Grokster Interpreted: Don’t Come Back for 50 Years

The unanimous Supreme Court decision holding in Metro-Goldwyn-Mayer Studios et. al. v. Grokster Ltd. et. al. that file-sharing networks may be held liable for copyright infringements claimed by studios and labels is a pretty clear message that the intellectual property status quo will be in place for a long, long time to come. Okay, so medieval ideas—that is, from the hallowed Republican 1950s—prevail.

What to do? Well, first off, the fact the Supremes have ruled for the studios and labels does not mean that anyone else has to operate like they do. So, let’s just ignore the studios and start new media distribution systems that route around them. Let’s not be dogmatic, encouraging all sorts of businesses built on content, from free to fee.

The court has ruled, so let’s move on. Artists should consider going around the labels; the only way to change the music industry and the movie industry is to compete with them, so let’s go.

We should not think of this as just two competing monocultures, the free versus the fee. Let’s aim for a diverse ecosystem of business models and let the energy of artists and profitability be the measures we use to describe success going forward. In other words, don’t interpret this as a “loss,” but as a starting point.

A bone-jarring Ah-ha moment: How Microsoft wins the Game Wars

Here’s how Microsoft will win the Game Wars by next summer, before the Playstation 3 ships in volume, using a wireless handheld Xbox that plays games, movies and TV stored on the detachable hard drives announced in the Xbox 360—and, building on .NET, Microsoft will turn both the game console and the portable game system into full-fledged productivity systems.

As you may know, I have been fascinated by the Sony PSP, particularly because of its code-sharing ability, though there are some shortcomings that need to be addressed if it is going to become a huge hit by appealing to all ages as a robust network client for movies, messaging and games. But over the past few weeks Microsoft’s Xbox strategy has brought several things into clear focus for me and I now realize that Sony is facing a profoundly different challenge than the simple game-system-versus-game-system battle that most folks talk about when the Xbox is discussed.

Take a look at the Xbox 360 spec. You see that the system is a full-blown media center right away. It supports DVD playback, CD audio, streaming and ripping of audio, a “Media Center Extender” that communicates with a Windows Media Center PC and these diabolically clever detachable one-inch hard drives of up to 20 GB capacity. With a few of these storage devices, you could carry dozens of hours of recorded television and movies with you anywhere.

What you need is a device, like the PSP, with a high-resolution screen to play the recorded entertainment. Moreover, that device has to provide wireless connectivity and support for .NET applications in order to be attractive to a non-gaming person. If you give them that, you may also sell them a few games, even if it is just to hand back to the kids so they can play while you are driving. But, in any case, this is what I hear rumors is coming next summer.

The detachable drives in the Xbox 360 blow away Sony’s well-worn attempt at introducing a new storage format, its currently unwritable 1.8 GB UMD discs. An Xbox 360 user will have far more flexibility in carrying along media and games than any other console developer. Sony should have learned by now that it can’t win by erecting walls, even walls it plans to take down. Sony hopes to sell TV shows on UMD; Microsoft will let Windows Media Player users record shows and take them along—which strategy will win? No contest: Microsoft wipes the floor with Sony.

This all makes perfect sense. Xbox as a system is a PC without the choice in OS, since the software running the console is intricately tied up with the box. In a way, it’s Microsoft finally coming round to Steve Jobs’ approach to building PCs—deep integration removes convenient alternatives in software, opening a larger ongoing revenue stream from each customer, who can be marketed to through your device.

Moreover, you can’t be sued by antitrust regulators for distributing an integrated device. Everyone else in the console space is doing it and, if Microsoft happens to have tapped the main artery of communication with the device (in Xbox Live), then it can not be accused of tying, as it has been in the PC market, where it forced manufacturers to use only Windows on their PCs or suffer adverse pricing pressure or the threat of being cut off in favor of other competitors. Sony, Nintendo and others can’t sue Microsoft without having to unbundle their own consoles and software, which they are not likely to want to do.

Then, you come to the fact the Xbox 360 and portable system will be a grown-up tool, not just a kid’s gaming system, which wins both maturing gamers and workers who want to better mix their work and personal lives in a single portable device. It’s both a bridge device and a back exit from the PC business that preserves all the strengths Microsoft has built on for 30 years.

