Blog Ipsa Loquitur

Congressman Scott Randolph:

“The point is that Republicans are always talking about deregulation and big government. But I say their philosophy is small government for the big guy and big government for the little guy. And so, if my wife’s uterus was incorporated or my friend’s bedroom was incorporated, maybe the Republicans would be talking about deregulating.”

Currently a Project of the ACLU-Florida.

Filed on under Irreverently Irrelevant

I’m more than a little surprised by the rapid ascent of Hulu Plus. Take a look at these first quarter numbers:

  • They have 50% more advertisers in Q1 2011 than Q1 2010
  • On pace for $500 million revenue in 2011 (up 90% over 2010)
  • On track for 1 million subscribers (up from 0 in 2010)

I think the ad-supported model is working out pretty well so far. If Netflix (which has 20 million subscribers) is buying TV series, then why can’t Hulu someday? Showtime, HBO, AMC, NBC, and the rest are increasingly becoming middlemen.

So what happens to middlemen?

I think we all know: they get squeezed out in the digital age. In January, I wrote about Hulu’s new President, who had made statements to the effect that ‘online video is killing TV, because people expect entertainment for free with advertising.’ I pointed out that the big broadcasters like CBS, NBC, and ABC had done this for decades and made boatloads of cash in ads.

Let Me Rephrase That

The more accurate statement isn’t that online video is killing TV, it’s “the lower ad revenue from online video is not enough to replace the huge ad revenue we make from broadcast/cable video, and online video is getting more popular as broadcast gets less popular.”

This is not an online video killed the TV star” situation — this is a “supply killed the oligopoly” situation. There was nothing inherently better about having three TV channels. Sure the signal:noise ratio was skewed in favor of signal, because it cost so much money to keep a TV studio running (electricity having been invented the previous week, of course) that before you let a Lucille Ball stand in front of a camera, you make sure she’s funny.

But there were plenty of flops in the Era of Three Channels. The emergence of cable and satellite television gave us dozens, then hundreds, and now thousands of viewing options. Now you’re not splitting the eyeballs (and ad revenue) three ways, you’re splitting it three hundred ways. Oh, sure, no one is watching the Golf channel’s reruns of the 1979 Chevy Pinto Classic, so it’s not three hundred equal ways, but the supply of stuff to watch went up. No worries, right? The TV star is going to be okay.

The Digital Dilution

Now how did the oligopoly get even more diluted? The Internet. YouTube. Hulu. Netflix. The signal:noise ratio has skewed in favor of noise, but there is thousands of times more signal today than there was in 1960. Thirty-six hours of video are uploaded to YouTube every minute. Hulu has programming from 264 networks. Netflix accounts for 20% of the entire US internet usage during primetime TV hours. That’s insane.

The demand has grown, but the supply has exploded. It’s not online video that’s killing the TV star, it’s competition. The ad revenue isn’t necessarily going to go back up to where it was in 1960, or 1980, or even 2000. NBC and Fox own Hulu: they’re hoping to make some money off whatever kills the TV star. But it is killing the TV star.

And when this whole online video thing replaces broadcast as the dominant delivery method, who knows? Maybe there will be titans who emerge as having superior services, selection, or just lobbied the shit out of Congress and the FCC to murder net neutrality. Maybe the digital landscape will come to resemble the analog landscape, and ad revenue for these titans will be astronomical, because in the future there are more eyeballs. (Either because everyone watches TV Wall-E style in the future, or because we’re cyborgs with extra eyes.)

Filed on under The News

The much-smarter-than-me Nilay Patel on the Amazon Cloud Player and the coming round of “music locker” services.

A new type of music service has got the music labels in a tizzy — they say Amazon isn’t licensed for streaming, and talk of lawsuits has already sprung up, as has a perception that Amazon legally over-extended itself with the service. That perception has only been heightened by word that Amazon and Sony are now negotiating, and there’s already some bad precedent for Amazon — MP3.com lost a lawsuit over a very similar service back in 2000. (I remember the case well; I was in college when it was decided, and it directly influenced my decision to go to law school.)

