Ali Sternburg

Aereo Launches in Boston, with 21 Other Cities Planned, as Litigation Continues

by Ali Sternburg on May 15, 2013

Aereo, the television streaming service that recently won in the Second Circuit, is no longer confined to New York.  Today, Aereo launched in Boston, and 21 other cities are planned for 2013, including Atlanta launching as Aereo’s third city on June 17.

In addition to increasing its markets, Aereo has also increased its lawsuits.  Previously, Aereo had been sued by broadcasters, who argued that when individuals watch shows in their homes they are unauthorized ‘public performances’ that infringe copyright.  The Second Circuit agreed that Aereo’s conduct was legal under the 2008 Cablevision case.  Last week, Aereo brought suit against broadcasters, by filing a declaratory judgment against CBS and some of its affiliates.  A declaratory judgment is a suit brought with the intent that the court clarify the ambiguity around the potential impact of a law or legal obligation on the plaintiff.  Here, Aereo has requested that the court confirm that its technology does not infringe CBS’s copyrights or violate the Copyright Act, and requests costs, attorneys’ fees, and any other relief the court deems just and proper.  The complaint cites May 1 comments from CBS President and CEO Leslie Moonves that “we’ll sue,” and April 23 tweets from CBS Corporation Communications Exec Dana McClintock, which are embedded below:

These remarks from CBS demonstrate what Aereo investor Barry Diller recently explained; broadcasting is a challenging business for competitors: “No incumbent wants anyone in. That is an unbreakable rule.”  But Aereo’s decisions to continue to enter new markets, and to bring this declaratory judgment, show that they are up to the challenge.

{ 0 comments }

European Commission Planning GIPO, a Global Participatory Internet Policy Database

by Ali Sternburg on May 14, 2013

The European Commission announced plans yesterday with several other nations and NGOs to launch a platform called the Global Internet Policy Observatory (GIPO), development of which is likely to start in 2014, for increasing participation and engagement around Internet policy debates and decision making.  This initiative is encouraging “participation of all stakeholders across the world,” and intends to supplement existing fora, providing additional information and expertise.

GIPO plans to follow developments in policy, regulations, and technology, by:

  • “automatically monitor[ing] Internet-related policy developments at the global level, making full use of ‘big data’ technologies

  • identify[ing] links between different fora and discussions, with the objective to overcome ‘policy silos’

  • help[ing] contextualise information, for example by collecting existing academic information on a specific topic, highlighting the historical and current position of the main actors on a particular issue, identifying the interests of different actors in various policy fields

  • identify[ing] policy trends, via quantitative and qualitative methods such as semantic and sentiment analysis

  • provid[ing] easy-to-use briefings and reports by incorporating modern visualisation techniques”

The EC announcement demonstrates a commitment to Internet freedom, citing a February speech from Neelie Kroes, the Vice-President of the European Commission responsible for the Digital Agenda, entitled “Stopping a Digital Cold War.”  (The Obama Administration has similarly spoken out in support of Internet freedom, such as its statement during the controversial WCIT negotiations.)  As DisCo has previously covered, the proposals being put forth at WCIT would have threatened the Internet’s disruptive potential, and we remain committed to fighting to keep the Internet open.  In contrast with the closed WCIT talks, the Commission emphasizes the intent to involve all stakeholders in GIPO, including the developing world and “groups which may have so far been marginalised in Internet debates and decisions.”

The headline of the announcement refers to the current state of affairs as a “global Internet policy labyrinth,” a word which conjures a complicated and confusing maze.  GIPO’s crowd-sourced knowledge base intends to provide some much-needed guidance for navigating Internet policy.

{ 0 comments }

MPAA, Spacey: Availability, Access, and Affordability Fight Piracy

by Ali Sternburg on May 8, 2013

The @MPAA Twitter account live-tweeted last night’s interview with Kevin Spacey, and they tweeted this quote from him:

This statement is consistent with what Netflix Chief Content Officer Ted Sarandos recently said: “The best way to combat piracy isn’t legislatively or criminally but by giving good options.”  This may not be a coincidence, because Spacey stars in Netflix’s House of Cards.  All thirteen episodes of the first season of House of Cards were released on Netflix all at once, rather than the traditional distribution model, and as Netflix CEO Reed Hastings said, this ended up “reinforcing our brand attribute of giving consumers complete control over how and when they enjoy their entertainment.”

