Category Archives: Business and Economy

Early signs: higher gas prices lead to less driving

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With gas prices moving upward, there are some signs that this is already changing driving behavior among Americans:

Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide…

Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery was picking up, adding 216,000 jobs in March…

Instead, about 70 percent of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gas soared past $4 a gallon. Now it’s creeping toward $4 again…

The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for new clothes, or going to movies, concerts and restaurants.

Economists and others have been talking about this for a while: what exactly is the price point of a gallon of gasoline where Americans might drastically change their transportation patterns? In this earlier post, I briefly discussed the claim that the Obama administration actually wants higher gas prices as this would lead to greener transportation choices such as mass transit or bicycling or car pooling (or other options).

But if gasoline prices stayed relatively high (so they don’t really go down like they have after some of the temporary spikes in recent years – see the weekly average in the US going back to 1990 here or a graph showing prices going back to the mid 1970s here), it might lead to all sorts of changes. This could include everything from buying smaller cars (as the story above suggests is happening) to more Amtrak riders to longer semi trailers to rethinking patterns of sprawl.

Righthaven drops another case

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Righthaven comes up a lot here at Legally Sociable, and I’ve mentioned their suit against Brian Hill, a 20-year-old blogger with autism and severe diabetes, before.  In another victory for defendants in Righthaven lawsuits, Ars Technica reports that Righthaven is dropping its suit against Brian, after the judge noted that enabling a cheap, easy settlement “is not my primary concern”:

Though the case was moving forward, Righthaven made clear it wasn’t actually interested in litigating the suit; it wanted to settle. “Righthaven is no longer willing to engage in settlement discussions over trivial issues while the Defendant and his counsel seek to extend this action for publicity purposes,” said the company. With settlement not a possibility, the company now just wants the suit to go away. [emphasis added]

Indeed, Righthaven’s lawsuits are starting to drop like flies.  It was just two weeks ago that Righthaven dismissed a suit against the freelance author of another Ars Technica article that covered Righthaven’s litigation antics.  In dropping the suit against Ars’ reporter, Righthaven claimed it was all just a mistake:

“We took immediate corrective action” after learning that Righthaven had just sued a reporter, said [Righthaven lawyer Shawn] Mangano. He added that, since reporters make use of copyright and tend to know a good deal about fair use, “It’s somewhat counterintuitive to sue a reporter for copyright infringement!”

While I certainly applaud Righthaven’s decision to drop these two particularly suits, I have to wonder about the outcomes in the other 260+ lawsuits they have filed over the past year.

Dictionary.com defines “bully” as “a blustering, quarrelsome, overbearing person who habitually badgers and intimidates smaller or weaker people.”  This definition appears to describe Righthaven perfectly; indeed, it is only when a defendant proves not to be “smaller or weaker” that they tuck tail and run.  Clearly, Righthaven didn’t think it was worth fighting a reporter backed by one of the largest magazine publishers in the U.S. or a highly sympathetic blogger with a clearly competent lawyer (PDF).  However laudatory in result, its dismissals in these cases seem to confirm that Righthaven is not truly defending a principled (if overzealous) view of copyright law.  Instead, Righthaven appears to be a garden-variety bully out to shake down the small and weak for four-digit settlements.

Copyright reform, anyone?

Update 4/12/2011:  Joe Mullin at paidContent has additional information about the Hill dismissal:

In a 3-page motion, Righthaven tries to let Hill off the hook but maintains a complainy sort of tone….Judge Kane responded to that by taking another extraordinary action—he actually ordered Righthaven’s “warning” to be stricken from the record entirely, along with all the company’s complaints about Hill’s bad behavior. That part of the filing was “immaterial and impertinent,” Kane wrote. That’s a strong suggestion that Kane has become quite annoyed by Righthaven’s tone and actions in this case.

Wow.  I think I’d be quite worried about sanctions if I were representing Righthaven in this case.

Further reading (hat tip to paidContent):

  • Order Denying Righthaven Extension, April 7 [Scribd]
  • Righthaven Notice of Dismissal, April 10 [Scribd]
  • Order To Strike, April 11 [Scribd]

Can Google incentivize being social?

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There is no question that Google would like to be more prominent in the social networking (SNS) phenomenon. Apparently, Google has tied an incentive for employees, a yearly bonus, to how well the employees help the company move forward in this area:

“[Your bonus] can range from 0.75 to 1.25 depending on how well we perform against our strategy to integrate relationships, sharing and identity across our products.” Social.

And yes, you read that correctly, the bonus can go up or down based upon Google’s performance in the social realm. The critics are already jumping all over this one, noting that it looks like all Google employees will be losing bonus money this year. And given the decided lack of success from products like Wave, Buzz, and to a broader extent, Orkut, who can blame them?

But on a higher level, it’s the strategy itself that may be the most interesting thing here. Mathew Ingram notes that you can’t threaten people into being social. While Mike Elgan calls this Larry Page’s first blunder (as CEO). I actually have a slightly different take on this. I think that on paper, this is actually a good idea and strategy. But in practice, I think it will ultimately be looked upon as a bad thing and may even directly backfire.

