Tuesday, March 20, 2007

Umair Haque explains property rights in his fuzzy little cloud world

"What's needed is a rights shift - for a radical innovator to fundamentally redefine the nature of property rights in an industry (which is really what YouTube and Myspace are doing)" says Umair Haque in response to the Viacom vs. Umair Haque controversy.

So: Umair is saying that his economics theories depend on a change in the law.


What kind of change did you have in mind, Umair? Legalizing property theft? Revising the copyright laws such that everything ever produced now belongs to the collective? Making one law for everyone else's work and another for your own?

Umair, Umair, Umair: how can it be right for you to pontificate on everyone else being willing to give up their IPR when you don't want analysts "ripping off" your own? How does your property rights revisionism proposal stack up anywhere outside the bubble of your über-ego? Even China, one of the last bastions of The People's property, thinks you are wrong.

You are, unsually, right that the law needs to change. But the most likely change is a tightening of the DMCA to remove the gaping loopholes that exist today - fair use abuse and the need for the copyright holder to police the abusers with desist notices. Ignorance is no defence, and defiant, persistent, unlawful ignorance - like that displayed on certain bubbleblogs - should be criminal.

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Umair Haque's Vagueness vs. Old Media Execs' Focus on ROI

This juicy little post from Techdirt shows just how little the Web 2.0 crowd understand the quicksand they are standing upon.

The very fact that the industry is turning to tried and true managers shows how the real action is not in the "new" part of the phrase "new media".

Techdirt sounds immensely surprised that "Levinsohn's been with Fox for nearly 20 years, most recently working on rights issues and revenue-sharing agreements", concluding "he doesn't sound like a guy that's going to be any sort of visionary new-media leader".

Quite right, just the opposite; he sounds like a guy who's focussed on making some money for the shareholders. What's interesting is that that last sentence fragment can be taken both ways - either as damnation (how Techdirt meant it), or as strong praise.

To the guy who did the hiring, it was almost certainly a highly valued quality; what music it must be to their ears to hear someone talking about exploiting their rights to actually make some money from their business assets...

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Viacom vs. Umair Haque : Umair gets it so wrong (again)

The news that Viacom is suing Google for copyright infringement is no surprise for those who understand basic Ricardian corn law economics or simple property rights, the things that underpin the civil society as we know it.

Viacom owns the unique resource - the entertaining content people log on to YouTube to watch - and content servers like Google cannot live without that kind of attraction. Google's entire business is based on the ability to find the quality needle in the mainstream haystack, sift the good from the mediocre, deliver it to your desktop - and then subtly monetize it. Is it then any surprise that copyright holders object to Google piggybacking for free on their assets to make serious money?

Don Dodge understands this, and so do many other publishing copyright holders, who are queueing up to sue Google. Even Steve Ballmer gets it:

"Is there a business model? Right now, there's no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that's up there is owned by somebody else.The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google."

You know something is rummy when you find yourself agreeing with Microsoft's cheerleader-in-chief. Steve has an axe to grind, but on the principle, he's right: it's like I own a house, and those boys and girls from Google set up a stall outside and decide to rent out rooms in the house to tourists, but without paying me - or even asking me for permission. And they tell me "don't worry, it's for your own good really, rents will rise and there will be more renters in the long run". Oh. OK. That makes sense. Thanks, Googleers.


Once again that shamen for hair-brained über-economics, Umair Haque, is tilting at bogus windmills, pretending that the fundamental industry shift is deeper. But the fact is that YouTube is Napster for video, and unless they pay those copyright holders for their content, they are going to find themselves on skid row, just like Napster.

Dave Ricardo rocks.

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