Assisted Suicide: YouTube Helps Music Goliaths Become Irrelevant

A few days ago, YouTube began muting the audio tracks of videos that contained “unauthorized” copyright material. Some videos will now have the notice “This video contains an audio track that has not been authorized by all copyright holders. The audio has been disabled.” displayed beneath them.

This is a good move for YouTube. It will help absolve them from any liability for “broadcasting” content that the RIAA cabal deems worthy of protection.

It’s not such a good move for the RIAA and similar groups. A music track is an essential part of many videos, and we can be pretty sure that not many people who produce them are going to go to the trouble of obtaining copyright clearance. Instead, they’re going to seek unencumbered music. This is going to drive up the demand for “open” music, which will in turn cause more musicians to provide the same in exchange for some small promotional credit on the video.

Thus a win-win is born. Video creators will have access to more music they can use, musicians will have a showcase for their work with a potential for global profile that would otherwise be difficult to obtain. How long will it be before this exposure results in a musician who “makes it” in the mainstream? It will only be a matter of time.

How will these musicians feel when a big label comes along to offer them a contract that pays a fraction of the revenue they actually generate while insisting that they turn their backs on their roots by joining the copyright cartel? Some will buy in to the promises and sign up, but some won’t. Instead they’ll seek new methods and revenue models for distributing their work. Perhaps they will make the bulk of their money from live performance, or maybe they’ll find other ways to do it, but they will eventually succeed at it.

Once a successful formula has been found, those who seek to maximize revenue by controlling distribution will have lost the final step in their battle. They will have successfully spawned a revitalized industry that makes them irrelevant. This has always been inevitable, but YouTube’s move will certainly accelerate the process. To me it is amazing how, blind to reality, this industry continues to find ways to kill itself off with ever greater efficiency.

Kudos to YouTube; still yet another dunce cap to the established music distribution business.

Realizing that the Brand Bubble has Burst

In Media Metrics: Hate to Burst Your Bubble, John Gerzema discusses the erosion of the power of branding. In the process he makes an interesting observation: many companies have capitalized their brands, and they carry them on their books at considerable values. If these brands are in fact not worth anything close to the value they’ve been assigned, then there’s another financial crisis on the horizon.

Gerzema is writing from his perspective as “Chief Insights Officer” at Young & Rubicam. As soon as I stop chuckling at this utterly ludicrous title, the observation is that as a member of the industry that has created and perpetuated the myth of brand value, his take is bound to be somewhat biased. This is the industry that has for decades convinced otherwise rational executives to spend stupid amounts of money on an intangible concept while simultaneously convincing them that the result is a capital asset.

Now certainly it can be argued that a brand has some value. Awareness of a product is linked to the selection of a product for purchase, without question. But the brand itself is still intangible. The value of a brand should be measured as the cost of changing it. As an example, let’s say Pepsi decided to rebrand itself as “Foo”. There would be considerable cost and significant time involved in doing this, but it’s possible. With some tired brands (Levis comes to mind), it might even be advisable. This cost of rebranding is the true value of the asset. My bet is that the actual cost is considerably less than the asset value on many balance sheets. In his article, Gerzma asserts that “brands account for 30 percent of the market capitalization of the S&P 500, or almost $4 trillion dollars” (without citation). That’s one heck of a bubble.

In discussing the extent of the bubble, Gerzma writes “Further signs of this worrying disconnect emerged as we examined the extent of the gap between business and consumer perceptions of brand value”. What’s funniest there is the phrase “worrying disconnect”. To me it seems like a “reconnect” between consumers and reality that can only be worrying to big advertising agencies and to CFO’s with overvalued brands.

All that money companies have poured into ineffective marketing efforts — driven by “gut feel”, and marked by a complete inability to measure performance in any truly analytical way — is money thrown away. It’s lost, it’s gone. We have tools that measure the effectiveness of most of these things now in hard numbers, and the brand game is up, it’s done.

