Towards a Liberal Copyright

Against Monopoly reports a new working paper "File-Sharing and Copyright" by Felix Oberholzer-Gee and Koleman Strumpf. The authors write that: "Copyright exists to encourage innovation and the creation of new works; in other words to promote social welfare. The question to ask is thus whether the new technology has undermined the incentives to create, market, and distribute entertainment." The authors conclude that: "As this essay has made clear, we do not yet have a full understanding of the mechanisms by which file sharing may have altered the incentives to produce entertainment. However, in the industry with the largest purported impact – music – consumer access to recordings has vastly improved since the advent of file haring. Since 2000, the number of recordings produced has more than doubled. In our view, this makes it difficult to argue that weaker copyright protection has had a negative impact on artists’ incentives to be creative."

Beyond adding my usual comment that copyright is not meant to be a welfare system for content producers, I won't be saying much. Below are links to articles/posts that have opined that a liberal copyright policy is better than the so-called strong copyright. I hope that you will find them interesting.

The link immediately below is a review of "File-Sharing and Copyright"
Harvard Study Finds Weaker Copyright Protection Has Benefited Society

The Effect of File Sharing on Record Sales An Empirical Analysis
(Here Felix Oberholzer-Gee and Koleman Strumpf conclude that: "Downloads have an effect on sales which is statistically indistinguishable from zero.")

The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada
Here Birgitte Andersen and Marion Frenz write that: "Our review of existing econometric studies suggests that P2P file-sharing tends to decrease music purchasing. However, we find the opposite, namely that P2P filesharing tends to increase rather than decrease music purchasing."

Against Intellectual Property

Against Intellectual Monopoly

Digital Productions

A Tale Of Two Studies On File Sharing...

Respected Dutch Researchers Note That Piracy Has A Positive Impact On The Economy

Textbook Company Embraces Free For Infinite Goods, Charges For Scarcities

Copyright And Its Harm On Culture

Nobel Prize Winning Physicist Explains How Intellectual Property Damages Innovation

How Copyright Is Holding Back The Creative Class

The sampling above is probably overkill, but I hope that it will serve as potential reference material should you wish to refute the propaganda of the content industry that so-called strong copyright (that deprives the consumer of their rights to content) is necessary to foster creativity.

New York Times - Off-Base Once Again

Once again the New York Times has written an article that purports to document how content creators, artists in this case, are getting screwed. In the article, "Use Their Work Free? Some Artists Say No to Google" , the Times quotes one of the artists as saying: “You’d think that if anyone can afford to pay artists and designers it would be a company that is making millions of dollars,” Mr. Ciardiello said in an interview."

Further down in the article the NYT writes: “There’s a lot of concern that newspapers and all of print is becoming a bit of an endangered species,” said Brian Stauffer, an illustrator based in Miami whose work has appeared in publications including Rolling Stone, Esquire and Entertainment Weekly, and who also rejected Google’s offer. “When a company like Google comes out very publicly and expects that the market would just give them free artwork, it sets a very dangerous precedent.”

Based on the tone of this article, the Times is once again attempting to foster the concept that the Internet is costing artists their jobs. This is disingenuous subterfuge to elicit sympathy for the "starving artists" and to distract the public from the reality that the newspaper industry is dying and can no longer support the number of artists wishing to be employed.

First, this article is logically flawed. Google is at liberty to solicit free content from anyone. If you don't want to work for free then you are free to decline. This is not, as the Times attempts to portray, about the obligation or capability of Google to pay artists for their work.

Second, look at the employees of the automotive industry. They are being laid off left and right due to the economy and the industry's obsolete business model. The content industry, like the automotive industry, is dying based on changing technologies and an obsolete business model. So why should it be any different if you are an artist and the newspapers can not afford you? As with any profession, you are not entitled to paid work.

Yes, it is depressing not to be able to get paid for producing content, such as artistic works. But we live in a free market system that is competitive. If the market doesn't value your work, to the point that you can make a living at it, then it is time to seek another employment opportunity.

Google does not have an obligation to only use paid employees. If people are willing to work for free, based on their love for the art, and contribute to Google, good for them. If you don't want to work for free then don't. The Times just does not seem to understand that content producers do not have a special right to paid employment.

Student Power - An Unrealized Potential

The LINUX community seems to missing a great opportunity to employ student power. When attending to college, students are routinely given assignments. Many of these assignments, while educational in nature, are useless from the viewpoint of adding to society's knowledge base. To make the student's work both educational and productive, students (on either and individual and/or class project basis) could be offered assignments related to enhancing the LINUX operating system. Actually, this would apply to all open source efforts.

