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Join Date: May 2001
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![]() ![]() "We’ve been watching live TV drop steadily as a default source since we first conducted this study in 2013. But this is the first year where we’ve seen a sharp drop among older consumers too, which has huge implications." – Peter Fondulas "The bottom line? Filters are expensive and they don’t work." – John Biggs July 14th, 2018 ![]() Trump’s Supreme Court Pick: ISPs have 1st Amendment Right to Block Websites Net neutrality violates ISPs' right to edit the Internet, judge wrote. Jon Brodkin President Trump's Supreme Court nominee argued last year that net neutrality rules violate the First Amendment rights of Internet service providers by preventing them from "exercising editorial control" over Internet content. Trump's pick is Brett Kavanaugh, a judge on the US Court of Appeals for the District of Columbia Circuit. The DC Circuit twice upheld the net neutrality rules passed by the Federal Communications Commission under former Chairman Tom Wheeler, despite Kavanaugh's dissent. (In another tech-related case, Kavanaugh ruled that the National Security Agency's bulk collection of telephone metadata is legal.) While current FCC Chairman Ajit Pai eliminated the net neutrality rules, Kavanaugh could help restrict the FCC's authority to regulate Internet providers as a member of the Supreme Court. Broadband industry lobby groups have continued to seek Supreme Court review of the legality of Wheeler's net neutrality rules even after Pai's repeal. Wheeler's rules—which prohibited blocking, throttling, and paid prioritization—were upheld by the DC Circuit in a 2-1 panel decision in June 2016, and again when the full court denied the broadband industry's petition for an en banc rehearing in May 2017. Six judges voted to deny the industry's petition for a rehearing, while Kavanaugh was among two dissenting judges. Kavanaugh's dissent said that "the net neutrality rule is unlawful and must be vacated." "The rule transforms the Internet by imposing common-carrier obligations on Internet service providers and thereby prohibiting Internet service providers from exercising editorial control over the content they transmit to consumers," Kavanaugh wrote. The FCC's imposition of the rule was unlawful because "Congress did not clearly authorize the FCC to issue the net neutrality rule" or to impose common-carrier obligations on ISPs, Kavanaugh argued. But even authorization from Congress wouldn't have saved the net neutrality rules from Kavanaugh's dissent, because he also argued that the rules violate ISPs' First Amendment free speech rights. Under Supreme Court precedents, "the First Amendment bars the Government from restricting the editorial discretion of Internet service providers, absent a showing that an Internet service provider possesses market power in a relevant geographic market," Kavanaugh wrote. "Here, however, the FCC has not even tried to make a market power showing. Therefore, under the Supreme Court's precedents applying the First Amendment, the net neutrality rule violates the First Amendment." Judge: Like cable TV, ISPs “decide” which websites to transmit Consumers generally expect ISPs to deliver Internet content in un-altered form. But Kavanaugh argued that ISPs are like cable TV operators—since cable TV companies can choose not to carry certain channels, Internet providers should be able to choose not to allow access to a certain website, he wrote. "Internet service providers may not necessarily generate much content of their own, but they may decide what content they will transmit, just as cable operators decide what content they will transmit," Kavanaugh wrote. "Deciding whether and how to transmit ESPN and deciding whether and how to transmit ESPN.com are not meaningfully different for First Amendment purposes." Kavanaugh's argument did not address the business differences between cable TV and Internet service. Cable TV providers generally have to pay programmers for the right to carry their channels, and cable TV providers have to fit all the channels they carry into a limited amount of bandwidth. At least for now, major Internet providers don't offer a set package of websites—they just route users to whichever sites the users are requesting. ISPs also don't have to pay those websites for the right to "transmit" them, but ISPs have argued that they should be able to demand fees from websites. Kavanaugh’s view rejected by fellow judges DC Circuit Judges Sri Srinivasan and David Tatel wrote an opinion disputing Kavanaugh's arguments. Here's how Srinivasan and Tatel responded to Kavanaugh's First Amendment claim: “[N]o Supreme Court decision supports the counterintuitive notion that the First Amendment entitles an ISP to engage in the kind of conduct barred by the net neutrality rule—i.e., to hold itself out to potential customers as offering them an unfiltered pathway to any web content of their own choosing, but then, once they have subscribed, to turn around and limit their access to certain web content