{ 0 comments }

Netflix Exec: To Combat ‘Piracy,’ Give Good Options

by Ali Sternburg on May 3, 2013

Lobbyists for copyright owners like to stress the problem of ‘piracy,’ proposing bills like the ill-fated Stop Online Piracy Act (SOPA), even when research continues to demonstrate that ‘piracy’ doesn’t always hurt, and in fact sometimes helps, content sales.  Often ‘piracy’ occurs when consumers’ expectations are not being met, because of technological constraints, or markets not yet existing.  If consumers can’t purchase the content lawfully, they may instead access it however they can.  (Exhibit A:  HBO’s ‘Game of Thrones.’)

However, content owners don’t always mind.  HBO programming president Michael Lombardo spoke out recently about this ‘piracy’ of Game of Thrones, saying it’s a compliment and doesn’t hurt DVD sales.  Lady Gaga’s manager Troy Carter has said ‘piracy’ is going away, thanks to technological innovation.

And just this week, a Netflix exec, in charge of Netflix’s new original content programming, echoed these sentiments.  According to Gizmodo, Netflix’s Chief Content Officer Ted Sarandos “claims the modern trend for easily streaming legal content is impacting on the more hardcore Bittorrent scene, with pirate traffic dropping in countries when Netflix switches on its servers.”

Sarandos explained that this is because “people are mostly honest,” adding that:

The best way to combat piracy isn’t legislatively or criminally but by giving good options. One of the side effects of growth of content is an expectation to have access to it. You can’t use the internet as a marketing vehicle and then not as a delivery vehicle.

Sarandos is exactly right that ‘piracy’ is reduced with a market-based solution.  The more services that emerge to provide consumers with superior options for content delivery the better, as competition drives down prices and spurs innovation.  There are barriers to entry, such as steep copyright licensing fees that deter innovation and lawsuits from incumbents, but disruptive competitors continue to emerge.  Companies shouldn’t be on the opposite side from their customers, by suing them or making their behaviors illegal; instead, they should be aware of consumers’ habits and changing norms, and innovate to meet demand.

{ 0 comments }

Barry Diller On Incumbent Broadcasters And Aereo Being Legal

by Ali Sternburg on April 30, 2013

Barry Diller, an investor in Aereo (for more on Aereo, see this DisCo post about their recent win), was interviewed yesterday by Bloomberg TV.  The Verge transcribed part of the interview, and an excerpt is below:

“I understand broadcasting,” Diller says. “No incumbent wants anyone in. That is an unbreakable rule.”

Aereo as it exists is legal, argues Diller; the real danger to its future is that the networks’ complaints will lead to a hostile intervention from Congress. “My attitude has been to jump into something that looks difficult and is against what people think will succeed and plant my little flag,” says Diller, adding that “sometimes it gets kicked.”

As The Verge notes, “Barry Diller is a media legend, a former Paramount CEO and USA Network mogul who helped launch the Fox television network.”  It is admirable that given his perspective and experience he is supporting an innovative service for delivering content to consumers, and is willing to depart from his former colleagues.  His quotes aptly demonstrate the conflicts DisCo often highlights between incumbents whose established revenue streams are being undercut by startups, who then seek government intervention to try to keep their market share (and, as Diller puts it, often ‘kicking’ the competitors in the process).  But given how popular the service has been in New York and its plans to expand (next stop: Boston), not to mention the crucial fact that the law is on their side, Aereo’s future looks bright.

{ 0 comments }

Months Later, Spotify is Back in the House

by Ali Sternburg on April 10, 2013

A few months ago, I wrote about the House of Representatives blocking Spotify under its longstanding P2P regulations, and the diverse backlash which ranged from the RIAA to Eric Cantor.  I suggested that the reason these overbroad regulations exist — which are intended for data protection, filesharing prevention, and virus preemption — is a series of unbalanced hearings from 2007 to 2009 that may have “caused technophobic Congressmen to panic, leading to a regulation that is now mindlessly enforced as a part of House IT policy.”  The rules appear to have been written and codified without adequately consulting people who understand the technology, and particularly what developments may emerge in the future.  Thus, there is an inherent bias against new, often disruptive, technologies, which are essentially blocked and disadvantaged by default.

