Thursday, April 30, 2009

Imagine if

Originally posted by Tom Koltai at 05:53PM (EST) on April 30, 2009

Wouldn’t it be interesting if the current push for a global world government actually went to the country with the most votes.

As an economist, I am enamoured of the concept of a united world central government overseeing that all people of the world are treated with respect, equally, fairly and without favour.

Unfortunately, if it were based on a fair and democratic voting process it would probably never come to pass – Why? – Because obviously the outcome would result in a socialist existence.

Because obviously the first action of the global Government, would be to make all decisions public referendums.

And the next action would be to outlaw paid lobbyist access to the members.

Every decision would be made by the public with a 24 hour per day rolling poll.

Think about it – it would be extremely cheap to run.
There would be just one chap – and he would speak on behalf of the entire world.

All interaction with the OWG (Our World Government) would be through the internet.

Any person could nominate an issue to vote on.

Issues would be passed or rejected by global voluntary vote. Those that were interested would vote, those that weren’t, wouldn’t.

Think of it as Government by Ebay. If you like it – bid. If you don’t like the motion… vote no and keep looking.

All those in favour of file sharing ----- tick here.
All those in favour of putting file sharers in jail ------ tick here.......
All those in favour of removing all guns and ammunition out of Somalia ------- tick here.
All those in favour of sending aid and education to Somalia -------- tick here
All those in favour of providing homes for all the homeless ------ tick here (=$3.00 extra tax per wk)
All those in favour of leaving the homeless in the street ----- tick here.

The result of such an experiment would be interesting.

Cartels would disappear overnight.
Pork Barreling would disappear.
Business that depended on Government subsidies would fail unless the public recognized and approved those subsidies.

There would of course have to be one more regulation to ensure that no one country could rape and pillage its neighbours…..

What is made here – stays here – and what isn’t made here doesn’t come here (Sounds harsh but it will encourage jobs and security for all countries, not just a few).

Which of course is the old import/export Tariff regime. So possibly, the Global Government needs to be independent state governments first.

The Danger of Social Computing or Publishing Maps

by Tom Koltai at 10:25AM (EST) on April 30, 2009
 
On Neil Diamond's Album, Hot August Night, he calls out… Hello out there Tree People…..

His words – which impressed me over thirty years ago are obviously an acknowledgement by Neil, that even the non-paying tree people had a value, by adding to the carnival atmosphere of the concert and just by being there, were therefore worthy of his recognition.

He didn’t chastise them for being free-loaders – everyone knew they were freeloading. He merely acknowledged them warmly as part of the event of a Hot August Night. (The Album became the number one seller in the US for a considerable time).

Could it be that part of the reason for his success was his treatment of the freeloaders and the subsequent public understanding of his comment to the the tree people?

However it was also those words that in my mind justified the actions of myself and three friends jumping the fence at the Western Springs Stadium in Auckland New Zealand a few years later to watch Led Zeppelin.

Did we break the law, obviously, so why did we do it ?

Well at the time – we were poor starving students that couldn’t afford the $7.00 concert entry ticket price.

Hell, for me, $7.00 equaled 2 loaves of bread, 2 dozen eggs, a ½ pound of  butter and a jar of coffee and bag of sugar for two weeks (Basically I lived on a variation of poached egg on toast for breakfast lunch and tea). In other words – the price of the concert tickets was two weeks food bill but I had serious conflict. From a higher power than that which employed the security guards around the Western Springs venue - my girlfriend wanted to see “Stairway to Heaven“ being performed live.

Can you imagine me saying no? (Especially when we were staying at digs only 800 meters from the Western Springs Stadium fence-line.)
The peer pressure was to jump the fence.

Now imagine if we had been strangers to the area and the four of us had driven there by car and stopped to ask a lone walker for directions to the Concert.

Hi, can you give us directions to the Zep concert please.
Sure, the average citizen would answer – and then they would proceed to give directions.

Then we would proceed to jump the fence and enjoy the concert for free.

Can you imagine the following Newspaper story in 1976 …..

Individual giving directions to Rock and Roll concert freeloaders gets 12 months Jail and $50,000 fine.