based on the ISP's own commercial preferences.” Also contrary to Kavanaugh's argument, Srinivasan and Tatel wrote that the FCC had the authority to reclassify ISPs as common carriers and impose net neutrality rules. "[T]e Supreme Court, far from precluding the FCC's [net neutrality] Order due to any supposed failure of congressional authorization, has pointedly recognized the agency's authority under the governing statute to do precisely what the Order does," they wrote. Srinivasan and Tatel cited the 2005 Brand X case that we've written about before; the case upheld the FCC's earlier declaration that cable Internet is an information service rather than a common carrier service. Brand X helped Wheeler's FCC defend the net neutrality rules because the Supreme Court decision supports the FCC's authority to define Internet service however it wishes, so long as it provides a reasonable justification. "[T]he Court made clear in its decision—over and over—that the [Communications] Act left the matter to the agency's discretion," Srinivasan and Tatel wrote. "In other words, the FCC could elect to treat broadband ISPs as common carriers (as it had done with DSL providers), but the agency did not have to do so." Srinivasan and Tatel also provided the two votes supporting the FCC's right to impose net neutrality rules in the 2016 version of the case. "Because a broadband provider does not—and is not understood by users to—'speak' when providing neutral access to Internet content as common carriage, the First Amendment poses no bar to the open Internet rules," they wrote at the time. The net neutrality rules forbid ISPs from blocking lawful websites and did not apply when ISPs cooperated with emergency communications and law enforcement officials, public safety agencies, and national security authorities. Judges also noted that the net neutrality rules only applied to ISPs that hold themselves out to consumers as "neutral, indiscriminate conduits" to the Internet. Technically, the rules allowed Internet providers to filter the Internet if they didn't act as a common carrier, as some services targeted at religious people have done. That exception supported the case that the rules did not violate the First Amendment and was narrow enough that it wasn't likely to be abused by major ISPs. Kavanaugh’s support of NSA surveillance In November 2015, Kavanaugh was part of a unanimous decision when the DC Circuit denied a petition to rehear a challenge to the NSA's bulk collection of telephone metadata. Kavanaugh was the only judge to issue a written statement, which said that "[t]he Government's collection of telephony metadata from a third party such as a telecommunications service provider is not considered a search under the Fourth Amendment." Even if this form of surveillance constituted a search, it wouldn't be an "unreasonable" search and therefore it would be legal, Kavanaugh also wrote. "The Fourth Amendment allows governmental searches and seizures without individualized suspicion when the Government demonstrates a sufficient 'special need'—that is, a need beyond the normal need for law enforcement—that outweighs the intrusion on individual liberty," Kavanaugh wrote. "The Government's program for bulk collection of telephony metadata serves a critically important special need—preventing terrorist attacks on the United States. In my view, that critical national security need outweighs the impact on privacy occasioned by this program." In a separate legal area that might be of concern to President Trump, Kavanaugh argued in a Minnesota Law Review article in 2009 that sitting presidents should not have to face civil suits or criminal investigations until after they leave office. "The point is not to put the President above the law or to eliminate checks on the President, but simply to defer litigation and investigations until the President is out of office," Kavanaugh wrote at the time. "If the President does something dastardly, the impeachment process is available." If confirmed by the Senate, Kavanaugh would replace Justice Anthony Kennedy, who is retiring effective July 31. https://arstechnica.com/tech-policy/...me-court-pick/ ![]() Fed Up Villagers in Michaelston-y-Fedw Install Ultrafast Broadband Gemma Ryall In a small, leafy village midway between two cities, an internet revolution has been taking place. Michaelston-y-Fedw might be just 10 miles from Cardiff city centre and a short drive from Newport but it has always been a world away when it comes to its broadband access. Its low internet speed of 4Mbps meant it was a proper "not spot" where young people could not watch YouTube, the local pub struggled to take card payments and downloading a film was nearly impossible. So fed up locals decided to take matters into their own hands and install their own ultrafast broadband. The local pub, village hall and church have just been connected and by autumn about 175 homes in the area will have upload and download speeds of 1Gbps - or 1,000 Mbps - some of the fastest internet speeds in the UK. When you drive along the lanes leading to the village, large banners