Category Archives: Gadgets and Technology

No surprise: Facebook wants to make money off advertising!

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The current economic engine for much of the Internet is advertising. This includes Facebook:

Facebook’s first experiment with paid ads was a flop. In 2007 it rolled out Beacon, which broadcast information on Facebook about users’ activities and purchases elsewhere on the Web without their permission. Facebook pulled the program after settling a lawsuit brought on behalf of Facebook users.

This time around, company officials appear to be proceeding more cautiously. David Fischer, Facebook’s vice president of advertising and global operations, says Facebook delivers ads that are relevant to users’ lives.

“This is an opportunity for brands to connect with you,” Fischer said. “When someone likes a brand, they are building a two-way conversation, creating an ongoing relationship.”

A lot is riding on getting it right. Last year, online advertising in the U.S. grew 15% to $26 billion, according to the Internet Advertising Bureau.

People familiar with Facebook say its ad revenue doubled to $2 billion in 2010, and is expected to double again this year as more major advertisers including American Express, Coca Cola and Starbucks climb aboard.

In February, more than a third of all online display ads in the U.S. appeared on Facebook, more than three times as many as appeared on its closest competitor, Yahoo, according to research firm ComScore Inc. Facebook’s moneymaking potential has wowed investors. Its market value is estimated at $55 billion on the private exchange SharesPost.

This should really be no surprise to anyone. As others have noted, the real magic of Facebook is not in the personal connections people can maintain but rather is in the information that users willingly provide. Moving forward, the trick will be for Facebook to do this in such a way that a majority of users don’t become upset.

I find the language here to be particularly interesting: users are entering a “two-way conversation” and an “ongoing relationship” with corporations. This is what corporations want but if users/consumers really thought about it, is this what they desire as well? While the user pays for particular products (and perhaps is willing to advertise a product for free), the corporation provides functionality but perhaps even more importantly, status and prestige.

I’m also struck by another thought: this article suggests that Facebook still has a lot of financial potential due to advertising. At what point does Facebook hit a wall or lose its momentum? In a short amount of time, Facebook has become a daily feature in the lives of hundreds of millions but there is little to suggest that their growth is unlimited.

A call for a sociological study of (digital) piracy

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John C. Dvorak suggests that we need more (sociological) research on the causes of digital piracy:

Understanding why piracy exists as a phenomenon needs to be better understood, but it should be up to academics, not me and other pundits, to determine the causes. Where is the great sociological study of piracy and the mentality behind it?

Dvorak briefly discusses what he thinks are the three roots of piracy: price, distribution, and marketing. At the end of the piece, he again calls for more research:

The real problem with piracy, again, is sociological. If an entire generation becomes acculturated to the free exchange of content and code, then the industry is doomed or it will have to cut back on its First Class Travel and rethink its models. Moaning and groaning about piracy will not stop it…

I’m not sure what can be done about all this, but it does need careful study, not more columns.

Sounds like it could be an interesting project. One angle would be to see how piracy has developed as a deviant (or not-so-deviant) behavior.

Some thoughts by Joel: Actually, there have been some really good academic studies of digital piracy published recently.  I wrote up some thoughts about the SSRC‘s 400+ page report titled Media Piracy in Emerging Economies in early March, and a few weeks later there was the (much shorter at 18 pages) London School of Economics paper entitled Creative Destruction and Copyright Protection:  Regulatory Responses to File-sharing.  Both are well worth reading (for sociologists, especially the former).

Righthaven’s contract unsealed; sanctions a real possibility

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Joe Mullin at paidContent has just posted a story about Righthaven’s previously sealed contract with Steves Media, parent company of the Las Vegas Review-Journal:

The contract reveals that the controversial copyright-enforcement company and the LV R-J are splitting their net earnings from suing hundreds of bloggers on a 50-50 basis. It also shows that the LV R-J is still largely in control of Righthaven’s litigation strategy—a fact that could end up being ruinous for Righthaven’s campaign of copyright lawsuits.