No you can’t because in 1976 – jumping the fence wasn’t much of a crime.

The judges would have laughed it out of the court…. And on the question of jailing the signpost, the directions giver, the guidebook, the UBD map, the community pin board, the search engine;
well I think on that question, thirty years ago, our Judiciary would have said – no – that’s quite impossible.
Giving directions to people that you suspect might jump the fence is certainly not a crime.

So – tell me. Am I growing crazy or did we with the Pirate Bay case just see the Convention for the Protection of Human Rights and Fundamental Freedoms  get overturned in Stockholm.

What happened to the right to give directions without being automatically associated as a criminal?

Here’s the link to the Translation of the Courts ruling in the Pirate Bay Case – now translated to English  http://www.wired.com/images_blogs/threatlevel/2009/04/piratebayverdicts.pdf

Here’s the Berne Convention for the Protection of Literary and Artistic Works.
http://www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html
Keywords:  Berne, Hot August Night, Neil Diamond, freedom of speech, Human rights, tree people, P2P, pirate bay

Tuesday, April 21, 2009

Lets Talk about P2P Damages, Coffee and Bulldust

by Tom Koltai at 02:16PM (EST) on April 21, 2009

Last Friday in a Swedish Court, the four pirates were awarded four years of jail time and financial damages against them (for running a Google search engine) of over three million dollars.

In February three Thai CD Pirates were handed out jail sentences under a year each and fined $14,200 each for pressing 306 CD-Roms per minute of pirated content for the last three years and selling them into the black-markets as originals . (See references below)

In other words for distributing over thirty million pirated CD’s these Thailand based pirates got a sentence that looks like a joke when compared to the Pirate Bay lads - who essentially, let me repeat myself - ran a SEARCH engine.

Of course this inequality in sentencing is essentially the PR machine at work to justify the passing of legislation designed to curtail human basic rights. (ACTA)

IPFI, MIPI, AFACTS, RIAA, MPAA all take delight in reporting the damages awards handed by the courts in various file sharing cases.
The majority of these claims are based on the premise that the downloader/uploader made “n” pieces of content available on the internet for free that would have sold for “o” dollars retail or “p” dollars wholesale and therefore depriving the content creators of {N x O} or {N x P}, “whatever your Honour thinks is fair.”.

Unfortunately, that is not quite how this works. In real life, it works something like this…..

A movie on the big cinema screen is a different experience to watching the same on a laptop or mobile phone screen.
The special Dolby surround sound effects can not be “felt” when you are peering intently at a 7” or 2” screen listening hard to the 8 ohm quasi stereo “speakers”.
There are no fresh popcorn smells – nor are there any Jaffas to roll down the stalls – and of course there is no way two people could watch such a small screen together so the “arm-over” maneuver doesn’t work outside the cinema.

All of these elements combine together to create a unique "experience value" that economists like to call the Hedonic value.

The basics of Hedonic value are in the measurement of consumer self justification value for the  payment of an item of perceived need. (Usually driven by advertising, marketing and lately more by social networks and peer to peer interaction.)

The hedonic value of watching a presentation on a big screen at the movie theatre is vastly superior to reviewing the same movie on a micro computing device. Especially if there is a couple involved. It’s a bit like the difference between a Starbucks Coffee or, a home made powdered, instant coffee.

I’m a coffee addict. I drink between thirty and forty cups of coffee per day.

At select establishments around the world, an Americano (long black) coffee costs $3.75 for the small cup.
If I were to use the content industries argument, my addiction is equal to a $150.00 per day habit.

I do quite often go out and have a long black coffee when chatting with friends or holding a business meeting, however that would not be more than three or four times a week and my total tab for that would not exceed $20-$30 all up.
The rest of the time, I drink instant coffee. The Germans have a good word for instant coffee, “ersatz kafe”, which means “pretend coffee” or fake coffee.

I use Nescafe Expresso coffee which sells retail for a 350 gm jar for $9.00 (sometimes $7.00 on sale). I buy a 2 kg bag of sugar for $1.65. The coffee and the sugar last me for approximately ten days,
I drink 245 cups of pretend coffee a week interspersed with about five – seven real coffees. My total coffee budget is therefore approximately $31.00 per week; not the $1050.00 that the content industry think I should pay them.