proudly proclaim: "Fastest Village in Wales." It's a huge deal for its 300 residents. Meg Cope, 21, says her house has the slowest broadband in the village because it's at the end of the current copper line - and it's affecting her studies at Cardiff University. "The internet is so important for my university work - I read a lot of articles and journals so I have to go into uni to download them and then come home to read them," she said. "It makes me feel like I'm behind with my degree. Its's so frustrating. "Just going online for social media, I have to use 3G and I end up using all my data and have to buy more." Caroline Hill and Ben Langman, who have been running the Cefn Mably Arms for the past 21 months, said the slow speeds had been hurting their business. "It affected everything. As soon as someone came into the pub and their phone connected with the wi-fi, it would crash our debit card machine," said Ben. "Trying to pay our 26 staff was difficult as it's all online banking these days. A few years ago you could do your ordering over the phone, now it's all online... It was so hard." But that's all changed as the pub has just been connected to the new ultrafast Fibre to the Premises (FTTP) broadband. "Now you can come along and download the whole Star Wars trilogy in three minutes," laughed Ben. They all have Dave Schofield to thank for dragging the village into the 21st Century. He and a team of about 30 volunteers - all local villagers - decided that because nobody else was sorting out their problem, they would do it themselves. He mentioned the idea at a village meeting, not thinking anybody would be enthusiastic, but he said everyone jumped on board. They set up their own not for profit Community Interest Company and raised £150,000 by asking local people to buy shares in the project. They then went about applying for every grant they could, including to the Welsh Government and Access Broadband Cymru, which offers vouchers to homes in areas that are not set to benefit from BT's Superfast Cymru project. Similar schemes have been undertaken in England, but for Wales it was a first. Farmers and landowners readily gave permission for trenches to be dug to lay the fibre optic cables - that are thinner than a human hair - from a hub to people's homes and businesses. And residents swotted up on the technology, pooled their skills and received training on how to lay the infrastructure. Local contractors use machinery to dig across farmland to people's driveways. It's then up to each home owner to dig trenches to carry the fibres into their own homes, with others stepping in to help those who can't manage the work. It has become a full time job for many of the volunteers. "We started digging on 21 February this year when the ground was frozen solid," said Dave, 52, who's lived in the village for eight years. "A few weeks later we were snowed in for three days and then we had torrential rain. "So it's not been easy but we were all determined. And it's brought the whole community together." David Walford, 21, stepped up to do the groundwork, digging trenches in the many fields that surround Michaelston-y-Fedw. "I've got a drone and I take loads of videos but I've never been able to upload them. There'd be no hope of doing anything like that," he said. "For the last three days I've been coming down to the village hall to finally upload all my videos to YouTube. It's amazing - you don't realise how painful it was before." For many of the villagers, the project has not just been about improving internet access - it's also been about improving community relationships. Jim Dunk, 71, has had a home in the village for 41 years but because he was in the Merchant Navy, he travelled the world and used it only as a base. "This is why the project meant so much to me," he said. "It's the place I came back to - but apart from the village pub, I didn't know many other people. Now, I've met just about everybody as I'm one of the people who's put the routers into all the houses." His wife Carina, who does the fibre splicing, added: "In a very short space of time we've got to know a lot of people very well. "Sometimes we're spending eight hours a day together. Before this, Jim was playing golf four times a week - now he's lucky if he gets there once. But he loves it." They still have much work to do. The popular Cefn Mably Farm Park will also be connected as part of the project - but first the team will have to get the wires across a river. That doesn't daunt them. "We'll just use a directional drill to do it," added Dave - a phrase he no doubt didn't think he'd be using this time last year. The people power behind the project has impressed many of the locals. "They're all so clever doing it," said Saskia Barnett, 22, who has lived in the village all her life. "It's such a great idea and will really make a difference for people living here. "When you're a teenager growing up here it's really hard... My brother and I would have to time when we'd go online - when he was playing on his X-Box I wouldn't be able to watch Netflix on my laptop. "Our house has just gone