advice as to how they might better understand the new economic realities of the digital age and, thus, learn to benefit from avenues of sustenance newly opened, rather than complain about old avenues that have been closed by rampant piracy.  The classic example—the one that inspires so much gallows humor among creators—is the imperative that, for instance, musicians should sell more tee shirts rather than cling hopelessly to the idea of ever selling music itself.    

But, let’s look at this theme in a different context, especially with regard to the number of people now working in that insecure stratum known as the “gig economy.”  What if you heeded the wisdom of the academics, tech pundits, and internet billionaires and launched a venture that channels your creative work as merchandise? In other words, what if the way you sell your art is literally as tee shirts?  Do the tech companies who promised you the opportunity of low-cost entry support this venture by facilitating the enforcement of your intellectual property? Meh.

After you invest the sweat equity and financial capital to create and register your original designs, then market, produce, and ship the goods, you can be sure that once your brand attracts customers, it will be counterfeited through ecommerce portals.  This is a near certainty.  

The counterfeiter/pirate will often be foreign-based, usually in China, and they will post pages on Amazon, eBay, Alibaba, etc. offering knockoffs that not only infringe your copyrighted designs, but also sell those pirate goods on inferior products.  So, while the counterfeits are eating into your market, you will also receive calls from customers complaining that you sell poor quality merchandise.  Or perhaps they’ll just give you bad reviews on the same wonderful crowd-sourcing platform that empowered the counterfeiters to rip you off in the first place.  

Your ability to keep web-enabled counterfeiting and piracy from driving you out of business will depend on a number of factors, namely whether your company has grown large enough to absorb the cost of enforcement plus lost sales.  Even for a decent-sized business (say $1-2 million in gross sales), these costs can be sufficient enough to have a substantial negative effect on the operating resources of the enterprise.  

If trademarks are infringed, enforcement is a little easier to address as a holistic process; but quite often, a counterfeiter will exclusively infringe copyright by pirating original designs for tees, hats, towels, mugs, etc.  This means someone—either an employee or outside counsel—will have to identify each of the items infringed, affirm their registrations, fill out the platform’s complaint forms, and follow the platform’s various steps to request removal of the infringing URLs from the site. 

The steps required by each platform can either be fairly straightforward or a unnecessarily labyrinthine, but the sites will generally comply with removals in a timely manner.  Nevertheless, the small business owner in this case has the same problem as the musician whose work keeps getting uploaded to YouTube—the game of Whack-a-Mole. The infringements you manage to remove in a period of days will soon reappear at new URLs with apparently new (but probably the same) sellers offering your products.  And you get to do the whole process again.  

So, the question naturally arises, why don’t the major online retailers use their astounding technological prowess to better automate the identity of likely infringers?  It is true that Amazon allows a legit merchant to upload a product shot and have the system search all the places that image appears. This is not a useless tool, but it still implies a lot of extra, costly labor for the business/copyright owner. 

Why doesn’t Amazon, for instance, provide a more proactive interface for registered merchants and manufacturers similar to YouTube’s Copyright Match for the community of YouTubers, which alerts a creator when her videos are used by other YouTubers?  For instance, how hard is it for an Amazon or EBay to interpret data comprising  a) a matching photo, b) a price point about 80% less than it should be, and c) a seller based in a piracy-rich location like China, and flag the URL as a likely infringer?  This is too complicated for the most powerful computer companies in the world?

These are corporations that harvest and monetize the most granular data about us as consumers and private citizens.  Have a casual conversation with someone about eyewear in the vicinity of your phone and, like magic, you will soon be served an ad for eyewear.  Somehow, we accept this creepy invasion with a resigned shrug while simultaneously choosing to believe that these companies simply cannot analyze a basic data relationship between a product-maker and its legitimate products. 

Whenever takedown/staydown proposals have been made in the context of the usual copyrighted works like sound recordings, the internet industry and its network of pundit(s) counter that any technology used to identify repeat infringements will be too error-prone, will not be able to identify when a given use is a fair use, and will inevitably stifle free speech.  These complaints are debatable enough in the usual context, but such considerations do not apply even hypothetically to the role copyright plays in this kind of counterfeit merchandise.  

If an online retailer were to more systematically remove repeat infringers from E-Commerce sites, they could alleviate some of the burden for start-up and smaller companies.  And since this kind of entrepreneurism is exactly what the web industry claims to have enabled, it does seem like the right thing to do.  

Of course, this has always been the fine print in Silicon Valley’s generous offer of free-to-use platforms for new, independent enterprise. Their interest in either ignoring copyrights, or even funding efforts to weaken copyright law, has always been an underlying flaw in their ebullient commands to “embrace the new models.”  In reality, however, even if your rock band really could offset the loss of not selling music with the sale of tee shirts, the tees themselves would be infringed, and the major retail platforms will apparently be of very little help.