Tag Archives: RIAA

SOPA: Rebuttal of RIAA Opinion Pt. 2

This is part 2 of The Official Merchant Services Blog‘s rebuttal of this New York Times Op-Ed piece titled “What Wikipedia Won’t Tell You” written by Cary H. Sherman, chief executive of the Recording Industry Association of America, which represents music labels.

The Real Slim Shady

Mr. Sherman in his article goes on to accuse Wikipedia of spreading misinformation. He tries to find a smoking gun by suggesting the tech giants have an agenda of their own. He accuses them of bias in terms of the story they present, saying they are bending the truth and not being neutral. He even attacks media outlets that supported SOPA for not “taking advantage of their broadcast credibility to press their case.”

This is amazing. In a piece crafted specifically to present the RIAA’s very biased agenda that is featured in one of those media outlets thus stretching the New York Times’ already damaged credibility — lest we forget Zachary Kouwe, Maureen Dowd or Jayson Blair — Sherman accuses his opposition of doing the exact same thing he is doing. Keep in mind, his own executives were gloating about how well the music industry is doing in 2011. But here he is saying the industry is still being harmed by piracy and that Wikipedia is not telling you the whole story. Sherman simply seems to not be as familiar with how the internet works as his employee Duckworth is. To borrow the ever-popular phrase, he’s doing it wrong. He says, “Misinformation may be a dirty trick, but it works.” Not on the internet. People find you lying to them, or manipulating them, and they either make a mockery of you or turn you off. Sorry Mr. Sherman but in this instance, Citation Needed!

First World Problems

Mr. Sherman makes another fatal mistake with his article when he types: “The conventional wisdom is that the defeat of these bills shows the power of the digital commons. Sure, anybody could click on a link or tweet in outrage — but how many knew what they were supporting or opposing? Would they have cast their clicks if they knew they were supporting foreign criminals selling counterfeit pharmaceuticals to Americans? Was it SOPA they were opposed to, or censorship?”

Sherman is playing off of a stereotype about the twitter-age, or Net 2.0 –that everything is simplified and broken down into tiny bits of information. That the online citizen isn’t getting the full story is in fact that’s his main idea. But Sherman has forgotten net 1.0, and the strength of what Google, Wikipedia and all of that data really is. Somewhere between twitter campaigns with STOP SOPA avatars and Sherman’s own e-mail inbox is this huge collective database of information, which includes the exact language of the legislation as written. Every single piece Host Merchant Services has written on SOPA has included this link:

Stop Online Piracy Act PDF

Many other articles that covered this topic throughout the past year have given links to all of the relevant data and text. It’s the internet Mr. Sherman. The information is just a click away. Many people not only had access to the bill, they also read it. And so their protest was based on the bill itself. Not on the oversimplification you suggest.

Young, Wild but Not Free

Mr. Sherman then takes a wild swing at all of the people who protested SOPA, suggesting some of them are criminals: “But others may simply believe that online music, books and movies should be free. And how many of those e-mails were from the same people who attacked the Web sites of the Department of Justice, the Motion Picture Association of America, my organization and others as retribution for the seizure of Megaupload, an international digital piracy operation? Indeed, it’s hackers like the group Anonymous that engage in real censorship when they stifle the speech of those with whom they disagree.”

So just because people don’t agree with your agenda, they’re hackers who support Megaupload and want free music? That’s the kind of rookie debate tactic that gets you ridiculed throughout the internet. It’s also misinformation and a huge distraction from the topic. The Megaupload arrest is separate from the SOPA debate. This is obvious. The arrest was made under the current law. The FBI was able to crack down on piracy using what is currently in place. That the federal government was able to successfully attack piracy under the laws currently in place would seem to weaken Sherman’s position. In fact data collected on the topic has shown that once the government moved past the Napster issue that Mr. Sherman was so quick to cry about in the opening portion of his article, piracy started to take a huge hit. In fact, that PDF from the IFPI has some compelling statistics about how much piracy dipped after Limewire was shut down. Apparently the current laws have a lot of teeth if law enforcement goes after the pirates and doesn’t waste time going after citizens or forcing search engines and payment network providers to police the internet.