over to the new router. It's not up and running yet but it will be so much better. It will be so good." https://www.bbc.com/news/uk-wales-so...wales-44631791 ![]() AT&T had a Secret Reason for Wanting to Get its Hands on Time Warner Wants to use 5G to get more people to watch TV shows while riding in self-driving cars Abby Jackson • Warner Media CEO John Stankey told HBO employees that 5G and autonomous vehicles is an opportunity to get more content in front of consumers. • The conversation was part of an internal town hall that leaked to the media. • Stankey predicts that individuals will consume an hour to an hour and a half more content over the course of the next four years. AT&T has its eyes squarely set on competing with Netflix. That much was clear during a recent town-hall event where Warner Media CEO John Stankey addressed 150 HBO employees about the upcoming year. But Stankey revealed a pair of unexpected motivations for AT&T's acquisition of Time Warner: 5G and autonomous vehicles. Responding to a question about why 5G matters, Stankey took the time to talk about self-driving cars, according to a transcript of the event that Recode published. "It does things like it opens up the ability for autonomous vehicles, vehicles that are self-driving," Stankey said. "Why do you care about vehicles that are self-driving? If you’re not driving yourself to and from work to and from Los Angeles anymore, you can sit in the back seat and let the vehicle take you, what do you get? You get another hour or two hours to consume great content that you build every day." 5G is the fifth — and next — generation of wireless technology. Its expected to deliver faster speed than the current 4G LTE standard, and allow for "internet of things" deployments. Stankey sees this as a boon to content providers.\ 5G may create brand new media time for consumers "So now you start to think about why am I bullish on building more content?," Stankey said. "Well, I think that the average number of hours that an individual consumes in a given day might actually increase somewhere in the range of an hour to an hour and a half over the course of the next four years because of that shift." AT&T doesn't want consumers spending those additional hours on Facebook, Stankey said. It wants to build a product that draws prolonged engagement from consumers, and HBO will help it get there. But to get there, HBO needs to transform, offering bigger and broader content to boost customers' engagement, he said at the event. That approach is a step in the right direction for AT&T's business model, Daniel Ives, the chief strategy officer at GBH Insights, told Business Insider. He noted that media companies that produce content will be busy in the upcoming year. The next 12 to 18 months will be a "content arms race," Ives said. https://www.newstimes.com/technology...s-13064491.php ![]() Justice Department Plans Appeal of AT&T-Time Warner Merger Approval Cecilia Kang and Edmund Lee The federal government on Thursday mounted a new effort to unravel AT&T’s deal with Time Warner, a blockbuster merger that has already started to reshape the media industry. The deal was finalized a month ago, after a federal judge rejected the government’s argument that the $85.4 billion agreement would harm competition and consumers. The combination of the two companies has created a media and telecommunications giant with television stations, a movie studio, nearly 160 million wireless customers and a nationwide satellite television service, DirecTV. An AT&T executive is already in charge of Time Warner properties like HBO and the news network CNN. The judge’s decision had almost immediately set off a round of intense deal talks among many of the biggest names in the industry, including Comcast and 21st Century Fox. Many media executives, including those at AT&T and Time Warner, say mergers among their companies are necessary to better compete against tech giants like Netflix and Amazon. The Department of Justice filed its notice of appeal on the same day that Netflix beat out HBO for the most Emmy nominations — ending the premium channel’s 17-year run as the most-nominated outlet. The Justice Department declined to comment. But experts say the appeal sends a clear signal that the government, despite its court loss, will be aggressive on deals between companies with complementary businesses, known as vertical mergers. Immediately after the AT&T-Time Warner merger was approved last month, Comcast entered a bidding war with the Walt Disney Company for the entertainment assets of 21st Century Fox. “If they had not appealed it, it would have been a green light for vertical mergers to proceed apace,” said Andrew J. Schwartzman of the Georgetown University Law Center. AT&T’s general counsel, David McAtee, expressed confidence about the company’s chances in an appeal. “The court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” he said in a statement. “While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the D.O.J. has chosen to do so under these circumstances.” The plan to appeal was made public late in the