Build a Staircase to the Moon with CD’s and DVD – Recycling – (Humour).

The other day I blogged about the dangers to our environment of continuing to make little plastic frisbies filled with media content.

“EMI often ships out unwanted CDs to China so they can be recycled “Now there’s no better use for them than to be crushed up and trampled on,” the source added.

EMI is said to have planned this recycling scheme to cut costs after losing 263 million pounds in 2007.

Today I came across a site that claimed that we had been making 30 billion of these things a year.

The sizes (thickness varies from .5 mm to 1.4 mm) depending on the technology and the year made.

A few years ago there was a real problem with disposal of unsold music CD’s when landfills in the USA refused to accept hundreds of thousand s of discs marked for destruction.

The problem was solved by the music industry by shipping the returns to china for disposal.

Actually I thought China was on the same planet as the rest of us earthlings and needed the same ecological considerations as everyone else’s backyard. But obviously not….. according to the music biz.

We live  in an age where a Terrabyte hard-disk can hold ones entire DVD and CD  collection and continue to hold it in a scratch free condition.

So what do people do with their CD’s and DVD’s once they are ripped and transferred onto the Disk drive attached to the TIVO / DVR / Home Entertainment system ?

You can see where this is going dear reader. Obviously, straight to the rubbish bin or in the case of selective council landfills, China.

So today, having a few idle minutes I calculated the production of all CD’s as being  (arbitrarily) 1982-2010 x 30 billion x 1 mm thickness and I discovered that we have a new potential use for our CD’s.

If we glued each CD/DVD to the next one, we actually have enough to reach the moon 2.18 times….. In other words we could build a staircase and forget all about those expensive rockets……

(Distance to the moon only 384,403 kilometres.)

References:

Distance to the Moon

http://ares.jsc.nasa.gov/education/activities/expmoon/distancemoon.pdf

Thickness of CD Roms and DVD’s

http://www.pctechguide.com/34DVD_Technology.htm

CD’s in Landfills

http://stanford.wellsphere.com/green-living-article/recycle-your-cds-and-dvds-keep-your-technotrash-out-of-landfills/789366

Robbie Williams’ unsold CDs shipped to China – mirror.co.uk

Posted in Humour | Tagged , , | 1 Comment

The Changing Cost of Storage Real Estate.

What to do with my aging music and video collection.

Like many 50+ year olds, I have an entertainment collection.

  • LP’s              35
  • 45’s               29
  • CD’s  Music 112
  • CD’s  Videos   9
  • VHS  Movie  146
  • DVD’s Music  17
  • DVD’s Movie  85

When packaged, my collection including the DVD Racks, VHS drawer cabinets, CD Rack and their contents can be squeezed into two large boxes and four small (book boxes) or in shipping parlance 1.2 cubic metres.

In 2002 – I packaged up my entire collection and placed it in storage where it stayed for the next five years. Along with household furniture (and other paraphernalia) the monthly cost was $880 per. The total storage volume was 26 cubic metres.

So the value of storage of music and video collection came out to approximately $2436.92 for the period.

If we attribute that same storage cost across my lifetime, and allowing for a high per square foot/m2 floor space rate, (approx 440$ per m2 P.A.) the cost of keeping my physical media is around $500.00 per annum, over and above it’s purchase price.

If I am to live to the expected maximum years…. then my muisc, video etc collection has cost me in the neighbourhood of $27,400 just to store it.

… and the music industry wants to know why we want to go digital…….. MEH – Fail music guys…. but then I guess if you guys all live in huge Hollywood mansions, you probably don’t realise the price of a high rise apartment in downtown Sydney… that’s only 109 m2!

In 2006, I purchased a hard-disk and a digital capture card. I then spent a few weeks queuing up content to be ripped and digitally catalogued.

Last year I purchased a 32 GB USB stick. (Well more like an SD-Card, but then there are no 32 GB SD cards…..)

I now have a wonderful collection of my entire life’s musical and video interests on a 32 GB stick (not all the videos……)

My phone can read it, my computer read it, it fits in my pocket and it weighs just 25 grams.

Anyone who wanted to know me would just have to look at the content on the stick and understand instantly my interests, desires and dreams.

Of course, now that it’s digital, complete with my computers digital footprint all over it (hash file identifier) – anyone could profile me rather easily.

Likes Santana, Led Zeppelin, Bruce Willis and Stargate. Hmmmmm – obviously this is someone we could sell “Red Bull” too.

So whilst I enjoy the fruits of labour in digitizing my collection and being able to play all of the content I purchased, DRM free, I am concerned about its security.

…. and if you don’t think this is happening to you….  why does the new version of iTunes examine every track you have and offer to clean it up for you ?

Why do streaming music and video services want all your personal details?

Why has Facebook opened up the personal aspects of your profile for everyone (read advertisers) to review?

Years ago, in the ISP business, the value of an Internet customer was based on the annual subscriptions and the estimated life of a subscriber to the service (based on subscriber churn).

Today, Google, Facebook and a plethora of internet sites collect every bit of data about each and every visitor.

Cookies, IP numbers, ohone, friends phones, friends email addresses, location,music preferences, each facebook profile update and tweet is scanned for “interest and brand recognition” signals.

So whilst we are all enjoying the new found freedom of carrying our 2 cubic metres of physical medai collection on an iPhone or USB stick, the downside is that our lives are no longer private.

Back to my music ccollection……

Now my only question is, what shall I do with my aging, dust covered originals?

I guess I’ll keep them.  Besides, I only ripped the music at 192 kbps and the movies at 1024 kbps.

Maybe one day I will want a higher quality digital rendition.

I look with envy at the current generation. They will never have the storage problem.

P2P is here to stay, and illegal file sharing will one day be made legal. (Although no-one from the Music industry has called me yet to find out how…….)

So today’s generation will just download the higher quality version over the top of the lo-fi version and they wont have to dust their CD racks once a month, or run their VHS tapes on fast forward through the VCR once a year to make sure they arn’t gummed up.

And they will be able to live in smaller houses without the need for all those ugly CD racks.

Gee, this digital stuff is pretty neat huh?

This is partially a reprint of an earlier published article – however is relevant as a stub artuicle for future reference too.

Tom Koltai, Sydney, April, 2010

Posted in Privacy vs Consumer profiling | Tagged , , , , , | 1 Comment

File Sharing Education Patrice Geoffron and the Global IQ

//

This article starts out somewhat sardonically (which is appropriate as regards the charges levied against the global online community), but becomes a little more serious as it develops.

News flash……

We have discovered a major omission in the Tera Report and will attempt over the next few weeks to correct this injustice

It would appear that M. Patrice Geoffron, omitted some major sections from the Tera report thereby understating the true value of damage to the music industry by Piracy.

Specifically in his selection of Consumer Durables in NACE 1.1

To overcome this deficiency we have been scouring the NACE categories for days to identify other items that should be included in his report.

We have identified an interim list that we urgently wish to bring to the worlds attention.

Internet Piracy would also appear to have affected the following Manufacturing industry’s:

  • Sales of Gramaphone players, mechanical, self powered, wind-up, portable.
  • Sales of Gramaphone Cylinders, wax,
  • Sales of Phonograph Players, mechanical, self-powered, wind-up, (home)
  • Sales of Phonograph players, mechanical, coin operated, wind-up, non portable.
  • Sales of Phonograph players, electro-mechanical, coin operated, non-portable.
  • Sales of recorded music, 78 rpm, 12” shellac,
  • Sales of Pianolla Rolls, paper, printed, with patterns
  • Sales of Pianolla Rolls, Linen, printed
  • Sales of Pianolla players, style upright, formal
  • Sales of Pianolla players, wooden, style, Grand Salon, formal
  • Sales of Pianolla players, wooden, electro-mechanical, style bar or saloon
  • Sales of Calliopes, steam powered, horse drawn
  • Sales of Organs, church, pedal powered, bellows, wooden

We note that M. Geoffron has already included Jukeboxes, coin operated, non-portable.

And;

  • Cassette tape player Decks (home)
  • Sales of Cassette Tape Player (portable)

However, additionally we have identified….

Sales of Record Players (portable)

  • Sales of Home Stereo units (non-portable), inc. Radio, valve [non-transistorized].
  • Sales of Home stereo units, portable, transistorized, mono [AM only radio]

We have discovered that all of the above business have also been affected by advances in technology and have lost considerable sales, no doubt due to piracy….

Pardon? M. Geoffron said what?

He said that Newspapers and ? Music sales were affected by piracy on the internet.

Did he say how newspapers were affected by these horrible Somalian marauders?

Non?

Well what about the music sales then? Did he compare the sales of individual music tracks with it’s chart position and then track the weekly sales in the shops?

Non?

Pardon?

Only one person in the world has done that research?

You mean besides me……

Oh, you are talking about me.

Good, I though someone else had measured the effects of a whole country downloading the most popular songs and measured every download comparing the sales against the download progress.

We developed a whole methodology you know… we called it the P2Pscore method.

Yes, I know. You kept telling me how wonderful it was.

The Hedonic Value of P2P to our Economy.”

(Koltai June 2009 – updated Apr 2010) we said;

We will be anecdotally commencing an examination of the apparently growing causational relationship between higher education and file sharing (and no, we are not referring to the music industries suggestion that universities/colleges are a hot bed of invisible i2p file sharers).

If the content industry is to be believed, their business model has been devastated by young college students wanting to get their entertainment for free.

Therefore we can make some assumptions from this claim.

File sharing exists to rip off the Music Industry,

Ergo, the most popular files will no doubt be the Music Industries most cherished jewels. The Top 40, an artificially developed promotional aid to assist in the sales of music tracks and development of artists

Enabling some conclusions to be drawn, amongst which would appear to be the fact that:

If the most popular files on the file sharing networks are not the Jewels of the Music Industry, then they have been misrepresenting the facts and their pleas for legislative protection and judicial relief need to be ignored and current legislative enactments need to be reviewed and rescinded if appropriate; e.g.: The three Strikes/Hadopi/ACTA..

On that basis we started looking at the most likely downloaded music content, the Australian Top 50 published by ARIA.

