Is Murdoch's Move Against Google Really About Twitter And Facebook?

from the no,-not-even-close dept

I'm a big believer in the idea that "earned media" or "earned links" are increasingly important online. That's the idea that growing numbers of people are relying on news links that are being passed to them via friends on social networks like Twitter and Facebook. It's about recognizing that more and more often news stories "find people" rather than the other way around. That is, people are increasingly getting links from friends, acquaintances and colleagues, rather than going searching for the news. And those "earned" links or "passed links" are quite valuable because friends are more likely to trust and pay attention to what is personally sent to them, rather than what's just on the front page of a news site.

However, even given all of that, I'm not sure I buy Mark Cuban's explanation for Rupert Murdoch and his plan to stop Google from indexing his sites. Cuban says that it's all about this recognition that such earned links are becoming so important these days, and Murdoch realizes that links from Twitter and Facebook are growing in value, whereas links from Google have little value. To be honest, I'd be surprised if Murdoch had thought through it that carefully, but more to the point, I'm not sure I believe the full premise. Yes, those links are valuable, but they need to start somewhere, and one of the ways they start is from news junkies using aggregators like Google News to find the news and start passing them around. Blocking that starting process makes little sense. On top of that, even when I'm passed a link, I'll often use Google News or other sites to dig deeper. Taking News Corp. sites out of the picture doesn't help at all. And, finally, while I keep hearing about sites getting so much more traffic from such passed links these days, I can say with authority that on Techdirt, they're still a tiny fraction of the traffic we get from Google.

So, yes, directly passed links from friends or colleagues are valuable and important, but it's a part of a wider ecosystem of news sharing that Google News and other aggregators are most certainly a large part of. Saying that blocking Google News makes sense because of things like Twitter and Facebook ignores how Google News plays into those links even being on Twitter and Facebook.

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Mark Cuban Remains Confused About Free

from the wait,-what?!? dept

Last week, in writing my review of Chris Anderson's new book, Free, I noted that Mark Cuban's initial critique of it was quite misguided, in that he made the quick (and flat-out incorrect) assumption that the story of "free" means that "everything is free," and thus it ignores costs. That's simply not true, and thus represents a big strawman that ignores the actual point of the book (though, to be fair to Cuban, it's a very common strawman found in many of the arguments against the book). Cuban has now taken a second shot at critiquing free, and I'd argue it's at least more interesting on a first pass, pointing out: when you succeed with Free, you are going to die by Free. That sounds like a worthwhile read, though I find it hard to believe. Here's the meat of Cuban's argument:

Lets look at the rule that eventually KILLS all freemium based content plays:

There will always be a company that replaces you. At some point your BlackSwan competitor will appear and they will kick your ass. Their product will be better or more interesting or just better marketed than yours, and it also will be free. They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo. You get the point. Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience. Or will be differentiated enough, and important enough to the audience to maybe even charge more. Who knows. But they will kick your ass and you will be in trouble.

I don't think anyone denies any of that. Except... here's the main problem that kills Cuban's point: this applies to any company, whether it uses free or not. What he describes is not unique to free. It's the story any company faces, and we're seeing how the companies that have "embraced" free have acted as that sort of "black swan" competitor to the companies that haven't. Look at what is happening in the recording industry or the newspaper industry, where they're struggling to understand new models.

Cuban tries to suggest that this is something special about the "free" space, but I can't fathom why it's any different than any company:

Its not that they can’t make money offering free. They can , have and will. The problem is that they know that its literally impossible to be the king of the mountain forever. But that won’t stop them from trying. And that is exactly what will kill them.

"Free" is just a price. If the cost of your product is $3 and someone figures out how to build a competitor for $1 (or free!) then you face the same problem. In fact, I'd argue you're better positioned to adjust if you understand the basic concepts behind free (which Cuban either doesn't, or he's bluffing for some odd reason), because it suggests you know what parts of the business to leverage as a resource, and which to charge for. So, I'm confused. What about what Cuban says is specific to "free" business models and why can't those who embrace "free" adapt if he seems to believe that others can?