There are surely ways to hack the Xbox 360—give the world about three days with it after it ships to get Linux running on it, for example—but most of the consumers in the world will not craft their own console. A competing data service will also certainly be available, but the majority of the market will opt for an Xbox Live subscription, especially if the same fee covers both the Xbox 360 console and a portable game system. If it turns out that Xbox Live also lets you run a .NET-enabled version of Word or Outlook, allowing you to communicate and consume, amongst other things, RSS feeds from friends, co-workers and media, then, you’ve pretty much wrapped up the personal media market.

Like the iPod, which has created a very powerful halo effect that brings people to the Mac, the Xbox 360 is a natural nexus of transactional opportunities Microsoft can leverage to sell many more “copies” (really, they are instances) of its existing productivity applications, as well as integration with its back office tools. That integration is both attractive to corporate IT managers who want to communicate better with mobile employees and it makes Xbox Live a channel for media, from TV and movies to music and text.

So, that’s how it will happen. Bill Gates will “surprise” everyone with the wireless portable game system announcement either in conjunction with the release of Xbox 360 or at the Consumer Electronics Show in January, and by the time Playstation 3 is available people will be placing pre-orders for the Xbox portable. That won’t kill the Playstation, because people will buy it for the games exclusively available on it, but it will severely limit Sony, who may have an improved PSP in the works, but one still hobbled by the proprietary UMD storage system, because even a writable UMD requires a burner that isn’t currently installed on anyone’s computer or game console.

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Dave completely missed the reality train

Katz-n-Winer

I introduced Dave Winer to Don Katz last night, knowing it would be an interesting conversation (which, ironically, happened during a fire drill at Gnomedex). Anyhow, Dave says Don “yelled at him in public,” which isn’t what happened—granted, I work with Don and he’s a close friend, but I do have the experience of 20 years of watching conversations and Dave’s report is remarkably off base.

Dave began the conversation saying he had been a happy Audible user until two months ago, when both his PC and portable player crapped out and he had trouble reloading his audio. Having changed computers and players more times than I can count since I became an Audible customer, I know the problem he was talking about: Audible needs to reset an account occasionally because it becomes impossible (because a PC isn’t available to deactivate) to authenticate more devices. You just call and Audible takes care of it.

Dave didn’t call. He complained publicly, which he has a right to do. Don Katz agreed he has a right to blog about his complaints, but he insisted that Dave had not availed himself of the support that would have solved his problem in seconds. Dave took what Don said to mean he should not have blogged the criticism, but what Don said was that what he blogged was unfair.

Dave went on to say that he was willing to pay $50 for the CDs of an audio book so he could take those discs and rip them to MP3 instead of paying $11 per book (which is what Audible charges on its most expensive monthly subscription service), regardless of the list price of the book. Many Audible titles are available on disc for much more than $50, but it’s cheaper to get the digital copy precisely because Audible offers the publishers assurances that their creative property will be “safe.” There are, of course, ways to defeat any DRM, which are basically as simple as ripping a CD, but Audible has combined reasonable pricing with reasonable use of security to make the market for audio content real.

I asked Dave if he would have any problem with Audible’s security features if they were more promiscuous, offering playback on many more devices. He replied with two different answers: DRM is just wrong and that had he not run into the DRM that day, he’d have no problem with it. This is a remarkably disingenuous answer, since it says, basically, that almost all the time Audible had managed to be pleasing to use. The one time he ran into a problem, Dave quit the service and dismissed the value of calling for some help. As a developer, has Dave Winer failed to believe the support he offered his customers was valuable and, if they didn’t take advantage of that support before bad-mouthing him has he considered that “fair” and their right?

Anyhow, Dave then began to lecture Don on how much money he made and, so, he is able to buy discs and rip them so that he need not suffer under the yoke of DRM. Don tried to explain that he was concerned about making quality audio available for a reasonable price—with improved navigation and playback features, too—but Dave was on a holy roll that, frankly, came off as kind of elitist. He could afford to make the choice he had, which he can and has a right to, but to blast Audible for having navigated the troubled waters of digital distribution to bring audio to the market was dumb. Dave ignores the fact that for most people inexpensive access to downloadable audio is a good thing, because they don’t bill at Dave Winer rates (which Dave explained in detail).

Dave said Audible was going to pay a high price for using DRM, and Don replied that the number of customers who have quit over the years because of DRM has been a “rounding error.” Dave insisted that this couldn’t be true, because he was representative, but he represents a tiny minority of users who apparently don’t value ease of use and access to inexpensive audio. Dave repeatedly said “I am your customer,” and Don replied “You’re an ex-customer,” so they were both right. However, Audible is focused on people who aren’t enjoying an unconstrained income.