Roll Call reported last night that Spotify is now accessible on the House network again.  According to a staffer, Spotify “modified some of their technology so the program no longer utilizes peer-to-peer technology.”  (Roll Call also noted that something similar had happened with Skype being blocked in 2011, but then reinstated after “member outcry and security modifications.”)

It’s good that Congress was responsive and listened to feedback.  Congress should continually monitor regulations and review existing and emerging technology, not just when a conflict arises, and also ensure that staffers who write legislation that impacts technology have access to the latest innovative products and services.

Plenty of institutions and businesses have inadequate internal IT policies, so this problem is not unique to Congress.  However, Congress is unique, for several reasons.  First of all, Congress is the entity that is responsible for shaping technology policy for the nation.  Thus, they should be more open minded and should avoid banning new technologies for unreasonable purposes.  Additionally, Congress does not face the same disciplinary mechanism that other organizations would face from competitors, who might lose market share as a consequence of not understanding technology.  That’s why it is critical to ‘bring in the nerds’ when the Internet and technology are involved — not just when making national legislation, but apparently for internal Congressional regulations as well.

UPDATE: House Majority Leader Eric Cantor (@GOPLeader), who had tweeted about the initial controversy, celebrated Spotify’s return:

Rep. Darrell Issa did, too:

{ 1 comment }

Can You Infringe Copyright In Six Seconds?

by Ali Sternburg on April 9, 2013

Last week, The Next Web reported that Prince’s record label NPG Records had recently sent a DMCA takedown notice to Twitter regarding eight Vine posts.  The use (and abuse) of the takedown process happens all too often.  (According to Google’s recent Transparency Report, Google is nearing 20 million takedown notices a month from rights holders, and the numbers are continuing to rise.)  This particular takedown incident is noteworthy for two reasons: the particular media format (Vine), and the claimant (Prince).  This post describes the nature of the dispute and explores the copyright implications of short clips of protected material.

Vine is a service (currently only available on Apple devices) that Twitter recently acquired, on which users create and post six second repeating video clips.  Sometimes they’re one continuous shot, other times it’s a choppy mashup of a few video clips.  (If you’re unfamiliar with Vine, check out this Buzzfeed post with some very entertaining Vines by inimitable supermodel Tyra Banks.)  According to The Next Web, although there are no other Vine takedowns on Chilling Effects, a “Twitter spokesperson tells us that this isn’t actually the first time Twitter has received takedown requests for content that appeared on Vine.”

That the first takedowns of Vines to appear on Chilling Effects were filed by Prince is oddly appropriate.  Prince is notorious for his disdain for the Internet, and especially for filing the DMCA takedown against a YouTube clip that is now known as the infamous ‘dancing baby case’ (the still-ongoing Lenz v. Universal).

The Chilling Effects database entry on these takedowns is dated March 26, 2013, and was filed via email March 22, 2013.  When I tried to visit the eight Vine URLs listed in the message from NPG Records each just said “Page not found” with a big frowny face.

However, I tried Googling each one, to see if any results came up for public Twitter results, and they did.  The first one turned up a Vine user’s handle (@ZackTeibloom), and so I checked for the same handle on Twitter, and it turned out he had just had a conversation several hours earlier with Mike Masnick (@mmasnick) from Techdirt.  Several of Zack Teibloom’s tweets are below:

It turns out all 8 of the Vines that were taken down belonged to him:  “literally all 8 of them were mine. That was the exact email they sent me.”

He described the content of the eight Vines:  “Two Purple Rain videos, Prince talking, Prince gyrating against a chair, Snoop from “The Wire” dancing, typical Prince show.”

He explained the takedown process (or lack thereof):  “They sent the exact letter you posted and asked that I take the Vines down. Links to Twitter were removed by them.”

And he wrote that he was ‘amused’ and treated it like a C&D, which suggests that he didn’t know he could have opposed the takedown with a counter notification:  ha, yeah that was his threat. I treated it like a cease and desist. All removed. Not worried. I was amused by it.

