Costa Rica is currently immersed in a legal dispute between the first collective society and the local radio stations. Although there have been previous efforts from record companies to obtain money from commercial music providers, the Costa Rican radio market has remained completely unregulated. Because up until now radio stations did not have to pay royalties, the Costa Rican dial is choke-full of radio stations playing any genre imaginable. But now copyright has arrived to the small tropical nation, and the vibrant radio scene is threatened by the prospect of increased expenses.

First some facts about the parties. Fonotica is a collective society that brings together multinational music giants like EMI, Sony BMG, and Universal; and smaller local record companies like DIDECA, Papaya Music, and La Butaca. The radio stations are represented by the powerful radio cartel Camara Nacional de Radio (CANARA). Fonotica demands payment from radio stations ranging from 2-3% of their advertising revenue, while CANARA has launched a wide-ranging radio campaign designed to get the public on their side by stating that such figures are excessive, that radio serves to promote music, and that radio is a free service, and therefore should be exempt from such charges. Interestingly, Fonotica is also set to ask for royalties from public performances from bars, discos, and other commercial establishments that play music to the public. CANARA has latched on this fact, rguing that all sort of public events that charge a fee will have to give music to the collective agency.

As far as I can tell, the public seems to be on the side of the radio stations. Music is very important to the Latin way of life, and everyone organises events where a “discomovil” plays music to get everyone dancing. The radio stations have been very effective in highlighting this fact to gather public support to their cause.

I have to say that I am largely with the music industry on this one. Public performance of music for commercial gain is an exclusive right of the owner, and it seems unfair that for a long time artists have gone unrewarded while countless radio stations have made handsome profits from advertising with minimal investment. However, I am against an excessive application of copyright law. There should be a threshold in what constitutes commercial activity, so an impromptu event designed to get some funds for a local charity could be exempt from paying fees for public performance. The cost could be given to the many enterprises making a living from other people’s music. Radios and mobile discos should therefore have to pay some fees.

While the law is on the side of the copyright owners, one of the interesting aspects of the debate is that there are questions about legitimacy. In a strategy that reminds me of the various cases involving collective societies in Spain, radio stations have been wondering if the music industry even has the right to ask for fees on behalf of artists they do not represent. This could prove to be more troublesome for the music industry, as they may be shackled with the burden of proof.

The era of free-for-all music might be over. While this will mean that many marginal radio stations will cease to exist, this would be keeping with copyright practice elsewhere.

It is important to keep a sense of proportion here. While the British press have displayed their usual mix of mockery and outrage, I was pleasantly surprised by the Foreign Secretary’s adequate response to all of the brouhaha surrounding the issue:

“You [are] leading the news with … the fact that there’s a picture that the head of the MI6 goes swimming. Wow, that really is exciting. It is not a state secret that he wears Speedo swimming trunks, for goodness’ sake let’s grow up.”

I actually agree with David Milliband there. While this may have been a lapse in the part of the wife of the future MI6 chief, it is hardly something to get your speedos tied up about, unless we suspect that Al-Qaeda has a plot to invade Britain with Neopets invitations. Nonetheless, something positive might come out of this incident. People may actually start taking their social networking seriously, and some may even consider that all of those pictures may not be such a good thing. Talking to my brother about Facebook, he informed me that he decided to remove all pictures of my nieces from the site because he was concerned about their privacy. Hear, hear!

Perhaps what has caused some surprise is that, although Judge Posner is known for leaning on the copyright maximalist side, he is also widely recognised as an astute observer of the law, and is known to posses a keen intellect (there is no way of conveying those thoughts without sounding a bit condescending, so apologies in advance for that). The article is mostly an innocuous observation about the sorry state of the printed newspaper industry. The real problem occurs near the end, when he says:

“Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.”

As I said, the reaction against this piece has been fierce, from people claiming that this proves that lawyers should not talk about the Internet, to others who see the article as just another sign that old people simply don’t get it. I surprise even myself by saying that I am willing to cut Judge Posner some slack because he comes from an honest position. He makes several accurate comments, such as highlighting some of the causes for the decline, and particularly by pointing out that one of the major issues is the migration of readers from paid to free content, often offered by the newspapers themselves. However, I disagree with several key points.