What is different, is the price I am prepared to pay for each alternative product. The instant cup of coffee 2 minutes after I wake up in the morning is worth far more than the Starbucks Americana that I have to cross the road for in a driving hail storm to get – but its hedonic value is enhanced by the fact that I can have that ersatz coffee without shaving, dressing or going out into the weather.

That first cup of coffee doesn’t in any way replace the desire or need to have the real thing later in the day, surrounded by my peers or colleagues in nice surroundings.

The two are separate, disparate and totally unrelated experiences and worth two totally different values.
It can be argued by coffee aficionados that ersatz coffee is a temporary fix only – a prelude to the real thing, a stop-gap, an emergency standby, the free taste. It can equally be argued that the world would not function as well without the ersatz coffees, which in reality actually make the real coffee taste so much better by comparison.

The same can be argued successfully for movies shared on the Internet. The “free taste” actually enhances the hedonic value of the movie experience and leads to more movie admissions at higher prices.

Cinema attendance figures for the last two years indicate that more people are going to the cinema than at any time in the last sixty years.  Yep –  records are being broken, daily.

According to a recent report by Price Waterhouse, the Ancillary markets and new technologies have revolutionized profit potential. Over the last decade, ancillary markets have grown by over 30%. The home video market alone has grown over 200%. The combined worldwide filmed entertainment market will achieve sales of $118.9 billion in 2009, a 7.1% compound annual growth rate (CAGR). Source: Price Waterhouse Cooper.

There are very few industries that can claim a 7.1% compound annual growth. (Then again, there are very few industries that have millions of PR people working for them for free, downloading files like mad for the ersatz taste.)

The hedonic value for consumers of attending a cinema screening is being proven daily at the Box office in leading file sharing countries like :

Headline: Slovakia, Bulgaria, Turkey, and Russia were the top performing European countries for cinema attendance growth in 2008.

Russia saw the largest amount of increased ticket sales, 124 million, up 16% from 107 million in 2008. Turkey, however posted a jump of almost 27%, with 38.5 million admissions.
Across Central Europe, Slovakia stood out with an 18.2% gain, to 3.3 million admissions, but still down compared to a strong 2006, with 3.4 million admissions.
Bulgarians were back up to 2.8 million admissions, a 12.1% increase, but below a five year high of 3.1 million admissions in 2004.
Poland's 3.4% rise brought a five-year high of  almost 34 million admissions

...and:

Headline: Box office goes boom
According to Box Office Mojo, an online site that crunches movie revenue data, February admissions were up more than 10 per cent over last year, and that came on the heels of the first-ever billion-dollar January. Compared to previous annual revenues, 2009 is tracking as Hollywood's most lucrative year ever, with the current year-to-date box-office standing at about $1.8 billion US -- as much as a 20-per-cent increase over same-period totals from the past three years.

In summary, the Content Industries claims that file sharing carried out on P2P technologies and networks is damaging their bottom line is sheer and utter  (warning – expletive forthcoming) bullshit.

It is akin to claiming that file sharing is stopping young couples from going to the cinema and the lack of “over the shoulder arm maneuvers” is leading to negative population growth.

In closing – if the industry’s claims that file sharing is hurting their bottom line is based on fact, rather than self creative litigation justification, then why during a depression are more people going to the movies than file sharing for free ?

My answer is that consumers are a lot more discerning than Hollywood and can actually taste the difference between instant coffee and real coffee.

The attention that Governments and the Courts should give the content industry about these claims is the same attention that Starbucks gives to Coles when the price of Nescafe in Coles drops down to $7.00 during sales. Nothing.