According to Teibloom’s tweets, it does not appear that he contested the takedown with a counter notification under 17 U.S.C. 512(g).

The DMCA notice and takedown regime has been essential in the rise of online platforms, particularly websites that host user-generated content.  Without the certainty that services won’t be liable for costly statutory damages for copyright infringement based on content users uploaded — provided they comply expeditiously with notice and takedown procedures — there would be a lot less investment in online innovation.  The 2011 Booz & Company study entitled ‘The Impact of U.S. Internet Copyright Regulations on Early-Stage Investment’ surveyed venture capitalists and found that a significant majority are deterred from investing due to the potential of liability for allegations of violating copyright, and would support an increase in clarity of copyright law and regulations.

There is thus much to be said for the certainty that the DMCA process provides.  One of the downsides, however, of avoiding litigation is that the rights holders’ claims are not subject to review by a judge or lawyer, and so allegations of infringement tend to go unchallenged.  This may not be a problem with regard to cases of willful infringers, but in many cases (such as, arguably, these Vines), the circumstances are not clear cut.  Does the claimant have the right to object to the use?  Would the use of the work qualify as fair use?  Is it even infringing in the first place?

MORE »

{ 0 comments }

Facebook Phone Essential to Its Long-term Mobile Strategy

by Ali Sternburg on April 4, 2013

As you likely already know, Facebook (NASDAQ: FB) unveiled its new mobile phone strategy today at 1pm EST.  The Verge had an excellent post previewing the launch and describing the landscape.

Facebook’s new offering is called ‘Facebook Home,’ and will be a new interface available on the Android platform, that will heavily integrate Facebook’s messaging (on the phone, it’s called ‘Chat Heads’…), social feed, and photo features.  ‘HTC First’ phones with Facebook Home will be available April 12.

Even if this initial ‘Facebook phone’ is not a hit — and many are skeptical of demand for this product — this is an important step for Facebook’s evolving mobile strategy, which is necessary for Facebook to remain a competitive player.  Regardless of the outcome of this release, the company will learn valuable lessons that make the long-term success of Facebook on the mobile platform more likely.  The rapid growth of the “mobile Internet” (smartphones and tablets), makes a company’s mobile strategy increasingly essential to its long-term prospects — and mobile presents a lot of different challenges for traditional Internet companies.

Remember Google’s first mobile offering, the Google Nexus One phone?  While that phone may have been perceived as a flop mostly due to the atypical mostly-online only sales strategy, it was also seen as a ‘successful flop’ that let Google test the Android platform, paving the way for successes with later Android phones from providers like Samsung, HTC, and Motorola.

A few months ago I wrote about Facebook’s new Graph Search offering and the landscape, where I cited an excellent Economist article on how technology companies are competing in different markets, not content with the area they currently dominate, and the piece remains ever-relevant.  Companies always face the potential of being disrupted, whether by startups or by new offerings from existing competitors, and so they have to continue to innovate in order to remain competitive in these dynamic markets.  Mobile competition may be uncharted territory in a lot of ways, but it is reminiscent of past technological ‘paradigm shifts’ that challenged incumbents, and it seems that many of today’s thriving companies have learned lessons from history, by continuing to enter new markets and offer new products — like this new release from Facebook.

{ 0 comments }

HBO Programming President on Game of Thrones ‘Piracy’: It’s a Compliment and Doesn’t Hurt DVD Sales

by Ali Sternburg on April 2, 2013

Last week, Rob Pegoraro wrote on DisCo about the various arguments people make about HBO’s strategy of distributing “Game of Thrones,” the season premiere of which just set a record Sunday for the most simultaneous infringing downloads.  According to TorrentFreak, which tracks traffic over the BitTorrent protocol, “These are mind boggling numbers that we’ve never seen before.”

Certainly, some amount of this downloading is due to HBO streaming only being lawfully available for purchase along with a cable subscription, at a time when TV consumers are increasingly ‘cutting the cord.’  (Game of Thrones DVDs have thus far been available for purchase about eight or nine months after the season ends.  A chart comparing the dates each season began and ended, with the release date for that season’s DVD, is available here.)  It turns out HBO is fully aware of this problem.  A new article on Entertainment Weekly quotes HBO programming president Michael Lombardo:

“I probably shouldn’t be saying this, but it is a compliment of sorts,” Lombardo said. “The demand is there. And it certainly didn’t negatively impact the DVD sales. [Piracy is] something that comes along with having a wildly successful show on a subscription network.”