Finally, here is the thing that bugs me, as both a creator of “content” and a technologist: Dave assumes that delivery technology is the essential value-add in the content value chain. He has described how he did “all the heavy lifting” and now the market was ready to blossom; at the same time, for many with content, delivery has been a frightening problem, because it becomes synonymous with “piracy” in practice. I’ve worked with Audible for years, as they developed a business model content producers could live with and customers could love—they succeeded years before the music industry. There is much, much more to audio listening than finding and playing the program. What we call DRM is also the foundation for auditing advertising in free programs and, even, simple things like having a file that remembers where you left off your listening and restarts at that point in the program. The “security” aspects of Audible’s technology are going to fade and the services it enables for producers and listeners are going to start to take the fore, but Dave’s going to miss that angle because he’s on a high horse.

So, that’s what happened when two pioneers met and one decided he was infinitely superior than the other. It was funny and sad, but when I read Dave’s rendition of the meeting, it is infuriating.

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Gnomedex: The Microsoft RSS announcement

Dean Hachamovitch, general manager, Longhorn Browsing and RSS Technologies, and Amar Gandhi, group program manager, are on stage.

“Syndication is powerful. Syndication is amazing.” We tried a long time ago and made mistakes (with Active Desktop and Channels in IE 4 and 5). We started to get it one person at a time. Scoble is a platform; it’s not clear what he is evangelizing, but he is a platform.

2005: Feeds are everywhere. They are all over the Internet, for us. It started with browse…. it was powerful, but limited by having to remember addresses. Search solved some of that, but it’s not done making things better. Now, there is subscribe—it’s not just a feature, it’s a new approach.

With Longhorn, we are betting big on RSS for developers and users. This means:

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RSS-enable everything

Provide a platform for RSS development within Windows

I’m sitting here with Raines Cohen, with whom I worked at MacWEEK back in the early 90s, and it strikes us that Microsoft is actually announcing Mac System 7, which touted “Publish & Subscribe.” Microsoft’s just 14 years too late.

We are the first audience to see IE 7.0. People shout. Opens browser, opens the Gnomedex site. The browser recognizes there is a feed and alerts the user subscription is available. Very Safari in Mac OS X 10.4. Remember, this will be out from Microsoft in…. 18 months or so.

Shows MSN Search on “Gnomedex,” which returns an RSS feed for the search results. No more searching again and again, because you can subscribe to the results. (Hmm, Microsoft is aiming at Technorati, PubSub, etc.)

“This is a set of APIs that stores all new subscriptions, and any application … on Windows can have access to it.” The RSS feeds become part of the user’s store and are available to be processed by any app. Nicely done, this is essential to the evolution of RSS, as I’ve written before.

Marc Canter asks what happens when there are multiple RSS feeds on the page. The answer is that there is a facility for viewing RSS resources and subscribing individually.

The enclosure tag is a tool for feeds of content, not just podcasts. The world is going to suck data and make new applications of it…. (my words, not the Microsoft guy’s).

IE can parse feeds to extract calendar information and hand them to Outlook, where they are stored in a folder associated with, in this case, Gnomedex. He talks about writing some code to do this, and someone asks “why not have the feed reader just handle the MIME type”? And Dean, getting testy about questions, sort of dismisses the question, making him seem like a kind of asshole Borg, rather than the friendly Borg he was playing before.

The example is a good one. “Every application understanding natively what a subscription means.”

They turn to processing photo feeds, extracting notes and superimposing the text on the pictures. Nice. Imagine, for example, a podcast with show notes displayed in the player. This kind of multi-data views of information, where we see and hear or see and read (or whatever combination of sensory experiences) can be expressed simultaneously.

Now, to lists. The elements of these data feeds can change. Microsoft has developed extensions to RSS to let publishers identify feeds as lists that are updated and the changes tracked. They show an Amazon.com feed of Wish List data. So, if you have a friend who has a wish list, you want to keep up on that. The extension allows management of position in the list and changes, including additions and deletions, with user notification of the changes.

Another aspect of the Amazon list is a filter that lets you view the list based on additional criteria, such as “just DVDs” or “just books.” This lets publishers create additional value in their feeds by facilitating personalized view of feed data.

The extensions specifications are available under a Creative Commons license. “You’re writing code for Windows, or Linux or Macintosh, go use these extensions.” Microsoft will make the code available in September; there’s a white paper available today at blogs.msdn.com/ie. Feedback to teamrss@microsoft.com.