I’m not sure that I really think the headline on this story captures what is going on (“I’m Having A Party. Here’s $50. Bring Cool People — Or You Owe Me $100.”): being social online is different than incentivizing employees to walk up to people they don’t know on the street and push products. In order to be social online, one needs only to make links between people (“friends” in Facebook terms) and then provide some content (which the user gets to pick and choose). Since I would guess that many Google employees are already operating privately in these SNS realms, how hard would it be to transfer some of that activity into a Google product? While this activity is still personal and requires effort from individuals, it doesn’t seem like it would take much to be social online with a new product.

Now it is a more interesting question to ponder whether such a strategy would actually help a fledgling SNS product get off the ground. This writer suggests other SNS launches were “organic” and a push from Google’s employees would only work if the product was really good. This might be the case – but the argument here is that we know for sure how SNS products take off. Could Google do something new with this kind of incentive and with its large number of employees (and their contacts), could they get a new program/app/platform up and running? If Google employees started even a decent online party, wouldn’t some other people want to get involved?

(On a side note, it would be interesting to think more about this incentive. What do Google employees think of this? By virtue of possibly losing some of their bonus, will workers operate as homo economicus and help make something happen?)

Documenting fair use

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Documentary.org has a wonderful write-up by Tamsin Rawady and Alex Buono about fair use in the documentary film setting.  As the writers/producers of Bigger Stronger Faster, a documentary about pop cultural influences driving performance-enhancing drug use, they grappled with how to tell their story legally:

The first problem we encountered is that it seemed like Fair Use was sort of an urban legend: Does it really exist? Can you really use archival clips without licensing them? And does anyone understand how this all works?

Fortunately, Rawady and Buono retained excellent legal counsel who were able to walk them through the issues and get them a highly defensible final cut, though even that wasn’t easy:

After the film has been released, expect to get calls from copyright holders upset about your use of their footage. Most copyright holders have never heard of Fair Use, and you should allow some money in your budget to have your attorney call and talk through the evidence you have. If you have been responsible in your Fair Use decisions, most complaints will only require one phone call from your attorney to make them go away. We encountered a handful of copyright holders from some very large corporations who were not pleased that their clips had been used in our film, but we were well prepared by our attorneys and had no problem avoiding any legal claims. [emphasis added]

I’m certainly happy that it worked out better for Bigger Faster Stronger than it did for Slaying the Dragon:  Reloaded.  Rawady and Buono’s story reminds us that, in law as in life, (1) an ounce of prevention is often worth a pound of cure and (2) the best (fair use) defense is a good (proactive) offense.

Further resources and reading:

High vacancy rates at strip malls and shopping centers

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More sour news regarding the economy, this time regarding retail space in strip malls and shopping malls:

Mall vacancies hit their highest level in at least 11 years in the first quarter, new figures from real-estate research company Reis Inc. showed. In the top 80 U.S. markets, the average vacancy rate was 9.1%, up from 8.7%.

The outlook is especially bad for strip malls and other neighborhood shopping centers. Their vacancy rate is expected to top 11.1% later this year, up from 10.9%, Reis predicts. That would be the highest level since 1990.

In 2005, the mall-vacancy rate hit a low of 5.1%. For strip centers the boom-time low vacancy rate was 6.7% that same year.

The article goes on to mention how this problem is particularly acute on the suburban fringe where development was taking place or was predicted to take place.

While strip malls take a beating from those opposed to sprawl and suburban garishness (think James Howard Kunstler – see his TED speech on the topic here), they can be quite important to local economies. From where I live in the suburbs (roughly 25-30 miles west of Chicago), there are numerous strip malls, including a number that I can walk to within fifteen minutes. While most of these businesses are not flashy, they encompass certain consumer needs from car care places to drug stores to restaurants to hardware stores. I have always wondered how businesses thrive in these settings: there is so much competition (why can’t the customer just go to the competition in the strip mall down the street?) and many decry the strip mall (though it would be an interesting debate to see whether people think they are worse than big box stores).

Using Groupon to sell real estate

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With the real estate market in the doldrums (and no end in sight), there are reports about a new strategy that would leverage the popular site Groupon:

In the Dream Town deal, the brokerage will pay out $1,000 in cash at closing to home buyers or sellers that spend $25 for the Groupon. The voucher is good for one year from the date of purchase. The offer launches on Friday and will run for a week. On Monday, it will be the featured deal for Chicago subscribers.

The Dream Town deal tips with 50 vouchers purchased, said co-founder and president Yuval Degani. The coupons apply to both traditional and distressed properties, and buyers can be owner-occupiers or investors. The transaction must be at least $150,000 to qualify for the deal, and there is a limit of one Groupon per customer. There is no cap on the total number of Groupons that can be sold.