U Jelly?

The last straw with Mr. Sherman’s terrible presentation of his organization’s biased agenda comes from his short and shallow rejection of the Online Protection and Enforcement of Digital Trade Act (OPEN). This bill was drafted as an alternative to SOPA and PIPA. This bill was, excuse the irony, carefully devised by tech industry experts in the government — with an eye toward attacking online piracy but closing the wide open holes that the previous bills contained. The Official Merchant Services Blog helped break this story back in early December, with this blog, where we stated: “A bipartisan group of lawmakers have come out in support of a new law that has been proposed as an alternative to SOPA. Under this proposed legislation, the U.S. International Trade Commission (ITC) would be given the power to investigate claims of copyright infringement on foreign websites. The proposal would also allow the ITC to issue cease-and-desist orders to foreign websites that willfully engage in copyright infringement. The lawmakers demonstrate some clever ingenuity here with this proposal by tapping the ITC for the job of piracy oversight. The ITC already investigates patent infringement complaints and can bar infringing products from being imported into the U.S.”

In short, OPEN is an alternative that was everything Sherman asked for in online piracy legislation that we never received with SOPA or PIPA. It was well researched. It deals with the issues. It has input from tech industry savvy and knowledgeable politicians that know what they’re doing. But Sherman’s misinformation sums up OPEN like this: “The diversionary bill that they drafted, the OPEN Act, would do little to stop the illegal behavior and would not establish a workable framework, standards or remedies. It has become clear that, at this point, neither SOPA, PIPA nor OPEN is a viable answer.”

Forget You

Again Sherman glossed over some important aspects of his own organization’s rhetoric. This article found at The Verge cites the RIAA’s opposition to OPEN and its support of SOPA. The article quotes RIAA Senior Executive VP Mitch Glazier as saying that the ITC “clearly does not operate on the short time frame necessary to be effective.” Glazer cites the delays in the RIM vs. Kodak case — filed in January 2010 but now expected to be ruled on in September 2012 — as a prime example. Glazier sees these delays as hugely damaging, saying that each day a piracy-facilitating website stays online can cost millions of dollars to “American companies, employees and economy,” and be “an ongoing threat to the security and safety of our citizens.”

So again, it’s a case of what Sherman isn’t telling you, while simultaneously suggesting it’s Wikipedia or Google that are obfuscating the issue. The biggest problem with SOPA and what helped get it killed in Congress was that it left things extremely wide open to interpretation. The biggest boon to OPEN is that it requires investigation. Yes, that absolutely does take time. Time needs to be taken. The RIAA doesn’t seem to care about the affects that can happen when a law goes into place allowing swift shut down of websites based on willy nilly complaints or the hidden agendas of competitors. In fact, this is what is wrong with the RIAA’s stance on piracy. They want what caused the protest in the first place. They want to be able to quickly shut down sites with little to no oversight on how the plug gets pulled. So when an alternative is proposed that works more at the a proper speed with investigation, careful consideration of the circumstances and oversight, the RIAA has to denounce that suggestion.

The RIAA keeps pushing for legislation that mirrors SOPA. In fact, this will be the third consecutive year that Senator Ron Wyden [D-OR] will defend our country against the immense loopholes and abusive traits that the RIAA crusades for — Wyden took a stand and singlehandedly curbed the Combat Online Infringement and Counterfeits Act of 2010 (S. 3804) in 2010, and then was at the forefront of halting PIPA this year in the senate. What Sherman is telling us isn’t anything revealing about Wikipedia. No. What Sherman is telling us is that no matter how many times the government tells him that these laws are poorly written and open for abuse, Sherman will keep pushing for this to go through.