We collected Data on a non-indexing Lugundum server for 26 weeks from February to September, 2009.

We compared the data searches to the ARIA music charts week by week, with particular care and attention to the happenings in June, (the commencement of the Australian winter) and this year, the loss of Michael Jackson, which turned the traditional charting world on it’s head.

As with any charting system, there are risers and fallers. The current Aria Top 50 Number #1 song is Boom Boom Pow by Black Eyed Peas. It would appear to be (as far as the P2P community concerned), a faller. Whereas, the week before, Knock You Down the ARIA # 49 had a P2PScore of 298,000 placing it at number 14 followed up this week moving to slot number 6 and would appear to be a riser.

ARIA Top 40 Digital

ARIA Top 50 Physical CD

The Koltai Comparative

P2P Top 10

P2P

AU IP Req

TW

LW

TW

LW

WK-1

#

P/Hr

29

16

31

HUSH HUSH; HUSH HUSH

1

390

3.406114

4

4

5

4

BREAKEVEN

2

291

2.541485

36

28

39

33

MY DELIRIUM

3

273

2.384279

3

2

4

3

JAI HO! (YOU ARE MY DESTINY)

4

256

2.235808

18

22

22

27

WHEN LOVE TAKES OVER

5

242

2.113537

38

New

37

49

KNOCK YOU DOWN

6

221

1.930131

12

10

17

10

NEW DIVIDE

7

194

1.694323

8

9

8

9

THE CLIMB

8

193

1.68559

39

26

35

26

KNOW YOUR ENEMY

9

192

1.676856

1

1

1

1

BOOM BOOM POW

10

185

1.615721

P2P interest in Boom Boom Pow when it reached the top of the Aria charts last year was flat with a slight drop (sample period 48 hours).

Whereas the eMule community in Australia valued Knock You Down at thirty chart points ahead of ARIA sales.

Our method for determining the popularity of the Australian Top 50 includes a factor based on the number of requests for a particular track by a certain artist from Australian IP numbers on the ED2K network.

We have devised a methodology for eliminating the thousands of industry generated fake and empty files from our data (inserted by the music industry to make obtaining the content harder for illegal file sharers and also a lot harder for anyone to measure the real metrics of file sharing.)

And we have some stats… according to an auto port (PC service ports) poll [see references] of 1.6 million users conducted in 2007 that demonstrated that 0.04% of the world uses emule on the eDonkey network. And the number of Emule users are estimated at between 3 (Peerates) and 27 (IPFI) million.

For conservative purposes, we prefer to use the Peerates number, 3 million.

The number of connected users per peer vary between 0 to several hundred – lets say average connected hosts per peer = a conservative 100.

Each host can effectively manage an average of about 31 file requests per hour. (This number is relevant to several factors, including the number of files a user shares on his/her hard disk, the distance between peers (number of hops) and the popularity of the individual files.)

So – number of Emule file requests (not actual downloads) to peers that have advertised the availability of a non-fake version of the file available for downloading.

Therefore, Global Emule Users times Connected Peers times Connected hours times Requests per Hour times percentage of peers within less than 4 hops distance. (Hops artificially deliberately restricted by BGP table)

GU  *  CP *DH * HR *PH = 3,000,000 * 100 *24 * 31 *78%

Total  174,096,000,000 file requests per 24 hours.

If that represents 0.04% of the worlds file sharing base (as per the 1.6 million sample taken) then we have a pretty definitive quantum.

Unfortunately very few people are examining the Hedonic value to the economy of the users downloading software programs, ebooks and entertainment.

P2P networks according to our research are downloading an awful lot of educational material right along with the entertainment portion.

For example users downloading educational material like Microsoft Office Excel – Hungry Minds – Excel Programming (2002).pdf by a factor of .4 requests per hour more than the number one listed hit song in Australia.

These numbers would suggest that P2P users are more interested in educating themselves than entertaining themselves.

If our statistical analysis continues to confirm this proof it would appear that as well as P2P killing the Porn Star, it’s users are now more interested in bettering  themselves educationally than ensuring the availability of the latest rap aural transgression assault on their eardrums.

To refresh your memories, in that article we said:

“According to Ipoque, 22% of Internet users generate 76% of all internet traffic via Bit Torrent or emule  downloading 38% movies, 25% Games 14% TV shows 9% music and only 1% porn”.

The music statistic was made up of 7.12% audio only files and 2.52% of music videos.

However the conclusion was that Pornography appeared to be gradually displaced by other areas of interest by consumers, the majority of whom appeared to satisfy their curiosity within a few months and move onto more relevant and interesting content.

The quantum of value per downloaded educational item of content is subjective to the individual.

Nevertheless, the mere fact that users are electing educational materials in higher frequency growth patterns than entertainment material (note the exponential curve), is significant and we feel it therefore relevant to conclude anecdotally that this would appear to be a trend.

We haven’t quite worked out how to determine the age of the persons requesting Autocad or Crystal Reports or the entire Hungry Mind series. However, if as I believe, the ages of the requesters of those files is getting younger, then some additional conclusions can be drawn and appropriate alterations need to be considered for the way industry and Government interacts with our younger users;

  • Reclassification of Material as Educational Promotional Give away marketing.
  • IFS via P2P appears to be filling a gap not currently provided by Universities or High Schools
  • A better educated population resulting in a higher GDP and higher lifestyle aspirations

As a 13 year old can have absolutely no use for Autocad apart from the educational value, the “loss” suffered by Software companies and as reported by IDC (summary findings here) needs to be revisited and revised downwards – however, those companies should be able to claim the downloads as a promotional cost on their taxation returns..

The Hedonic value? Considerable.  The methodology for calculating that value and adding it to the national GDP of Australia ? We’re working on it.

But some initial subject matter worthy in our opinion of further consideration and research would be:

  1. Socio-economic values including:
    1. Value to trade of international language assimilation through the distribution of popular multi-media content.
    2. Sociological value of distribution of country specific cultural content
    3. Global Trust quotient developing as a result of 1 & 2.
  2. The value to commerce of having technologically more capable employees familiar and capable of utilizing a wider range of software environments.
  3. The value to Government of having a citizenry with a higher level of education fostered by open access to information.
  4. The loss potential to nations that do not allow their younger generations to utilize all possible means to learn.
  5. The future trading loss when nations that do not restrict their Internet users, have a smarter abnd better educated population base.

Back To the Music

Let us not forget that the whole file sharing hoo haa was started by Napster and it was the music industry that decided to latch onto file sharing as the reason for its failing revenues.

We think it would be ironic if the device (The Top 40 List) that “made” the music industry successful during their build-up years was the unraveling of their aspirations a half century later. Not because there is anything wrong with the Top 40, with the exception being, the Industries Top 40 does not apparently equal the users Top 40.

This was confirmed for us recently in a comparison of number one hits versus music sales.

The music purchasers were diverting from sticking to number one purchases.

In Australia last year a local TV station aired an AC/DC special. The P2P networks responded to the call to action and search requests for AC/DC’s hit Thunderstruck outperformed the entire Australian Top 50 by a factor of 62%.

In other words, Thunderstruck was searched for almost as much as the entire collection of Aussie Top 50.

But of course, this news would delight the band, because it is a strong indication of ticket sales for their (at that time) up-coming Australian concert tour.

However, this started me thinking, what else could be more popular than the Australian Top 50?

We were surprised ….

Peer Gynt’s Prelude to Act II composed in 1875 beat out all but two of Australia’s top 50.

Now it’s a nice piece of music, but not quite as well known as Opus 46 (In the Hall of the Mountain King).

In conclusion, our finding is that the world isn’t all that interested in what the music industry are pushing and as to the accusation that file sharing is the reason for their financial losses…..

we respond briefly; bullshit! When Australians, (determined by IP numbers) choose a 233 year old piece of music over the current Top 50…. There has to be something wrong with the Top 50.

We concluded this article with a brief light-hearted look at…

An anecdotal analysis of the value of P2P to the Australian Economy

Population (AU):

22,000,000

Notes

Per Unit

% pr/yr

Number of

Total $

Infrastructure

A

98,000,000,000

0.21%

98,000,000,000

20,580,000,000

Maintenance

B

209,860,000

1

209,860,000

209,860,000

Wages/Paye

C

5,000,000,000

1

5,000,000,000

5,000,000,000

Computer

D

1,000.00

33%

11000000

3,630,000,000

Laptop

E

1,500.00

66%

4400000

4,356,000,000

Router

F

69.00

33%

3300000

75,141,000

Wifi

G

180.00

33%

3300000

196,020,000

Sat Dish

H

420.00

33%

110000

15,246,000

Modem

I

90.00

20%

11880000

213,840,000

Cellphone

J

550.00

66%

22,000,000

7,986,000,000

Retail Use Plan Home

K

39.95

100%

5,500,000

2,636,700,000

Retail Phone Data Use

L

18.00

24%

9680000

501,811,200

Wholesale Billing

M

12.00

100%

5,500,000

792,000,000

45,400,618,200

GST

(GST not calculated on “A” and “B”)

2,061,261,820

Total Value of P2P

(At 80% of Network and CPE value)

$37,969,504,016

(This table does not make allowance the surge in the acquisition of small home media centres and terabyte hard disks. )

Hard disks

Year

2004

2005

2006

2007

2008

2009

$

220

185

330

360

195

440

Size

80

160

320

500

1000

2000

$ p/GB

2.75

1.15625

1.03125

0.72

0.195

0.22

Home media centres are now under $150 each on eBay and 1 TB hard disks are similarly priced. Therefore a $300 (AUD) investment allows for the storage of approximately 1500 ninety minute movies.)

In other words, in Australia P2P is worth more than the entire combined revenue base of the member companies of the various industry bodies trying to stop P2P. (i.e.: EMI, Warner, MGM, Sony)

Now if we to multiple those figures by the population of the rest of the world and you have an industry globally that adds up to $10,355,319,277,091

That means that technology that started because of the ubiquity of content has now outstripped the value of that content, and replaced it with something far more valuable.

Basically, taxable revenue – yes I did say TAXABLE, dollars that your government obtains revenue from – unlike Movies and Music and overseas made TV shows.

