As part of its "Look before You Click" Campaign, Consumer Union's WebWatch released new data [PDF] on Tuesday demonstrating the pervasive presence of malware. With a grant from the New York State Attorney General's office, WebWatch conducted a survey of New York residents and found that nearly one in four residents of the state had been the victim of a badware infection in the past year.

A lot of that malware - from annoying pop-ups to more malicious viruses - is preventable. The survey shows that most New Yorkers know the basics of protecting their computers; Ninety seven percent keep their computers secured behind a firewall or maintain updated anti-virus software. That's the good news.

The bad news is that there's still a lot of net pollution out there: spam, spyware, viruses, illegal traffic. Not only are people not protected from all of it, many of them, without even knowing it, actively seek out the places on the web where rogue software is most likely to reside.

Consider the Storm botnet, estimated by some to be on as many as 50 million computers. It spread on the web since early 2007 through spam or website offers for things like "free" music or software downloads, things millions of web surfers have looked for before.  The virus spread further - and was remotely controlled by its operators - via peer-to-peer file sharing networks, which also offers the promise of "free" stuff.   Other malware distributors are now ramping up, exploiting social networks, other web tools and even reaching into the workplace.

Fortunately, the operators of peer-to-peer networks are starting to realize the commercial value of their networks-how they can maintain their cooperative and collaborative peer-to-peer spirit, while at the same time protecting users and working with content creators rather than against them. One of the earlier-and better-examples of how to blend advertising, social networking, and file sharing in a safe, legal environment is imeem , which has negotiated revenue-sharing contracts with major record labels.

Cutting down the number of places where cyber-criminals can turn to spread their malware is a part of the Arts+Labs mission, and a win-win-win for all of us: P2P networks become legitimate, revenue earning businesses; content creators are compensated for their work; and consumers can still get the content they want without worrying about becoming a victim - or an unwitting purveyor - of dangerous or illegal content.

As we noted yesterday, the settlement between the American Association of Publishers, the Authors Guild and Google shows that creators' rights and consumer benefit can go hand-in-hand in the Internet age. It's a victory for consumers and creators alike.

The agreement demonstrates that collaboration between the technology community and the creative community can give consumers access to a wealth of resources while also preserving copyright owners right to control how their work is distributed online and to earn fair compensation for their creativity.

In addition, the agreed payment by Google of at least $45 million to authors whose works were copied without their permission makes clear that the appropriation of copyright holders' works without their permission or any consideration of compensation to the creator should have costly consequences. As this settlement makes clear, copyright holders must approve the use of their works before they can be copied or distributed.

UCLA law professor Doug Lichtman told Arts+Labs yesterday afternoon:

The settlement announced today is a win all around. For content creators, the settlement makes clear that copyright rights continue to have vitality even in the digital age. Google's disregard for copyright, which was the basis for the original project and their stance in the now-settled litigation, has been fully and rightly repudiated. For technologists, meanwhile, the settlement shows that the content and technology communities can work together to create new and frankly amazing opportunities. We are not there yet, but today the world took a huge step toward a searchable, online, comprehensive Library of Alexandria. The only damper to today's celebration? The worry that Google just created for itself yet another functional monopoly.

Georgetown University professor Paul Rothstein also weighed in with us yesterday...

The digital age presents unprecedented opportunities for the dissemination of creative works in the arts, literature, and the like, among a remarkably wide audience-- to the immeasurable benefit of man- and womankind.  But eventually there will be no creative works to disseminate if those responsible for producing them are not fairly compensated.  This settlement is a step in the right direction towards making works widely available to the general public yet at the same time providing fair compensation that will encourage creative production.  Hopefully it will inspire other efforts to achieve this kind of accommodation.

We're collecting more interesting commentary and reaction below.  The sentiment is clear - disregard for the rights of artists and content creators can't be tolerated. . .even in a digital environment.

The Copyright Alliance:

Voluntary arrangements like this, where copyright owners have flexibility, are far superior, and frankly can't be compared to a compulsory model. Here the rightsholder still can largely determine his or her own fate. I hope this system works as anticipated, and can be a model for future litigation involving massive infringement of creators' rights, noting that rightsholders have every right to push litigation to a court verdict if they feel that is the bestapproach.

Medialoper:

At first glance, this appears to be the rare settlement agreement that seemingly benefits all parties.