A link to the judge’s order and the contract is available here.  I’ll update this post when I’ve had time to read and analyze it thoroughly…

Update: After reading through the contract and order to unseal for myself, I think these are the most relevant sections:

Section 3.3

Stephens Media shall have the right to Notify Righthaven…that Righthaven should not take any Infringement Action with respect to a particular putative infringer.…Stephens Media shall only send any Declination Notice on a reasonable basis with the grounds of reasonability being that a particular putative infringer [1] is a charitable organization, [2] is likely without financial resources, [3] is affiliated with Stephens Media directly or indirectly, [4] is a present or likely future valued business relationship of Stephens Media or otherwise would be a Person that, if the subject of an Infringement Action, would result in an adverse result to Stephens Media.

I guess it’s safe to conclude that Stephens Media did not see fit to step in on behalf of the Center for Intercultural Organization (“a charitable organization”), Brian Hill (an autistic blogger who practically defines someone “likely without financial resources”), various newspaper sources (“affiliated with Stephens Media directly or indirectly”), or any of the hundreds of other bloggers (“likely future valued business relationship of Stephens Media”) Righthaven has sued.

Sections 7 and 8

Section 7.1:

Stephens Media shall effect the assignments to Righthaven of copyrights as required by this Agreement…by executing a particularized assignment with respect to each copyright and each consistent with (and in form and substance the same as) the scope of assignment….

Section 7.2:

Despite any such Copyright Assignment, Stephens Media shall retain (and is hereby granted by Righthaven) an exclusive license to Exploit the Stephens Media Assigned Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media Assigned Copyrights other than the right to proceeds in association with a Recovery.

Section 8:

Stephens Media shall have the right at any time to terminate, in good faith, any Copyright Assigmnent (the “Assignment Termination”) and enjoy a right of complete reversion to the ownership of any copyright that is the subject of a Copyright Assignment; provided, however, that if Righthaven shall have commenced an action to prosecute an infringer of the Stephens Media Assigned Copyrights, Stephens Media shall be exclusively responsible for effecting termination of such action including, without limitation, all Losses associated with any dismissal with prejudice.

Taken together, these three excerpts seem to affirm that Righthaven is essentially buying the right to bring lawsuits from Stephens Media, which is arguably impermissible under Silvers v. Sony Pictures Entertainment, Inc., 402 F. 3d 881 (9th Cir. 2005).

Section 11

Stephens Media understands and acknowledges that Stephens Media and Righthaven may be liable for an Infringer’s attorneys’ fees as required by Law in connection with an Infringement Action. Stephens Media further understands that a lawsuit brought solely to harass or to coerce a settlement may result in liability for malicious prosecution or abuse of process. If any Claim made by an Infringer in an Infringement Action results in Losses, other than Losses described in Section 8, Righthaven shall be solely liable for such Losses and shall indemnify Stephens Media from and against any such Losses but only if such Losses do not arise out of a misrepresentation by Stephens Media or other breach by Stephens Media of a provision of this Agreement.

I guess we now have incontrovertible evidence that both the newspaper and Righthaven knew “that a lawsuit brought solely to harass or to coerce a settlement may result in liability for malicious prosecution or abuse of process”!  I wouldn’t be surprised if this section gets referenced in a future sanctions order.

Conclusion:  what does Judge Hunt think?

It’s impossible to know, of course, what’s inside Judge Hunt’s mind.  However, his order to unseal the Righthaven contract strongly suggests that he is growing weary of Righthaven’s legal antics:

There is an old adage in the law that, if the facts are on your side, you pound on the facts. If the law is on your side, you pound on the law. If neither the facts nor the law is on your side, you pound on the table. It appears there is a lot of table pounding going on here.

There has been presented absolutely no basis to strike the Request to Unseal, and that motion will be denied. [emphasis added]

No doubt Righthaven is already sorry they filed this case.  The only remaining question is whether their sorrow will be measured in dollars.  And just how many.

YouTube’s copyright school

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In an apparent bid to prevent one-time copyright infringers from becoming two-timers (or more), YouTube has created a 4 minute and 39 second copyright school on its website, as explained on the official YouTube blog:

Because copyright law can be complicated, education is critical to ensure that our users understand the rules and continue to play by them. That’s why today we’re releasing a new tutorial on copyright and a redesigned copyright help center. We’re also making two changes to our copyright process to be sure that our users understand the rules, and that users who abide by those rules can remain active on the site.