“Our big picture is we’re really an emerging company,” Degani said, noting that Dream Town has focused on its Web presence and search engine optimization, which helps its site appear higher on search results. “What we’re trying to do is acquire new customers. We’re not really looking at (the Groupon deal) as a reduced commission. We’re looking at it as getting customers for life.”

Degani said Dream Town has four locations and 165 agents in the area.

I wonder how many people will take this offer and then use it within a year. Typical Groupon deals are for smaller or more immediate purchases while this asks buyers to consider a bigger and more important purchase. But if you are already looking to buy (though there are a limited number of these people), $1,000 in cash could sound pretty good.

The article also mentions some other innovative offers that have recently popped up on Groupon. Seeing this story reminds me that the outgoing Mayor Daley spoke at length in a speech on campus (here, here, and here) about the success story of Groupon. But a city like Chicago will need a number of companies like Groupon to develop and thrive in order to gain population.

A picture of civility

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Carolyn Wright over at Photo Attorney has some good reminders for copyright owners who are contemplating filing lawsuits against infringers:

While most photographers will contact an infringer either directly or through an attorney to attempt to resolve an infringement claim before filing suit, the law doesn’t require it. Instead, you may file your copyright infringement lawsuit immediately after finding the infringement without ever contacting the infringer.  But it’s usually best to first contact an infringer for a variety of reasons…. [emphasis added]

Carolyn cites the expense of litigation, needless escalation of conflict, alienation of a former/future client, and (potentially) mistaken accusation as reasons to talk to a suspected infringer before filing a lawsuit.

As in so many areas of life and law, just because you can do something doesn’t mean you should.  An overly litigious, scorched-earth approach to copyright enforcement rarely results in good outcomes, even (especially?) for copyright owners.

I applaud Carolyn’s civil approach to resolving copyright conflicts.  I can only wish that everyone took her talk-first, file-later approach.

The benefits of Best Buy’s flex schedules for employees

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Two sociologists have published a study in the American Sociological Review that shows that employees at Best Buy’s headquarters benefit from flex schedules:

Sociology professors Erin Kelly and Phyllis Moen said a flexible work schedule that focuses on results and not just activity cut turnover at Best Buy’s Richfield headquarters by 45 percent while improving productivity.

The flex schedules, they said, cut down on stress and work interruptions due to personal issues because employees were able to find a better balance between their work and home lives…

The U of M study followed 600 workers for eight months after the start of the program, 300 who worked under the flex plan and 300 who continued working the traditional 9-5 day…

The study showed that 6 percent of the employees working under the flex plan left Best Buy during the study period, while 11 percent of the control group left during that time. Also, the results were about the same regardless of gender, age, tenure, job satisfaction, and stage of life.

Turnover can be a problem for companies who then have to hire new employees and train them so cutting turnover even five percent is no small matter.

Based on the success of the program, Best Buy has changed some of their practices:

The research showed that the flex program led to Best Buy getting rid of “low-value work,” such as unnecessary meetings. The researchers said staff and supervisors started re-considering their work patterns, figuring out what activities were the most productive.

It would be interesting to see exactly how the employees in the flex program talk about these changes. And I would be interested in hearing more about this trade-off in a company stressing results rather than activity – are there downsides to this?

It’s Friday, I’m in Love (With Copyright Law)

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You’re no doubt one of the multi-millions who’ve seen Rebecca Black’s viral video Friday.  Or the “Bob Dylan” cover.  Or the Colbert-Fallon cover.

Anyway, you’ve probably seen it in one form or another.

Writing for The Hollywood Reporter, Aaron Moss (partner at Greenberg Glusker) provides a thorough analysis of the copyright issues surrounding the song itself and a brewing legal dispute between Black’s family and Ark Music Factory.  Over the course of the article, Moss cites the following rights/licenses implicated by Black’s viral video and its subsequent marketing:

  • copyright in the sound recording
  • copyright in the composition
  • mechanical license
  • digital phonograph delivery license
  • synchronization license
  • master use license
  • public performance license (in the composition)
  • digital public performance license (in the sound recording)

Confused yet?  You’re probably supposed to be.  As Moss puts it in the section explaining that the copyright in the sound recording and the copyright in the composition are two completely separate rights:

This rather unintuitive concept, by itself, has been enough to pay countless lawyers’ salaries over the years.

Or as Moss notes as an aside when explaining the concept of digital performance licenses:

As a result of the way copyright law has developed — which is to say, ad hoc, aimlessly, in fits and starts, and with plenty of lobbyist influence…

I highly recommend reading Moss’ entire piece.  It’s a good reminder of just how convoluted contemporary copyright law is and just how many actors (artists, session musicians, engineers, label personnel, etc.) may have to agree in order to exploit an existing song in a new way.

The (statutory) damage is done

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I covered the Tenenbaum case earlier in a few posts here earlier this week, but I decided to step back and do a bit a broader analysis in a guest post over at the Citizen Media Law Project blog.  Check it out.