afternoon; shares in AT&T fell 1.3 percent in after-hours trading. The Justice Department had considered filing an injunction to stop the deal from closing after the judge, Richard J. Leon of United States District Court in Washington, approved it on June 12. But it did not go ahead with the motion because AT&T said the media arm would be operated as a separate group, making it easier to unwind the business should the Justice Department succeed in an appeal. The latest legal maneuvering will not immediately change the business. But if the Justice Department ultimately prevails in its appeal, AT&T would have to detach the Time Warner business, now renamed Warner Media. The government’s approach to the AT&T-Time Warner merger contrasts sharply with its relatively quick approval of Disney’s proposed acquisition of 21st Century Fox’s entertainment properties. That agreement, in which Disney said it would pay $71.3 billion for Fox’s television and movie business, was approved in June, about six months after it was announced. Transactions of such size typically take a year or longer. The Justice Department’s decision to appeal could benefit Rupert Murdoch, the Fox chairman, who has supported Disney’s offer over Comcast’s, according to Craig Moffett, a longtime media analyst. Comcast appeared to already be backing away from its bid, but the government’s appeal could make the giant cable company move away even faster by raising more doubts about whether the Justice Department would approve such a deal. “Lobbing in this hand grenade right now sort of seals Comcast’s fate,” Mr. Moffett said. Comcast is locked in a separate bidding war for control of the European satellite broadcaster Sky, which has more than 23 million customers across five countries. After Fox improved its offer to control Sky on Wednesday, Comcast quickly topped that bid with one of its own, valuing the company at $34 billion. The AT&T and Time Warner merger has generated such intense interest partly because of the political overtones. As a candidate, Donald J. Trump, who had frequently criticized the Time Warner property CNN as “fake news,” vowed to stop the AT&T-Time Warner merger if elected to the White House. “We will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said at the time. The Justice Department, however, said politics had played no role in the decision to oppose the AT&T-Time Warner deal. Mr. Trump exhibited more rosy feelings for the deal between Disney and Fox. “I know that the president spoke with Rupert Murdoch earlier today, congratulated him on the deal,” the White House press secretary, Sarah Huckabee Sanders, said in December. The government sued to block the AT&T-Time Warner deal late last year, saying the combination of companies that distribute and produce content would lead to higher prices for all cable customers. After a six-week trial, Judge Leon concluded that the Justice Department did not provide enough evidence that it would harm consumers and competitors. “If there ever were an antitrust case where the parties had a dramatically different assessment of the current state of the relevant market and a fundamentally different vision of its future development, this is the one,” Judge Leon wrote in his opinion. The filing that announced the government’s intention to appeal did not include any details about what arguments the government planned to make to a higher court, the United States Court of Appeals in Washington. If either side disagrees with the appeals court’s decision, the case could then move to the Supreme Court. Mr. Schwartzman of the Georgetown University Law Center said the odds of winning are low for the side appealing its case. He and other legal experts said Judge Leon’s decision was specifically tailored for AT&T’s merger with Time Warner, limiting potential problems in an appeal. Gene Kimmelman, president of Public Knowledge and a former senior antitrust official at the Justice Department, was likewise skeptical of the Justice Department’s chances, but he said the government’s intention may not ultimately be to win a court appeal. “It signals to the market the government isn’t throwing in the towel but I think it’s a long shot because the appellate court has to defer to the trial judge on facts,” he said. https://www.nytimes.com/2018/07/12/b...-approval.html ![]() Murdoch's 21st Century Fox Ups Sky Bid to Beat Rival Comcast Gregory Katz and Danica Kirka Media mogul Rupert Murdoch's 21st Century Fox increased Wednesday its bid to take full control of lucrative European pay TV service Sky in a prolonged battle with U.S. rival Comcast. Fox raised its bid to 14 pounds ($18.58) a share as it seeks the 61 percent of Sky not already under its control. The company says this is 12 percent higher than the last bid from Comcast and values Sky at 24.5 billion pounds ($32.5 billion). Fox has increased its bid by just over 30 percent since its first offer in December 2016. Shares in Sky Plc were down 0.8 percent at 14.90 pounds, suggesting investors believe Comcast could come back with another improved offer. Sky operates in Austria, Germany, Ireland and