Lime Wire founder on copyright law: 'I was wrong'

NEW YORK--Lawyers representing the four largest music labels tried to convey a message in court here today: Lime Wire founder Mark Gorton was so determined to help people pirate songs that he disregarded copyright law, artists' rights, and even the Supreme Court.

And eventually, Gorton conceded.

The best that he could offer for an excuse was that he misread the law. "I was wrong," Gorton told the court. "I didn't think our behavior was inducing [copyright infringement]. I understand that a court has found otherwise."

In numerous exchanges with Glenn Pomerantz, the labels' lead attorney, Gorton acknowledged knowing that LimeWire was being used to swap songs without paying for them by a "large percentage" of users. Despite being aware of the piracy, Gorton said he refused to shut down the service.

"I was wrong. I didn't think our behavior was inducing (copyright infringement). I understand that a court has found otherwise."
--Mark Gorto

The copyright case brought in 2006 against Lime Wire and Gorton by the Recording Industry Association of America (RIAA)--the record companies' trade group--is in the final stages. A year ago, U.S. District Judge Kimba Wood found Gorton liable for inducing mass copyright infringement. Last October, Wood ordered that Lime Wire's peer-to-peer service, LimeWire, which Gorton today acknowledged was used by millions of people to pirate perhaps billions of songs, be shut down.

Hulu Plus ‘On Track’ To Exceed One Million Subscribers This Year

Hulu Plus, the subscription service that launched last November, says it is “on track” to sign up more than a million paying customers by the end of this year.

It’s a far cry from the 20 million people who subscribe to ideological twin Netflix, but it’s a heck of a start — and it comes amid fertile innovation around the flat screen TV you take everywhere, otherwise known as the iPad.

Hulu Plus was in private beta for months last year but opened up to everyone on Nov. 4 (a day after a Dish Network VP says the network-backed video-on-demand online service, was destroying television). Hulu doesn’t offer live programming, but slightly delayed on-demand prime-time shows from four broadcast networks (not CBS) and about 260 others, as well as vintage programs of the “TV Land” variety. It initially charged $10 a month, but reduced that to $8 in short order.

Hulu also said that revenue was “on pace” to reach $500 million this year, primarily from 289 (so far) advertisers. Some $300 million of that will go to content providers.

Hulu is available on computers and a range of gaming platforms and soon but its greatest potential is tapping into the mobile device revolution. Conditions are ripe: There are millions of tablets being sold, on-demand is considered a feature rather than a bug in the age of the DVR, and wireless carriers are permitting video streaming on their strained 3G networks.

Now that TV is just an app, it really can go anywhere in a way that Sinclair and Sony only dreamed of.

These days “anywhere” also includes about the house: both Time Warner and Cablevision — competitors of a kind to the sort of streaming TV service Hulu provides — are offering iPad apps which let their subscribers watch live programming, but only when connected to home internet service they also provide. And let us not forget SlingBox, the pioneer in letting you watch your TV, at any hotspot anywhere in the world.

A comparison to Netflix isn’t entirely fair, since the latter has been around quite a bit longer, is already responsible for 20 percent of peak U.S. bandwidth use, and is primarily about movies and TV shows from seasons past. But in the disruptive media universe Hulu and Netflix are joined at the hip, and both would now seem to be rising stars in the battle for the virtual living room.

Nieman Lab Analysis Paints Grim Trajectory for The Daily

Interest in The Daily seems to be waning, according to a Nieman Journalism Lab analysis based on Twitter sharing activity. After an initial spike of interest, then an app upgrade which eliminated some technical problems, News Corp.’s iPad-only publication has settled onto a undesirable trajectory best described as “decline, plateau, decline,” according to Nieman author Joshua Benton.

There are a number of caveats, not the least of which is that the Nieman study doesn’t count readers: It can’t, and News Corp. is under no obligation to publicly disclose this metric.

News Corp. said a month ago that downloads were in the “hundreds of thousands.” But even this doesn’t reveal much, because the app is inoperable unless you pay for a subscription after a trial period.