Notes:

Assumptions.

  1. The cost of the telecommunications infrastructure in Australia is “A”
  2. The cost of maintaining that infrastructure is “B”
  3. That infrastructure generates “C” in wages, PAYE tax and individual taxation.
  4. To utilize that infrastructure you require termination CPE (Customer Premises Equipment).
  5. CPE includes, Telephone handsets, Modems (dial-up/ADSL), Nat routers, satellite dishes, WiFi devices. Items “F” through “I”
  6. If fifty percent of Australians have a computer – let’s call that “D”
  7. Most computers are cycled every thirty six months. Therefore Annual replacement of “D” is valued at $330.00 on the basis that the purchase price is $1000.00
  8. We assume 20% of Australians have a laptop. “E”
  9. If 100% percent of Australians have a mobile Phone – let’s call that “J”
  10. If 5.5 million homes of 7.2 million are connected to the internet, that generates a monthly subscriber value of “F” (For this exercise, we assume a monthly total of $39.95 per sub.)  “K”
  11. 44% of Mobile Phones have data plans and approximately 24% of those phones utilize their internet connection.
  12. The average mobile phone data consumption is therefore worth approx. $18.00 per month. “L”
  13. All services are billed between the wholesale carrier and the retail Service Provider. “M”

In Conclusion

If the additional value of the Hedonic benefits of P2P networking are added to the equation,

Vis:

Easy to obtain multi-media content (i.e.: Grandma can now do it)

No limits on access to Data, both Governmental and Academic

Less resources utilized on international bandwidth segments due to localized file sharing networks – thereby increasing the user experience for other non p2p file sharing users

Rapid referencing of materials not readily available elsewhere.

Then the value per person [Per Capita] in Australia on a national basis increases from $1,300 PP to an estimated $4,200 PP, man woman and child.

That now equals 10% of the GDP.

P2P appears to be providing unexpected benefits.

However I should make it clear that these numbers are based on anecdotal estimates and require additional research (but we thought we would publish anyway as these days, empirical data does not seem to be required before Governments accept the findings of paid for reports from self serving individuals.)

References:

A Measurement Study of Peer-to-Peer File Sharing Systems Stefan Saroiu, P. Krishna Gummadi, Steven D. Gribble

Dept. of Computer Science and Engineering, Univ. of Washington, Seattle, WA, 98195-2350

A Survey of Anonymous Peer-to-Peer File-Sharing

Tom Chothia and Konstantinos Chatzikokolakis

Laboratoire d’Informatique, ´Ecole Polytechnique, 91128 Palaiseau Cedex, France

{tomc,kostas}@lix.polytechnique.fr

OECD INFORMATION TECHNOLOGY OUTLOOK 2004

PEER TO PEER NETWORKS IN OECD COUNTRIES

Ethical Issues in the Music Industry

Response to Innovation and Piracy Robert F. Easley

Journal of Business Ethics (2005) 62: 163–168

Content Availability, Pollution and Poisoning in File Sharing Peer toPeer Networks

Nicolas Christin Andreas S. Weigend John Chuang

S.I.M.S., UC Berkeley

Development of peer-to-peer (P2P) internet online hybrid test system

Peng Pan1; Hiroshi Tomofuji; Tao Wang, Masayoshi Nakashima Makoto Ohsaki1; and Khalid M. Mosalam;

GEEKS BEARING GIFTS OPEN SOURCE SOFTWARE AND ITS ENEMIES

Nicholas Gruen

POLICY • Vol. 21 No. 2 • Winter 2005

Privacy & Piracy: The Paradox of Illegal File Sharing on Peer-to-Peer Networks and the Impact

of Technology on the Entertainment Industry” [2003]

Written Statement of Professor Doris Estelle Long Senate Committee on Governmental Affairs

THE BITTORRENT P2P FILE-SHARING SYSTEM: MEASUREMENTS AND ANALYSIS

J.A. Pouwelse, P. Garbacki, D.H.J. Epema, H.J. Sips

Department of Computer Science, Delft University of Technology, the Netherlands

In 2007, Paul Reskinoff, from Digital Music News in conjunction with Big Champagne, started collecting statistics about file sharing clients installed on individual computers. Over a period of a year, they extracted data from 1,661,688 Internet users – the results are amazing….

P2P Client

Sep-06

Jan-07

May-07

Sep-07

Network

Limewire

0.341

0.368

0.355

0.364

Gnutella

uTorrent

0.03

0.046

0.073

0.113

BitTorrent

BitTorrent

0.052

0.053

0.049

0.046

BitTorrent

Ares

0.035

0.038

0.043

0.046

Ares

Azureus

0.06

0.063

0.059

0.043

BitTorrent

eMule

0.038

0.038

0.043

0.04

eDonkey

BitComet

0.049

0.044

0.043

0.039

BiTorrent

BearShare

0.034

0.034

0.032

0.029

Gnutella

BitLord

0.024

0.027

0.028

0.026

BitTorrent

KaZaa

0.045

0.031

0.021

0.015

FastTrack

BitTormado

0.021

0.018

0.016

0.015

BitTorrent

Frostwire

0

0.004

0.01

0.012

Gnutella

Pando

0

0

0.008

0.009

Pando

Total %

73%

76%

78%

80%

Source: http://www.digitalmusicnews.com/report/desktopq407

Over 79% of people have some file sharing software included on their computer.

We extrapolated those figures and discovered that the world will reach P2P ubiquitous file sharing installation by the end of 2011.

Posted in File Sharing Reports/Studies | Tagged , , , , , , , , , , , , | 1 Comment

The Alexa Experiment – Report 1 – Alexa Rank from 20,610,772 (3 months) to 406,149 (1 month) in 30 days.

The future of Advertising  …. Or…. Patrice gets a lay day…..

Last month, I announced that we would be running an experiment in Alexa Rankings. Today, we examine our progress in the Blogsphere as calculated by Alexa rank and compare that with retrosepective peek at the state of the blogsphere six months ago and the changing face of media and advertising.

We arrive at a conclusion that the long tail of blogs (i.e.: those with an Alexa rating of under 100,000) actually have a different future that would appear to include a higher level of engagement with the reader than the corporate multi-million dollar blogs.

As an analogy of our findings, we offer the comparison of an antique shop in the country that you come across during a Sunday drive versus your desire to spend long hours food shopping at Coles or Woolworths.

We appear to have moved up slightly in Alexa’s rankings.

Alexa Ranking on the 8th of April, 2010.

Conventional wisdom on the internet indicates that today’s user wants short sharp entertaining content and most will avoid the long
editorial commentaries of the traditional newspaper.

I was informed that readers were not interested in Blog articles that had poor grammar, bad spelling and lousy logic construction.

My findings over the last month disagree with this.

My Summary of the KOVTR blog over the last thirty days.

  • Grammar, style and spelling – atrocious.
  • Content – reasonably accurate (but it’s a Blog…. please go to the library and do serious research if this is the subject of a thesis.)
  • Logical construct = illogical requiring quantum thought process from the reader.
  • 26 Posts of which 21 have Graphs
  • 7 have pictures
  • 16 contain tables
  • Average time to prepare and publish an article – 4 hours.
  • Average article length: 1521 words (+graphs, pictures and tables)

Table of Articles – most recent to oldest order.

Date

Article

Words

Graphs

Pictures

Tables

29/04/2010

The Tera Report Response 5 – 1+1=-6
or How Much can you BUY an Economist for?

2241

6

3

26/04/2010

The Tera Report and its
Commissioners BASCAP

3138

2

26/04/2010

ACTA in Australia Not needed thank
you.

3272

1

1

25/04/2010

The Tera Report Response 7 Vivendi
as a Case Study of Music Piracy

1395

13

2

23/04/2010

Perhaps the Publishing Business
should pay the environmental clean-up bill.

1870

2

1

22/04/2010

Tera Rebuttal Response 2 – Sunset
Industry Selection – NACE Categories DL-323

2112

3

2

22/04/2010

EuroStat News…. With Koltaisms……
(Humour)

322

22/04/2010

Tera Rebuttal 4 – The Search for the
missing Jobs.

2243

10

1

2

21/04/2010

Other Reasons Music Sales might be
Down “The Missing Five Minutes”

1528

2

1

1

20/04/2010

Executive Overview of our Findings
in Relation to The Tera Report

3979

3

5

15/04/2010

SMS Power Versus Hollywood, Radio,
Videogames & the Music Industry.

1625

5

1

14/04/2010

File Sharing Myth-Buster – Myth #1
File sharing is Killing the Video Rental Business.

1106

8

1

13/04/2010

Reason Number 3 For the Drop in
Music Sales Availability – Too Little or Wrong Format

3094

13

1

11/04/2010

A Contemporary Analysis of
Psychological Tools Used in Reporting Music Sales Results

1403

4

3

2

11/04/2010

Japan as a Control Statistic for
File Sharing Analysis Studies

827

7

1

9/04/2010

Reason Number 2 – Top Reasons why
Music Sales MIGHT be/ARE down

780

10

8/04/2010

Piracy or Common Sense – Top Reasons
why Music Sales MIGHT be/ARE down.

1500

7

3

6/04/2010

My Father the File Sharing Pirate.

527

6/04/2010

Misdirection Ambiguity and Deception
in Presentation of Music Industry Statistics. (err, Game-on-Dude)

1975

9

4

6

5/04/2010

Why the Music Industry is Dying – in
Pictures…

107

11

4/04/2010

The Music Industry Twelve Year
Technology Cycle (A Retrospective Analysis)

1440

12

3/04/2010

Tera Report interim Tidbit

536

1

31/03/2010

Terra Rebuttal Response 3 – The
Accuracy of Data

1275

6

2

30/03/2010

Tera Rebuttal Response 1 – File
Sharing = Convenience & Availability

508

1

1

30/03/2010

Alexa Ranking The Experiment.

249

1

29/03/2010

Statistical Anomalies in Reports
Originating in the EU

494

Totals

39546

134

13

34

Alexa Rank Today.