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Copyright And Libel Questions Hit The Twitterverse

from the you-knew-this-was-coming... dept

A few weeks back, someone pointed me to a Twitter message where one Twitter user was (jokingly) accusing another of copyright infringement for repeating a message. While the situation was amusing, you knew it was only a matter of time until the question became more serious. Mark Cuban put up a blog post this weekend asking about the copyrightability of Twitter messages. His question revolves around whether or not it's copyright infringement for someone like ESPN to repeat what he wrote in a Twitter message, which he would have preferred they didn't quote.

I'm certainly no copyright lawyer -- so perhaps some could chime in in the comments -- but it seems like there would be two issues here. The first is whether or not the content is covered by copyright -- and, for most messages the answer would probably be yes (there would need to be some sort of creative element to the messages to make that happen, so a simple "hi" or "thanks" or whatever might not cut it). But, the more important question then would be whether or not ESPN could quote the Twitter message. And, there, the answer is almost certainly, yes, they could, just as they could quote something you wrote in a blog post.

If you ran down the fair use test, it's difficult to see how a public Twitter message wouldn't easily qualify. If it's ESPN, it would be for commercial use, but not in the sense of "selling" the content. Plus, it's for journalistic reasons, which is often given a fair use pass. Second is the nature of the copyrighted work -- which, being a Twitter message, I would guess most judges would assume it's expected that the content can (or even should) be repeated. The third test fails, since it would be the entire message, but the fourth test, on "the effect on the potential market for the copyrighted work" would almost certainly point towards fair use. Since the four factors aren't weighted equally, I think the only clear "failure" is the weakest and least important of the four tests (how much of the content was used -- which is way outweighed by the other factors), it's hard to see how this isn't a perfectly reasonable use.

But, of course, with copyright designed for a world before everyone had a printing press, we're going to come across more such questions in the future -- and I'm sure there will be a few lawsuits along the way.

For example... while it's not a copyright lawsuit, Courtney Love has been sued for libel due to her Twitter messages. Apparently, she's been Tweeting in anger against her former fashion designer -- Dawn Simorangkir -- and Simorangkir is now suing for defamation. The messages themselves may prove to be defamatory (assuming they're not true), calling the woman:

a "nasty, lying, hosebag thief"; having "a history of dealing cocaine"; having "lost all custody of her child"; and, being guilty of "assault and burglary"

There's also the message claiming that the designer would be "hunted til your [sic] dead," which seems more like a threat than libelous. Of course, one could argue that the legal filing by the designer is also potentially libelous, stating:

"Whether caused by drug-induced psychosis, a warped understanding of reality, or the belief that money and fame allow her to disregard the law, Love has embarked on what is nothing short of an obsessive and delusional crusade to destroy Simorangkir's reputation and her livelihood."

I would imagine that, if Courtney Love were not in a drug-induced psychosis, she might find that claim objectionable.

Still, you have to wonder if there were a better way to handle this. For example, filing the lawsuit seems to call more attention to the falling out between the two, perhaps leading many more people who might be interested in Simorangkir's work to think twice. While Love, as a celebrity, does have a certain reach, it seems like Simorangkir could better respond just by laying out the facts of the situation and telling her side of the story in a calm and clear manner, which compared to some rantings on Twitter would probably give people a good counterbalance without needing to involve the courts.

Either way, as these two stories demonstrate, we're in for a long series of lawsuits and legal threats having to do with Twitter messages.

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Mark Cuban Declares War On Free TV Online... But Misses Out On The Economics

from the protectionism-doesn't-work dept

There's a myth out there among some newspapers folks that "if only" the newspapers hadn't committed the "original sin" of putting content online for free, the newspapers wouldn't be facing difficulties these days. It's the kind of story that sounds good if you don't look too closely at the details. Plenty of newspapers did try to charge and almost all of them failed. People were never that interested in paying for news online, and plenty of new sources of news were popping up for free online anyway. Charging was a dead-end model from the beginning -- and to understand why, all you need to do is understand a little basic economics concerning the difference between infinite and scarce goods.