In the absence of primary data, Nieman had the intriguing idea to extrapolate from the indirect evidence of the number of times a Daily story was tweeted from within the app. The idea is that sharing trends might indicate relative subscriber levels, assuming that the sharing impulse is pretty much always the same.

Nieman acknowledges that tweeting volume needn’t necessarily correlate with subscribership in an intuitive way. Still, the theory seems sound: If tweeting from The Daily goes up, it might only mean that people are tweeting more, or it could mean that more people are tweeting. If tweeting goes down, it might mean that the impediments to tweeting have increased (e.g., the button was resized in an app upgrade, which didn’t happen), or it might mean that there are fewer subscribers.

Whatever the cause, tweeting from within the app has consistently trended down, Nieman found, using the help of social media firm PostRank, in what it called “a discouraging trend.”

“While a certain amount of decline would be expected after the initial rush of attention, the fact that there’s never been an appreciable, sustained uptick in sharing isn’t cause for optimism,” Nieman said. “Also remember that, in the middle of this stretch, Apple released the iPad 2 — literally millions of new iPads have been purchased in this narrow window, creating millions of new potential Daily customers who might want to download one of the platform’s most promoted apps.”

There have been only 6,026 tweets generated from within The Daily from launch day, Feb. 2, through March 31, Neiman found. “Its activity on Twitter seems to match my own perceptions of how they’re doing — an early rush of excitement; a decline as people lost interest and the app struggled with technical problems; a plateau once the tech got sorted out; and then another decline once the

Blockbuster Saved by Dish, But What’s Left of Video-Store Biz?

The Dish satellite network has successfully bid $320 million in a bankruptcy auction for Blockbuster Video, the once-mighty rental chain squeezed out by Netflix on one end of the spectrum and dollar-a-night supermarket movie-vending machines at the other.

Dish seems determined to keep the brand and at least some bricks-and-mortar locations alive. But how long will be it before hard-copy delivery of movies and TV shows will be anything more than a niche play?

“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network,” Tom Cullen, executive vice president of Sales, Marketing and Programming for Dish Network, said in a statement. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”

Clearly Blockbuster’s on-demand streaming service was a big asset for Dish to acquire. Adding it to the Dish network’s existing array of offerings makes it a more significant product than its current incarnation as an also-ran competitor to Netflix and Amazon. Those services are already challenging satellite and cable providers for on-demand Hollywood fare and for subscription dollars.

Blockbuster has learned, just as Borders did, that being a well-located, ubiquitous retailer with a cornucopia of content isn’t necessarily enough to beat the nibblers like RedBox (which sells your product to customers in the midst of their daily errands) and the upstart innovators you haven’t yet caught up to (digital media).

Explaining the Google Books Case Saga

A federal court yesterday rejected a settlement between Google, authors and publishers, throwing into doubt the search company's plans to make every book ever published searchable online.

Acknowledging in his opinion that “the creation of a universal digital library would benefit many,” federal district court judge Denny Chin ultimately decided that the proposed agreement was “not fair, adequate and reasonable.”

Origins of the Google Books Case

This is the latest twist in a six-year legal saga that began when Google announced in 2004 that it was partnering with several research universities around the world to scan their entire library collections. Google would then make the digitized copies available for search online. To date Google has scanned over 12 million books.

Scanning a book means copying it, and copying a book without permission from the publisher or author is a violation of copyright. Soon after the announcement, publisher and author groups began protesting Google's ambitious plan as a violation of their rights. If Google was going to use their works, they wanted to be asked for permission—and they wanted a cut of any profits.

Google maintained that scanning the books was “fair use.” While all books would be indexed and searchable on the Google Books site, users would only be able to access the full text of books that were out of copyright and in the public domain. If a book was still under copyright, and its rights-holder had not given permission, then a search would only return a small “snippet” of text, not the whole book or even a page.