References
Three CD pirates jailed in Thailand
http://www.ifpi.com/content/section_news/20090225.html

Passion Helps Record Year At Global Box-office
http://www.zeeks.com/wirestory/?story=0fc3m7kv

Box office, admissions rise in 2006
http://www.variety.com/article/VR1117960597.html?categoryid=13&cs=1

Box office goes boom
http://www.vancouversun.com/Cars/office+goes+boom/1364236/story.html

European cinema bounces back in 2006
http://www.obs.coe.int/about/oea/pr/mif2007.html

Weekend box office figures
http://www.ukfilmcouncil.org.uk/weekendboxoffice


Keywords:  damages, bull, box office, PR, Hedonic Value, Dolby, coffee

Friday, April 3, 2009

Ho Hum Sweden Passes new anti File Sharing Legislation.

by Tom Koltai at 10:12PM (EST) on April 3, 2009 



Prologue Fairy Story.....

Imagine how you would feel after spending a fortune in election fees, lobbying fees, legal fees, private eye investigator fees, advertising and in the process of doing so, accidentally giving your stated enemy, the key to Fort Knox, a free pass to remove as much loot as they liked and too boot, the mindset of all of your customers so that the customers would want to carry all the gold away to be deposited in the pirate coves secret enemy stronghold, the infamous, tri-homed, impregnable EPG.


But if you were the Content Industry, you would feel like you had won a great victory when the Swedish Government this week finally passed the anti-piracy legislation.

And Internet traffic in Sweden Plunged 30% downwards overnight.

File sharing in the USA was “outlawed” with the Digital Millenium Copyright Act. (DMCA).
Yet in the United States last night between 10:00 pm and 12 pm east coast time – there were approximately 38.7 million (visible) people sharing approximately 4.3 Terrabytes of data and transferring between themselves, approximately 300 megabytes per user.

Just how much data is that in terms of total backbone traffic.

11610000000 megabytes (MB)
11337890.62500 gigabytes (GB)
11072.158813 terabytes (TB) or – 16196000  movies.

Please remember, this is over a two hour time period with half of the east coast of the USA already in bed asleep.

There have been various attempts at measuring Internet Growth and P2P traffic as a component of Internet Growth – yet no-one has yet done a chart of the two together.

We thought we would have a go.

So will the legislation make any difference to the Swedes ? I doubt it.
Especially when the latest offering from the Pirate Bay is total anonymity, total invisibility (and obviously total immunity to prosecution) for the lowly sum of only five euros per month.

Assuming everyone in the world wants to be impervious to prosecution (sign-up here)

then we can calculate five Euros per month times 23 million peers. I make that around $(USD)200,000,000 estimated revenue for the Pirate Bay boys next year.

And that’s not payment for content – that’s payment for the “mechanism of delivery” and as I said the other day – the US Supreme court has found that a mechanism in itself if capable of being used for legal activities as well as illegal, is not a breach of the DMCA.

Lets think about that.
Regardless of the outcome of the current court case, the Pirate Bay have developed an intensely loyal following.
Past efforts at de-knackering the Pirate Bay have proved fruitless,

Their revenue from the new delivery model will challenge Apple Ipods within two years and shut down iTunes within five.

Isn’t it time that the industry offered to buy the Pirate Bay or at the very least learnt to work with them?
Haven’t they learnt that every push actually costs them more ?

I like watching new movies and would like to make sure that Hollywood can afford to keep on making them. And so, whilst I disagree with some of their modus operandi tactics, haven’t they learnt yet that sometimes a leopard just has to scrub off its spots ……… no matter how much “face” it loses………before everyone VANISHES
 

References
Andrew Odlyzko; Measurements and Mismeasurements and the Dynamics of Data Traffic Growth (2002);l http://www.dtc.umn.edu/~odlyzko/talks/cmg-mismeasurements.ppt

Stephen McClelland; International backbone traffic growth 'nigh unstoppable'; http://www.telecommagazine.com/newsglobe/Print.asp?Id=AR_3861 14/Jan/2008

*Bin Fan anors; Stochastic Differential Equation Approach to Model BitTorrent-like P2P Systems
Dept. of Computer Science & Eng. The Chinese University of Hong Kong
http://www.cse.cuhk.edu.hk/~cslui/PUBLICATION/ICC_2006.pdf

International Telecommunications Union Measuring the Information Society. The ICT Development Index 2009 http://www.itu.int/ITU-D/ict/publications/idi/2009/material/IDI2009_w5.pdf