A TechDirt commenter, responding to Mike Masnick's pessimism (via Broadstuff):

For all the wailing and gnashing of teeth, and even though it's contrary to Mike's ardent desire that such content be "freed," this is not a bad agreement at all. Quite the opposite. Now, I've only scanned through the actual text of the agreement, but it actually provides for far greater use of scanned books than Google might have been able to do if it just asserted its right of fair use.

[...] Cooperation between the publishers/authors, libraries, and Google will mean more books will be available for the service (and I'd anticipate a scenario where all newly published books are digitally sent to Google for the project automatically upon publication).  All because Google had the foresight to realize that publishers and authors have rights too, and that if reasonably addressed (and this is really quite a reasonable agreement), new cooperative models can actually be put into practice.

Business Week Tech Beat's Rob Hof:

As a book lover, what I find the coolest thing about the deal is that eventually, I'll be able to visit most any library and, using at least one terminal that will be set up at each library, view digital versions of these books for free (though I'll have to pay to print out pages). It's nice that all the sides managed to agree on something that is demonstrably a good thing for all of us.

Search Engine Land:

The press releases characterizes the agreement  as a "win for everyone." In this case that's probably accurate. I may be overreaching in saying this, but this settlement may also represent a framework for online distribution of other digital content from the TV, film and/or music industries.

Dave Weinberger:

Once this settlement is agreed on, we will have what sounds like a reasonable program for working within the bounds of copyright.

Ars Technica's John Timmer:

All the parties, while mentioning their own vested interests that were served by the agreement, rightly tipped a hat to the big winners: readers, who might otherwise not be able to access some of this material. ...  Details are a bit sparse on some implementation aspects right now, but it's hard to find fault with the spirit of the agreement.

Chris Snyder, at Wired's Epicenter blog:

Regardless of who benefits more as a business, this certainly a big win for readers.

The Arts+Labs Co-chairs Mike McCurry and Mark McKinnon released the following statement on the Google settlement with the American Association of Publishers:

This settlement shows that creators' rights and consumer benefit can go hand-in-hand in the Internet age.   It is a victory for consumers and creators alike.

The agreement demonstrates that collaboration between the technology community and the creative community can give consumers access to a wealth of resources while also preserving copyright owners' right to control how their work is distributed online and to earn fair compensation for their creativity.  

In addition, the agreed payment by Google of at least $45 million to authors whose works were copied without their permission makes clear that the appropriation of copyright holders' works without their permission or any consideration of compensation to the creator should have costly consequences.  As this settlement makes clear, copyright holders must approve the use of their works before they can be copied or distributed.

The framework established by this agreement, if approved by the Court, should open the door to additional innovation and may potentially provide a model for legal access to other types of artistic content.  This type of collaborative problem-solving is part of Arts+Labs' vision and is far preferable to years of litigation that would delay a future for the Internet that is safer, faster, more reliable and more beneficial for every consumer.

One of the great pleasures of new distribution technologies is the ever-greater variety of content they make available.  Not only can the people with obscure and eclectic tastes find quality content much more easily, but other consumers can develop an appreciation for such things.  The long tail of content is more accessible for everybody.

This week we're reviewing a site that's aiming to be, for video, synonymous with "niche": it's called Babelgum.

Babelgum brings to the internet a dedicated platform for independent, yet professionally produced, video. That's right, they have standards: they require a decent video and audio quality, they confirm that all videos are done by professionals.

Babelgum is aiming for the content that lies between the familiar networks and the roughest of the emerging talent. Babelgum is an online video site for the next generation of creators.

Instead of mainstream entertainment content, Babelgum carries content from film festivals and independent films of all kinds (including music videos).  For these Babelgum offers awards - not for the bald purposes of a talent search but to highlight good work. It carries sports you probably won't catch on your TV, and various networks with niche appeal, with a particular specialization in content with themes of social and environmental issues - hence the "green bubble" logo and the extensive use of green throughout the site. 

Incidentally, the Babelgum name is relevant, too: "Babel" for the scriptural Babel composed of the united people of the world, speaking one tongue and proud enough to build the Tower to the heavens; and "gum" for the "social glue" holding us together.