In mid-2005, the Author's Guild and the American Association of Publishers filed suit to stop Google from scanning any more books. Soon the Author's Guild's case was certified as a class-action lawsuit, meaning that anyone who had ever published a book—millions of authors—would be part of the class represented and would be bound by the result of the case.

Al-Jazeera in Talks With Comcast Over U.S. Distribution

Al-Jazeera is in discussions with Comcast, the nation’s largest cable operator, about bringing the network’s English-language channel to millions of U.S. homes, the Qatar-based news service said Tuesday.

Al-Jazeera hopes to capitalize on its growing reputation as a serious provider of top-quality journalism from an increasingly tumultuous Middle East.

“We’re very grateful for all the support and appreciation we’ve been receiving,” Al-Jazeera English managing director Al Anstey said in a statement. “Clearly the demand is there for Al-Jazeera, and people want to see us on their screens.”

Anstey arrived in New York City on Tuesday to lead the talks, the network said. The Comcast meeting was the first move in a new push by Al-Jazeera to get on U.S. cable systems, which have been reluctant to carry the Qatar-based news network. A Comcast spokesperson declined to comment on the talks.

It’s quite a turn of events for Al-Jazeera, which until its widely praised coverage of the unrest in Egypt was something of a pariah in the United States. During the Iraq War, Defense Secretary Donald Rumsfeld branded the network’s reporting of civilian casualties as “vicious, inaccurate and inexcusable.”

Now, the White House is watching Al-Jazeera alongside CNN.

As recently as a few weeks ago, Fox News host Bill O’Reilly labeled Al-Jazeera as “anti-American.” Later on the same program Fox News commentator Monica Crowley called the network a “propaganda outfit for the autocrats who sit on the sands of the Middle East.”

This might come as a surprise to Former Egyptian President Hosni Mubarak, who accused the channel of “fomenting unrest.” Or to embattled Libyan leader Moammar Gadhafi, who in a rambling and defiant speech Tuesday said Al-Jazeera was trying to portray Libyans as “bad people … a people of turbans and low beards,” according to one translation.

Internet TV Service ivi Chief Vows to Appeal Judge’s ‘Wrong’ Ruling

A federal judge in New York has issued a preliminary injunction against internet TV service ivi, in a closely-watched case pitting an upstart web video service against some of the most powerful entertainment companies in the world.

In a phone interview with Wired.com after the ruling Tuesday, ivi founder and CEO Todd Weaver vowed to appeal the order.

“The judge has it wrong,” Weaver said flatly.

The injunction is a victory for the major TV networks and a setback for the nascent crop of online video distributors aiming to offer an alternative to the major cable and satellite companies. The case highlights the disharmony between copyright law and FCC regulatory policy at a time of rapid evolution and innovation in the online video space.

“Plaintiffs have demonstrated a likelihood of success on the merits of their copyright claim,” U.S. District Judge Naomi Reice Buchwald wrote in her decision. “They also have demonstrated irreparable harm, that the balance of hardships tip in their favor, and that the public interest will not be disserved by an injunction.”

“ivi streams signals to a nationwide audience, without copyright owners’ consent or compliance with the rules and regulations of the FCC,” the judge added.

Launched by Weaver, a Seattle-based entrepreneur, in September 2010, ivi (pronounced “ivy”) immediately drew the legal wrath of several major entertainment companies, including Disney, NBC Universal, Fox Television, and Major League Baseball.

That’s not altogether surprising, considering that the company’s business involves pulling down over-the-air TV signals from 55 stations in New York, Los Angleles and Chicago, and rebroadcasting them over the internet to its users, for $5 per month. Needless to say, ivi does not have the originating stations’ permission to rebroadcast the programming.

Amid unrest, a hard new look at online anonymity

Some people have undoubtedly forgotten that in the years before Facebook's fast ascent, social media was dominated by anonymity: handles worthy of CB radio, vintage AOL screen names trailed by strings of numbers, LiveJournal IDs bookended with the x's and o's of emo-kid culture. And there was a sense that in this odd and very public new medium, it wasn't safe to use your real, full name.