Colin Richardson Australia's Peak Demand for Internet Bandwidth
http://www.latrobe.edu.au/teloz/reports/richardson.pdf

Whirlpool Internet Stats 2003-2008

Our own Data - Internet Statistical Analysis

Keywords:  Terabytes, Swedes, Sweden, piratebay, iTunes, iPod, internet, growth, DMCA

Wednesday, April 1, 2009

P2P the New Hardware Buzzword.

by Tom Koltai at 01:13AM (EST) on April 1, 2009

In years to come, we will see P2P “Enabled” hardware advertised by the Goodguys. For the moment, P2P users must get used to the idea that just like in the early eighties, prior to the Sony Betamax decision, everyone that owned a VCR was a criminal.
In 1984, after seven years of litigation, the Supreme Court largely upheld the lower court's initial ruling. In the most far-reaching portion of that decision, that court said flatly that a product is not liable for contributory infringement if it is also used for legitimate purposes. "Indeed, it need merely be capable of substantial non-infringing uses," the court wrote.
The court also held that home recording, at least for the noncommercial use of "time shifting," was not infringement.

Those last two sentences become rather important when compared to P2P software. With the BBC’s iPlayer, TVUplayer (30,000 users to 400,000 users in 5 months) and number of smaller but legal implementations and uses of P2P software (e.g.: CNN news broadcasts), the numbers of P2P users are swelling. Consequently it is becoming difficult for statisticians to differentiate between legal file sharing and unapproved file sharing.

Which makes today’s anecdote rather exciting.

The other day I was talking about a Time Machine.

P2P is a constantly evolving technology/activity.

Users on the east coast (Philly) apparently are Time-shifting new episodes of House (MD) – removing the adverts with Video Redo and Posting it immediately on the Internet.

Users on the west coast (San Fran) have got used to being able to download the new episodes and watch half the program (advert free – TiVo proof)  before the scheduled timeslot arrives on the west coast.

Now half an hour may not seem like much of  a time machine – but when you add the fact that TiVo cant now sell “Guaranteed – Skip Button over-ride House MD advertising” to P2P enabled content watchers on the west coast any more, it starts to become a little more interesting.

Remember, the judge ruled that the technology, if capable of being used substantially for non-infringement uses was not liable as a contributor to the infringement AND that time shifting was legal.

I don’t think he meant forwards in time – but what the heck….. I’m sure the US Judiciary likes to watch House and Judge Judy adfree as well.



Keywords:  iPlayer, time shifting, judge judy, House MD, TVU, tivo, time machine, P2P

Sunday, March 29, 2009

The War between the RIAA and The Rest of the World

by Tom Koltai at 05:31PM (EST) on March 29, 2009


War throughout the ages has been traditionally declared for the acquisition by one sovereign state (or Warlord) of another’s (sovereign state or Warlords') possessions.
The legitimacy of the process is provided for by the Charters and Constitutions of nearly all of the World Governments.
Censorship, introduced by those Governments has traditionally been in force to prevent the people from observing that which the Governments decided was not good for them. In this manner, throughout the ages, Governments have prevented their populace from being able to seed revolution.
Unfortunately, the Internet has provided the tools of Global free speech uniting the world, not against their Governments, but against Corporate America.

Definition (US site) DECLARATION OF WAR - An act of the national legislature, in which a state of war is declared to exist between a nation and some other nation. This power is vested in Congress by the Constitution, There is no form or ceremony necessary, except the passage of the act. The public proclamation of the government of a state, by which it declares itself to be at war with a foreign power, and which forbids all and every one to aid or assist the common enemy. A manifesto stating the causes of the war is usually published, but war exists as soon as the act takes effect. It was formerly usual to precede hostilities by a public declaration communicated to the enemy, and to send a herald to demand satisfaction, but that is not the practice of modern times. If the content Industry with its own peculiar accounting systems, offshore bank accounts for the receipt of licensing and royalty fees, international lobbyists (Content Industry Ambassadors) to all Governments isn’t a recognized Independent State, it should be.