All of this content is launched through a downloaded player which is typically kept at full-screen. At that size, the video is very decent albeit slightly below broadcast quality. And the player has all kinds of little tools around the edge of the video that fade away during regular playback, bringing the full range of the site's tools onto one screen: video settings, personal profiles, widgets, a channel guide, and more.

Users can create their own "smart channels" as a couple of other sites have attempted, this one using tags (so if you enjoy a motorcycle race, Babelgum looks for other videos labeled with motorcycle, motorsports, racing, etc.) in addition to personal favorites and ratings. Users can also create and join "communities" based around similar videos, although Babelgum's quality standards sometimes leave it with insufficient content to sustain many unique communities.

That said, there's enough variety of obscure content that new users will find some things to enjoy that they've never seen before. And as Babelgum builds up more content over time, that's bound to enrich the experience.

Why aren't there a bunch of other Babelgum-like sites out there? Until recently, hosting a range of niche content was prohibitively expensive; but Babelgum boasts its own peer-to-peer (P2P) backbone to lower the cost of distribution (see our post on P2P).  The ability to do this helped them create a viable business model.

Babelgum preserves the experience--and the low, low cost of $Free--by using rather unobtrusive advertising: rather than regular commercial breaks that other sites have, Babelgum's ads skirt around the edge of the screen and allow the video to continue. The ads can be distracting (it is advertising, after all), but they don't monopolize your attention or create a mandatory break in the action.

The result is, new and relatively low-profile creators get to strut their stuff without being crowded by blockbusters.  Consumers get a one-stop outlet for fairly high-quality independent content. That's Babelgum.

Peer-to-peer (P2P) networks are a nifty and powerful innovation. Because they are able to move large amounts of data quickly at a relatively low cost to the distributor, they are an increasingly favored means of moving audio, video, and even large video game updates.

Marketing research and consulting firm MultiMedia Intelligence estimates that "P2P data currently represents 44.0% of all consumer traffic over the Internet and 33.6% in North America" and that total P2P traffic will expand almost 400% in the next five years. The vast majority of the data is for video.

As Ars Technica reports, this poses some challenges to internet service providers (ISPs) on whose networks all this data is supposed to flow. How their response to this explosion of video data affects the companies that offer bundled internet and TV is an open question, but it underscores the importance of network management. As bandwidth hungry applications like P2P proliferate, especially on wireless networks, the need for network management will increase exponentially.

P2P's distribution power has often been used for illicit purposes, including not only illegal transfers of copyrighted materials but also but also for sneaking malware, viruses and other infected content onto downloaders' computers. This places enormous demands on the network and can contribute to congestion and delays that harm all customers.

The fundamental challenge for network providers is making sure customers get access to network resources in a fair and equitable way. It's just no longer acceptable for a handful of users to suck up all the available bandwidth, particularly if their bandwidth demands are tied to illegitimate uses of applications like P2P.

But it turns out that some sites have learned to tap this technology to make secure P2P networks into engines of legitimate commerce and distribution. In the Arts+Labs Veoh Review, we highlighted that

Veoh is uniquely able to broadcast lengthy, broadcast-quality video because it is partly powered by a proprietary [P2P] distribution network, showing that P2P can be secure, safe and legitimate.

This is part of a larger trend, as MMI expects that in the next several years, legitimate P2P traffic will grow 10 times faster than illegitimate traffic. That's good news and demonstrates that P2P has arrived. How this explosion in bandwidth traffic is managed will be equally as important to P2P's long-term success.

Nokia's pre-loaded devices launching under the brand "Comes with Music" is a great offering for consumers who want the instant gratification of having at least some of their favorite music pre-loaded for listening on a portable device.

Pre-loaded music that is either niche or genre based is a very intriguing idea, and you can think of a few different way this offering could be sliced, diced and priced.

But what is also interesting about the offering is that it is not going to be available in the US or outside of the UK in Europe (at least according to the announcements). Why might that be?

Rights clearance for these preloaded devices is very complex, particularly in the US and especially if the device maker does not want to pay the full statutory rate for the songs (remember, each recording has two copyrights, the song and the sound recording, not usually controlled by the same person).

This is potentially a great opportunity for the more flexible independent music community to step up, and also for songwriters to get a payday, albeit not necessarily 100% of the statutory rate (assuming the devices are not priced at a price point that could justify the full rate).

It would be fairly straightforward to base a license on a percentage of the retail price for the device with a sliding scale depending on the number of recordings. What is not so straightforward is where a technology company would go to obtain all the rights they need.