Thanks to Facebook, and founder Mark Zuckerberg's personal philosophy, that's changed. What Facebook did, with a policy that requires proper names and the initial restriction of access based on proven university or company affiliation, was bring the idea of "real identity" to the mainstream Internet. In general, that's been considered a good thing; but in the wake of widespread antigovernment protests across a number of Middle East and North African countries, the Facebook philosophy is facing a sharp challenge as critics suggest that a real-names-only policy could see pro-democracy activists targeted individually by autocratic governments.

A "digital freedom" nonprofit called Access Now is leading the charge, launching an online petition this week called "Unfriend the Dictators" to encourage Facebook to rethink its policy. An explanation on Access Now's site reads: "Facebook should be congratulated and condemned in one go: They've built a revolutionary platform that's catalyzed the political change sweeping the Middle East and beyond, but Facebook has also become a treasure trove of information for dictators, allowing them to identify and track down those who oppose them."

As the protests in the Middle East move beyond Egypt and Tunisia to the brutal reign of Moammar Gadhafi in Libya, who has made threats of serious violence should opposition continue, the question becomes more pressing: Should Facebook bend the rules if it might save lives?

Can Cable Block the Google TV Revolution?

Behind the scenes at the Federal Communications Commission, a quiet war is being waged over the future of television. It isn’t getting as many headlines as net neutrality or the Comcast/NBCU merger, but the debate is nearly as important. It’s about how far Google, Sony, and their allies can take their Google TV system.

Big Cable is trying to set limits on how easy it will be for devices like Google TV to access pay TV content and reassemble it into something that will reconfigure both television and the internet.
In their bid to get the FCC to help Google TV and similar devices, “Sony/Google are asking the Commission to ignore copyright, patent, trademark, contract privity, licensing, and other legal rights and limitations that have been thoroughly documented,” the National Cable and Telecommunications Association (NCTA) warned last Wednesday.

What is NCTA talking about? The trade association is trying to set limits on how easy it will be for devices like Google TV to access pay TV content and reassemble it into something that will reconfigure both television and the internet.

That’s at the heart of the FCC’s proposal for an AllVid system, which Google very loudly supports. AllVid doesn’t exist yet, but the idea is to mandate an industry-wide gadget that you could plug into your broadband router and connect to your cable TV provider, then watch online video and pay channels through a variety of AllVid-friendly devices. Not surprisingly, Google and Sony love this idea, because it could transform the Google TV from just a neat product into a revolution.

Big cable hates the proposal, because that revolution could leave multi-video program distributors (MVPDs), if not in the dust, at least working in a far more competitive video environment. But the AllVid proposal faces real technical challenges that have yet to be worked out.

MPAA sues Hotfile, battle for cloud begins

According to the MPAA, Hotfile is operated by Florida resident Anton Titov, who was not immediately available for comment.

A growing number of digital-locker services have come under fire lately by copyright owners. Liberty Media Holdings, an adult-film studio, last month also filed a copyright suit against Hotfile. On the music side, EMI, the smallest of the four record labels, is suing MP3tunes.com, a digital locker specializing in the storage of songs.

The cyberlockers are an alternative to BitTorrent file-sharing services and are growing in popularity. With these services, there's no need to download any software. A user logs on to a locker service and watches whatever films or TV shows are stored there.

The MPAA was careful to make the distinction that not all cyberlockers are unlawful. That's important because the Digital Millennium Copyright Act's safe harbor protects Internet service providers as long as they obey some rules. The trade group for the top film studios said Hotfile doesn't come close to qualifying for safe harbor protection.

The service "openly discourages use of its system for personal storage," the MPAA wrote. "Hotfile's business model encourages...users to upload files containing illegal copies of motion pictures and TV shows to its servers and to third-party sites."
According to the MPAA's suit, Hotfile is no free-information advocate. This is straight-up piracy for profit, the trade group said. Hotfile collects revenues by charging a monthly fee.