I have been out of academia for some time, so I don't know whether this is or is not being done. If it isn't being done it would seem to be a tremendous waste of student power!

This concept has been simmering in my brain for some time. The following TechDirt article: "Student Wins Against Professor's Threats Over Posting Code Online" rekindled my interest in engaging students to enhance open source projects.

Intuit - A Despicable Company

Maybe my nerves are frayed today and that resulted in me having an extreme visceral reaction to the TechDirt article: "The End Of Microsoft Money: Big Company Doesn't Always Win". Maybe it was because Mike Masnick mentioned two of my all time "favorite" companies in one post and was off-base with his analysis to boot. Mike's off-base comment was that Intuit "won" the personal accounting product "war" because "Smaller companies are often more innovative and effective at taking on big companies."

The realty is quite different, Intuit, the seller of Quicken, is NOT an innovative company. Intuit "won" this contest because of marketing. In fact, Mike has a link to the underlying Cnet article: "How Intuit managed to hold off Microsoft". What is not mentioned in either the Cnet article or in Mike's analysis is the overly aggressive hyper abusive marketing strategies used by Intuit to sell their products. Additionally, Intuit does not disclose all the onerous business practices they impose to force the buyers into unnecessary "upgrades". Quicken, the personal finance program, is simply a cash cow for Intuit.

Intuit didn't win because it had a better product, it "won" because the more inept company, Microsoft, decided to drop out.

When Quicken was first released, it was a good program, it was innovative, and I had no complaints about Intuit's corporate policy. Over time Intuit has become a despicable company. I won't bore you with the mind numbing details of my negative experience. I'll end it here, but I would suggest doing an internet search so that you can form your own opinion.

PS: Paragraph above corrected based on the comment provided by Anonymous Coward. Also added a link to the Intuit, Inc. page on Wikipedia.

Jim Cramer's Wall of Shame

Jim Cramer has a popular financial show on CNBC, Mad Money. Recently he re-invigorated his CEO Wall of Shame identifying those CEO's who have succeed in destroying their companies. As part of this process Jim has been soliciting the audience to suggest nominees to who have earned a "coveted" spot on this wall of shame. In today's business environment that shouldn't be hard.

Last night it was the turn of Lewis Campbell, the CEO of Textron to get roasted and placed on the Wall of Shame. Textron, in many respects is very similar to General Electric. Like Textron General Electric has virtually collapsed. Forbes reports, in an aptly titled article: "Dim Bulb", that under Immelt guidance that GE's "stock has delivered a negative 12% annual return, 11% less than the S&P 500 Index, taking GE's market value from $390 billion to $198 billion." Forbes goes on to write that "This record and Immelt's average annual pay of $14.4 million over the last six years put him near the bottom of our performance-versus-pay scorecard. He has some contrition about this. In 2008 he declined a bonus and earned only $5.3 million."

So Campbell gets his own special spot on the Wall of Shame but Immelt is quietly passed over. General Electric, it should be noted, is the owner of CNBC news. Consequently, Jim's boss just happens to be Immelt, the CEO of General Electric. If equality means anything, when will Immelt be placed on the Wall of Shame?

PS: We own shares of General Electric

Search Engine Shortcomings

A long standing complaint that I have had with search engines is that they disgorge a lot of irrelevant results in the form of sales pitches. Of particular concern, when searching for for product reviews, you get websites that do not have real reviews and in some cases don't even have the product! Yet you are stuck wading through this morass looking for that proverbial needle.

Of course, to be fair, these search engines would not exist if it were not the for the fact that companies are paying the search engines for this advertising. Nevertheless, it is a disservice to simply dump on the user irrelevant content. After a while, the user will get discouraged and simply not use the search engine. Displaying relevant results, in the end will promote business and user satisfaction/trust will be a lot higher. Ubersoft has an excellent cartoon related to Microsoft's new search engine Bing, that also highlights the detrimental effects of giving the user irrelevant results. (To see the image better, click on it or on the word Ubersoft.)

Odds and Ends

May was pretty busy, my twin daughters graduated from college. They were both accepted to graduate school so now we are busy getting prepared for that. From the perspective of bringing some sanity back to copyright law and patent law, there have been some positive developments.

TechDirt reported on May 8, 2009 that: "Court Rejects Online Terms Of Service That Reserve The Right To Change At Any Time". The underlying article from JD Supra: "District Court in Texas Rejects Online Terms of Service as Illusory and Unenforceable". In looking these articles up, I also ran across this old TechDirt article: "Court Pushes Back A Bit On Unilateral EULA Changes". The underlying court decision can be read here.