This is a lot easier to do in the UK given the unilicense that is available for publishing, and points out a frustrating hole in the licensing process for legitimate technology companies trying to use music--and pay for it.

-- Chris Castle

This week, we're taking a look at a website that's trying to bridge the computer/living room divide - from "the tube" to "the series of tubes": this week's Arts+Labs review is for ABC. 

As with all TV networks, bridging the divide means putting their existing content on the web. ABC's video player handles that task quite well. ABC showed up early in the race to get mainstream content onto the web, and their playback quality has been exemplary from the beginning.

The quality changes during playback to account for your system performance, but even the standard resolution video holds up well when expanded to full screen. If you have the proper setup (especially a high-speed connection), the quality climbs right to the top.

As for quantity, ABC is showing full episodes for 17 of its 24 primetime and late-night shows - 23 total, if you don't count Scrubs, which ABC acquired for the show's upcoming eighth season. Episodes for nine of those programs can be viewed in HD.

These numbers are lower than those for the other major networks, but a big part of the reason for that is ABC's near-total reliance on hour-long shows--and Dancing with the Stars, which occupies two and a half hours of prime time each week. Another reason is that ABC doesn't stream full episodes of its daytime programming online.

To complement their programming, ABC has made moves toward something all of the networks are attempting to some degree: keeping viewers connected to their favorite shows even when they aren't in front of the television.

To that end, ABC has created individual pages for 28 of its shows. These 28 shows account for almost all of the 31 message boards they've set up, and 13 of those account for most of the 20 blogs run by ABC. The website even includes podcasts for several of the shows, as well as some show-themed games and widgets.

It doesn't end at the web, either. ABC wants you to connect through your mobile, too: fans of both primetime and daytime shows can sign up for text alerts, and various shows have ringtones and wallpaper available.

Again, this is all clearly designed to reach out for viewers even when their favorite show isn't on - keep them connected to fellow enthusiasts, provide them with extra material surrounding the show, perhaps give the viewer some input (voting on reality show contestants, for example) and otherwise frequently draw their attention back to the show. Involved viewers are repeat viewers.

Having top quality content is a significant advantage for sites such as ABC, and they have the quality content because they have a clear business model that protects the creators and the viewers.  By making its content easily accessible online, ABC is making their creative content even more valuable for consumers.

The financial headlines these past few days are making it abundantly clear that the world's financial markets are still like a non-stop two-week ride on the Six Flags Great Adventure Rollercoaster. The time for hysterical fear, dry heaving and the legalization of trampling is upon us...at least, according to The Onion.

But in Internet land some things continue to move methodically onward and upward; in particular, look at what's happening in the delivery of online entertainment.

In just the past week, we've learned that...

• YouTube is dipping its toe in the water by finally partnering with entertainment companies to begin showing some full-length television programs, in hopes that the new approach will help it increase ad revenues. Despite the Web site's popularity, Google has so far struggled to monetize user generated content despite trying out a range of different advertising models.


• On the heels of YouTube's announcement, Joost said that it, too, was going to make some changes that will make its site easier to use for consumers and, hopefully, attract more visitors to the site. Chief Executive Mike Volpi said Joost would turn to flash video so that users would no longer need to download special software to watch videos.


• SNL looks to be "in talks to develop a new on-demand video Website that would feature an array of comedy clips".

Despite Wall Street's woes, markets haven't yet disappeared. The old-fashioned desire to make a buck - yes, even on the Internet - is leading to scads of new online entertainment options, experimentation and innovations.

For years, YouTube looked the other way while hosting users' unauthorized uploads of movies and TV shows.  Now, they are joining the game as well, as consumers are increasingly clamoring for high-quality entertainment on the Internet that they can find and enjoy easily.  Whether it's Grey's Anatomy or Dr. Horrible's Sing Along Blog consumers want it when and where they want it and they want it to be safe, fast, and reliable.

It's a simple lesson: Business models that work for both the creators of a good and the consumers of a good are the only business models that are self-sustaining. Take either out of the Internet value-chain and the system goes kaput.

The other night, NPR's All Things Considered had a really interesting segment on Jayme Stone's quirky new collaboration with West African musicians called "Africa to Appalachia". Stone is a Juno-winning banjo player and composer who picked up his passion for music from an eccentric music-loving uncle. His inherited musical eccentricities are never more evident than on this musical partnership with West African songwriter and singer Mansa Sissoko.

