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How to Ruin an Entire Medium: The Attack on Internet Radio

A lot of really crazy ideas were floated as the next big thing during the dot-com bubble. USB-powered olfactory devices, buying 50-pound bags of dogfood online, and even Internet currency backed by Whoopie Goldberg instead of the Fed all got a lot of press and a lot of money before disappearing. You might remember a lot of excitement around the idea of Internet radio back then too. It seemed for a while that everyone and their brother was setting up RealServer on a spare Pentium II or signing up with Live 365 to broadcast the definitive European house techno mixes or every bootleg Phish MP3 they could collect to the masses. Streaming was dodgy, but possible, over dial-up speeds and it worked so well over high-speed lines that universities and offices ended up blocking ports. But Internet radio has largely faded away. Was it a bad idea all along, like the CueCat? Nope. Was it killed by ever-expanding iPod storage? Probably not. Rather, Internet radio's popularity and vitality were drained by a poorly-legislated artificial monopoly and compulsory licenses. This all has to do with how music is licensed. In the wild-west days of the Internet, anyone could broadcast anything and it was up to musicians and copyright holders to go after broadcasters. Since broadcasters included anyone with some spare time and virtually no one was making any money, this resulted in a huge, messy, innovative, fascinating jumble of Internet radio stations, much like the fascinating jumble of Web pages we know and love. Clearly, though, musicians had a valid argument about not getting paid for their work. At first, the RIAA pursued the same tactic used against Napster and other P2P systems - refuse to negotiate at all and sue into oblivion. Lawsuits, or the threat of lawsuits, shuttered services like NetRadio. Finally in 2002 relief came in the form of uniform royalty rates set by the U.S. Copyright Office. Unfortunately the rate, 7/100th of a cent per song per listener, was much too high for all but the largest Internet broadcasters to pay. And the fee was retroactive to 1998, meaning big checks were due when the policy went in place. To put that fee into perspective, let's say you have a station that averages 10 listeners at any time. You play songs that average 3 minutes each, and were broadcasting from 1998 through 2002. That's 700,800 songs, and really 7,008,000 listener-songs, which means suddenly you owed almost $5000. Small change for Yahoo, perhaps, but good luck making $5000 in advertising revenue with an audience of 10 listeners. So by 2002 we've done a great harm to a once promising medium. It isn't dead yet, since some big players can afford the fees or subsidize their broadcasting with other revenue. Not quite dead, but not lively or interesting - let's say five years of a persistent vegetative state. Now The U.S. Copyright Office is pulling the feeding tube. It has granted the RIAA the exclusive right to administer a compulsory license over all music through it's collection agency, SoundExchange. This means two things will change- first, the fees are going to go up, way up. Second, even if you don't play any music owned by RIAA member record companies, you still might have to pay them. This doesn't necessarily benefit the copyright holders. SoundExchange doesn't have to seek out and pay the 13-year-old kid who created some random MP3 on his mom's iMac. Also, forcing broadcasters out of business will result in less fees being payed. Pretty much every blog on the Web thinks this is an ill-conceived plan. Listen, I've watched a fair amount of Star Trek in my day and when Wil Wheaton tells you something won't work, you better listen. In addition to stunting an entire medium, this whole system is obviously unfair. Internet radio will pay much, much more than terrestrial radio. The regular radio stations pay license fees based on a structure that was calculated based on their revenues. Those royalties probably totaled less than $500 million last year, but by the time the online fees hit their cap Internet radio will pay a projected $2.3 billion for fewer listeners. What can you do? Not much, but the founder of Pandora has asked people to sign a petition. The "Internet Radio Equality Act," introduced by Congressmen Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.), would reverse the decision so writing your Congressmen might help a little. But in large part the damage is already done. Imagine if the Web had been subject to similar legislation. Back in the 1990s copyright holders like Disney and Fox were aghast that anyone could put up a site with a GIF of Bart Simpson or Mickey Mouse. Do you think the billions of dollars of value and commerce generated by the Web would have happened if every single jpeg, whether or not it was someone else's IP, required payment of .07 cents per pageload?