The new paradigm of internet presence appears to be driven by Tags (The more tags, the more hits) and of course the length and depth of
the article tail. I am receiving more hits for the first article published at the end of March than I am for the articles published today.

The interesting observation here is that being a new Blog-site in the eyes of Google, I have very little built-up “Goggle juice” and my Google page-ranking is definitely at the bottom of the barrel; whixch essentially means that as a niche blog, I depend on the quantity of articles with differing Tag words to obtain new “peeps“.

Stats run starts April 11 2010.

So to anyone thinking of blogging, the first 21 million is easy and only takes around 22 unique visitors per day.

Although….

My average time on site for readers equals

If you are writing short blog articles….. then possibly, the readers only stay a few minutes…..
If you are depending on the reader to be attracted to click-throughs whilst he/she is there, then the adverts better be amazing…..

Last year I blogged about the major newspapers only retaining users for an average of two to three minutes. (Article incl;uded herein, lower down the page.)

It appears that the times are changing, with the SMH now keeping eyeballs for :

Last year we said:

Where to Spend Your Advertising Dollar…

by Tom Koltai at 04:09AM (EST) on September 28, 2009  

The Disagreement about Blogs


There are two point two new Blog sites created for every second of every day of the year. (around 175,000 per day.)

It has been predicted that within three years, 50% of all content online will be user-generated.

The blogosphere doubles every 236 days! Presently, there are around 77 million blogs,


One viewpoint is that :

From TNS Global website

NEARLY A THIRD OF OUR LEISURE TIME IS SPENT ONLINE

LONDON. December 8th 2008: New figures released today reveal the staggering amount of time Brits now spend on the internet in their spare time – with the league table topped not by students, but by housewives.

And from Blogher

The majority of people consider Blogs are rated between somewhat reliable and highly reliable as sources of empirical data and product purchasing  advice/recommendations.

Blogs as a Source of Information

Source: The BlogHer/Compass Partners 2008 Social Media Study P15

And contrarily, from a leading Psychologist:

Now we discover people don’t believe blogs – so stop blogging…!

A major survey of over 27,000 people has discovered that blogs are the least credible source of information online. Coupled with similar research on the trustworthiness of blogs, this most recent study suggests the end is nigh for blogging.

According to the study, we believe “word of mouth” over and above everything else. The TV news comes next, then online news with newspapers just a little bit behind. Blogs are way down the bottom, with only one in every ten people believing them.

And another contrary opinion – this time from Businessweek, headlined:

Only 16% Trust Corporate Blogs: Are They Worth Doing?

The response from Forrester Research is it depends. But the bottom line is that based on survey research the firm released a report today, it’s time for some rethinking of corporate blogs. (To get the report you have to hand over some contact data).

Forrester found that 16% of the people who read company blogs trust them—less than every other form of content they asked about, including print media, direct mail, even corporate emails.

So we understand that half the experts say Blogging is not worthwhile and the half saying it is.

BTW, the half whom claim that blogging was worthwhile seem to represent the female population rather strongly. This is inline with our
discovery over the last two months that a great majority of the game players in Zyngas Facebook based Farmville game were averagely aged as being 27 year old females.

Because of our experience in online data usage (since 1987) we believe that wherever the girls are – the boys are sure to follow and that
observation can now be confirmed with our recent stats collection on Farmville player sexes.

Chris and I both blog on this website, Our backgrounds are not dissimilar except that I entered the computer field once I completed uni
and Chris entered the music business. We then both spent a considerable period of our lives being extremely entrepreneurial with some success and a couple of failures (on my part).

So Chris is our expert social networker and I am our spreadsheet guy.

You can tell the difference between our styles by reading some of the blogs. Chris is careful with his spelling, grammar and sentence
structure, carefully hunting for the right balance of adjectives, verbs and nouns to present his views.

My online style is rather raw by comparison. My previous attempts at writing were always edited, so this new role of self-editing is obviously beyond my capacity.

The words flow and the fingers try to keep up, usually failing.

Chris is always asking me to be more careful with my presentation, grammar and spelling. And I respond (jokingly), “Do you want quality or volume?”

His reply is usually dismissive of my cavalier style but somehow we get through each of these editorial discussions and the Perceptric blog grows and grows.

During one of our “editorial quality” conversations recently I retorted to the repeated grammatical structure and spelling entreaty with an
almost flippant, “It would appear that regardless of the poor layout and my bad spelling, we are doing better than the newspapers in retaining readers  attention”.

“We don’t have many readers (less than 100,000), but the ones that we do have are connecting with us in a more meaningful and much longer time than any of the major Australian Media sites do”.

“Are you sure?” asked Chris.

“Well, if you look at the time that the average reader spends on our little irrelevant blog and compare that to nearly anyone that has a few million bucks to run their blog – we appear to be creaming them. Do me a favour – pull up the Alexa ratings for Perceptric.com”.

“Yep, done”.

“OK, now add-in some premium media content – like ninemsn.com.au smh.com.au. afr.com.au and to balance the results include another Blog site like crikey.com.au, and then click compare and then Daily Traffic Rank”.

Chris and I then discussed the aspects of the different stats available on Alexa.

According to the Daily Traffic Rank it would seem that thefield is dominated by Ninemsn almost neck and neck with the SMH with Crikey inthird place, followed closely by the AFR and trailing invisibly at the back isPerceptric.

So if that’s all it takes to get advertising, then I think I will do a deal with Microsoft and get my name on the top of every Internet Explorer browser,

So now dear advertising reader, it’s your cue to ask, “But Koltai – how do we know they’re reading our ads”.

Ah, there’s another little tool in Alexa that allows you to see how long individual peeps stay on a site. It shows a totally different picture.

It would appear the Perceptric is (was)  leading the pack.

Then, in daily page views per user, there is a battle royal for attention, but again with Perceptric gaining on the field..

So, should you, dear reader, spend your advertising dollar with Perceptric?

“Um, no, we don’t do advertising.”

But the evidence is clear that major media, while they have the initial attention of the consumer, also seem to lose it fast.

“Do you mean that people actually stay longer on the Perceptric blog than the leading Television and Newspaper sites of the land?”

“Well, yes. They do.”

“Why?”

Well this might be a reason….

“At Perceptric, we tell it like it is with very little spin.
Neither Chris nor I have political aspirations. We have nothing to sell except our knowledge and we give away a lot of that knowledge for free.”

“But are you qualified?”

“You mean beyond our both being over 50, both entrepreneurs and our university studies?”

Yes. What qualifies you to broadcast your views to the world at large.

“Well nothing really. We don’t believe that one needs to be qualified to obtain user attention. If one however then gets users attention,
then obviously one is giving the users what they want.”

“And what’s that, Koltai?”

“Read the Blog…”

Oh, and keep in mind, it doesnt matter if a site has 10 million users or 20 users. If the users only stay online long enough to leave,
the user numbers dont really mean much.

Internet destinations that engage their readers/players/users for long periods of time should be your media buying target. (Per impression of course.)

Postcript:

We talked earlier about an article from Businessweek entitled, “Only 16% Trust Corporate Blogs: Are They Worth Doing?”

“It would appear that Businessweek, is up for grabs,according to http://www.dancewithshadows.com/business/bloomberg-among-potential-bidders-for-businessweek/

Bloomberg, the financial news agency, is considering a bid for BusinessWeek, the business magazine published by McGraw-Hill.

According to a report in The Wall Street Journal, the interest shown by Bloomberg in buying BusinessWeek has “further crowded” the field of potential bidders, and also indicates Bloomberg’s intentions in continuing to expand beyond its core business of providing financial data, news, and analytics to professionals.

Quoting “people familiar with the matter,” The Wall Street Journal reported that the other potential bidders for BusinessWeek included Bruce Wasserstein, the chief executive of the investment bank Lazard Limited and who owns the magazine TheDeal and New York Magazine; ZelnickMedia; Joe Mansueto, founder of Morningstar; and private equity firms Platinum Equity, Warburg Pincus, and OpenGate Capital.

The bids for BusinessWeek will take place on September 15, 2009.

In July 2009, the United States-based publisher McGraw-Hill, which owns BusinessWeek, had said that it was “putting on the block” its financial magazine and also “exploring strategic options” for the magazine.

BusinessWeek, founded in 1929, has a circulation of 936,000 copies in the United States. The magazine’s main competitors in the national business magazine-class are Forbes and Fortune, both of which are published bi-weekly.

So the company that depended on the Forrestor Research report that said that only 16% of the world listened to Corporte Blogs is now
being sold. Possibly consumers don’t really trust the big Corporations anymore.

We wonder if the following has anything to do with McGraw-Hills decision? 

PPS: That’s all folks, until the next badly written, badly spelt, atrociously laid out, irreverent Blog article. Thank-you and it’s goodnight from me, and goodnight from him. (Two Ronnies circa 1970)

PPPS

Damn I forgot the all important title – where should you advetise?

We think you should take a couple of adverts on facebook – and our suggestion? Place them next to Farmville for maximum bang for your
buck.

But with that said – this advice is only good in Internet time. Next week? It will probably be a different Game.

This gives you the greatest access to 34% of the female game playing population most likely to be aged 27 years old and a housewife.

And I’m sorry I published this because I guess Farmville will be now be one of the most expensive words on Google.

The last word…..

Although I have only been blogging on this site (kovtr.com)  for four weeks, my attention guage (time + pageviews per user) is through the roof.

Here is KOVTR versus SMH.

That’s 21 pages per unique IP number vs 3 pages.

I don’t have any advertising, but if I did, which publication do you consider would get the most hits on advertisng (per reader).

But let us revisit the status quo in another month or so and see if the increase in readership (that I will doubtless obtain), will mean a
decrease in tine on site and pageviews, an increase, or will the numbers remain static.

Statistical logic tells me that the more readers I obtain, the less focused my readership will be and my bounce ratio will rise.

The key appears to be in the accurate selection of Tag words. Too many and the bounce ratio goes up. Too few, and you fail in the
harvest for new eyeballs.

This Tag Cloud science is fascinating. More so because it seems to be the Paradigm that is replacing all traditional forms of media
advertising.