What's fascinating is that this musical collaboration really is a full-circle historical exploration of the banjo and banjo stylings. Banjo history in our country has typically been associated with traditional bluegrass, country and jazz, but the instrument itself can be traced back to travels across the ocean on slave ships coming from West Africa in the 1600s and 1700s. "More than anything," says Stone, "it was the blueprint of the banjo that traveled over in musicians' minds, and they built a similar thing with what they had here: dried-out gourds, goat skin, whatever they could find."

In Africa, the banjo's early predecessor's had as few as one string and as many as 21 and many different names depending on the region and dialect - ngoni, the two-stringed konou, the akonting and the one stringed juru keleni. Despite the parallel evolution of the instrument, the "sound of the notes are complementary" Stone says. "You have this nylon against metal, but the playing style and the melodic sensibility is quite similar."

So why is this all interesting? Africa to Appalachia is something different. It's a coming together of two traditional styles of banjo and banjo-like instrumentation from different parts of the globe. It's a blending of what most would probably think are two completely distinct and different musical cultures that - as it turns out -- have surprising similarities. The result is a new creation, a brand-new musical style - call it Afrilachia or maybe Aprika.

What does this all mean for the future of music? Increasingly collaborative efforts from musicians across the globe are rapidly blending rich and distinct musical styles and influences to create entire new genres of music. What happens when we combine British Ska and country or Irish folk and Latin salsa -- not simply "remixing" existing songs and styles electronically, but rather getting musicians from different cultures to sit down and actually collaborate to blend influences? It's anybody's guess, but if Stone and Sissoko's ingenuous Africa to Appalachia is any indicator, the blended results will be a polyrhythmic smorgasbord for the ears.

Adam Thierer made an interesting point last week over at TLF about the future of online video, especially in light of the explosive growth we're seeing in readily-available, legal online video content. As Thierer points out, video content is available over the Internet in so many ways now - Netflix, Hulu, TV network's sites, YouTube, Vudu, and through gaming consoles like the Xbox 360 and Playstation 3, just to name a few resources - it's clear that the old ways of thinking about the video marketplace simply won't do. He writes:

As Brian Anderson and I point out in our new book, A Manifesto for Media Freedom, policymakers are still trying [to apply] a host of unique regulations to "old media" providers, including: various censorship rules, educational programming mandates, special campaign finance advertising laws, must carry regs, media ownership caps, broadcast "localism" requirements and various other "public interest" obligations, and much more.

Thierer hopes, and rightly so, that these "old media" regulations don't get carried over to "new media" platforms. That's an incredibly important point, because part of what has helped the growth in online video offerings is the relative freedom content owners have to use the Internet to experiment with different models of distribution. Will the Netflix model survive over the Hulu model? Will consumers purchase enough video content through gaming consoles to make that distribution model sustainable over the long term? Will YouTube's new offering of streaming entire television shows be a viable competitor to IMDB's new offering of both television and feature-length films?  Who knows?

But as Thierer aptly puts it, "Internet and digital video delivery is offering society an unprecedented abundance of media riches. They last thing we need to do is screw it up by laying on reams of regulation."

"It's not just about taking television and repurposing it on the internet. It's about discovery, it's about community, it's about interactivity. There is entertainment in the community." - Former Disney CEO Michael Eisner, on the future of online video.

This week, we review a site that's testing Michael Eisner's argument that the future of online video is in discovery, community and interactivity - with an emphasis on discovery. It's called Crackle.

Crackle is more tightly focused than Veoh or YouTube, and seems to like it that way. Crackle advertises that they're all about emerging talent, but there's also a bit of established talent trying original, new things to draw you in.

For example, comedian Penn Jillette (the talking half of Penn & Teller, and recent contestant on Dancing With the Stars) was given a set of high-def video cameras and told to rant into them whenever the urge strikes him, yielding a series of short videos called Penn Says.

Crackle features original web series of every genre, each regularly producing short episodes, along with a mix of short films. And the overwhelming majority of these videos are created by the emerging talent they're talking about.

The straightforward purpose of Crackle is to attract this new talent and build new content with it. The site, which is owned by Sony Pictures Entertainment, has run a dozen contests since summer 2007 in animation, short films, standup and sketch comedy.