Uncle Ben: From Servant to CEO

Uncle Ben is now a CEOFor years, he has been ever with us. A familiar face in the grocery aisle, quick to ease our hunger. But he shall serve you rice no more, for Uncle Ben has been promoted to CEO (or perhaps chairman of the board) of Uncle Ben's Inc. Uncle Ben, instant rice pitchman, has long been seen as a holdover from less polite times. He clearly was not meant to be your actual uncle, or even that guy your dad knew from school that everyone made you call "uncle" as a creepy sign of pseudo-familiarity and respect. Since he was an older black man, dressed as either a manservant or perhaps maitre d’, and "uncle" was a disrespectful way to refer to blacks in the South, it seemed perhaps he was just another racist stereotype. Oh, they told us that he was a farmer known for the best rice in the region, but why the fancy duds? The use of stereotypes to market products has a long and interesting history in the U.S. The movie Ghost World has an interesting, fictionalized take on the matter. Some were obviously meanspirited, but others, like Uncle Ben and Aunt Jemima, have managed to change with the times and get by, partly because the stereotypes were no longer relevant. Kids today don't have a clue what a "mammy" character like Jemima is supposed to be, except for vague images from old Tom and Jerry cartoons, if they still play those. Is a black butler any more offensive than say, a British one? Well now we know for sure that Uncle Ben is not a racist stereotype, at least not anymore. With this promotion from servant to CEO, Mars, Inc. has finally revealed the truth: Ben was just in a very long, very abrupt career track within the company. Perhaps you and I are salivating over the step from associate analyst to analyst, but that is because we don't have the vision and patience of Ben. Sixty-odd years might seem like a long time for just one promotion, but it's not so bad when the promotion is from the lowest rung on the ladder to the highest, busting through any glass ceilings in the way. Ridiculous you say? It's not without precedent. When young Bruce Wayne's parents were murdered in front of him, the leadership of Wayne Enterprises was opened up. Later, because of his duties as Batman, Bruce could never devote the time required to run a large corporation. Much of his CEO responsibilities were in fact delegated to Alfred, his manservant. Of course Alfred was never officially named to the board, but you can see how that sort of thing could happen. Who was the last CEO of Uncle Ben's Inc.? Perhaps we should look into whether or not his parents were murdered in front of him, such that he was raised by Uncle Ben. Just like Batman, but black, and his crime-fighting gadgetry is probably rice-based. In any event, does this mark then end of all racism in the United States, or is it just a way to drum up some press for the same damn rice they've been selling for 60 years? Let me know what you think in the comments.