Therefore, Tag identification should be associated with advertising content.

Koltai, they’re already doing that, it’s called Search Engine Optimisation [SEO] techniques.

Well, yes, they might think they’re doing that, but I’ll bet you that the science of Tag association with advertising product turns out to have a lot more to do with the ink blot tests or subconscious needs and desires than anyone yet realises.

I think the art of successful advertising is about to become most interesting and in the near future we will buy things without realizing
that it is something we really really wanted until the article is received.

We already have on-demand advert placement according to demographic.

We already have smart content tracking tyechnology allowing for SEO rankings to be forward advised for the automatic electronic auction of the advertising click-thru slot that will be visited by this user in 7,6,5,4,3,2,1 NOW.

We think the ink blot will tell the advertisers what you will be interested in buying in ten minutes time but not in 4 minutes time.

e.g.: I might be interested in subject X but do I want anyone to know that I’m interested in subject X.

We’ll develop that theme more in the future. This is the start of where Skynet starts to program the humans about what to buy…

References:

Digital Divas

http://advertising.microsoft.com/WWDocs/User/en-us/ResearchLibrary/ResearchReport/Digital-Divas.pdf

NEARLY A THIRD OF OUR LEISURE TIME IS SPENT ONLINE

http://www.tnsglobal.com/news/news-6A7B1D614B284E20B26AA3A75601275B.aspx

Youtube Video Promotion for StopBigMedia.com

http://www.stopbigmedia.com/

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The Tera Report Response 5 – 1+1=-6 or How Much can you BUY an Economist for?

Introduction.

When I was twelve, I was a regular sporting dude. Rugby, Soccer, Track and Cricket.

My father volunteered his time to be the St Patrick Colleges Football (that’s soccer) Coach, (unfortunately). Yet he drummed into me the absolute necessity of playing the ball and never the man.

In academia, and all non-contact enterprises, a similar modus operandi exists. Everyone is a gentleman. However, when one sees the future of the world coming under the shadow umbrella of politicians that are being advised by mischievous reports that very few would understand or have the inclination to attempt to decode or replicate, then it is time to alter the rules and play the man.

With the current worldwide push to limit individual creativity through the artifact of copyright, I fear that we may be already too late and have effectively ceded our intellectual and creative futures to a handful of corporations that have only their own interests at heart, and care not one iota if an independent songwriter, singer, guitarist or drummer can make a living from their muse.

The Ball is whether file sharing damages manufacturing industries in the EU largest economies to the point that they will loose thousands of jobs.

The Man is Patrice Geoffron.

Who is Patrice Geoffron.

Professeur d’économie à l’Université de Paris-Dauphine.

A respected and leading member of that educated and elite group of people that are used to dealing with and have direct access to the heads of Governments, advising the advisors on policy changes that affect not only our current interaction with technology and the Internet but the well being and future educational prospects of our youngsters.

Therefore the responsibility on the shoulders of learned men like M. Geoffron is at a higher level than plain simple persons like moi.

After all, who am I but a plain peon, chastised and adjudged by ASIC and found wanting.

But then, I don’t advise heads of state.

The recent Hadopi vote in France and the Three Strikes legislation in the UK, have all had the benefit of Professor Geoffron’s input and advice.

For the readers that speak French, the following is worthwhile watching…. If only to ascertain the possibility of bias….

Intervention de Patrice Geoffron – Colloque 16/01/09

http://www.dailymotion.com/video/x8i0cm_intervention-de-patrice-geoffron-co_news

For those that don’t speak French, it’s basically “the Internet is full of pirates that are stealing all your content and want to read all the content on line for free……..”

So don’t bother watching the video, it’s really a waste of bandwidth.

However, as one comment in relation the video suggested:

“With Martin-Lalande to your left, and Mr. Riester, Rapporteur of Internet Piracy in the audience. Mr. Negro was where? Vivendi, SACEM, SACD from the first image, who are you kidding?”

An excellent question….. Who is he kidding?

Unfortunately, when Patrice talks, Governments, Ministers, Prime Ministers, Kings, Dictators
and Presidents listen.

Patrice Geoffron likes to play with numbers to make +12% look like minus 12%

It’s a good trick, as long as no one sees what you are doing with your other hand.

Table 15 – Recorded music, film and TV consumer/end-user
spending in UK (M€)

CONSUMER / END-USER-SPENDING

GROWTH

Creative Industries

2004

2008

2004-2008

Box office market (Patrice Geoffron)

966

1082

-12%

Actual (Koltai Calculation)

+12%

Chapter 2 / The Impact of Piracy on the Most Affected European Creative Industries – 31

For example, Patrice took a number of out of date statistics and then told his audience, that he would only use the largest
Countries because they were the bulk of the industry and if he extended the data set, the problem would just be bigger…… But let me quote him directly:

This study also differs from earlier research by using a more accurate and comprehensive definition of Europe’s creative industries, one that expands the EU definition of core creative industries and also encompasses the economic contributions of non-core creative industries.
4Building a Digital Economy : The Importance of Saving jobs in the EU’s Creative Industries / Executive Summary

Findings of the Study…In 2008 the European Union’s creative industries, based on the more accurate and comprehensive definition, contributed 6.9%, or approximately €860 billion, to total European GDP, and represented 6.5% of the total workforce, or approximately 14 million workers.

The TERA methodology…Our methodology for defining the creative industries, which draws from KEA’s study and WIPO’s definitions, yields a more accurate assessment of the  true scope of the creative industries in Europe since, for the first time, both core and non-core sectors are taken together to estimate the economic weight of the whole creative ecosystem

Executive Summary / Building a Digital Economy : The Importance of Saving Jobs in the EU’s Creative Industries 5

We have estimated the economic contributions of the creative industries at a national level for the five main European countries (the UK, France, Germany, Italy and Spain), representing threefourths of European GDP contributions. The core creative industries can be assessed with the same methodology as at the European level.

Regarding the non-core creative industries, there is a technical difficulty in determining the weight of the non-core industries on a country level because of gaps in the Eurostat data, which form the basis of the calculation. To overcome this limitation we calculated the “core/non-core” ratio observed at the European level, resulting in the non-core industries representing 54% of the value added of the core creative industries and 70% of the employment of  the core creative industries. We then applied this ratio at a national level.

Given this procedure, these results shall be considered with caution. However, our assumptions remain valid since the objective is to provide orders of magnitude of the weight of creative industries in order to portray the economic ecosystem at risk from widespread piracy.

14 The Contribution of the Creative Industries to the European Economy / Chapter 1

  1. We calculate the weight of the “non-core” industries based on Eurostat data3

3 http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

Chapter 1 / The Contribution of the Creative Industries to the European Economy 17

..and this was despite the opening statement on the European Commissions Homepage on Statistics says:

Introduction

The usage of Information and Communications Technologies (ICT) has been one of the main drivers of changes within society and businesses since more than a decade. Official statistics are vital in order to monitor these changes.

In 2005, the Commission set out a new strategic framework for the Information Society: i2010 – a European Information Society for growth and employment. It is a key element of the renewed Lisbon Strategy and offers a comprehensive strategy for the ICT and media sector.

The Eurostat information society statistics are key to monitoring its three priorities:

  • The completion of a Single European Information Space
  • Innovation and Investment in ICT research
  • achieving an Inclusive European Information Society

A respective i2010 benchmarking framework was approved by Member States and the Commission in 2006, which set out a comprehensive set of benchmarking indicators on Internet and broadband take up by citizens and businesses, and on the use of computers and online services. It provides for flexible modules on a specific issue to be defined each year.

The collection of Community statistics on the Information society is based on the framework Regulation (EC) no. 808/2004 adopted by the European Parliament and the Council. It ensures harmonised data for all EU Member States and other participating EEA countries until 2010 and contains two modules: one on enterprises and one on households & individuals. As a framework regulation it allows adjustment to newly evolving needs by users and decision makers by annual implementing measures (Commission regulations, see links in Legislation).

Now let us re-examine what Patrice Geoffron considers is the “More Accurate Core Data set.

Table 2 – Sector delineation of the “core” creative industries4

Economic
Activity

Description

NACE

Press and literature

Other publishing

DE2215

Printing and service activities related to printing

DE222

Music, Video, Software

Reproduction of recorded media

DE223

Database

Computer and related activities (software consultancy and
supply, data processing, and database activities and on-line distribution of
electronic conten)

K72

So he threw out all the selections in KEA, WIPO and ended up with DE22 (part) series and K72 series.

What does that give us? When the veil is lifted, what is Patrice Geoffron really betting his reputation on?

According to Eurostat document:Statistics in focus by Author: Pekka ALAJÄÄSKÖ 101/2008 designate4d KS-SF-08-101-EN.pdf

Business services are drivers of the EU-27 knowledge-based economy. Boosted by the European Services Directive2, they face strong outsourcing and export demand, and thrive with the new production possibilities offered by innovations in information and telecommunications technology.  The provision of Business services was the main activity of 3.2 million EU-27 enterprises in 2005, which generated turnover of EUR 1 292 billion.

There were 14.2 million persons employed in providing Business services, accounting for 11.2 % of the non-financial business economy total (NACE C to I and K) and 18.7 % of Services (NACE G, H, I and K). Business services created value added of EUR 665.8 billion, equivalent to 12.4 % of the non-financial business economy and to 22.3 % of Services. Legal, accounting and management services (NACE K74.1) was the largest subsector in Business services, making up 48 % of enterprises, 38 % of value added and 34 % of persons employed.

Okay, he appears to be on target….. (apart from leaving out Video editing, Motion picture and video activities, 3D content creation,
Motion picture and video production, Operation of arts facilities, Radio and television activities, Cinematographic animation, Games Development, special effects, Consumer durables, Information and Communication Technology (including the following NACE codes: 30, 31.3, 32, 33.2, 33.3, 51.43, 51.64, 51.65, 64.2, 72), Operational services (74.5 to 74.7, 74.82, 74.84), and a few other minor
industries worth an approximate 200,000 additional jobs, like delivery of music and VOD to mobile handsets, Telecommunications….) and the least important contribution to the publishing world….. NACE 1.1 Code O9231 – Artistic and literary creation and interpretation. (But who needs artistic interference in the publishing business…….)