However, it looks like Mark Cuban believes in that "original sin" concept, and is posting a series of blog posts to try to prevent TV networks from making the same "mistake." It started with the claim that anyone who thinks TV is going a la carte online is crazy, because the "content companies" will never give up the fees they earn from the networks. After a bunch of folks challenged him on this, Cuban added a second post asking a bunch of questions, but which did little to actually answer his critics. He (like NBC Universal execs) laughs off the "threat" of people switching to all online access to TV content, noting that very few people have done so. This surprises me, since you'd think that Cuban would be familiar enough with Clayton Christensen's work to know that just because there are only a few early adopters (and the quality isn't as good) that it doesn't mean that it's not a potential threat. In fact, those questions are basically the de facto list of questions that an "incumbent" player tends to ask when facing a Christensen-style "innovator's dilemma" just before the upstart technology really begins to hurt the legacy business.

From there, however, it just gets silly. Cuban tries to stir up some sort of moral outrage among cable subscribers, exhorting them to call their cable companies and satellite providers demanding that they not allow any TV content online for free (as if it's their choice). His reasoning?

Those of us who enjoy this matter of life should be completely outraged that there are those who are leeching off the money we pay to enjoy tv. Our check goes to pay our bill. The money then goes to pay for the tv network, which in turn goes to pay for the content. Its a system that works.

Like any good system, there are those that want to have their cake and eat it to. The content we pay for ? They want it for free. We pay for it, they want it for free.

How is that fair ? Where is the justice ?

We pay for the content. We should be able to get it where we want it, and when we want it. Those who want it for free ? They should pay too.

Yes, and newspapers shouldn't be online for free. And music shouldn't be online for free. But they are and they will continue to be. Why? Because of those basic economics. As Saul Hansell at the NY Times points out, this is the nature of competition. Sure, everyone would love to keep getting paid, but some enterprising content company is going to recognize that getting more attention is a lot more valuable in the long run than keeping its content locked up on cable networks. Those content providers are going to realize that by breaking free and getting the content out there, they're able to stand out against those who lock up their content. They're going to be able to score more viewers and from that, more advertising dollars. And that will hurt those who keep their content locked up -- so, they'll be forced to free up their content as well. It's just basic economics.

Oh, and as for the whole "moral outrage" bit -- it's difficult to see how people who are already pretty pissed off about constantly rising cable TV prices are suddenly going to rise up and tell the cable companies to keep on charging them higher prices by locking up content. No. It seems likely that most of those folks are pretty excited about the idea that some of that content might go free, and can actually push down cable TV rates.

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New Models To Compensate Journalists And Writers

from the it's-possible dept

We're seeing plenty of stories of old school journalists pining for the "good old days" (that never really existed), and that's exactly what the Wall Street Journal recently published with a ridiculously vapid opinion piece by a columnist for the Newark Star-Ledger, Paul Mulshine, who dismisses the entire world of bloggers and internet reporters because some people he hears on the TV and radio can't pronounce the word "pundit" properly. Beyond the sheer irony of dismissing internet reporting as being untrustworthy based on a few people on TV and radio who pronounce a word incorrectly, the guy also dismisses all new business models for compensating journalists, by saying:

The old model for compensating journalists is as obsolete as the telegraph. If anyone out there in the blogosphere can tell me what the new model is, I will pronounce him the first genius I've ever encountered on the Internet.

Perhaps Mr. Mulshine should stop listening to talk radio and actually get online -- where an increasing number of folks have actually figured out how to make journalism pay. We recently pointed out that, in the sports world, salaries for top journalists were going up, as national sites like ESPN looked to hire the best of the best.

Or perhaps he should talk to Mark Cuban -- though, I'm guessing Mulshine's old school views on journalism would have a serious problem with Cuban's recent suggestion for how to save newspaper sports coverage. Cuban points out that sports leagues need local beat writers to cover their sports, as they do a much better job than the national sites like ESPN and Yahoo Sports. Yet, he knows that newspapers are struggling -- so his suggestion is that the sports leagues should fund the journalists, while leaving the editorial control entirely up to the papers, aside from a guarantee of a certain amount of coverage in the local paper.