Courage Wolf

Host Merchant Services and all other payment network providers have a vested interest in this legislation because they keep getting named in it. These laws keep coming up that require payment processors to be involved in the policing of online content. The issue is just as important to merchant services as the Durbin Amendment. And so The Official Merchant Services Blog is once again here to keep people informed about these developments. The RIAA is singing the same old song about Napster and Piracy trying to push some sympathetic buttons with the people, but at the same time attacking the overwhelming opposition to their agenda, calling them misinformed — and criminal. Suggesting that internet users don’t go beyond twitter messages in the depth of their awareness of issues that pertain directly to the future of their internet usage. And the entire time the RIAA is engaging in this shell-game of misinformation, they’re also gloating about how profitable they’ve been able to make digital music transactions. They claim they know the internet. But Mr. Sherman acts like he still thinks it’s a series of tubes. He might know it’s not a truck, but he’s still doing it wrong.

We’ll leave you with the same message we had days ago when Sherman’s employees were tweeting “DECLARE THAT!”

The bottom line is if Lady Gaga and Pitbull online sales are robust and legit, it’s probably time to back off the Online Piracy rhetoric.

SOPA: Rebuttal of RIAA Opinion Pt. 1

Everyday They’re Shufflin’

The Stop Online Piracy Act and the Protect Intellectual Property Act were both killed in Congress — shelved because they were too wide open to abuse. The protest against these bills reached a collective crescendo when internet giants Wikipedia and Google and WordPress teamed up with a host of others for an internet blackout. When the largest source of internet information — and grade school kids’ favorite spot for help with their homework — goes dark and the search engine juggernaut that fuels the internet shines its spotlight on your bill, things have finally gotten serious. The U.S. citizens took notice of this blackout, and joined the internet in protest. And Congress heard the people and backed off this poorly written legislation.

But that hasn’t stopped the entertainment lobby. They went back to the drawing board and then returned mere weeks later with a new idea on how to combat online piracy. Unfortunately that new idea was the exact same idea as before. This was seen in the wishlist the International Federation of the Phonographic Industry (IFPI) released. The highlights of this list are essentially that the music industry wants pretty much the exact same things that were in SOPA, the same things that prompted the protest in the first place. A list of seven demands, which include the exact same far reaching calls for search engines and payment processors to police websites individually and be responsible to law enforcement for content they are indirectly connected to.

We’ll get back to this, but for now the point is the music industry felt the need to push for the same stuff that killed SOPA and PIPA. And that came right back to the forefront with Mr. Sherman’s opinion article in the New York Times. Essentially the RIAA wants a do-over and Mr. Sherman is here to tell us why that needs to happen.

Come At Me Bro

So today The Official Merchant Services Blog is going to try to put this issue in its place much like Blake Griffin did to Kendrick Perkins recently. Yes, we are going to Posterize the RIAA. Because the op-ed article indicates the RIAA has soft interior defense and can’t play man to man very well at all. First up we’ll start with the relative hypocrisy of Sherman’s ill-timed article found in this contextual relationship: Suggesting Wikipedia isn’t telling people everything, and then making this comment, “They knew that music sales in the United States are less than half of what they were in 1999, when the file-sharing site Napster emerged, and that direct employment in the industry had fallen by more than half since then, to less than 10,000.”

This is hypocritical because Mr. Sherman is leaving out some very pertinent information — which his employees were just recently bragging about on twitter. As we reported on January 31, the RIAA was excited about the IFPI wishlist because it had a series of statistics that showed the music industry is doing well with digital sales. The music industry claims Wikipedia is being deceptive and then suggests that they are still reeling from Napster, which was effectively scuttled back in 2002. They’re making a play for sympathy from an issue that happened almost a full decade ago, and yet they just got finished gloating about how successful they were this year!

Jonathan Lamy, senior VP of Communications for the RIAA, tweeted that paid subscription services rose 65 percent to 13.4 million in 2011. This tweet was in response to figures released by the IFPI which Lamy was excited to read. Lamy also tweeted that paid digital music services are active in 58 countries, generating $5.2 billion in revenues.

And then Cara Duckworth. The VP of Communications for the RIAA also cited the IFPI figures and then said: “W/more than half of all music sales coming from digital services, we know how Internet works. “Music=Innovation. Declare THAT. #CES #SOPA.”