We highlighted M. Geoffron’s selected countries.

Patrice generously didn’t want us to bother with the detail for the other countries; he said:

We did not attempt to estimate the economic contributions of the “partial copyright industries” to the economy of the EU member states. If we had included these contributions, the impact of the creative industries on the EU economy would have been greater than the global figures presented here, which represent, for this reason, conservative estimates.

Well, we thought we would extend the dataset to see just how big the problem, really was.

After all, if one is hired to advise heads of state, ministers of the Crown and the entire EU Government, then one shouldn’t take any shortcuts…..

So, by using (the outdated and invalid) NACE 1.1 we discovered that industry was shrinking…..


However we also learnt from Toth last week, that labour regime shopping meant that those jobs were going to neighbouring
states….. Like this.


But of course, M. Geoffron is correct, the pittance of jobs added to the EU 25 is a paltry 200,000 compared to the 1.48 million minus the 150 thousand….. Ooops. There appears to be an illegal growth of jobs.

That can’t be right….

M. Patrice Geoffron assured us that Piracy was decimating the industry…..

That jobs were being destroyed.

He didn’t say that the industry was actually GROWING……..

Here is the data with all the EU states included …..


Oh dear.

It would appear that as well being unable to add up Cinema admissions, M. Geoffron is unable to add up growth.

Because surely, the omission of the EU member states from the report was an oversight. An accident.

We thought we would compare our findings with the official Eurostat viewpoint…..

Statistics in focus Author: Aleksandra STAWIŃSKA 4/2010 KS-SF-10-004-EN.pdf

Publishing, printing and the reproduction of recorded media (NACE Rev. 1.1 Division 22) generated EUR 97 billion of value added in the EU-27 in 2006, representing 1.7 % of the nonfinancial business economy total. However, in employment terms this sector’s contribution was smaller as 219 900 enterprises employed some 1.8 million people, equal to 1.4 % of the nonfinancial business economy’s workforce.

Monsieur (Professor) Geoffron surely would not set out to use a partial data-set to convince the EU Government to vote away our rights
to unfettered and unfiltered and continuous Internet access.

Why would anyone want to do that.

No, Professor Geoffron, must have made an honest mistake.

After all, no-one with such a responsible position would lie to the Government would they?

No-one voluntarily would accept thirty pieces of silver to sell out the Internet access of the next generation of kids, would they?

We will let one of M. Geoffron’s countrymen, Serge Halimi in Le Monde Diplomatique have the last word….

Internet did not destroy journalism, he [journalism] was dying already

In 1934, the French Radical leader Edouard Daladier castigated “two hundred families” who “put the power delegates” and who “spoke on the public, because they control the press.” Three quarters of a century later, fewer than a score of dynasties have a comparable influence, but across the world. The power of these new feudal hereditary – Murdoch, Bollore, Bertelsmann, Lagardere, Slim, Bouygues, Berlusconi, Cisneros, Arnault… – often exceeds that of governments.

En 1934, le dirigeant radical français Edouard Daladier fustigeait les « deux cents familles » qui « placent au pouvoir leurs délégués » et qui « interviennent sur l’opinion publique, car elles contrôlent la presse » Trois quarts de siècle plus tard, moins d’une vingtaine de dynasties exercent une influence comparable, mais à l’échelle de la planète. Le pouvoir de ces nouvelles féodalités héréditaires — Murdoch, Bolloré, Bertelsmann, Lagardère, Slim, Bouygues, Berlusconi, Cisneros, Arnault — excède souvent celui des gouvernements.

And…. a little Graph….. which possibly someone should show Patrice.


References:

http://www.monde-diplomatique.fr/2009/10/HALIMI/18192

Eurostat:

Statistics in focus by Author: Pekka ALAJÄÄSKÖ 101/2008 designate4d KS-SF-08-101-EN.pdf

Statistics in focus Author: Aleksandra STAWIŃSKA 4/2010 KS-SF-10-004-EN.pdf

The Tera Report.

Todays article was bought to you by the number 30 and the words silver and pieces.

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ACTA in Australia Not needed thank you.

We welcome the initiative of the ACTA participants to make some of the discussions available for public scrutiny and particular the Ministers initiative in making the material publicly accessible via the Department of Foreign Affairs and Trade at  http://www.dfat.gov.au/trade/acta/index.html.

ACTA is a Trade Agreement that is ostensible deigned to protect the commercial imports and exports of countries that already have a number of trade protection barriers in place not the least of which are the GATT administered by the WTO and copyright protection administered by the WIPO.

These agreements and organisations were formed  to manage and regulate the commercial trade of goods and trademarked and copyrighted products between countries and groups of countries.

The existence of ACTA is a slap in the face for the WIPO.

We would like to respond to the Minister’s request for comments in relation to concerns that we have in relation to:

1.         the widely practiced act of file-sharing.

2.         accidental receipt of copyrighted works.

3.         possible abuse of the individual person search and seizure provisions that have not been removed from the wording.

We have proven that file sharing takes place mainly as a result of content not being available via legitimate means.

In Koltai, March 2010, we said,

It is evident from this dataset that music artists who are not represented on Amazon are 39% more likely to be listed on ED2K file sharing networks than those artists whom are available as legitimate music downloads.

Further, the recent dramatic increase in the sales of Digital products across all media disciplines, confirms the fact that the majority of persons prefer to act in a financially responsible manner that recognises copyright and that copyright creators should be re-numerated for their work.

The historical perspectives and examination of the commercial results of recent technical phenomena like:

iTunes and the iPod;

social networking,

YouTube and;

Mobile phone cameras

Have demonstrated that innovation, currency (time, not money)  and availability (access) are key factors in determining sales growth.

The amazing results of the JK Wedding dance Video on Youtube demonstrated that traditional forms of marketing and physical publishing models are essentially sunset business models in comparison to the results achievable by utilizing social networking memes.

Whilst, the content Creation Industry (CCI), advertising and traditional publishers are still struggling to fully understand the new consumerism model of “free is good”

Today’s youth have already moved onto the next meme. They appear to care less about free than NOW.

P2P file sharing is now considered passé by the greatest majority of internet users with only a few newbies and the older generation utilizing it.

The next meme is the use of private networks, sometimes encrypted, usually invitation only, the methodology of choice. Some even utilise sneaker net to effect the same result, totally unobservable by any industry watchdog.

In Australia due to download Caps,  users have taken to renting 10-20 DVD’s at a time, ripping the contents onto their home DVR/Media Centre entertainment players, (available on eBay for under $150.00)

The sales results in digital music and Video on Demand offerings since June 2003 prove that digital sales are firmly tied to catalogue releases and social networking memes than the old fashioned advertising “but this one now” campaigns of the old media campaigns.

Today’s technology generation want content NOW.

In Australia for example, the majority of digital resellers consist of non-functional web pages with a limited selection offerings.

Australians are for licensing reasons unable to access legal services such as Spotify, or purchase content from Amazon and others unless they have a US mail box set-up.

In fact although the music industry inform us that they have created all these wonderful new “legal portals” the reality is that very few are available to Australian residents.

The limitation placed on Broadband internet accounts (usage CAPs) is both the curse and the (perceived) saviour of the content industry.

The curse, because with monthly limits as low as 5 and 10 Gigabytes, total VOD consumption is limited to three to five films per month.

Therefore in Australia, because of there technological and licensing issues, Australians still download and in fact are in the top ten per capita of torrent utilisation countries in the world.

The question remains, should the Government change the laws during this technology hiatus period and if so, who will benefit?

There will very little financial benefit as the monthly download caps will still be in place. Which of course also stifle dramatically the attempt to torrent any more than ten or so movies per month.

Until the Stokes family can roll out their unwired solution across the country, I doubt there will be any forward movements in competitive content delivery to Australians.

Unfortunately reports like the Tera Report from Tera Consulting, paid for by BASCAP, clearly demonstrate that the persons issuing the reports and possibly the commissioners of those works are not above using incorrect statistics to prove the damage that file sharing has on copyrighted works.

The Ministers Department have provided a Factsheet which states:

What IS the goal of ACTA:

  • Counterfeiting and piracy continue to negatively impact States and companies. Unfortunately, today they are also increasingly affecting the everyday life of citizens. Besides the often-copied luxury goods and blockbuster movies, counterfeiters and pirates are now taking liberties with common household articles – everything from home appliances to toothpaste. From the perspective of public and consumer health and safety, the appearance of counterfeit medicines and items such as counterfeit spare parts for cars, buses, and planes poses a threat that cannot be ignored.
  • The ACTA will establish an international framework for participating governments’ efforts to more effectively combat the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.
  • Counterfeiting and piracy are transnational activities. The growth of this illegal trade spurred the ACTA participants to agree to develop an instrument that will strengthen international cooperation in our individual and common efforts to confront this shared threat.
  • The ACTA initiative aims to define effective procedures for enforcing existing intellectual property rights.
  • The ACTA will concentrate on three areas:

a) cooperation among the ACTA parties to address the challenges of cross-border trade in counterfeit and pirated goods,

b) establishing a set of enforcement best practices that are used by authorities, and

c) a legal framework of enforcement measures.

  • The ACTA is intended to focus on commercially-oriented counterfeiting and piracy. There is evidence to suggest that organized criminal organisations are increasingly involved in the manufacture, distribution, and sale of these illegal goods.
  • Counterfeiting and piracy not only take place in the physical world, but also increasingly in the digital environment. ACTA cannot be regarded as an agreement that only focuses on the Internet. The ACTA aims to address the problem of counterfeiting and piracy as a whole, and seeks to cover each of its dimensions. Further details are provided for in the Summary of Elements Under Discussion.