Still someone with a “CxO” title at a major agency has a responsibility to evangelize for his industry, be he right or wrong. He applauds the performance of brands who are “innovating beyond advertising”, such as in product development, corporate social responsibility and sustainability”. I hate to break it to him, but in these cases the brand is just an identifier that links a consumer to an enterprise that is doing these real, tangible things such as producing good products in a responsible way. Now there’s an insight!

Gerzma wraps up his weak argument that big agencies somehow still have a purpose with “today, everything is marketing and only creativity matters if a brand is to hold its value in this rapidly transforming and unforgiving marketplace.” This is a complete and utter contradiction of the reality that he has observed but still cannot accept: good products and good service are everything, and marketing is in large part the process of communicating the good things you do through various channels. Worse, some channels cannot be controlled, such as social media.

The days of managing a message through monolithic media are long gone. Now it’s about doing a excellent job and getting people to talk about what your organization does in a genuine way. Social media can be influenced, but ham-handed attempts to “manage” it are almost certainly destined to end badly. If I was involved in a big advertising agency, that’s the bubble I would be most worried about. That and keeping my resume up to date.

On the Enforcability of the GPL

A comment from my last post asked me to back up the claim that settlements have lent weight to the validity of the GPL. I got some feedback from a friend and did a little research of my own and here’s a summary of the stuff that’s easy to find.

The developers of Busybox have been busy indeed:
March 6, 2008 BusyBox Developers and High-Gain Antennas Agree to Dismiss GPL Lawsuit
March 17, 2008 BusyBox Developers Agree To End GPL Lawsuit Against Verizon
July 23, 2008 BusyBox Developers and Supermicro Agree to End GPL Lawsuit
October 6, 2008 BusyBox Developers Settle Case With Extreme Networks

The GPL Linux Kernel has been defended in a European court verdict.

Many other successful settlements in favour of the GPL are available at gpl-violations.org.

Groklaw’s article “A GPL Win in Michigan” discusses how the US courts have found the GPL enforceable.

Sun Microsystems gets the GPL, even if it doesn’t suit them. in a CNET article from 2005, Jonathan Schwartz is quoted as not liking the GPL because of “the GPL provision that says source code may be mixed with other code only if the other code also is governed by the GPL”. Sun’s rather formidable legal team gets it: you can’t mix non-GPL code with GPL code and still comply with the GPL.

This is just the beginning. The SFLC has launched a suit against Cisco on behalf of the FSF. SCO descends further into bad joke status by attacking the GPL, with IBM on the other side. Any bets on who will take that one?

On the flip side, there’s nothing I could find where a challenge to the GPL was successful.

More Controversy: the Joomla Extensions Directory (JED) and the GPL

Back in June of 2007, the Joomla project generated a community firestorm by announcing that, based on legal opinion, it felt that all Joomla extensions were required to be released under the GPL and that it would start to encourage third party developers to comply with that interpretation.

Detractors tried to paint this as some sort of policy decision. Somehow they never quite grasped what was being said, so I think it bears being repeated. Open Source Matters, Inc. (OSM), the non-profit charged with protecting the interests of the project, sought and obtained an opinion from legal experts well qualified in this area. Their opinion was specific, clear, and — this is critically important — while not based on precedent set by court decision, was based on several lawsuits that were settled just before going to court.

This needs some elaboration to make it as clear as possible: businesses who thought that this interpretation of the GPL was wrong, and who distributed proprietary attachments to GPL products, backed down when faced with going to trial. In my opinion, the only reason why a commercial enterprise would elect to settle a case of this nature just before going to trial is because they knew that they were likely to lose. When several suits get settled this way, all in favour of the GPL, they begin to carry significant legal weight.

So OSM had two choices: communicate the requirement that extensions be GPL or adopt another license. Considering that Joomla formed as a direct result of the actions individuals who believed in the GPL, there was really only one alternative.

Free Software — as defined by the GPL — may embrace open source, but it is not the same as open source. It is designed to give users rights and freedoms that go well beyond access to the code. For developers the interpretation is simple: get on board or use code that has a different license, period.