This is, obviously, a controversial suggestion (even with editorial control separated from the dollars), especially for those who believe in complete editorial separation of church and state. But, as Cuban notes, considering the state of the newspaper business these days, perhaps it's time to revisit that church. He also leaves out the fact that this isn't quite as far fetched as it sounds. Media companies have a pretty long history of also owning sports teams, seeing synergies between the media properties and the teams, though they've often failed to recognize those synergies (and these days, many media companies are trying to sell off the teams). The Tribune Company is trying to sell its stake in the Chicago Cubs. The NY Times has put out feelers to sell off its stake in the Red Sox (more of a fit for the NYT-owned Boston Globe). Cablevision, in NY, owns the Knicks. The concept has worked in reverse at times as well -- with much of the NY Yankees' recent fortunes coming from starting up its own media company, called YES (not to mention that before the current ownership of the Yankees, the team was owned by CBS).

Either way, the suggestion is actually worth exploring in some format. In truth, this is often what has happened anyway, with local companies buying ads in the paper and expecting coverage of the local sports teams, even when there wasn't a direct need for it. Making it more explicit, while also making the editorial controls clear, doesn't seem so unreasonable. In fact, it seems like it might make a lot more sense than the old way of doing things in that it gets everything out in the open. As for Mr. Mulshine, he also seems to be harkening back to good old days that didn't really ever exist. Nearly 100 years ago, there was apparently an eerily similar debate over newspaper business models, with people fretting and worrying about how the traditional newspaper business models of ad sales and subscriptions simply couldn't support enough journalism. While not many of the other proposed models took hold, perhaps it's time to take another shot.

And, in fact, this is part of what we believe we're able to do here at Floor64 with our Insight Community offering. Companies have been tapping into the Insight Community to generate interesting and relevant content, while ceding all editorial control to us. For example, American Express has been using Insight Community content on its own award-winning Open Forum blog discussing trends and issues related to small businesses. American Express does not have editorial control over most of the content, and the content is pretty clearly not specific to or slanted by American Express's sponsorship of the endeavor. And, as some people are noting, that blog is full of such wonderful content, that plenty of other mainstream publications, including the NY Times and the Financial Times, are noticing that such a publication really is no different than a small business trade publication now.

Except, rather than American Express having to buy ads in random small business trade publications, it gets to sponsor the whole thing -- while ceding much of the editorial control to others. Obviously, we're a bit biased here, because we believe this is a tremendously viable model, but if you read the content on that site -- or, say, the content on the Digital Nomads site, sponsored by Dell, that runs under a similar model, you can judge the quality of the content yourself -- and recognize that for all the whining and complaining about the old models going away, there are tremendous new opportunities opening themselves up, as well.

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Mark Cuban Charged With Insider Trading

from the before-or-after-the-news-is-public dept

Over the years, Mark Cuban has been quite open on his blog concerning various stock strategies that he has -- which have often gone against the grain. He's not a big fan of just buying a small amount of a company's outstanding stock and holding it, assuming that as a small shareholder, you're probably not getting the real information about a company. A few years back, Cuban funded a somewhat controversial investigative journalism project, where the journalist would research companies that he believed were scams in some sense. The journalist would reveal his findings to Cuban before publishing the content, allowing Cuban to short the stock. This led some to accuse Cuban of insider trading, but that was clearly incorrect, as the info wasn't insider info, but information that had been uncovered through research.

However, the SEC is now claiming that some of Cuban's other stock moves weren't so cut and dried. It's charged Cuban with insider trading in his stake in meta-search engine Mamma.com. That story was a big deal four years ago. Towards the beginning of 2004, Cuban had to reveal publicly his 6.3% stake in the company (anything over 5% needs to be revealed), saying that he liked the company because in using its search engine he found that it worked well, and in investigating the company he realized that it was generating a fair amount of cash. However, just a few months later headlines were made again when the news came out that Cuban had sold his stake, noting that he was upset about the company's plan to raise money via a private placement, pointing out that such a transaction would dilute him. So, when he found out about it, he sold all his shares.

The problem, according to the SEC, is that he sold those shares after company insiders told him about the planned fundraising -- not after the company made that info public. If that's true, then it does sound like he would have been selling on material non-public information received from an insider, which would be bad news.

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Mark Cuban's Wrong: Porn Filtering On YouTube Doesn't Mean It Loses Safe Harbors

from the porn-ain't-copyright-infringement dept

Mark Cuban has a weird obsession with trying to convince people that YouTube is illegal, despite plenty of evidence to the contrary. His latest discussion on the topic is a real stretch. In response to the bad ruling that gives YouTube log files to Viacom, Cuban is saying that Viacom can now wipe out Google's DMCA safe harbors by showing that the company filters porn.