What IS NOT the goal of ACTA:

  • The ACTA is not about raising substantive standards of intellectual property protection (IPR) or specifying or dictating how countries should define infringement of those rights.
  • The ACTA does not focus on private, non-commercial activities of individuals, nor will it result in the monitoring of individuals or intrude in their private sphere.
    Accordingly:

    • Civil liberties would not be curtailed by the ACTA.
    • There is no proposal to oblige ACTA Parties to require their border authorities to search travelers’ baggage for IPR infringing goods or their personal electronic devices for IPR infringing downloads.
    • There is no proposal to oblige ACTA Parties to require internet service providers (ISPs) to terminate users’ connections on the basis of accumulated allegations of online IPR infringement (the so-called “three strikes” rule).

Unfortunately, the Discussion paper is at odds with the factsheet. The Discussion paper uses the term “other competent” authorities. Yet in “CHAPTER FIVE INSTITUTIONAL ARRANGEMENTS” the discussion document skims over the most important details, which are, the who, the what, and the how, or what is referred to in Chapter five as the implementation and other administrative details.

This chapter will include all necessary provisions for the institutional set up, including questions related to the implementation of the agreement, how and when to hold meetings of the Parties, and other administrative details of the agreement.

Section 1: Civil Enforcement

Civil enforcement refers to providing courts or other competent authorities with the authority to order/take specific actions when it is established that a party has violated intellectual property laws, and the rules on when and how to use those powers. The issues under discussion in this section include:

  • scope of the section – which intellectual property rights would be covered by the provisions of this section;
  • the definition of adequate damages and the question of how to determine the amount of damages, particularly when a right holder encounters difficulties in calculating the exact amount of damage it has incurred;
  • the authority of the judicial authorities to order injunctions which require that a party desist from an infringement;
  • remedies, including the destruction of goods that have been found to be infringing an intellectual property right and under what conditions and to what extent materials and implements that have been used in the manufacture or creation should be destroyed or disposed of outside the channels of commerce;
  • provisional measures, such as the authority for judicial authorities or other competent authorities to order, in some circumstances, the seizure of goods, materials or documentary evidence without necessarily hearing both parties; and
  • the reimbursement of reasonable legal fees and costs.

Section 2: Border Measures

Border measures refer to actions that customs and other competent authorities would be authorized to take to prevent goods that infringe intellectual property rights from crossing borders. The term also describes the procedures that must accompany these actions. Elements under discussion in this section include:

  • scope of the section – which intellectual property rights will be covered, and whether border measures should only apply to importations or should equally apply to the export and the transit of goods;
  • a de minimis exception that could permit travelers to bring in goods for personal use;
  • procedures for right holders to request customs authorities to suspend the entry of goods suspected to infringe intellectual property rights at the border;
  • authority for customs to initiate such suspension ex officio (on their own initiative, without a request from the rights holder);
  • procedures for competent authorities to determine whether the suspended goods infringe intellectual property rights;
  • measures to ensure that infringing goods are not released into free circulation without the right holder’s permission, and possible exceptions;
  • the forfeiture and destruction of goods that have been determined to infringe intellectual property rights, and possible exceptions;
  • responsibility for storage and destruction fees;
  • capacity of competent authorities to require right holders to provide a reasonable security or equivalent assurance sufficient to protect the defendant and to prevent abuse, and
  • authority to disclose key information about infringing shipments to right holders.

I have in the last few years been extremely interested in Copyright and what is permitted and what is not under Australians copyright laws. There appears to be a fair bit of buck passing at all levels of the community.

The Attorney Generals office is arbitrarily the most competent authority in Australia on the topic of copyright, yet queries to the AG’s office result in :

“Therefore, before relying on the material, users should independently verify its accuracy, completeness, relevance for their purposes and that it is up-to-date.

Before any action or decision is taken on the basis of any material on this website the user should obtain appropriate independent professional advice.

Links to other websites are provided for the user’s convenience and do not constitute endorsement of material at those sites, or any associated organisation, product or service.”

Unfortunately, I have found that the quality of the advice from the legal profession is sometimes unable to be relied upon with lawyers suggesting that they are there to take instructions and not provide advice.

In an environment where the Government is unable to offer firm guidance in the execution of queries relating to Copyright matters in Australia, there is little justification for criminalising the great majority of Australian technology users or penalizing them with the implementation of ACTA.

Suspicians are aroused when documents are worded thusly:

  • a de minimis exception that could permit travelers to bring in goods for personal use;

Not utilizing the queens plain English… e.g.: The ACTA participants have agreed that the search and seizure procedures will not apply to travelers in relation to their persons or personal possessions.

The words de minimis by inference suggest that an action may be dismissed if the claim or cause is considered de minimis. Small or insignificant.

Yet the following words totally destroy the small gleam of hope….. “COULD” permit travelers.

This is definitely diametrically opposed to the intent in DFAT’s factsheets….

    • Civil liberties would not be curtailed by the ACTA.
    • There is no proposal to oblige ACTA Parties to require their border authorities to search travelers’ baggage for IPR infringing goods or their personal electronic devices for IPR infringing downloads.

Although, there doesn’t appear to be a specific instruction to do so, the concept of letting a customs official or some other “authorized person” determine whether or not they should use ACTA as a justification for search seizure, destruction and possible imprisonment is one that is rather chilling.

and

  • scope of the section – which intellectual property rights will be covered, and whether border measures should only apply to importations or should equally apply to the export and the transit of goods;

Therefore with the wording of the ACTA agreement in it’s current state I am forced to assume the worst and express a few personal concerns that the limited public release of information has done little to mollify.

Personal concern 1.

That the organizational body evolving from the ACTA discussions is still being kept secret from the public. Which is of  particular concern when one realises that this body will be given, by the ACTA signatories the right to over-ride the laws of all signatory countries in relation to:

a) Personal Property, seizure, destruction and associated costs.

b) Unilateral breach of human and civil rights

c) An unfair obligation by individuals to be required to prove at short notice their unequivocal title to copyrighted material that may or may not have come into their possession via self determinate means.

Example 1. In the case of a laptop computer containing the contents of a listserver discussion forum, e,g. rec.arts.video, there may be attached to some messages an ascii representation of a portion or all of a video that may be a technical breach of copyright. ACTA in it’s current iteration would require the customs officer or other “official” to confiscate the laptop, even if the individual was not aware that the infringing material was thereon.

Example 2.  A business traveler may have on his person an iPhone. A present form his wife. At breakfast that morning, upon telling his 10 year old daughter that he would be away on business for a week, she immediately went to her bedroom and sent him a Youtube video of Usher singing  Hey Daddy (Daddy’s Home). Being an extremely busy company CEO, he notes that the receipt of the message from his daughter and makes a mental note to view it later……

Unfortunately, the customs man at the boarding gate for flight 862 to LA, has had a bad day. His wife slammed the bathroom door and he had to cook his own breakfast; so when our CEO puts his phone down on the emigration desk to sign his departure form, the official sees a successful well dressed business man with a 32 GB iPhone, something that he can’t afford to buy on public service pay-grade 3. “He mister, no phones allowed in the”…. He sees the message from the mans daughter…..  Youtube Video…. Daddy’s Home – Usher. “Excuse me sir, your phone appears to have a copyrighted song on it. Can I see your receipt for purchase of the song please.”

The CEO responds, “It’s a message from my daughter, I doubt that it falls under the auspices of Customs to determine whether or not I have a receipt for a song that I would never purchase because it’s just not my kind of music.”

Result: confiscated Telephone and Laptop (on suspicion.) The man misses flight 862 to LA.

The business meeting in Orange county scheduled for 9:30 am the following day, never proceeds. Australia loses the contract for the development and construction of 3000 Kangaroo Hummers (worth 20 billion dollars) for the sake of song that was uploaded by the publisher prior to the record release to encourage the development of a fan meme.

The business man goes home and shouts at his daughter.

His wife files for divorce.

I know of few customs personnel that would be qualified to determine who uploaded the song and whether they werre the rights holder or not. (In fact this appears ot be a problem even inside CCI companies where the marketing department upload content and the legal department send out the takedown notices the following day. If the CCI companies cant get it right, then who would ACTA propose be the adjudicating approved authority that could make these determinations?)

Are these examples extreme? Not at all. The ACTA wording as it stands allows for both of these examples to be in our futures, soon.

The ability to use almost any digital content on the personal equipment of travelers to detain, confiscate and destroy with no recourse to normal legal due process is not something that IIII believe any Australian would approve of or vote for if asked.

The Minister may have been forward thinking and transparent in his release of the information on the DFAT pages, yet there is too much unsaid in the discussion paper and too many questionable items still up in the air.

The writer would be considerably mollified if this ”Trade Agreement” was restricted to trade quantities of Trade goods.

i.e.: Specifically excluding the transit of goods that are for personal use, (described as one of everything carried on ones person or in ones accompanied baggage) by individuals, either via pedestrian or mechanized travel via air, sea, road or rail;

This exclusion would by definition exclude postal or courier articles intended as Trade samples.

In conclusion, whilst we agree that there needs to be protection of intellectual property and a certain comfort for developers and manufacturers of new products; we question the copyright term of 50-75 years when viewed against the normal time permitted to claim depreciation on an item of capital expenditure, or R&D.

Further we question the validity of erecting barriers to e-commerce trade, communications and basic human freedoms when the single largest reason for file-sharing has been the demonstrated delay in digital content release by the content creation companies.

Further, We consider that the Government should undertake it’s own study into file sharing, whilst at the same time analyzing the expenditure of Australian households and entertainment elective choices by the Australian people.

Australia was, in 2010 according to IFPI the only country to achieve the holy grail of posting a profit in all areas of media consumption.

With the limited technology access, the limited commercial offerings available, this is a clear indication that Australia does not need, or will not benefit from the personal search and seizure portions of the ACTA model and I call on the Australian Government to vote against those elements of ACTA that do not deal with commercial quantities of Trade.

N.B. The limited technology  access of 5-10 GB per month in Internet downloads would affect movie downloads, but not music downloads.

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The Tera Report and its Commissioners BASCAP

(BASCAP Business Action to Stop Counterfeiting and Piracy)

Regular readers would realise that I have a “thing” for the Tera report.