It is obvious that Judge Posner sees the demise of printed newspapers as the worst thing that could ever happen to the news media, tantamount to the destruction of the free press. I disagree strongly with his outlook because there is no reason to believe that newspapers in their present form should continue if there are no adequate business models behind them. If people will not buy newspapers, it is because they are getting their news elsewhere. It is often argued that large news-gathering organisations have the resources to provide the news because of their size, and therefore can support adequate news coverage. Anyone who has ever read the Daily Mail, or watched Fox News, will know that resources do not translate into quality or journalistic integrity. On the contrary, a lot of newspapers are often reliant on second-hand information, and are riddled with lazy journalism. Every country has some few outstanding newspapers, but for the most part there is a lot of rehashed dross out there.

There is also an astounding short-sightedness about the source of the problem. The competitors for the printed newspaper are not the blogosphere, or Google; they are other news sources such as the BBC, CNN, CBS, CNBC, FOX, etc. Because TV news already have news-gathering operations in place, they can provide free online news for less cost than a newspaper, mostly because their web presence serves to enhance their TV news-gathering operations. But perhaps most importantly, newspapers have to recognise that the Internet is instantaneous, and that you not only have to compete against free content, but you also compete with being yesterday’s news.

Google is depicted in some pieces as the parasite, the guilty party that is destroying the news organisations because it is the largest online target at the moment. I suspect that many newspaper organisations are setting the stage for a large-scale lawsuit against Google and other web intermediaries. However, they are fighting the Internet, not Google.

Not all is lost for newspapers. Many people still like reading printed papers, myself included, so many of the larger ones will continue to exist. It is also evident that there are some papers that are doing things well in the digital environment, such as the NYT, The Guardian and The Times. I think that these will be the last papers standing when the solution for some of their problems arrives in the shape of electronic paper, and other new technologies that will maintain the tactile nature of the newspaper with the immediacy of the Web.

One thing however is clear, there is no way that the solution lies in copyright. Linking is here to stay, get over it.

“The Open Database License (ODbL) is a license agreement intended to allow users to freely share, modify, and use this Database while maintaining this same freedom for others. Many databases are covered by copyright, and therefore this document licenses these rights. Some jurisdictions, mainly in the European Union, have specific rights that cover databases, and so the ODbL addresses these rights, too. Finally, the ODbL is also an agreement in contract for users of this Database to act in certain ways in return for accessing this Database.”

Good stuff. The main users of the licence will be some open map peer-produced projects and other geo-location collaborative efforts such as OpenStreetMap or khtl.org. These projects provide high-quality valuable data mined and maintained for free by volunteers, so they do not want to see their efforts commercialised by unscrupulous data providers. ODbL therefore provides an easily accessible licence written specifically with databases in mind.

Some readers may wonder why these open data projects are not using a Creative Commons licence. The problem with using CC for databases is that these are specifically designed for copyright, and as already mentioned, some databases may not be protected in that manner. Besides, Creative Commons tends to frown upon licence proliferation. The ODbL was briefly covered by John Wilbanks of Science Commons at the COMMUNIA conference last Tuesday in Turin. Science Commons is looking mostly at scientific data, so its target audience is slightly different. SC’s licensing strategy favours the public domain, and the existence of public domain dedications such as CC0. I see the point of SC’s criticism of the ODbL, but thankfully the Open Knowledge Foundation and SC have agreed to disagree, and the ODbL will not be recommended for scientific data, but mostly for its core target market.

Kudos to Jordan Hatcher, Rufus Pollock and Jonathan Gray for their hard work, ODbL is a worthy addition to the corpus of open licences.

“I was always hoping more people would read it, and it would get a lot of comments,” Mrs. Nichols said recently by telephone, sounding a little betrayed. “Every once in a while I would see this thing on TV about some mommy blogger making $4,000 a month, and thought, ‘I would like that.’ ”

Why do people start blogging with such inflated and unrealistic expectations? No wonder so many decide to quit eventually. Building an audience takes time and effort, and some people seem to expect instant gratification.

Gartner's hype cycle

Someone commented that blogging is going through Gartner’s hype cycle, and I thoroughly agree. There is a moment called the trough of disillusionment, where most of those who adopted a technology because of the hype did so with false expectations of fame and fortune. The reality is that the technology requires a lot of grafting.