I’m with Lido

Lee A. Iacocca's recent book, Where Have All the Leaders Gone?, has received a good amount of press this past week, all centered around one specific passage:
Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course." Stay the course? You've got to be kidding. This is America, not the damned Titanic. I'll give you a sound bite: Throw the bums out! You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies. Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That's not the promise of America my parents and yours traveled across the ocean for. I've had enough. How about you? I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have.
Makes me want to read the book. Though, of course, all the blogs I've read covering said passage have just left it at that. They might make some sort of comment about Iacocca's personality, or what he said about the current crop of domestic auto executives, but they don't really go in and dissect what he said. (I'll disclaim right here that I, like the zillion other blogs that have commented on the book so far, have not actually yet read the book, so if the passage - and my comments hereforth - were taken out of context, Mr. Iacocca, I apologize.) To start with, there is a sense of outrage among Americans. Perhaps more of a sense of outrage now than I've ever seen in my lifetime. It's there if you look for it - on the Internet, on college campuses, in demonstrations across the globe, in Keith Olbermann's words, in Jon Stewart's words. Many of us are not happy at all about the course of the nation. Where you're not seeing the outrage is in your daily newspaper, on your nightly mainstream news program, in comfortable suburban homes. I'm glad Mr. Iacocca, once and former business leader himself, has taken a stand against the modern business and corporate climate. If there's anything more sinister than the incompetence of the Bush administration, it's the measures that corporations have taken to ensure and enhance their profit margins. Take, for instance, the bankruptcy law revisions implemented within the last few years. Probably the most severe of those revisions now forces people who declare bankruptcy to continue repaying their debts rather than wipe the debts clean off the board. Granted, some people abused this in the past, racking up debt and then eliminating it via bankruptcy with no reprisal. But for the people for whom bankruptcy was designed - those facing serious hardships who simply need a break - these revisions make their situations worse, not better. In fact, I've yet to see any single benefit to the consumer - the people - and all the benefit to the corporation. What sense does it make to enact laws that give more power to the corporation than to the people? I know what you're thinking: The credit card companies and their Congressmen are in league. That may be the case, but I have no proof of that (blame a complicit media more concerned about Anna Nicole's babydaddy), and besides, shouldn't those Congressmen be on the side of the people they were elected to represent? Another example. The same bankruptcy revisions (or laws passed at about the same time) permitted credit card companies to increase their minimum payment calculations. If credit card debt - and debt in general - was not one of the major problems plaguing this country today, forcing Americans to carry the lowest amount of savings ever, then I'd say fine, such a measure will help Americans clean up their debt. But the end result is an increase in debt as Americans struggle to meet these higher minimum payments and turn to additional means to borrow money. Another example. Most, if not all, states now have mandatory car insurance. Of course, car insurance is a good idea (except when insurance companies cancel your policy after they're actually forced to pay out a claim - but that's another column) and you really don't want some uninsured jerk hitting your car and sticking you with the bill. But in reality, uninsured jerks will remain uninsured jerks. Or underinsured jerks. Making insurance mandatory will not make life any easier for you when one of those uninsured jerks whacks your car - it'll just provide more incentive for him to hit and run. What it will do is create a larger marketplace for insurance companies. Ever wonder why GM and Ford can't seem to muster the ad dollars for many time slots and programs that Geico and Progressive can? Even beyond those examples, businesses and branding have invaded our lives so much over recent years that we've become complacent to the attack. Do me a favor. Look up from your computer screen and without leaving the room count how many brand names you can see. When you next go shopping, examine the size of the brand name on the plastic bag they give you to tote your purchase around the mall. Did Best Buy or American Eagle pay you for the right to advertise on your belongings? No, you paid them and most people gladly pay them. One of the things I despise about modern hip-hop music - even more so than all the negatives being mentioned in the Imus scandal - is the glorification of brands. Are you paying to hear Fiddy rap about shooting gangstas and slappin' his hos, or are you paying for an hour-long Cadillac, Bentley and Rolls-Royce commercial? And to bring it all back to Mr. Iacocca, there is no outrage. Hell, one of the most stinging critiques that Mike Judge delivers in Idiocracy is that of the rampant branding and corporacracy - their clothes are plastered with brand names, a Cabinet member is paid to mention a certain brand in his everyday conversation and everybody has been brainwashed by advertising to believe that a sports drink is superior in every way to water. But most reviews attribute this to the idiocy of that civilization rather than the aggressive marketing practices of those corporations. So, Mr. Iacocca, what should we do about this? Just express our outrage on blogs and on message boards, get a bunch of people who already agree with us to agree yet again with us? The Internet is a great enabler of outrage. In fact, it's one of those things that only the Internet can really excel at. We can't all write books and enjoy the same sort of publicity as the man who introduced the Mustang to the world. We can vote. We can hold our elected representatives accountable. We can cast off the branding that we've allowed to work its way into our lives. We can buy local. We can buy independent. And we can make the same suggestions time after time and watch as people express their outrage, then take the easy way out and ignore all those suggestions. I really hope that Mr. Iacocca expresses some sort of solution in his book and does his best to implement that solution, because I'm sure as heck out of good ideas. UPDATE: Okay, I thought about it. There's at least one thing we all can do. Stop watching television. Seriously, how much TV do you think Mr. Iacocca watches? How much do you think Kurt Vonnegut watched? How much does Stephen Hawking watch? They have better things to do with their time, as do we all. The reason we haven't built a successful hybrid car, as Mr. Iacocca asked, is because that one engineer who has the talent to spearhead such a project and push it through is right now at home watching Dr. Who or CSI. The reason Wal-Mart reigned for so long atop Fortune 500's list isn't necessarily because of their low prices, it's because some whistling dancing smiley face on TV is goading them into shopping there. The reason you take your family to Olive Garden isn't necessarily because the food is good, it's because you saw the ad on TV right before it was time to make a decision about dinner for that evening. So I'll suggest now to not buy that new HDTV set you've got your eye on and when 2009 (or whenever the deadline is) rolls around and all television stations have to switch over to HDTV (do I smell another squeeze-the-consumer plannned obsolescence scheme behind this?), let your TV set go blank. Go outside. Lose some weight. Build that hybrid car. Write a book. Do all the things you can't do while staring at a TV set.