Good entertainment rises to the top through user ratings and a team of editors. Those who win get to pitch their and feature concepts and acts to various divisions of Sony, for a chance at working with other artists and Sony resources to make more content. Sony gets to pick the cream of the crop.

In the meantime, contestants and users are uploading a great deal of original content. And while users can search for that content, Crackle isn't inviting you to browse through it with big lists of the popular videos of the day. That's not the specialty of the site, and the unique mix of content created by this dynamic is the result of a deliberate change in business model that made Crackle...well, Crackle.

See, Crackle wasn't always like this. It started out as Grouper, a peer-to-peer (P2P) file-sharing application. Users created groups with other trusted users, and could trade an unlimited volume of files within those groups.

And while this did allow some people to trade documents, home videos and photos with their families and other trusted peers, like a number of other P2P applications, it had a great potential for abuse, as well.

But Grouper restyled itself in late 2005 as a user-generated video site, and was part of the wave of success of that business model. In 2006, Sony Pictures Entertainment acquired Grouper. Change was coming. But as the founder of Grouper told Variety in 2007, they had already been considering a transition to something a bit more boutique:

User-generated vid has its place on the Web, but "it's not a business for us," Felser said. "The content is rarely exclusive, and it's hard to monetize," he said, noting that advertisers demand far more certainty on the type of content before they'll spent big bucks on ad buys.

So with the help and guidance of Sony, Grouper traded in its business model yet again, this time into a multi-platform (mostly Sony platforms, like the PSP and Sony Bravia) video network with a purpose beyond competing for eyes on videos that other websites also carried. And thus it became Crackle.

So Crackle is trying something different than the Veohs and YouTubes. They're attracting new content, letting the cream rise to the top, and leveraging that talent to create even more new content. They're giving little-known artists a chance to get noticed and maybe even get some backing. And the result is a unique mix of original content for consumers to try out for free, on demand.

It's nice when everyone wins.

At Broadband Census, Andrew Feinberg reports on the Chamber Intellectual Property Summit at which Mark McKinnon of Arts+Labs spoke.  The panelists, Feinberg writes, "spoke about the importance of preserving users' right to make "fair use" of copyrighted material", as well as "the importance of technological protection measures."   Some excerpts...

There is "no question" that old business models need to change in a networked world, said Rick Cotton, executive vice president and general counsel for NBC Universal. Embracing digital distribution will "drive the future," Cotton said. "It's what consumers want."

New content protection technology brings the promise of a "mature model" of internet distribution that avoids "the dark side" of peer-to-peer technology, said Cotton. The broadband ecosystem envisioned by Cotton would somehow tell people that they can access programming as they please, but also send a message that stealing is not acceptable. Such an ecosystem must be built cooperatively, balancing ease of access, consumer desires and a choice of ad-based or fee-based models.

[...]

Lane and McKinnon agreed that consumer convenience is paramount in any content protection scheme and should be "seamless," Lane said. McKinnon predicted that with the rise of broadband and good content protection, it would not be long before "DVD's are like 8-tracks."

Fair use is not incompatible with content protection, Lane said. Content protection technology is a "key component" of the future broadband economy, and mechanisms could be devised to protect fair use as well as copyrights. Lane cited News Corp.'s MySpace Music as an example. He said that MySpace had received "zero complaints" about its content protections restricting fair use.

Read the rest at Broadband Census.

We'll try to avoid turning this into an Event Notification blog, but another good event this week has popped onto our radar (and by "popped onto our radar", we mean "has invited Arts+Labs Co-Chairman Mark McKinnon to participate").   The US Chamber of Commerce is hosting the Fifth Annual Global Intellectual Property Summit Wednesday, October 8th.

We would particularly like to draw your attention to this panel, which features Arts+Labs Co-Chairman Mark McKinnon...

Frontiers of Innovation: Protecting IP in the Digital World

The digital world is emerging as the cornerstone for innovation, with new products, applications, and platforms being launched daily. This new frontier allows the business community endless opportunities to get consumers what they want, how they want it, almost instantaneously. At the same time, the Internet provides seemingly endless opportunities for bad actors to steal intellectual property and deceive, and sometimes harm, consumers. This panel will examine how innovation on the Internet can be fostered while protecting intellectual property more effectively.