Against Monopoly also picked up on this story: "Canada rules against business method patents". Michael Geist has this write-up: "Canadian Patent Appeal Board Rules Against Business Method Patents".

In reading these posts I also thought of Ed Foster who died in 2008 and wrote the Gripe Line column for Infoworld. Christina Tynan-Wood has since taken over the column. For good or bad, the theme of the Gripe Line has returned to its original concept of working to resolve consumer complaints with computer vendors. With Ed (the column over-time) increasingly focused on abusive corporate practices, such as the ever changing EULA which has made contract law a farce. His exposure of abusive corporate practices and abusive legislation will be missed by those seeking to put sanity back into copyright law.

The Economist in May ran an online "debate" titled "Copyright and Wrongs". The premise of the debate was whether copyright law was beneficial to society or detrimental to society. A lot of good points were made. But what was unfortunate about this so-called debate is that it seemed to be between two people who support copyright and were only arguing the point of how onerous copyright law should be! Hardly a real debate.

A breath of fresh air in this debate were the comments by Ms. Jessica Litman. Ms. Litman wrote "In the past 30 years, technology has made printing presses, paper, ink, warehouses, trucks and shelf space optional. Mass dissemination need be expensive no longer. Authors can communicate directly with huge audiences. ... Technology, thus, offers an opportunity to rebalance copyright law to ensure that a larger share of the copyright bargain can be enjoyed by creators and by readers, listeners and viewers." Ms Litman goes on to say that: "Instead, we have seen the conventional distributors of 20th-century works stampeding each other into a copyright panic, and running to lawmakers with demands for greater control over both distribution and consumption. Lawmakers, for their part, have been happy to oblige them, since copyright-affected industries have a record of generosity to politicians."

As a final casual observation, the Washington Post reports: "Trump to Miss California: You're Fired". I have not followed this story that closely, but it seems that Ms. Carrie Prejean has become the victim of a character assassination whisper campaign because she actual said something she meant. What is amusing with this, in a perverse way, is that I came home and my wife was watching a show where a contestant was making her pitch before a panel of judges. The contestant said, in a typical politically correct fashion, that if she won, that she would give her money to the UN. Unexpectedly one of the judges asked her: "When was the last time you did community service?" Stunned silence followed. The look on the contestant's face said it all, concerning her hypocrisy. Its unfortunate that Ms. Prejean is paying a price she should not be paying.

Health Insurance and the Automotive Industry

It seems that there has been an increasing buzz in the media concerning health reform. The Washington Post writes: "Obama Signals Willingness to Compromise on Health Reform". What I think is interesting is that health insurance industry may be starting the same downward spiral that the US automakers have taken. Like the automotive industry new economic realities are emerging that may, in the end, put the health insurance industry as we know it out-of-business in a relative sense.

First, the original intent of insurance, especially health insurance, was to provide medical coverage for catastrophic events. Overtime, the health insurance industry has morphed into an industry that is providing routine coverage (such as well health examines), and other supportive services such as smoking cessation. Nothing wrong with doing that, but the costs of providing all these services has to be paid for out of the employees and companies health care premiums. This would be similar, but in a reverse sense, to the automotive industry failing to curb union wages.

Second, the health insurance companies have become bloated inefficient bureaucracies with overpaid executives like the automobile companies. These companies are now managed based on accounting not the delivery of goods and services to the consumer (patient).

Third, when you buy insurance you are, in a sense gambling. Will I get sick or not???? The insurance companies of course hope that you never get sick. In the old days, before we had medical testing, it was pretty much a random event as to whether you unfortunately won by being sick/dying or the insurance company wins by you being healthy. In the old days the insurance companies could not really test risk-factors, such as genetic diseases, that we can today.

Today the operating environment is quite different and in a sense favors the insurance companies. Individuals can now be tested for a wide variety of risk factors, such as cancer, which in theory would allow the insurance companies to better allocate their customers premiums. The insurance companies also have significant potential liabilities associated with medical care. You get injured but don't really die and have to spend years in the intensive care ward. Health care today because of the ability to test risk factors, the ability to predict susceptiblity, the availability of exotic expensive treatments, and the ability to keep people alive makes medicine today - expensive. Few people would advocate cutting costs by pulling the plug on a patient.

Fourth, the increasing cost of medical insurance has become a national issue. Like the automotive industry, the health insurance industry has simply continued to raise the price of its products and continued with this tired old business model. As with the automotive industry, the politicians are now beginning to see/taste/smell "votes" for stepping in and supposedly solving this growing concern. Clearly the hand writing is on the wall that some structural changes will be forced on the health care industry like the automotive by our non-representing politicians to save us.