Wednesday, May 2, 2007

THE "NEGOTIATIONS" CONTINUE: GOOGLE REFUSES TO BUDGE (Terry)
Viacom-V-GoogleThe game of chicken that Viacom is playing with Google/YouTube moved to a new level this week with Google filing its response to the Viacom suit and asking for a jury trial. This was predictable, because the game is all about negotiations, and this puts the puck back in Viacom's zone.

At stake here is the old way of doing things versus the new, and Google's response is filled with language that we all need to consider. Staci Kramer at PaidContent.org gives an excellent summary:

Google’s 12-page response echoes its initial reaction--insistence that it has upheld the DMCA and that any finding otherwise would cause damage beyond Google. The constant refrain: "Defendants deny the allegations ... "

From the intro: "By seeking to make carriers and hosting providers liable for internet communications, Viacom’s complaint threatens the way hundreds of millions of people legitimately exchange information, news, entertainment, and political and artistic expression. Google and YouTube respect the importance of intellectual property rights, and not only comply with their safe harbor obligations under the DMCA, but go well above and beyond what the law requires."

Google product counsel Glenn Brown explained in an interview Monday that "the rest of what we argue--and will argue in the case--is that we’re confident in our legal position and we’re not going to let this case distract us from continuing to innovate ..."

Viacom's reaction continues their position that YouTube profits from copyrighted materials and adds that the Google response ignores the most important "fact" in the case, which is that YouTube "does not qualify for safe harbor protection under the DMCA." This is an extremely risky position to take, because it asks a jury to define whether YouTube is an "online service provider (OSP)." Google believes that it is, and, frankly, it's pretty hard to argue with that.

This same provision of the DMCA (Section 512) is used by bloggers and others to find protection from comments left by others, and the courts have tended to agree with the bloggers in such cases. YouTube will use these rulings to establish that they meet and have met all the requirements of the DMCA.

In order to qualify for safe harbor protection, an OSP must:

  • have no knowledge of, or financial benefit from, the infringing activity
  • provide proper notification of its policies to its subscribers
  • set up an agent to deal with copyright complaints
Viacom argues that YouTube doesn't meet the first requirement, because it both has knowledge of and profits from the infringing activity. The question is will a jury swallow that, especially with the case being positioned as individual people trying to share videos with each other against the big, bad corporation (Viacom).

Michael Arrington at TechCrunch writes:

I have visions of bloggers fighting to get a good seat at the trial, and live blogging the entire thing. The fate of YouTube’s buisness model, as well as many other web startups, will likely be linked to the outcome of this litigation.
While this is technically true, I don't think the case will ever get to that point. The risk is simply too great for the copyright industry, and the issue really belongs in congress, not the courts.

The corporate lawyers representing broadcast companies generally take an extremely conservative position on all matters involving copyright, including section 512 of the DMCA. The established internet pureplays and pureplay start-ups take the opposite position, and therein lies significant conflict that, frankly, needs resolution.   <Permalink>

<<< >>>

DIGG DEFIES A CEASE AND DESIST ORDER: ANOTHER MAJOR LEGAL BATTLE COMING? (Terry)
This story is both fascinating and chilling at the same time.

When we speak of the "personal media revolution" or the "user revolution," we're referring to the disruptive influences of everyday people armed with communications tools formerly reserved for the elite. And make no mistake, we're talking about a real revolution. Will "the man" win or the people? This is at the core of the Viacom/YouTube matter and now a new one between the user-driven "news" site, DIGG, and a consortium of the HD-DVD industry.

DIGG logoDIGG users have overwhelmed the site in recent days with stories about the breaking/hacking of the HD-DVD encryption code to enable users to copy the content of the DVDs. DIGG got a cease and desist order and initially tried to take down the offending stories. But the users revolted and soon nearly every story related to the code-breaking. DIGG's founder, Kevin Rose, gave up:

In building and shaping the site I've always tried to stay as hands on as possible. We've always given site moderation (digging/burying) power to the community. Occasionally we step in to remove stories that violate our terms of use (eg. linking to pornography, illegal downloads, racial hate sites, etc.). So today was a difficult day for us. We had to decide whether to remove stories containing a single code based on a cease and desist declaration. We had to make a call, and in our desire to avoid a scenario where Digg would be interrupted or shut down, we decided to comply and remove the stories with the code.

But now, after seeing hundreds of stories and reading thousands of comments, you've made it clear. You'd rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won't delete stories or comments containing the code and will deal with whatever the consequences might be.

This may seem honorable, but these users -- who appear to bear no legal culpability -- have put "their" site in jeopardy, and once again, the law will have its hearing.

Those of us who live within the copyright industry need to be mindful of the energy that's behind this "revolution" and that it's not just a bunch of hooligans fighting a guerilla war. They will argue that they didn't start the war, and that suing customers is probably not the best of business practices.

As stated above, we need to rethink a lot of things about entertainment and copyright law, or this battle is liable to get very bloody.   <Permalink>

<<< >>>

MORE DEALS, AS CONTENT PROVIDERS GET "JOOST" (Steve)
Every new web video technology that comes out generally gets met with skepticism from the old guard. "It's too grainy," "It's amateur," "It won't replace real TV," and the other criticisms are now proven to be tired. Developments in online video are worth paying attention to - especially when they have the potential to be game changers.

Joost LogoJoost is such a product.

I've been playing with the beta of Joost for about a month now. (And it is, indeed, pronounced "juiced.") It's a nifty bit of software engineering that delivers high-quality video to the desktop via peer-to-peer technology. That's the same tech that brought us Skype and the file-sharing service Kazaa and the people behind Joost are the same people behind both those products. So they know their stuff when it comes to disruptive models of delivery.