ETA: What the heck is going on with Technorati authority anyway?

Last week Charles Arthur wrote a great piece about music sales in The Guardian, in which he commented that overall entertainment sales have gone up in the last decade, but mostly for DVDs and games. This is something that I have been commenting as well for quite a while, as it is something that I have noticed in my own music purchases. I do not download music in P2P sites anymore, but I do not buy that much music either, instead I buy DVDs, books and games. Sharkey now has responded to Arthur’s article claiming that:

“However, to deny that a totally free, unregulated peer-to peer ecosystem – which redirects revenues from UK creators, artists and entrepreneurs towards Pirate Bay and other unlicensed businesses – has a negative impact on jobs is illogical.”

This is the place where Sharkey should own up and give us some counter-evidence that makes his case. If it is illogical to think that there is a link between downloads and music sales, then there should be a wealth of evidence to prove it right? But Sharkey does not give us any evidence, he just gives us more talking points from the industry about innovation.

Until the music industry starts making sure that their propaganda is based on facts, we will continue to deride their statements.

I loved some of the comments to Sharkey’s article. This one in particular:

“The idea that you can make a record in a few weeks, then live on the proceeds for the rest of your life is over, pal.”

True.

I will not dissect all of the sessions I attended, many other people live-blogged the event, so for a more detailed account I recommend a look at Raph Koster’s list. My personal highlights included Koster’s own keynote presentation, learning about Dmitri Williams and his amazing research; the Governance panel chaired by Greg Lastowka; a legal issues panel including some interesting talk about patents from Timothy Bechen and Nikitas Nicolakis; an economies panel with Ed Castronova, learning about Berhnhard Drax truly innovative machinima reportage; the policy panel chaired by the always clued-in Ren Reynolds; and also learning about non-Chinese secondary markets (Lewt.com is my personal find of the conference).

More than anything else, I want to comment on some wider themes present at the conference. I have now attended enough virtual worlds events to realise that there is a deep split in the VW community between the gamers and the Second Lifers. Perhaps calling them “Second Lifers” is inaccurate, as this faction is also composed of some other hard-core virtual world spaces, but for lack of a better word I will call them the SL crowd. This is a palpable split that often decends into acrymonious exchanges in the back channels. The gamers pretty much think of MMOs whenever they mention virtual worlds, and this usually means WoW, while the Second Lifers tend to get frustrated by this categorisation, and evangelise about the many probabilities offered by virtual spaces. As a gamer, I tend to silently dismiss the social spaces (if I can’t kill something, I’m not interested), but I can empathise with the SL frustration. I was also struck by the animosity from the SL crowd towards specific economic research into virtual worlds, particularly the emphasis on gold farming. I was surprised to learn that many think that this is passé and worn out topic. I beg to differ. Gold farming is an important topic of research because of its overall economic relevance. True, there are other economic stories taking place in VW that deserved attention, but at the moment the phenomenon of real money trade in virtual goods offers real policy issues.

Another common topic throughout the conference was the repetition that VWs may have reached a plateau. I think that this should not surprise anyone, VW research is at the same stage as Internet studies were at around 2000. The novelty aspect is gone, and what remains is a core of relevant subjects that require in-depth analysis. The “gee-whiz” factor was exhilarating while it lasted, but now what remains is a more sober exploration of the technologies. This may mean that VWs are now the subject of boring legal analysis centred on age-old topics such as contract law, but it is a testament of the enduring nature of the phenomenon.

Virtual Worlds research has not plateaued, it has grown up.

I also found some interesting use of back channels, and this conference had three of them going at the same time. There is something almost juvenile and cliuquish about back channels, and I was amused how certain people moved from one to the other as they became better known. The cool kids need to remain exclusive.

Just another example of that creativity that is not supposed to exist on social media sites.

We spent lots of tax-payer's money drafting a report, and all we got was a lousy key.

The final Digital Britain report was released yesterday. It is long, filled with something for everyone, from digital radio to a new broadband strategy. Some interesting commentary already from panGloss, Charles Arthur, Chris Marsden, and TorrentFreak. The report will be dissected by Internet pundits in the following days, but I will add a few comments and highlight some aspects that I have found interesting.