The show is currently, on a per-season basis, the network’s top money-earner despite widespread piracy of the show, the executive confirmed. “If you look at aggregate of international and DVD sales — which are the two revenue streams we look at since we’re not selling it domestically on another platform — yes, absolutely, in terms of shows we have on now,” Lombardo said.

It thus appears that even while HBO is leaving money on the table by not catering to cord-cutters (many of whom want the premium network to take their money), Game of Thrones is still the network’s most financially successful show.  The fact that content creation is increasingly profitable in the digital age — notwithstanding that there is substantial infringement — is nothing new.  It is consistent with the new European Commission study I recently wrote about, concluding that online infringement drives music sales, and with the recent “Sky Is Rising” studies demonstrating that digital content distribution is contributing greatly to the health of the entertainment industry.

Lombardo’s quotes demonstrate that HBO is well aware of consumers’ preferences, which is encouraging.  Doing more to serve those preferences would create additional revenue streams, and likely diminish these torrent statistics.

{ 0 comments }

Aereo’s Legal Victory A Win For Cord Cutters

by Ali Sternburg on April 1, 2013

Today, the Second Circuit affirmed the district court’s denial of a permanent injunction against Aereo — a win for consumers, for cord cutters, and potentially for disruptive innovation.  Whether Aereo is disruptive because of its new use of now-standard cloud computing and broadcast technology or its cutting-edge reading of copyright law — or, probably, some combination of both — is not important for our purposes today.  What is important is that it makes it easier for more people to cut the cord, which ultimately threatens cable’s legacy business model.

Litigation had been pending over the legality of Aereo, a service that allows people to stream the same free over-the-air broadcast that televisions receive on a computer, tablet, or mobile device.  (That sounds like something convenient, useful, and technologically possible that should exist, right?)  Aereo’s business model is based on an essential Second Circuit precedent, the 2008 case Cartoon Network LP v. CSC Holdings, Inc., which is popularly known as “Cablevision.”  In both Cablevision and Aereo, the activities permitted by the technology at issue were found not to constitute a public performance, and thus no exclusive right granted to copyright owners was infringed.  CCIA had been following this case, and filed briefs at the district court [PDF] and in the Second Circuit [PDF].  CCIA’s briefs cited a report by Josh Lerner on the impressive growth of VC funding for US cloud computing businesses since Cablevision, which stated:

Our results suggest that the Cablevision decision led to additional incremental investment in U.S. cloud computing firms that ranged from $728 million to approximately $1.3 billion over the two-and-a-half years after the decision. When paired with the findings of the enhanced effects of VC investment relative to corporate investment, this may be the equivalent of $2 to $5 billion in traditional R&D investment.

CCIA’s briefs also had a memorable line on the Cablevision case:  “It is no exaggeration to say that the proper interpretation and application of Cablevision is critical to the future of the Internet.”  Aereo is currently only available in New York City, which is in the jurisdiction of the Second Circuit.  However, recent reports suggest that the service plans to expand to 22 other cities and has been in talks with Dish and AT&T, among others.

In March 2012, just two weeks after its launch, Aereo was sued by a number of large entertainment companies (just to name a few: Fox, ABC, CBS, NBC, and Disney) for copyright infringement in the Southern District of New York.  (The case — technically, two separate cases that were consolidated — demonstrates the entertainment industry’s tendency to litigate as a reaction to an innovative new technology service interfering with their established business model for distributing content.)  In July, the court denied plaintiffs’ request for a preliminary injunction, and Aereo was allowed to continue to operate.  The plaintiffs appealed to the Second Circuit, who affirmed for Aereo today.

(Side note:  Just last week, CCIA also filed an amicus brief [PDF] in a case against the not-so-subtly-named Aereo competitor, Aereokiller, where similar legal arguments were raised.  That case is pending in the Ninth Circuit.)

MORE »

{ 0 comments }

← Previous Entries