Rick Cotton, Executive Vice President and General Counsel, NBC Universal
Susan Mann, Senior Director, Intellectual Property Policy, Microsoft
Rick Lane, Senior Vice President, Government Affairs, News Corp
Mark McKinnon, Co-Chairman, Arts+Labs

Moderated by: Robert Shapiro, Co-Founder and Chairman, Sonecon, LLC

More details about the 5th Annual Global Intellectual Property Center Summit are here, and the summit agenda is here.

The Cato Institute will be exploring the vigorous debate about copyright and intellectual property in a book forum at 12 noon on October 10th, featuring Robert Laughlin (author of The Crime of Reason: And the Closing of the Scientific Mind)  and Thomas Sydnor, Senior Fellow and Director of the Center for the Study of Digital Property at the Progress & Freedom Foundation. The event is free of charge and you're encouraged to attend or watch the event live online.  Cato's Jim Harper has written about the event here and here.

Of course, Arts+Labs falls on the side of those who believe that artists have a right to be compensated for their work. It is an important part of our mission "to ensure that artists and innovators can easily and effectively share their creativity through new distribution channels online, secure in the confidence that their rights will be respected and their ingenuity rewarded."

With that in mind, I offer this, from Thomas Sydnor, on the importance of protecting the rights of the creators...

Property rights ensure that the relative value of these activities to others can be assessed and revised through a decentralized process of consensual agreements and mutually beneficial exchanges. Consequently, if one person makes the risky investments needed to create a socially valuable resource--like a sound recording--governments should not let others appropriate that resource for their own gain just by showing that the creator might also derive some incidental benefit.

You can hear both sides at the Cato Institute Book Forum at noon on October 10th.

More choices for safe, legal content are emerging...

Nokia ... launched its free music package on Thursday, issuing a challenge to Apple Inc's dominance of the digital music market. ... Nokia said all major music labels and most independent labels will offer their tracks as part of Nokia's 'free' music bundle "Comes with Music," raising the total number of tracks to around 5 million.
[...]

The battle for mobile music is increasingly crowded. Sony Ericsson launched its music package this month in Sweden, and South Korea's LG Electronics plans a service similar to Nokia's.

Nokia's package will differ from others on the market since users can keep all the music they have downloaded during the subscription period of 12 or 18 months. There are no charges for tracks downloaded as the cost is bundled to the phone price.

Analysts said the choice of a relatively cheap model was a clear indication Nokia was trying to win over consumers who often are not paying for music but getting it through file-sharing sites on the Internet.  "If you have access to everything, what's the need for pirated music?" said Universal's Rob Wells.

Veoh labels itself an "internet television network."  They may be selling themselves short.

On the one hand, Veoh offers a bevy of high-quality, legal content, most of which is under the "TV Shows" tab.  They carry full episodes and clips from several major networks, but also from many more obscure channels and even dozens of web series.  Since its creation, Veoh has vastly expanded its partnerships to give it a wide array of mainstream and independent content (including some clips in HD), so if you're looking for something that interests you, you'll find it without much fuss.

But Veoh does something very different from television. Veoh also has user-generated content, even pulling video from YouTube into its "videos" library.  On the one hand, this makes Veoh a very rich experience; on the other hand, even with flexible search options and a "family filter" to help users find what they want, you might still have to sift a bit to find exactly what you want within the videos section.

Combining these two models on one site makes Veoh more of a wide-ranging, on-demand service than a television network.  And Veoh exploits that fact with VeohTV (still in open beta), which not only takes the service to a full-screen out-of-browser experience, but expands on it with several useful features. 

• VeohTV allows you to store videos offline for later viewing, like a DVR, and create playlists if you like. 
  
• If you have S-video ports on your computer and TV set, you can bring VeohTV's broadcast quality service to your living room. 
  
• If you're away from your personal computer, you can use the Home Delivery feature from any other computer to browse for videos and "send" them to your home computer for download.
  
• Veoh and VeohTV don't rest entirely on direct content delivery.  Like a number of other sites we will be reviewing, they make something more out of the experience by tying it all together with a personal profile and a social network.   Having a profile allows the user to subscribe to various shows, channels and publishers, and it also empowers Veoh to make recommendations based on preferences, which are revealed by viewing habits and honed by the ratings system.  For the water-cooler aspect of TV culture, users can customize their profiles (limited though they may be), add widgets, find friends, and even keep up with what their friends are watching or see how friends rate the things they watch.
  