Although there are some topics such as net neutrality and broadband that interest me greatly, the chapter that has received most press coverage has been the one dealing with the Creative Industries. I am on record criticising the interim report for its lack of vision when it comes to digital content, and I am sad to say that the final report is perhaps even more disappointing. Digital content is still very much a top-down exercise according to UK regulators, and the Web 2.0 revolution does not really merit more than few mentions. I found this paragraph quite telling:

“The popularity of X-Factor and Britain’s Got Talent shows the enduring drawing power of content-creating talent that few people possess. The digital world allows more of that talent to find its way to more consumers and admirers than ever before. But it is not wholly democratic: some have the talent to create content; many others do not. As throughout history, there need to be workable mechanisms to ensure that content-creators are rewarded for their talent and endeavour. And the need for investor confidence is key. User generated videos can be hugely popular, but there remains a healthy appetite for big movies costing many millions to produce.”

What a preposterously condescending and misinformed thing to say. This type of binary thinking about content is precisely what has made the traditional content industries seem like the fossilised dinosaur bones they often pretend they are not. It is possible to design strategies to accomodate both user-generated content and traditional owners without dismissing the participatory web in such manner.

With regards to enforcement, the report completely buys into the self-reported losses from the copyright industry as the basis for their suggested action against piracy. If you really want to have evidence-based policy, then surely you should rely on independent research, and not the bloated figures from interested parties. Thankfully, the report does not propose legislative action immediately, but it will initiate a consultation process (the consultation paper is already out). The consultation will look at giving Ofcom powers to compel ISPs to send notification letters to infringers, as they claim that there is enough research that proves such measures are successful. However, tougher action is needed, and technical solutions are proposed:

“For that reason the Government will also provide for backstop powers for Ofcom to place additional conditions on ISPs aimed at reducing or preventing online copyright infringement by the application of various technical measures. In order to provide greater certainty for the development of commercial agreements, the Government proposes to specify in the legislation what these further measures might be; namely: Blocking (Site, IP, URL), Protocol blocking, Port blocking, Bandwidth capping (capping the speed of a subscriber’s Internet connection and/or capping the volume of data traffic which a subscriber can access); Bandwidth shaping (limiting the speed of a subscriber’s access to selected protocols/services and/or capping the volume of data to selected protocols/services); Content identification and filtering– or a combination of these measures.”

So, early reports about the implementation of technical solutions were accurate, and repeated infringers will see their connections stopped. I will stick my neck out and say that these will do little to stop repeat infringers. Just yesterday the Pirate Bay announced that it would be offering a VPN service called IPREDATOR. Once again, the pirates are one step ahead of the armada.

It will be interesting to see the result of the consultation. Just reading through the document it becomes evident where it is headed, highlighting once more industry figures. I found another telling sign that the conclusions will be pro-industry, when I read that the consultation highlights the list of most pirated video games of 2008. At the top of the list is Spore. Perhaps the drafters of the report do not know that Spore is the primary example of an industry own goal, as its ridiculous DRM actually prompted people to download the game, even if they had purchased a copy.

Stay tuned for more developments, this one has legs.

Although I share some concerns about the Google settlement with publishers (e.g. exclusive rights to sell orphan works), I think that it is generally a good deal for the publishing industry, as it opens new market opportunities to sell out-of-print books. However, I am more concerned about the threat from competition law. Some of my work into networks has been looking precisely at how dominance in networks comes about, and I believe that regulators should take this into consideration when scrutinising dominant companies online.

To make a long story short, some type of networks have special characteristics that may be conducive towards the creation of large hubs. The Internet is a scale-free network, that is, it is a network that displays high clustering and where some nodes have a disproportionate number of incoming links. Under certain circumstances, nodes can undergo a runaway accumulation of links, in other words, the rich-get-richer, following patterns that are often best described in gases through Bose-Einstein condensation. This collapse in competition is often independent of the actions of the component elements in the network, so it might be futile for regulators to try to stop it from happening. Nobody knows when one such condensation occurs, but when it does it creates a super-hub, much like what we see with Google.

Bose-Einstein condensate

So, Google may be suffering from its own success, but this is probably independent of its own actions. Its dominant position has come about as a serendipitous accumulation of links, and should not be subject to competition law.

Before anyone makes any comparisons, I’m not standing under a blanket with mascara running down my face.