What the RIAA isn’t telling you is far worse than what Wikipedia isn’t telling you. But Mr. Sherman isn’t about to concede facts when the agenda needs to continue to be pushed. The music industry is finally getting the hang of the digital market. Their own people brag that they know how the internet works. Declare that! But Sherman’s still waving the Napster suit in your face trying to claim that Wikipedia is obfuscating the issue.

It gets worse.

Born This Way

Sherman writes, “While no legislation is perfect, the Protect Intellectual Property Act (or PIPA) was carefully devised, with nearly unanimous bipartisan support in the Senate, and its House counterpart, the Stop Online Piracy Act (or SOPA), was based on existing statutes and Supreme Court precedents.”

The only thing in that statement that is rooted in the reality of what happened with SOPA and PIPA is that there was a lot of bipartisan work. Unfortunately, the work was bipartisan unity on finding problems with the so-called carefully devised legislation. Tech industry experts on both sides of party lines found the problems and holes in the legislation. As we reported on December 27, 2011, SOPA sparked unity in the federal government. And as we’ve written in our in-depth analysis, the bill was not very carefully devised at all. In that analysis we lean heavily on discussion from Congresswoman Zoe Lofgren [D-CA], an expert in the tech industry. We’ll highlight just a bit of Lofgren’s criticism of this bill, with questions raised: “Section 103 also allows a “portion of” a website to be deemed “dedicated to the theft of U.S. property,” regardless of the culpability of the website as a whole. Like many important terms throughout H.R. 3261, the precise meaning of these words is ambiguous, and will require years of expensive litigation to clarify. However, the plain meaning of the words seems to indicate that any large website could face a risk of termination by payment and advertising providers based solely upon infringing material contained in a single web page. ”

This is not carefully devised legislation. And as we eventually reported, the bill’s own sponsor admitted he did not fully understand the technical aspect of the bill and he backed off of it. Bill sponsor Lamar Smith is quoted in various media sources as saying: “I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy. It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.”

To Be Continued

SOPA: The RIAA isn’t doing so bad [2023 Update]

SOPA and PIPA Review

To recap what SOPA was about you can review our initial post about it from our November 20, 2011 blog. The Official Merchant Services Blog was out in front of this story and eventually the rest of the medial caught up with the impact that this House of Representatives bill and its twin in the Senate — the Protect Intellectual Property Act (PIPA) — were going to have on a variety of tech industry sectors, including Payment Network Providers. Host Merchant Services provides an in-depth analysis of SOPA here.

The Kids are All Right

According to the RIAA the music industry is outperforming other entertainment sectors in terms of digital sales. Jonathan Lamy, senior VP of Communications for the RIAA, tweeted that paid subscription services rose 65 percent to 13.4 million in 2011. This tweet was in response to figures released by the IFPI which Lamy was excited to read. Lamy also tweeted that paid digital music services are active in 58 countries, generating $5.2 billion in revenues.

Jumping into the tweets was another RIAA executive, Cara Duckworth. The VP of Communications for the RIAA also cited the IFPI figures and then said: “W/more than half of all music sales coming from digital services, we know how Internet works. “Music=Innovation. Declare THAT. #CES #SOPA.”

Throwing down the gauntlet, the RIAA is now essentially claiming that they have a viable working digital sales model that can exist on the internet. And yet still they pursue a lobby to crack down on piracy, and collateral damage that includes the internet and e-commerce.

Here’s a graphic detailing the top sales from 2011 according to the IFPI:

The Wishlist

The IFPI put out this PDF which details a very hardline stance on how to deal with Online Piracy. Perhaps the most entertaining aspect of this wishlist is that it essentially repeats the details of SOPA. According to the PCWorld article IFPI chief executive Frances Moore said record companies are building a business in digital music “in spite of the environment in which they operate, not because of it.”