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Gnomedex: Dave Winer notes

Dave Winer gets a big round of friendly applause as he starts. No Wi-Fi connection, so the demo seems to be shot.

Dave urges us to ignore that he is facing us, talking, and that we are an audience. An unconference (a conversation). We’ll all be talking soon, but the first person Dave calls on says they don’t have anything to say.

Dave is recording the session. Unconferences are kind of like blogs. Blogs say you don’t need an editor to approve what you write. If you want to publish it, that’s good enough. The same is true of the Internet development environment—a platform without the platform vendor. The Internet lets us slice up everything (protocols, content, apps) and let’s everyone participate.

The Microsoft people are going to show you that they get this now, that they are going to go with the same flow as the rest of us. We all get to participate, but none of us gets to be the platform vendor who decides what everyone gets to do.

He says the companies thriving on the Net did not have to invent the technology. I think he’s missing how much politics went into the evolution of commerce, advertising and other foundations of the business successes. “Technology control is behind us, it’s not the way of the future.” That’s true, except that there are many currents of influence that shape the lack of control we perceive.

A comment from the floor: Open standards are carefully built to preserve openness. With RSS, there isn’t a standards body and that’s bad. Dave says: “I don’t think the W3C was effective. I don’t think it did what you said it did. The Web they were managing has been there a long time… and there hasn’t been any evolution…. There was a dominant vendor in the Web who decided how the Web would evolve. But what did happen was that we routed around them, which is why RSS is the juggernaut is as big as it is.”

Question, folks: Why does RSS work? Answer: XML, a standard. TCP/IP, a standard. FTP and other retrieval standards. RSS rides the network, it isn’t the network.

Ah, the demo works (and the network IP address allocation is fixed). The OPML editor Dave uses doesn’t require switching from reading and editing modes. He shows a blog editor for scriptingnews, switching between modules on the page, editing his blogroll. It’s fast and neat; he moves modules with by dragging in his list of modules. He shows adding a podcast by embedding a link with automatic enclosure generation.

That’s the blog editor…. He turns to OPML. Importing an OPML file and editing it in the same interface as he was using for the blog. Next, he shows directory editing in an outliner view with integrated OPML file linking to populate the outline, which is a big virtual view of a collection of OPML files.

Argh, the Net’s down, again. Dave says there is instant outlining capability, but the broken connection prevents us from seeing that.

I want a community of users and developers. It’s open source, so someone can add a spell checker. “I think this is the next Web after HTML.” The current RSS is fantastic system for delivering news, but there is a lot of information that doesn’t change—if you wanted access to information that we think of as knowledge, the information that is most important is how the bits relate to bits, the relationships.

“I don’t think you could get a commercial project off the ground,” Dave says, and I hope we can do it this way (open source). “Putting a piece of software out that people don’t have a good experience with is a waste of time.” He expects the project will be there in about a month.

Question from the floor: Why do you think that each posting doesn’t need a headline, comments or its own web page?

Dave: I had comments (a long time ago). It was a wonderful collegial society and then it became by flamers. People went away and started their own blogs and therein was born the blogging community. I have comments (now) when I want them, and if you read those comments you’ll see that they are all flames.

Question: I read your blog almost religiously, but it’s also the one that I hate the most. You say “this is cool.”

Dave: I don’t just say that! Hating my blog is okay, as long as you just keep coming back to read it. So, what is the title for this post?

Same questioner: Wining about Winer.

Question: Maybe I missed it, Dave, but what were you demoing?

Dave: The OPML Editor

Steve Gillmor: What does instant outlining look like?

Dave: It looks like outlining through instant messaging. Shows a group of people in his user list. Each person’s messages to the group are shown… in outline form. Basically, we’re just polling to see if there are updates to outlines.

He expects the blog editor to take off quickly. The OPML editor will be a slow burn. There’s a “configurable” server located in a folder in his WWW folder, with an upstreaming capability to update a server at hosting.opml.org. “I haven’t decided” how it will be made available. I don’t want to be in the same kind of flame war as I was over weblogs.com.

Question: How easy will it be to get the editor to recognize the modules on my blog?

Dave: I’m making it general…. he doesn’t really answer this question about usability—if it takes a lot of work to get individual parts of a blog into the editor, it’s not very attractive. “The blogging feature is about 24 hours old, but it works.”

J.D. Lasica: Naming. You say you want this to be a hugely popular phenomenon, so it might need a different name.