If we receive a copyright notification for one of your videos, you’ll now be required to attend “YouTube Copyright School,” which involves watching a copyright tutorial and passing a quiz to show that you’ve paid attention and understood the content before uploading more content to YouTube.

Ray Dowd over at the Copyright Litigation Blog is not a fan, noting that Google:

  • fails to mention the existence of the public domain;
  • states that “[i]f you are uncertain as to whether a specific use qualifies as a fair use, you should consult a qualified copyright attorney”; and
  • fails to mention the Constitutional purpose of copyright law.

I have to agree with Ray.  The video’s section on fair use (direct link) is particularly egregious.  Unlike the rest of the video, this section adopts the sped-up vocal “style” often adopted at the end of radio commercials to breeze through legal disclaimers (e.g., “Sweepstakes only open to U.S. residents 18 or older…”)  How is this even attempting to educate and inform?

Far from providing a balanced view of copyright law, YouTube’s clear, bottom-line message is this:  Don’t remix or even approach the fair use line.  This is certainly one vision of copyright law, but there are others.  I am reminded of Christina Mulligan’s excellent blog post last June that looked at contemporary copyright law through the lens of Fox’s hit show Glee:

The absence of any mention of copyright law in Glee illustrates a painful tension in American culture. While copyright holders assert that copyright violators are “stealing” their “property,” people everywhere are remixing and recreating artistic works for the very same reasons the Glee kids do — to learn about themselves, to become better musicians, to build relationships with friends, and to pay homage to the artists who came before them. Glee’s protagonists — and the writers who created them — see so little wrong with this behavior that the word ‘copyright’ is never even uttered.

Lawrence Lessig makes the related point that such recreations benefit society, pointing to John Phillip Sousa’s early-twentieth-century fear that recorded music would eventually displace amateur performance entirely.

Google is taking a lot of heat from copyright owners these days, and it’s hard to blame them from trying to stave off any accusations of infringement that might eventually stick to Google itself.  Nevertheless, I don’t think their frenetic, one-sided “educational” video is the best solution.

Students suffer withdrawal in a one day media blackout

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Professors and teachers can often provide anecdotal evidence of how students react when told that smartphones (and other devices like laptops) are not to be used in the classroom. A new study suggests that the problem isn’t really the classroom: simply not having these devices at all could the issue.

Researchers found that 79 per cent of students subjected to a complete media blackout for just one day reported adverse reactions ranging from distress to confusion and isolation.

In vivid accounts, they told of overwhelming cravings, with one saying they were ‘itching like a crackhead [crack cocaine addict]’.

The study focused on people aged between 17 and 23 in ten countries, including the UK, where about 150 students at Bournemouth University spent 24 hours banned from using phones, social networking sites, the internet and TV.

They were allowed to use landline phones or read books and were asked to keep a diary.

One in five reported feelings of withdrawal akin to an addiction while 11 per cent said they were confused or felt like a failure.

Nearly one in five (19 per cent) reported feelings of distress and 11 per cent felt isolated. Just 21 per cent said they could feel the benefits of being unplugged.

Some students took their mobile phone with them just to touch them.

While some of these symptoms don’t seem as bad as others, it is interesting that only 21% “could feel the benefits” of being “unplugged.” These devices and SNS tools really have become necessities in a short amount of time.

In reactions to this study, it would be interesting to see whether people advocate a complete move away from such technology because of these possible dangerous side effects or if people suggest more moderate usage. But if usage is really is an addiction, then moderate usage could still be an issue. I would like to see a follow-up to this study that examines a longer-term media blackout – how long does it take for students to readjust to life without all this media and then what would be their thoughts about what they might be missing (or gaining)?

Lessig keynote at ABA’s Techshow

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Yesterday, Larry Lessig gave the keynote at the American Bar Association’s Techshow 2011, available on YouTube here.  (ABA Journal write-up here.)

I’m watching it right now and will post additional thoughts when I’m done…

Update:  Much of Lessig’s presentation covers the same material he presented before WIPO last November.  However, the last part of his speech (direct link) talks a little bit about why Lessig thinks that IP policy in America is so wrong.  In brief, Lessig argues that special interest content providers have essentially “bought” Congress’ support of draconian enforcement.

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?)

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.

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.