Veoh is uniquely able to broadcast lengthy, broadcast-quality video because it is partly powered by a proprietary person-to-person (P2P) distribution network, showing that P2P can be secure, safe and legitimate.  Ambitious, innovative sites like Veoh are making the online experience better for both users and artists.

Those of us who toil in the vineyard of online music subscription services are quite, quite familiar with the difficulties of obtaining licenses for songs for on-demand streaming.  (Remember, there are two copyrights in a sound recording--the song and the recording of the song--and record companies only control the sound recording.)  The task of obtaining rights to even the big songs much less the more obscure long-tail material is an effort worthy of legend.  I'm never sure if I prefer the analogy to Dante's fourth circle of hell, or Hercules' fifth labor.

The Songwriters Guild of America led by A+L advisory board member Rick Carnes, the Nashville Songwriters Association International, led by Bart Herbison, and the National Music Publishers Association led by David Israelite and his fine team finally reached an agreement with the major online music services and the RIAA that finally established rates for on-demand streaming and limited downloads.

You can read the details in the press release, but the fact that it happened at all is a MAJOR step forward.

The agreement is now submitted as proposed regulations to the Copyright Review Board which will take into account the proposed regulations in determining the final rates and regulations for subscription services.

This caps what is essentially a decade-long struggle to get licenses for the technology companies who want to do it right in the legitimate online music space.  I know that David Israelite in particular spent a lot of time in recent years trying different legislative strategies to bring this package home, and it looks like he may have finally done it.

Too often these achievements are so inside football that the participants feel like they just made the immaculate reception in a silent stadium, instead of getting Franco Harris-level cheers.  Hopefully there will be no doubt about who scored a touchdown when the CRB issues their ruling.  But in the meantime, I'll stand up and give a cheer and hopefully others will, too.

This is a fine example of technology companies working with the creative community toward a common goal--creating a legitimate market for music online that can generate income for creators, in this case the songwriters whose ranks have been decimated by net pollution.

NYMag's Vulture blog is charmingly and amusingly skeptical of us, but, here anyway, we think they've misunderstood us a bit...

Their sweetly naïve mission: to remind people how great paying for things can be -- to "educate consumers and highlight innovations by media companies and Internet providers to make the Web a better place to legally get songs, movies and TV shows." Current plans revolve around a moderate biochemical attack that would institute widespread low-grade amnesia and, hopefully, cause everyone to forget how easy it is to get all that stuff for free.

• MTV.com, ABC.com, NBC.com, CBS.com, Fox.com, ComedyCentral.com - Free
• Jaman.com - "independent and classic movies for free"
• Hulu.com - "all free video, all the time"
• Joost.com - "free, online, and on demand"
• EZTakes.com - "available for free"
• Mediazone.com - "free content for sports and cultural programming"
• Babelgum.com - "free, independent online television station."

We don't want people to "forget how easy it is to get all that stuff for free."  We're trying to show people new ways to "get all that stuff for free."  Yes, even if the artists get rewarded in the process.

The point of Jonathan's book seems to be that for a variety of reasons [viruses, Spam, identify theft, etc], we may soon see the end of the "generative" Internet, the "open" Net and the emergence of an Internet that mostly consists of tethered devices or "single purpose" appliances and closed networks. ... He clearly believes the future of the Internet is moving more and more towards that "appliancized" model and away from the "generative" one in part because people feel threatened by dangerous applications or malware.

I guess I see that both models will thrive because they serve different purposes and because there are forces that drive the Internet today that simply encourage evolution and choice, while preserving the essential cooperative essence of the Internet that keep it running.

For one thing, the concept of "generativity" seems to revolve only around the notion of new applications, software or content techniques.  Innovation need not be limited simply to a new application or software program in my view however.  Why isn't a new "applicance" focused on a specific need for a consumer just as much an example of "generativity" as a new program or application? 

This is especially so when you look at how consumers use the Internet today.   Consumers see value in both models depending on what they are trying to do. ...  [T]he ultimate innovation is something that meets a consumer need in a better way.  Why shouldn't consumers have these sorts of choices and why does this threaten the Internet?  After all, the Internet only has merit if it meets consumer needs and demands.