This is simply incorrect. The DMCA safe harbors do not claim that if you filter any material you must filter it all. Filtering out porn is a different beast than filtering out infringing content. You can tell that porn is porn simply by looking at it. But you cannot tell if content is infringing just by looking at it. It could be put up there on purpose by those who own the copyright. It could be fair use. It's not as simple as just saying that because YouTube removes porn it loses its safe harbor provisions. Also, while not specifically concerning the DMCA, other lawsuits involving the similar safe harbors in the CDA have found that intervening with content on a site does not mean that the safe harbors go away. Having knowledge that some content is porn is quite different than having knowledge of what content is infringing on someone's copyright.

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Random Scams Won't Take Down Google

from the nice-try,-though dept

Three years ago, reporter Tom Foremski tossed out his idea for how Microsoft could kill Google in an underhanded way: offer $100 million to whoever clicked on a random Google ad. The trick would be that no one (other than the person administering the prize at Microsoft) would know what the ad is. Foremski's theory was that this would lead to massive clickfraud and anger from Google advertisers. Of course, there are a lot of assumptions in there that likely wouldn't hold up in a real world test (with the biggest being that the whole deal would stop working the second someone "won"). However, now we've got Mark Cuban tossing out a suggestion for how to take down Google that seems to come from the same "wishful thinking" playbook. Cuban's idea is that Microsoft (with Yahoo) should offer to pay the top 100,000 sites in Google to get them to remove themselves from Google, and agree to be "exclusively" in the Yahoo/Microsoft listing. The idea is that the money would serve to pay for the lost traffic from Google -- but that's highly speculative.

If Microsoft actually tried this, it would be quite difficult for the Justice Department not to call an antitrust foul, first of all. But, at a more practical level, it just wouldn't work. It's based on the false premise that those top 100k sites are really the only sites that matter. If they all disappeared from Google's index, another 100k would quickly fill in to replace them. In fact, it would get more and more difficult to convince sites to leave Google's index, since the competition for clicks would get easier and easier as others did leave. On top of that, if this actually did happen, my guess is Google would continue to index those sites anyway forcing some sort of court battle over whether or not a site can actually block a search engine from spidering it entirely. These sorts of ideas are fun to think about, but once you think past the basic idea, it's not hard to recognize why the scams would never work. Beating Google is never going to be about a scam.

Now, I should add that I started writing up this post last night. This morning, the news came out that Cuban is included on the board slate that Carl Icahn has put up to try to force Yahoo to sell to Microsoft. The timing, obviously, is no coincidence. Cuban's blog post went up just hours before he was revealed to be a potential board member. However, just because this could, conceivably, put Cuban in a position to actually push Microsoft/Yahoo to implement such a plan, it doesn't make it any more viable. In fact, it makes it that much more questionable.

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Putting A Movie On TV Before It's In Theaters

from the Mark-Cuban's-latest-experiment dept

While some movie studio execs are still claiming that it's not "technically possible" to release movies in the theaters and elsewhere at the same time, Mark Cuban forges ahead doing just that. A couple years ago he made news for doing a simultaneous theater and DVD release of a Steven Soderbergh film, recognizing that people want to watch a movie wherever it's most convenient to them. Unfortunately, short-sighted theater owners boycotted the movie and the press quickly condemned this "day and date" technique as a failure. Of course, it didn't help that the movie just wasn't that good.

However, that experience hasn't stopped Cuban from continuing to experiment and push the movie industry into this century. His latest, as pointed out by Carlo, is that the new Demi Moore and Michael Caine movie Flawless is actually debuting on Cuban's HDNet TV channel two days before the theatrical release. Slowly, but surely, perhaps theater owners will recognize that they can't rely on artificial scarcity to get people into the seats. They'll have to start innovating and offering a better experience. Perhaps it's worth noting that Cuban is also a theater owner... and appears to actually be working hard on making the theater experience better and experimenting with unique business models. If he, as a theater owner, isn't scared of "competing" against home theaters, why are other theater owners so afraid?