The report claimed that;

1. Objectives of the study The production and distribution of works by creative industries, including movies, music, television programmes and software, has been recognised as having a positive effect on economic growth and the creation of jobs. Unfortunately, over the last decade digital piracy (copyright infringement of digital media) has increasingly threatened the economic performance of the industries responsible for these creative works. For this reason, stemming the rising tide of digital piracy should be at the top of the agenda of policymakers in the European Union and elsewhere. But to make well-informed decisions in this area, policymakers would benefit from understanding the extent of the economic contributions of these industries and of the losses resulting from digital piracy.

The lack of accuracy of it’s selected data sets.

The deliberate omission of growth segments of the publishing industry in Europe (e,g.: Computer Database business software but not the growing area of 3D film graphics or video games.)

The deliberate use of out of date (pre 2008) EU NACE industry codes (1.1 vs NACE V2.0)

The deliberate inclusion of only sunset industry business models (like jukeboxes and newspapers).

The deliberate use of terminology that implies that the report was more comprehensive than other similar studies and therefore conclusive, when in fact the report was not more comprehensive and even added up the data incorrectly (e.g.: showing a total minus growth in UK film admissions when in fact the numbers clearly showed a positive growth.) (The list goes on, please search for Tera Report on kovtr.com to read some of the other articles on the topic.)

One has to ask when one finds such a poorly researched and badly prepared, misleading document, who does it serve? Let’s follow the money…..

To do that we have to understand the motivation of the persons whom paid for it’s creation. i.e.: WHY does the Tera Report exist???

Last year we explained that unfortunately, the nature of today’s company directors, CEO’s and shareholders was to expect and demand a return on investment today and not tomorrow. Shareholders would only reward directors for results NOW, not in five years time. As many directorships are of a limited tenure nature, 3 years as opposed to five, ten or more, it is understandable that the short term view is given a higher preference than the long term view.

“How can I make sure I get my Christmas bonus this year?”

BASCAP, is an organistion of (CEO’s) people, composed of persons, who’s principle concern is the welfare of their families;  “How can I get the most out of my tenure in this job? I may not be here next year or the year after that.” The members of BASCAP have a short term need. The organisation itself, has a longer term need. It, [BASCAP] the organisation needs to continue to source funding from it’s membership to survive. If there is no reason for it to have a membership, then it would no longer survive. Therefore BASCAP, like any consultant, or organisation, requires to continually reinvent itself and align itself with popular issues that are emotionally powerfully enough to elicit donations, subscriptions, sponsorships or commissions from it’s rank and file membership.

The Carrot and the Donkey.

For manufacturing companies, the nineties was a time of opportunity, of providing delegates to Asian countries on Trade missions and small commercial successes. Many western companies starting out on Department of Trade initiated marketing exhibitions, that eventuated initially with healthy consultancies and an opportunity to save costs and earn increased margins by extending their manufacturing to these Asian countries due to lower labour rates and longer working hours. The Asian centred Western Companies did well and the economy in the late nineties boomed. Unfortunately the carrot and Donkey approach only works when the Donkey can’t espy the carrot field next to the road on which it is traveling. Today, those same Asian companies are now creating knock-off clones of virtually everything. BASCAP was formed in an attempt to shut-down these manufacturing pirates. ACTA, is an extension of BASCAP’s efforts internationally to attempt to right a wrong that occurred because Directors of Yesteryear were only interested in the profits that they could extract at that time, with little thought of the long term consequences.

From Bascaps about page….. What is BASCAP? (Please note the caption under the photo)

Counterfeiting and piracy impact virtually every product category. The days when only luxury goods were counterfeited, or when unauthorized music CDs and movies DVDs were sold only on street corners are long past. Today, counterfeiters are producing fake foods and beverages, pharmaceuticals, electronics and electrical supplies, auto parts and everyday household products. And, copyright pirates have created multi-million networks to produce, transport and sell their unauthorized copies of music, video and software.

That seems like an eminently worthwhile aim. Surely however, BASCAP is referring to only commercial Piracy operations and not home consumers. Because if they are referring to home consumers, then unfortunately, as persons who read our article yesterday about Vivendi would realise, the multi-million dollar networks constructed for consumer file sharing of online content actually in some cases belong to the companies that own the content being shared by the consumers. In which case, as we said last year, it’s no longer piracy, merely a new content delivery methodology. And the physical goods piracy? Let’s stop all these horrible counterfeiters from stealing our business. We have to put those people in their place. It was OK when we paid them a pittance to create our products for us so that we could resell them at extremely high margins, but now that they have learnt how to manufacture the stuff, they find that they can make more money by doing it themselves and selling the output directly. Unfortunately, the Asian countries did far too well at creating cheap products. Consumers all over the world now expect their LCD screens to cost $500.00 and not $10,000. Consumers are not unfortunately economists. They fail to connect the impact of low priced

(Note the phone on right is spelt iphQne)

consumer articles available in the discount stores with the fact that their next door neighbour who used to work at the Sydney [quality brand] LCD assembly plant at Silverwater was laid of last week.

The problem unfortunately is not even that simple, which of course if it were,  could be fixed by trade restrictions on certain products to save the local employment economy. Tariffs are normally an anathema to any economist, yet, when I consider the alternative to be a global corporation dictating terms to our customs agents, our judges, courts and civil servants,  (ACTA) then possibly the tariff protection method is far preferable.

I think it appropriate to quote Bill Gates on the subject of protectionism vs innovation: “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.” —Bill Gates In a memo to his senior executives (1991) referring to software patents.

The Tera report was commissioned to influence Governments to pass restrictions on the exchange of information between academics, commercial entities and the worlds consumers. The result of such legislation may have some short term benefits to  legacy companies that are no longer the centres of new innovations, however in the longer term (3-5 years) I predict that such restrictive legislation will slow down the development of new products and cause the economy to be severely and mortally wounded. Although, this is not the first instance of corporations convincing Governments to protect their industry.

Here is a portion of an article that I published last October, which gives an interesting insight into how forward thinking men (ok, one man, Frédéric Bastiat) thought of the protectionism sought by the dying tallow industry in the occasion of the introduction of kerosene/gas lighting.

To Protect OR to Innovate – That is the Question.

by Tom Koltai at 03:07PM (EST) on October 31, 2009 Isn’t interesting that industries that use outdated business models tend to die. In the 1800’s Candle and Tallow makers were fearful of their futures and even in two hundred years ago, there were people that paid out on the protectionist industry. The following is copied in toto from http://www.panarchy.org/bastiat/petition.eng.1845.html

Frédéric Bastiat

A Petition

(1845)


Note This is the famous text through which Bastiat, with a ferocious sarcasm, exposes to ridicule the protectionist State and all those who are in favour of protectionism. In times of anti-globalization, a text to be read and re-read paying to it full attention.

Petition

presented by the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.

To the Honourable Members of the Chamber of Deputies

Gentlemen: You are on the right track. You reject abstract theories and little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.

We come to offer you a wonderful opportunity for your — what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice — your practice without theory and without principle. We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a consideration that he does not show for us. [A reference to Britain’s reputation as a foggy island]. We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat. Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support. First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged? If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth. If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land. Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion. The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc. But what shall we say of Paris itself? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls. There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity. It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition. We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle that guides all of your policy. Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense? We have our answer ready: You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too. Indeed, you yourselves have anticipated this objection. When told that the consumer has a stake in the free entry of iron, coal, sesame, wheat, and textiles. – Yes, you reply, but the producer has a stake in their exclusion.- Very well, surely if consumers have a stake in the admission of natural light, producers have a stake in its interdiction. – But, you may still say, the producer and the consumer are one and the same person. If the manufacturer profits by protection, he will make the farmer prosperous. Contrariwise, if agriculture is prosperous, it will open markets for manufactured goods. – Very well, If you grant us a monopoly over the production of lighting during the day, first of all we shall buy large amounts of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal, to supply our industry; and, moreover, we and our numerous suppliers, having become rich, will consume a great deal and spread prosperity into all areas of domestic industry. Will you say that the light of the sun is a gratuitous gift of Nature, and that to reject such gifts would be to reject wealth itself under the pretext of encouraging the means of acquiring it? But if you take this position, you strike a mortal blow at your own policy; remember that up to now you have always excluded foreign goods because and in proportion as they approximate gratuitous gifts. You have only half as good a reason for complying with the demands of other monopolists as you have for granting our petition, which is in complete accord with your established policy; and to reject our demands precisely because they are better founded than anyone else’s would be tantamount to accepting the equation: + x + =  – ; in other words, it would be to heap absurdity upon absurdity. Labour and Nature collaborate in varying proportions, depending upon the country and the climate, in the production of a commodity. The part that Nature contributes is always free of charge; it is the part contributed by human labour that constitutes value and is paid for. If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market. Thus, when an orange reaches us from Portugal, one can say that it is given to us half free of charge, or, in other words, at half price as compared with those from Paris. Now, it is precisely on the basis of its being semigratuitous (pardon the word) that you advocate it should be barred. – You ask: How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest? – But if the fact that a product is half free of charge leads you to exclude it from competition, how can its being totally free of charge induce you to admit it into competition? Either you are not consistent, or you should, after excluding what is half free of charge as harmful to our domestic industry, exclude what is totally gratuitous with all the more reason and with twice the zeal. To take another example: When a product — coal, iron, wheat, or textiles — comes to us from abroad, and when we can acquire it for less labour than if we produced it ourselves, the difference is a gratuitous gift that is conferred up on us. The size of this gift is proportionate to the extent of this difference. It is a quarter, a half, or three-quarters of the value of the product if the foreigner asks of us only three-quarters, one-half, or one-quarter as high a price. It is as compl
ete as it can be when the donor, like the sun in providing us with light, asks nothing from us. The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!


It would appear that little changes in 200 years. Free versus protectionism.

The question people should be asking themselves is WHY?

Why do we need to legislate against something that has been this way for 26,000 years of human evolution.

Monkey see, monkey do. Clever monkey. So why do we need to either put the monkey in jail or bankrupt him when it is obvious that the large CCI industries are not losing any money at all from file sharing.

References:

Lee T. (June 9, 2007)  A Patent Lie – NY Times http://www.nytimes.com/2007/06/09/opinion/09lee.html?_r=3&oref=slogin

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