Dave: Why did I take the job at Harvard? (This is not an answer to the question) I wanted to show the scholars at Harvard how to do information. Turns out the scholars at Harvard don’t care about blogging. I did sell a couple hundred thousand outliners for the Mac in the 1980s and I think we can do better now. I have 60 users, so there is time to change the direction, but you’re not stuck with the name. NetNewsWire is not called “RSS.” If you come up with a new name, we’ll have two names for this and that’s a million times worse than one bad name.

Scott Mace: See CalendarSwamp.com. We’re going to make calendars interoperable. Can we use OPML or RSS to do that?

Dave: OPML may be better. But let’s not create a new standard to do it, let’s use what we’ve got.

Question: Can you talk about OPML in the workplace?

Dave: The key concept is narrating your work. You show up for work in a virtual workplace and it’s like showing up for work in an office. You start by seeing what other people are doing (using OPML) and feeds that you subscribe to to keep up on what others are working on. Some people are good at this and others are not. In my experience, the people who could tell you what they were working on were most effective. I liked working with those people. It makes me feel more effective.

Question (follow-up): One of the great things would be knowing who read what. Is OPML open to handing that?

Dave: OPML is totally open to that. But you should also think about the sociology of it. You can also right a script that marks everything read. You have to trust people you work with.

Marc Canter: You added blog tools, but there is a perception that you don’t want to offer certain features. But the tool is open for anyone to add what they want.

Dave: The philosophy is David Weinberger’s “small pieces loosely joined.” The idea is that any tool can participate as long as there is a common file format and you should use formats that are discoverable.

Now, the song…. Ideas were Yellow Submarine, I Can See Clearly, Here Comes The Sun, Louie Louie. And the song is…. Yellow Submarine. Paul McCartney’s going to want performance rights fees for this, I’ll bet.

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Second-timers know something, too

Ev Williams responds to a piece by Mr. Gutman:

I firmly believe that the extreme imbalance so pervasively assumed to be a required component of startup life is detrimental to effectiveness in the long run. What I think is much more key is focus. ..Another trick to this theory is that it’s harder to demonstrate focus to your people than it is to demonstrate willingness to put in insane hours. And all this is not to say that, endless hours can’t make up for some lack of focus. (Although, at a certain point, you have decreasing returns and start making bad decisions. I wonder how many of Blogger’s bugs were put in after midnight by me.)

This in response to what I think is a typical perception of a startup life, where Gutman says:

…can you win in business, on your own terms?

Experience says no. To win you have to submit to the lunacy of the crazy world we live in. If you won’t push the pedal to the floor, you can bet your competitors will. And while you may be motivated even with cushy surroundings and shorter days, the people you hire will take it as a signal that they can relax too.



Whose experience says that? Yes, you have to work hard, but I’m with Ev on this. Being smart does not mean killing off the rest of your life to make a company “succeed,” alienating your family and destroying the personal lives of your employees and partners is going to translate into a sustainable team capable of capitalizing on all that fabled hard work. Perhaps that’s why founders and early employees retire early, because they’ve got nothing left to put into the company. But I’d rather have their experience later than every shred of their humanity today; nor do I think that I am preserving their humanity by giving them absurd perks to make work more palatable, which is just another way to misallocate funding, if you ask me.

We’re building Persuadio on the idea that the company will thrive by having our people involved in the world they are seeking to describe, whether it’s at the side of a soccer field or through the habit of blogging late at night. Living gives people insight that can’t be purchased. All the whacky benefits of working at a bubble-era startup can’t replace the time when the mind idles during a meal with the family or a good not-related-to-work book, delivering some work-related insight that is flavored by the whole range of human experience.

Does that mean I am for laziness? No. There are plenty of times that you have to pull an all-nighter or give up your weekends in order to make progress on a product or to satisfy a customer (there have been a couple of those in the last two weeks for Persuadio). But there are also times when it is a good idea to take the afternoon and spend it with your kids, because they need you, too. If work subtracts from society, which it does when it is conducted as a frantic mission, the results can damage the world. Daniel Pink‘s new book, A Whole New Mind, does a good job of exploring how much of ourselves we’re leaving behind when we think narrowly.

When a company preserves its people, allowing them to bring more and more experience to their work each day, it is far better positioned for success than one that perpetually drives people to distraction, exhausting the mind and body without granting the intellectual and physical benefits of a day’s work well done, such as a walk or an evening with a spouse. People who live and work well stay, everyone else either is too lazy to last at a company or burns out. There is something to be said for the middle way.