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Why The New York Times Should Stop Using The Term 'Newspaper'

from the bad-advice dept

I'm probably biased since our blog is our primary communications vehicle here at Techdirt, but I thought Mark Cuban's suggestion that mainstream media outlets like the New York Times should shun the word "blog" to describe their work was pretty silly. Cuban thinks mainstream media outlets should make up a term like "RealTime Reporting" to describe their blog-like products. The Times's Saul Hansell makes the essential point: "blog" describes a medium, like "column" or "newsletter." Calling something a blog doesn't imply anything about its level of quality. To the contrary, one of the advantages of blogs is that people can subscribe to them on an individual basis. This allows them to make fine distinctions. Not only are readers perfectly capable of distinguishing between the New York Times blogs and 15-year-old girls on LiveJournal, but readers will also learn to distinguish among the blogs on the Times itself. If some of the Times's blogs are brilliant and the others are mediocre, readers will figure that out and the best blogs will get more traffic over time. Another way to illustrate how silly Cuban's line of reasoning is is to put the shoe on the other foot. The New York Times company publishes a "newspaper." There are thousands and thousands of bad "newspapers" out there, from the National Enquirer to those free weekly papers that get tossed in peoples' front yards. So by Cuban's logic, the Times should avoid the word "newspaper" in describing its product to avoid associating itself with the riff-raff. Perhaps it should begin describing it as "PaperBased Reporting" instead.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Go To The Movie, Get The Soundtrack For Free

from the yet-another-idea dept

It always amazes me when movie industry execs complain that the models we discuss wouldn't work for the movie industry. That's ridiculous, because in many ways, it's already working for the industry. As Marcus Loew once famously said: "We sell tickets to theaters, not movies." The movie has never been the "product." The experience of seeing the movie is the product, and so the focus shouldn't be freaking out about "pirates" while making the movie-going experience worse. It should be the opposite. It should be about enticing people to want to go out to the movies by giving them something extra that makes it worthwhile. Going to the movies is a social experience. It's much cheaper to eat dinner at home, but plenty of people go out to eat at restaurants because those restaurants (while more expensive) give people a reason to go (better food quality, better service, a chance for a night out, no need to cook or wash the dishes, etc.). There's no reason why the movie industry can't do the same.

While we've talked about a number of different ideas for enticing more people to go to the theaters (beyond making the experience better, why not let people buy a discounted DVD of the movie they just saw as they exit the theater -- if they really liked it, many will want to own it to see again, and to see the extras). Mark Cuban, who has actually been at the forefront of many of these ideas (and, also happens to be very involved in the industry, though more on the independent side) has an interesting new suggestion. He points out that only a small number of people actually buy the soundtracks associated with movies -- but if you want to attract more people to go to the movie, why not give them the ability to download the soundtrack of any movie they go see in the theaters. Put a special code on the ticket stub that takes them to a download store -- and on that store include the soundtrack as well as extras, such as the script from the film. Obviously, this content will be spread around and can be accessed by others, but many will value the fact that by seeing the actual movie they get access to the official content. As Cuban notes, this can also be a win for the music industry, as a portion of the movie ticket sales can be used to compensate them as well. It's yet another example of the model we've discussed repeatedly: using infinite goods (music, script) to make the scarce good (seats in a theater for a show) appear to be more valuable.

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You Don't Promote Innovation By Holding Back Those Who Push The Boundaries

from the push-the-limits,-find-solutions dept

Mark Cuban has weighed in on the whole Comcast bittorrent kerfuffle, siding with Comcast, noting that he wants it (and other ISPs) to block P2P traffic because such traffic clogs the last mile and that's inefficient and a problem. This is, unfortunately, the same kind of thinking that the telcos love: that the internet is somehow running out of bandwidth, and the more controls that are put on it, the better. However, that's static thinking. It assumes a steady state, or, at best, linear growth of innovation and change. Unfortunately, that's not how innovation works. The more people push the boundaries, the more demand it creates for better, more efficient solutions, and the more incentive there is to create such solutions. Rather than begging for artificial barriers to be put up, Cuban (and others) should be encouraging such uses. They push the boundaries to the point that people learn where the next big friction point is, and they innovate to get around it. When people are using up last mile bandwidth, all it's doing is creating additional incentives to solve the problems and provide much larger pipes into and out of homes. For a content distributor, such as Cuban is these days, you would think that would be a good thing.

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