Piracy

The recession has created new urgency for multiple content industries to find a better way to protect and monetize their property/content in the digital world.  The dotcom bubble ethos that “information wants to be free” is like a gross mold destroying the incentives to create and distribute valuable content digitally. (Be sure not to miss the shocking analysis at the end of this post comparing revenue generation per user in the digital "ecommony" versus the real economy.)  

The first point of this post is to connect-the-dots why several content industries are currently in the news actively pushing back against the "ecommony" anti-business model, where content owners are expected to effectively give away their valuable content to the open Internet/digital commons without the requirement of permission or payment.

The first broad and serious counter-movement by business may be in the offing to ensure that valuable content is indeed paid for when distributed digitally. Serious financial and business risk is driving creative thinking about how to better protect and monetize valuable content digitally.

"A 'Cyber Katrina' is inevitable" according to George Foresman, a former Undersecretary  for Preparedness at the Department of Homeland Security.

I strongly urge you to read an outstanding, sobering and succinct post by USA Today's Byron Acohido: "Cyber Katrina is upon us" which:

• concludes "Cyber threats are accelerating;"
• highlights 8 "proof points" from respected Internet security sources that highlight "a continual increase in malicious and criminal activity on the Internet."

Byron Acohido adds:

• "Given these gloomy metrics, is there any reason to hope this cyber cyclone can be subdued? Vint Cerf, the man most often referred to as the father of the Internet, painted a dark scenario in this recent Guardian interview. When it comes to Internet security, “it’s every man for himself. . .in the end it seems every machine has to defend itself.”

Kudos to Byron Acohido and Jon Swartz for their tenacious and continuous focus on this under-reported, but critically important Internet issue -- and for their excellent book on the real and shocking gaps in everyday Internet security: Zero Day Threat.    

I consider myself of like mind with my friend Adam Theirer of PFF on most all issues of substance, however, I must take strong exception to his misguided take on Google and Googlephobia. 

In Adam's post "Googlephobia: Part 6 - the Left Begin to Turn on Google":

Kudos to Peter Osnos of The Century Foundation for connecting the dots in his piece: "The Platform: make Google pay."

• Mr. Osnos asks the pertinent question: Now that Google has conceded the principle that infomation is not free in its $125m settlement with authors/publishers, why don't newspapers and magazines insist on getting paid for their content?
• It's a thought-provoking piece read -- I recommend it. 

Mr. Osnos' central thesis becomes even more important when you consider that Mr. Schmidt recently suggested to advertising executives that they should consider if the business model for journalism should become a not-for-profit model!

What many in the journalism industry do not appreciate is that Google is quietly cheering on the demise of modern journalism and Big Media so that it can be replaced by citizen journalists that will of course use their platform predominantly through, Blogger, YouTube, and Google Knol.

• Google believes it can provide anyone and everyone a more efficient digital content platform than anyone else.
• Apparently Google's real mission is to organize all the producers of the world's information -- to work for Google!

Google's $125m settlement with authors/publishers is an excellent window into how Google intends to anti-competitively extend its de facto search advertising monopoly market power to other content markets.

• Think about it; if Google only has to pay a penalty of less than a penny on the book-selling dollar, why wouldn't Google be emboldened to steal all the entertainment property of others, and just settle for less than a penny on the dollar like it has with books? 
• What a cheap and easy way to extend and cement one's monopoly market power in search advertising into other content markets.    

Kudos to Professor James Gibson and his op-ed in the Washington Post today, "Google's New Monopoly" where he spotlights the anti-competitive effects of the Google-book settlement because a deal cut with no competition can embed barriers to entry so that competition can never emerge to compete with Google going forward in digitized books. 

• I made a similar point in my post "Google proves crime does pay -- if you have enough market power." 

More on Google extending its monopoly market power:

Google claims the settlement is not an extension of market power because Google is not requiring an exclusive arrangement from authors or publishers. This is brilliant misdirection. Google doesn't need a formal exclusive because their Machiavellian scheme grants them a practical exclusive arrangement.

Google, in settling with authors/publishers for $125m over their copyright infringement lawsuits, has cleverly leveraged its market power to tip, and lock in, another Internet segment to de facto Google monopoly control – access to most of the world’s books online. The untold story here is how this settlement:

·         Enthrones Google as the de facto gatekeeper to access most of the world’s books online;

·         Establishes a “new model” for online content distribution;

Google, the most-sued intellectual property infringer in the world, just settled a class action lawsuit with authors and publishers for $125m and a revenue sharing deal going forward;  this deal has much broader implications than most would think for Google, for other companies suing Google for theft, and for the pending Google-Yahoo ad partnership.

Implications for Google: After steadfastly maintaining that they had done nothing wrong and that they were protected by the concept of fair use, Google has now de facto conceded that it was broadly infringing on authors' and publishers' copyrights, while also signalling it feared losing in court. 

Google's CEO Eric Schmidt had the temerity to suggest that journalism consider becoming a not-for-profit enterprise -- at a recent Google program for magazine executives.

• See Ad Age's article: "Google's Schmidt says Internet 'cesspool' needs brands -- Says the solution is quality content; tells publishers and editors to 'increase your relevance'. 
  • From the article: "...when asked where the industry ends up if there aren't outlets willing to pay journalists to create quality content, Mr. Schmidt was a bit Palin-esque, saying that he didn't have an answer but one thing to look at is whether journalism should be a for-profit enterprise."

Google's CEO must think journalism-business people are stupid.

Miguel Helft/The New York Times has figured out that Google is indeed a media competitor, but apparently doesn't think other media have connected the dots -- given how they framed their lead business article today: "Is Google a Media Company?"

While its obvious that Helft/NYT get the joke that Google is most certainly a media company by the prominence, graphic, and headline of the story, they also did their journalistic duty in presenting both sides of the question, including allowing Google a lot of space to continue its charade that Google is not a media company.

Let's have some fun with Google's "who? little old us? a media company? you must be kidding..." --defense in the New York Times article.

What did we learn from today's FCC action on the FreePress-Comcast dispute? 

First, there remains no need for passage of net neutrality legislation, as an FCC majority showed that there is an oversight process in place and readily available to address anyone's concerns about maintaining consumers' right to "access the lawful Internet content of their choice."  

Second, the absence of any fine against Comcast, the lack of any finding of anti-competitive intent by Comcast, and the FCC acceptance of Comcast's self-imposed deadline to address the FCC's concerns --speaks volumes. 

• Basically, the FCC is affirming the direction and actions that Comcast already has undertaken on its own, in dramatically increasing its terms-of-service disclosure and migrating to a protocol-agnostic network management technique by year end.    

Third, an enforcement process is the appropriate mechanism for determining what is "reasonable network management," not a regulatory rule or legislation.