But I think there’s a very real chance Amazon will emerge scot-free from all of this, because Cloud Player is built on top of massive amounts of bandwidth that simply didn’t exist for previous entrants in the market. In fact, by pursuing Amazon here, the labels might hurt their own cause in a fatal way. Let’s take a look.

When I first heard that Amazon’s new service didn’t have the legal blessings of the music industry, I was nonplussed. Why on earth would you poke the music industry? Have you seen the first page of Google search results for RIAA? They’re apparently almost as famous for suing people as they are for commoditizing music.

It’s not suicidal, though. The RIAA’s actually never sued people for turning a CD into a bunch of MP3s, even though it’s almost certainly a violation of the “anti-circumvention” provision of the DMCA. Their reluctance to sue for CD -> MP3 or MP3 -> iPod is pretty well-founded, too. Even though currently in the Second Circuit, the DMCA has no Fair Use exception, that the RIAA hasn’t been willing to start suing for ripping CDs is illuminating.

Patel points out that Amazon’s just adding a link to the chain: CD -> MP3, and then MP3 -> Amazon. If the first copy is okay, why can’t the second? Read Patel’s post; he really points out how the RIAA has painted themselves into a corner with their shortsighted business and legal strategies over the last decade.

Filed on under Legal Theory

The RIAA is suing the makers of the file-sharing software LimeWire for $75 trillion. The judge is not amused:

“If Plaintiffs were able to pursue a statutory damage theory predicated on the number of direct infringers per work, defendants’ damages could reach into the trillions. […]

As Defendants note, Plaintiffs are suggesting an award that is ‘more money than the entire music recording industry has made since Edison’s invention of the phonograph in 1877’. The absurdity of this result is one of the factors that has motivated other courts to reject Plaintiffs’ damages theory.”

Judge Kimba Wood calls Record Companies’ Request for $75 Trillion in damages ‘Absurd’ (via squaredem)

Filed on under The News

SSL is what makes transacting business over the internet reasonably safe. However, in the last two weeks, two of the certifying authorities of SSL have been breached, and handed out fake certificates for sites like Gmail. The major web browsers have revised how they handle certificates (specifically, they now check to see if the certificate has been revoked), but if you use Mac OS, you might consider the following,

[…] OCSP and CRL checking is disabled by default in Mac OS (except for Extended Validation “EV” certificates). You should turn it on. While I don’t see a big risk to most of us from the Comodo issue, in general it is a very good idea to enable this checking. To do this on Mac OS 10.6:

  • Open Applications -> Utilities -> Keychain Access
  • Under Keychain Access menu, select Preferences…
  • Select the Certificates tab
  • Set “Online Certificate Status Protocol (OCSP)” to ”Best Attempt”
  • Set “Certificate Revocation List (CRL)” to “Best Attempt”
  • Set “Priority” to “OCSP”

via The Security Skeptic.

Filed on under A Day in the Life

From Threat Level:

A film company suing 5,865 BitTorrent downloaders over the flick Nude Nuns with Big Guns doesn’t own the rights to the movie, according to court documents and interviews. Incentive Capital of Utah took ownership last month of the B-rated flick about a sister who is “one Bad Mother.”

Yet two weeks after Incentive Capital foreclosed and assumed Camelot Distribution Group’s titles because of an allegedly soured loan, Camelot filed a mass copyright lawsuit (.pdf) on behalf of Nude Nuns claiming it owned the rights.

Now Your Honor, I’m not some fancy big city lawyer. Back home in the back woods of Kentucky, we got usselves a sayin’. If you gonna sell me a hound dog, make sure you sell me y’all hound dog, ah reckon.

Yesterday, Wired ran a story about a novel way to recoup investments in indie films: wait until they’re pirated, and sue the downloaders. This plan seemed far from foolproof, but I have to say, I didn’t expect someone to actually bungle this step quite so dramatically. The film company defaulted on the loan used to finance the movie in the first place, and the film itself was apparently collateral for the loan. So now the lender owns the film, not the plaintiff. Whoops!

Filed on under The News