At the time of the GPL announcement, I had decided that Joomla was the best CMS for my web development business. I had just begun to get involved with the project, and had at best contributed a patch or two. As a small business, source code is our biggest asset and I will admit I had some concerns about giving up the ability to protect that asset. But at the same time I am not so hypocritical that I think somehow we have the right to protect our code, while using hundreds of thousands of lines of code written by others without compensation.

A few days ago, the project announced that the Joomla Extensions Directory was only going to list extensions released under the GPL (JED to be GPL Only by July 2009). Predictably, this has created another round of controversy.

The difference here is that while the original position was based on legal opinion, this decision is more one of policy. The project is choosing to not promote extensions that violate the terms of the GPL.

When the first announcement was made, my Joomla involvement had just begun. Now, I’m one of the more active members of the project and part of the Development Team. While not part of the Core Team or OSM Board, which are the bodies responsible for the governance of the project, I have made some significant contributions. Every time someone downloads and installs Joomla, they benefit in some small part from my work.

It is in this context that I’m going to respond to several reactions to the JED announcement:

ReactionResponse
Joomla needs commercial extensions in order to survive and gain acceptance from business customers.
  1. Similar dire claims of the project’s demise were made when the GPL compliance announcement was made. Not only have they not come true, Joomla is more active and vibrant now than it has ever been, so FUD to that.
  2. The vast majority of extensions are already GPL, including some of the best extensions for 1.5.
  3. I successfully use the argument that the GPL protects a business from the failure of a small development shop without introducing new risks. Any business that backs away from GPL software as a user simply hasn’t been sold to properly.
I can’t make money if my extension is GPL.
  • Leaving aside the fact that there are many companies that disprove this, anyone making this argument is saying that they can’t make money without ripping me off! Start paying me and others for our contribution to your success and then I might be slightly sympathetic.
  • Maybe we need an alternative licensing model. Pay OSM US$50,000 to $100,000 for a Non-GPL Joomla site license and feel free to install as many commercial extensions as you like. Don’t install one single third party GPL extension without paying them, though!
  • Find an extensible commercial CMS and go write proprietary code for it. If your business is capable of paying for the development licenses and the training and certification courses you’ll need to get started, then you might in fact have a viable proprietary software company. If not, stop whining.
  • If you’re that great, you don’t need Joomla. Go write your own CMS.
Policy makers in the Joomla project are out-of-touch idiots and something should be done!
  • Fork it. Go on, I dare you. Everybody who is currently working on the code base understands and supports the GPL. The people who didn’t left shortly after the 2007 announcement. If you like the code, but don’t like the policies, go do it your way.
  • Personally, I think people who think they can get fair value for their work without also giving the project similar value (say, based on revenue per line of code) have ethical problems. So not only do you want to rip off the users who buy your extensions by denying them their legal rights under the GPL, but you want the Joomla project to help you do that. Good luck.
  • The site www.extensionprofessionals.com (running Joomla 1.0 (snicker) way to innovate, guys) offers proprietary extensions. This site is sponsored by the “Joint Commercial Developers Association” (jcd-a.org), comprised mostly of people who found Joomla’s GPL interpretation unacceptable. In a year or two, we’ll be able to measure the success of this extension site by comparing it with the JED. Should be good for a laugh or two. Take a look at the frantic activity on jcd-a.org for a peek at the future. The word joint comes to mind, but not in the context of a collective effort.
Someone will fork my code and release a better version three weeks later.
  • If your business model is predicated on code that’s so weak that someone can make significant improvements on it in three weeks, and that someone isn’t you, then maybe you should consider either a different business model or another career.
  • Let’s make it very clear: the GPL makes it difficult to earn a living by flaunting mediocre code without some other kind of value add. If you can’t come up with a proposition to add value, consider another business. Really. It’s just not going to work.

From my viewpoint, a great part of Joomla’s success has been as a direct result of its commitment to empower the end user via the GPL. Moreover, the principles of the GPL have attracted much of the talent that the project currently has. I see companies that don’t embrace these values but who continue to earn a living thanks to the project as nothing more than parasites. I’m certain that once the leeches have been pried from the JED, it will grow more quickly and become more vibrant than ever before. Time will tell.