Joost requires a modest software download, and works with PCs and Macs. When it's running, Joost goes fullscreen, giving the user choices of channels in an easy-to-understand environment.

The video quality is darn near TV, and will only get better. And the service is free.

Content is everything here, and Joost keeps making announcements about new deals with content providers that will make this a killer app: Viacom, CNN, the NHL, Sony, CBS, Coca-Cola, Nike and Microsoft already have deals in place. You can watch National Geographic documentaries and music videos. Cartoon Network's "Adult Swim" shows are there. This is not a "we'll give them 2 minute clips to tease them to watch our shows" play. This is the real deal. This is disruption.

Joost and its partners are going to be trying out new ad models here, too. According to an article by the AP:

"(Joost) is still experimenting with when and how it will run ads, including short advertisements before or after programs, traditional 30-second ads in the middle of longer programs, and more experimental ideas such as ads that appear on the screen briefly and then fade away while a program is running."
More than just delivering TV, Joost is also going to have social tools that will enable people to chat with each other while watching.

Disruption in programming. Disruption in delivery. Disruption in advertising. That's a product worth watching.   <Permalink>

<<< >>>

EVERYTHING YOU NEED TO KNOW ABOUT MEDIA CONSUMPTION IS AT ITUNES (Steve)
The number three most-purchased music video as of this writing is a Ford commercial.

A newspaper is producing local news video in HD.

The top podcasts are from NPR and PBS, not from jokers and teens with microphones and laptops.

People love history, current affairs and non-fiction. They're not just drawn to pap.

Spend some time poking around the iTunes store and you'll learn an awful lot about the way people consume media. And what you will learn will challenge many of the notions you have about what people want.

We talk about how people hate advertising. TiVo is the end of TV advertising. The model of advertising is gone. Wrong. People love advertising - when it's entertaining. Right now, the ad for Ford that features American Idol contestants singing "Crazy Little Thing Called Love" is the #3 music video download on iTunes. People are paying $1.99 for an ad. The money is going to charity, but there's no way this video becomes #3 unless it's entertaining - which it is. And it paves the way for "non-charity" paid music videos. And, charity or not, this is an advertisement for Ford and American Idol

. TV people routinely turn their noses up at the quality of video that newspapers generate for the web. (Remember how newspapers used to look down on TV sites for daring to generate print content?) The Washington Post, with its 33 video cameras now on the streets, is putting out videos in High-Definition. The free video podcasts are terrific local news stories, done as nat-sound pieces. The story about a 17-year-old composer is as rich and well-shot as anything you'll see produced by a TV station. And it's in HD, shot on a small camera.

Mass entertainment talks down to people. Let's face it. But when given a choice about what they want, this audience makes some highbrow choices. Of the top 10 podcasts, 7 are from public radio, PBS, CNN, or in one case - an instructional podcast in learning Spanish. And in the audiobooks section, you don't find the kind of entertainment Hollywood thinks we want. 14 of the top 15 audiobooks are non-fiction. People want to hear about Einstein. They want to hear from the Dalai Lama and George Tenet. They're interested in the teachings of Abraham and in Stephen Colbert.

All of this represents the very wonder of giving people choice. We're no longer trapped by the lowest common denominator. We're free to produce high-quality content and lots of it. The demand is clearly there - you can see it on iTunes. The audience wants choice. The choice of whether to provide it is up to you.   <Permalink>

<<< >>>

MARKETING VIA SOCIAL NETWORKS: A MEDIA 2.0 STRATEGY (Terry)
Steve and I have written about the power of social networking in the Media 2.0 disruption and how there are significant opportunities in this world for local media companies. MySpace is, of course, the king of social networking, so we closely watch what they do.

Young people prefer social networking to TVA new study sponsored, in part, by MySpace offers some fascinating data and a new advertising metric that deserves our attention. The study, "Never Ending Friending," provides research and a roadmap for using social networking sites using a couple of examples from MySpace.

After listening to respondents, crunching numbers, and working to synthesize all this data into a singular narrative, we happened upon a simple phrase that we think best expresses the emerging new world of social networks: "never ending friending." This phrase describes a world where frictionless attraction makes forging meaningful relationships easier -- and more rewarding -- than ever before.

In summary, we learned that social networking is a quantum change in how we interact -- with each other, with bands and brands, and with the entire media landscape. We also learned there are indeed a set of best practices that will govern behavior in this new world.

The report looks at a new metric they call "the momentum effect" and builds it upon what they call consumer-to-consumer (C2C) marketing.
The secret to activating the momentum effect appears to revolve around giving consumers the opportunity to share their own story using the brand as a symbol and reference point. Giving consumers the tools to add the brand to their wallpaper or opportunities to make a dream come true through brand-connected programs are two methods we measured to great effect in this research.
68% of social networkers do their thing in the evening hours, which helps explain the below illustration from the report. The losers are video games and television.

Young people watch less TV and play less games while social networking

Stations with powerful brands or sub-brands (franchises) would do well to consider applying the recommendations of this report into the mix of their online offerings. Marketing this way will work well for some brands moreso than others. MySpace can also target young people by DMA and at a fairly affordable price ($10k/month minimum one month), so if you've got a content offering or service that appeals to youth, it's not a bad way to go.

But creating a page and growing a base of "friends" costs nothing except the time to do it, so it's really a no-brainer tactic.   <Permalink>

<<< >>>

CHECK OUT: Nielsen is out with its first survey of DVRs in American homes. 17.2% of households have at least one. Dallas is #1 with DVR penetration of 26.5%, followed by L.A., San Francisco-Oakland-San Jose, and Washington D.C. The average is skewed somewhat - DVR penetration is heavier in major markets, throwing off the curve.