Moore went on to say record companies are working with ISPs, search engines, governments, and law-enforcement agencies to reduce the number of illegal downloads and ensure that an ever-higher percentage of the music that is downloaded is bought legally. “Our digital revenues, at one-third of industry income (and now more than 50 per cent in the US), substantially surpass those of other creative industries, such as films, books and newspapers.”

So the IFPI establishes with facts and figures that the music industry is doing well on the internet. Digital Music services are getting traction, profits are rising and piracy is being challenged. The RIAA finds all of this so amazing and awesome that they go and re-tweet it to the world.

With all of this good stuff being said about digital music sales, why does the IFPI have a wishlist of demands to fight piracy that seem pretty much like the exact same thing SOPA wrote?

The Seven Demands

This arstechnica.com article goes into detail about the demands the IFPI has. The demands can be broken down to seven key elements:

Graduated response laws in which rightsholders can pass along notices about file-sharing to the accused party and possibly disconnect them from the internet.
Site blocking. The industry wants the ability to wall off infringing sites, however defined (yes, you read that right, they don’t currently define the criteria for being able to wall off the site), at country borders.
Search Engines need to help the industry. Search Engines need to remove links to infringing content that the industry identifies as well as prioritize links according to industry standards, not the engine’s own standards. Search Engines need to rank search results factoring legality or illegality into the ranking.
Payment Processors. Just like SOPA and PIPA, the wishlist also includes payment processors. Which is why The Official Merchant Services Blog is continuing its ongoing coverage of this topic. Payment Network Providers, Payment Processors, merchant services providers, whatever the entertainment industry wants to call us, are being targeted to police copyright infringement. It’s very strange. The IFPI wishlist demands processors cut off pirates voluntarily, much like SOPA tried to do. As the ars technica article states: “This was a theme of the recent Stop Online Piracy Act in the US, which originally featured a section encouraging companies like MasterCard to take unilateral actions against websites, and provided legal immunity for doing so. IFPI touts a deal with the City of London Police and credit card companies in which IFPI supplies the City of London Police with evidence that illegal downloads are being made available from an infringing site. The police review the evidence, verify its integrity and notify payment providers that their services should not be provided to such sites.”
Ad networks are being called on to cut off funds to suspected pirates as well. Even though some online advertising sites are themselves going through litigation for spams, scams and clickjacking.
Mobile operators need to get involved according to the IFPI wishlist. Because hey, why not? The IFPI’s paranoia suggests that outside the comfy confines of the U.S. where illegal downloaders just lazily go about swiping songs from their PCs, “piratical behavior increasingly takes place through phones and other mobile devices.”
And finally, the IFPI calls for increased litigation. Keep suing the big sites. The PDF report cites how much piracy dropped after Limewire was shutdown as the impetus to keep going after the big dogs in the world of online piracy. Compared to some of the other demands on this list, the final wish seems to be far more reasonable, logical and effective. Going after ad networks, especially those already mired in a legal quagmire of clicks and spam issues, might not do a whole lot in the war on piracy. Going after the big, popular piracy sites, though, might have an impact.

Where to go From Here?

It just seems tiresome that after all that went down with SOPA, PIPA, the internet blackout, and the controversy, the music industry just reloads and reuses the same exact talking points that got the laws killed in the first place. SOPA died because the things being asked for weren’t going to work. Banking on payment processors to police the internet was a bad idea. It still is a bad idea. This whole wishlist smacks of some old sitcom gag where a child asks one parent for a cookie, is told no, then goes and asks the other parent. The answer’s still no.

Payment Network Providers do not support online piracy. But the demands being given to them have loopholes where the Processor is being asked to shut down customers that are legitimate and not pirates, just on the whim of the entertainment industry.

And the real kick in the pants with all of this? At the exact same time the music industry makes this zealous push to continue to ask for wide open and ineffective legislation, they spend time gloating about how well they’re doing on the internet with legal, and apparently very profitable, digital transactions. All of course run through e-commerce sites supported by the same payment processors they are asking to shut down other customers at their fancy.

The bottom line is if Lady Gaga and Pitbull online sales are robust and legit, it’s probably time to back off the Online Piracy rhetoric.