Why Not Put a Wind Turbine on Your Roof?

Wind turbines are cool. The might not be able to replace all the coal power plants in the world, but they're a great example of how old concepts and new technology can be put together like peanut butter and jelly to become a delicious source of power. Mag Wind MW1100They're also a great example of the sort of positive environmentalism that sees efficiency and economic growth as two sides of the same coin. I would go so far as to say that most of the various groups opposing wind farms around the country are really lame. But what if I wanted to join in on the blade-spinning fun, instead of just blathering on and on about it on the Internet? There's a cool-looking rooftop vertical-axis wind turbine (VAWT) from a company called Mag-Wind that looked really promising when I first saw it late last year. It's compact, doesn't require a tall mast, and it's designed specifically for roofs. Unfortunately, it might not be on the up-and-up. Paul Gipe at Wind-Works.org ran some numbers and he doesn't think the power output they are claiming is possible. There's also some talk of a fake Mag-Wind dealer (not actually authorized by the company) taking a whole bunch of people's money in North Dakota. More interesting discussion can be found at Treehugger. This is unfortunate because I had dreamed up a plan to put one of these guys on top of my roof any then buy a plug-in hybrid like the Chevy Volt. Charging a battery at night is already cheaper than buying gas according to Prius conversions. I'm just the kind of geek who goes out and spends money on sort of thing. Now it is possible that the calculations are off, because no one seems to have been able to make any independent measurements yet. Maybe the assumptions are wrong - for example, when they say 1100 kWh/month in a 13 mph average wind, maybe they are talking about the wind measured in a clear area away from buildings, like you see on the weather report. Because of the "roof effect" the wind actually hitting the turbine would be more than 13 mph. Also, this isn't a completely fictional company, their representatives and distributors have contacted bloggers and other writers here and there. So I guess I'll hold out a little hope and keep an eye out for something to materialize from these guys. In the mean time, anyone have a recommendation for a roof-mounted wind turbine that definitely exists? Maybe the WindCube (man that is cheesy-sounding bad name)? Oh, and here's some footage of various wind turbines in action in Taiwan. Not too exciting, but it shows that some people have working VAWTs up and running. [youtube]n0_lmtfwUYg[/youtube]

Pay More for DRM-Free Music at iTunes

Earlier we wrote about why people will pay for free music. Apple's Steve Jobs wrote that he would happily remove all the DRM locks from iTunes if the record companies would let him. Now one company is. EMI and Apple reached a deal to allow totally restriction-free songs for sale. The kicker is that the songs will cost 30 cents more that the locked-down DRM versions. At ZDNet, they think the success of this move rests on three factors: will this bring in more customers, will the new customers stop file trading, and is the extra $0.30 per track worth it to the record companies? I think the first question is a good one but the last two miss the point completely. The problem here is the way the issue is framed: the record companies have long been more concerned with stopping file trading and suing "pirates" than actually making money. File trading is here to stay. The nature of the Internet makes it a technological inevitability. You cannot sue a whole technology out of existence. Whether or not EMI (or any of the other major companies) allows DRM-free tracks to be sold, the minute one person buys a CD the whole entire system of locks and encryption and watermarks and whatever else has been completely broken. So what do you do? You figure out why people are using Napster or whatever to download songs, and then you compete with it by offering a better value. No one was even willing to try selling song downloads until Jobs convinced them to, and iTunes has been able to sell billions of tracks. I'm not sure the higher price is such a good idea. I agree that DRM reduces the value of the song downloads. But you have to look at the bigger picture: iTunes is still competing against free mp3s on peer to peer networks. I think Apple picked the $.99 price point for logical psychological reasons - it's much easier to justify spending the money if it's not even a dollar. In any event, this is a good move and I think both iTunes and EMI will see real benefits from this.