SunTzu provides an insight [http://www.chinapage.com/sunzi-e.html] into how the result may turn out.
(Using the Stanza numbering from the web site)

12. Therefore, in your deliberations, when seeking to determine the military conditions, let
      them be made the basis of a comparison, in this wise:--

13. (1) Which of the two sovereigns is imbued with the Moral law?  
      (2) Which of the two generals has most ability?  
      (3) With whom lie the advantages derived from Heaven and Earth?  
      (4) On which side is discipline most rigorously enforced?  
      (5) Which army is stronger?  
      (6) On which side are officers and men more highly trained?  
      (7) In which army is there the greater constancy both in reward and punishment?
14. By means of these seven considerations I can forecast victory or defeat

The answers at the moment are in my opinion,
(1) The Global Internet Community
(2) The Global Internet Community - IF it bands together
(3) The Global Internet Community
(4) RIAA
(5) The Global Internet Community
(6) RIAA
(7) RIAA

Therefore - at the moment we have a slight advantage. In the last week, that advantage started to grow.

Last week a colleague stated that US Corporations were currently in survival mode. “Telcos and Content Companies are going to be squaring off to try to monetise the consumer in any way that they can.”
This week some extraordinary comments started emanating from some of the biggies.
AT&T"We are not under any circumstances going to suspend or terminate any customer's service as a result of a third-party allegation unless they have a court order," Mr. Cicconi said. "The copyright owner has legal rights, and we are not going to be the agent to enforce their rights."
Comcast:"Comcast, like other major ISPs, forwards notices of alleged infringement that we receive from music, movie, videogame, and other content owners to our customers. This is the same processwe've had in place for years - nothing has changed. While we have always supported copyright holders in their efforts to reduce piracy under the Digital Millennium Copyright Act (DMCA), and continue to do 50, we have no plans to test a 50-called 'three-strikes-and-you're-out' policy."

It would appear that survival is becoming more important than Corporate comradeship.
Governments are also starting to see where the tide is swelling and siding with the voters (filesharers).New Zealand Prime Minister John Key said last Monday:
“We have now asked the minister of commerce to start work on a replacement section [for 92A]… There is a need for legislation in this area. Some progress was made between copyright holders and the ISPs but not enough to agree a code of conduct… In our view there are a number of issues that made it difficult to complete that code of conduct without fixing the fundamental flaws in section 92a.”

And it would seem that even in the courts, the content industry is managing to upset the judges.According to this story recently on P2PNet, the RIAA lawyers basically snubbed Juctice Nancy Gertner and told her to Stick her Decision…... ( a request for additional detail on a motion that the RIAA didn’t want to respond too).

The History of Censorship in Australia.
Many in Australia consider the Governments Internet Filter a methodology of returning Australia to the days of old when Censorship was the norm.
From the 1930 Australian National Yearbook [large pdf file] page 760 under the heading........
CHAPTER XXVI.—MISCELLANEOUS.§ 11. Film Censorship.
1. Legislation. The censorship of imported films derives its authority from section 52 (g) of the Customs Act, which is the section giving authority to prohibit the importation of goods. Under this section proclamations have been issued prohibiting the importation of films and relative advertising matter except under certain conditions and with the consent of the Minister. The conditions governing importation are contained in regulations issued under the Customs Act and provide, inter alia, that no film shall be registered which in the opinion of the censor is,(a) blasphemous, indecent or obscene; (b) likely to be injurious to morality, or to encourage or incite to crime;(c) likely to be offensive to the people of any friendly nation; (d) likely to be offensive to the people of the British Empire; or (e) depicts any matter the exhibition of which is undesirable in the public interests.

Therefore the Governments desire to be able to filter P2P content is demonstrably based on the historical methodology of prudent governance of a Nation.

However, there appears to be some objection to this being able to occur.

http://www.youtube.com/watch?v=30sYTuP_UnM&feature=player_embedded

With the Population making anonymous Manifesto threats – there is no doubt, some would say, the world is most definitely at war.
With Corporations and Governments siding with the people does the content industry have a chance?
The financial and voter reality is – probably not.



Keywords:  NZ section92a, SzunTu, censorship, war, RIAA, P2P