Italy as well as the U.K. It has 22.5 million customers, attracted by offerings such as English Premier League soccer and "Game of Thrones." Murdoch's company still faces significant regulatory battles in Britain, including the culture secretary's statement that Fox would have to sell Sky News to win government approval because of concerns about media plurality. Fox's bid for Sky is the most recent episode in Murdoch's long-running effort to take full control of the company. His last bid foundered amid a 2011 phone-hacking scandal, in which journalists working for Murdoch newspapers were accused of gaining illegal access to the voicemail messages of crime victims, celebrities and members of the royal family. News Corp., which is controlled by the Murdochs, withdrew its bid for Sky soon after. The effort to buy Sky comes as Fox itself is the object of a takeover battle by Comcast and Disney. Disney said in June it is offering more than $71 billion for Fox's entertainment businesses in a counterbid to Comcast's nearly $66 billion offer. The companies want Sky in order to amass programming and better compete with technology companies like Amazon and Netflix for viewers. https://www.newstimes.com/business/t...t-13065424.php ![]() Comcast's Brian Roberts is Talking to Disney's Bob Iger the Only Way he Can — through Opaque M&A Strategy • Comcast is now focused on buying U.K.-pay TV provider Sky before it makes a decision on the remainder of Fox's for-sale assets. • If Comcast walks away with Sky, it may decide to give Disney the remainder of Fox. • A U.K. takeover panel still needs to decide what the fair value of Sky is after Disney raised its bid for Fox last month. Alex Sherman, Julia Boorstin Theoretically, there is no better time for Comcast, Disney and Fox to work out a deal than Sun Valley, Idaho, where media titans meet annually to talk about mega-mergers under the watch of boutique investment company Allen & Co. And yet, like the phrase "water water everywhere, Nor any drop to drink," Comcast CEO Brian Roberts is in a difficult position -- he can't talk to Disney executives to broker a deal for Fox because Disney and Fox have a signed merger agreement. That prohibits Disney from talking to Comcast about potentially splitting up Fox's assets and avoiding a major bidding war, which has already sent the price of Fox assets up about $20 billion. Comcast has been waiting for weeks to strike back at Disney's $71.3 billion offer for Fox's bundle of assets. Earlier Wednesday, Fox increased its bid to buy the 61 percent of U.K. pay-TV provider Sky to $32.5 billion, topping Comcast's outstanding bid of about $31 billion. Instead of rebidding for all of the Fox assets, Comcast is now focused on increasing its bid for Sky, according to a person familiar with the matter. Before that happens, Fox actually may need to increase its latest bid again. That's because a U.K. takeover panel is deciding if Sky is worth more than 14 pounds per share, due to the so-called "chain principle," which links the value of Sky's independently traded shares to the 39 percent that Fox already owns (and Disney is bidding for as part of its $71.3 billion offer). Assuming Fox agrees to pay a higher mandated price for Sky, Comcast would then increase its bid over that price, the person said. In fact, Comcast may be reassessing its bidding strategy for the remainder of Fox if it walks away with Sky, the person said. If Comcast bids again for Fox, the takeover panel may force it to pay even more for Sky, which would not make sense if it's already won the asset. Comcast would be bidding against itself. This may be Comcast's attempt at "talking" to Disney, since Roberts can't bang out a deal with Disney CEO Bob Iger and Fox Executive Chairman Rupert Murdoch at the Sun Valley Resort bar. If Comcast can convince Disney to give up on Sky, it can throw Disney a bone by backing off on the rest of Fox's assets. It's always been the closest outcome to a "win-win" for both sides. What's unclear is if Disney is willing to cede Sky. Iger has consistently emphasized how much Disney loves Sky's platform and user interface. To "talk back" to Comcast, Disney would have to get the message out that it wouldn't bid again on Sky, perhaps through a public statement. That may give Comcast the security it needs to back away on the rest of Fox's assets. Part of that bundle of Fox assets is the remaining 39 percent of Sky. Disney could decide it wants to tender into Comcast's offer for Sky, allowing Comcast to own 100 percent of Sky and lowering the overall cost (and debt burden) for Fox's assets. After divesting Fox's regional sports networks and agreeing to divest other assets up to $1 billion of earnings before interest, tax, depreciation and amortization, Disney's acquisition could be a lot easier for shareholders to swallow. So the probable next steps are: • U.K. takeover panel rules on value of Fox's Sky offer • Comcast tops Fox's offer for Sky • Disney decides if it wants to signal to Comcast that it will drop Sky in return for Comcast throwing in the towel on the rest of the Fox assets. https://www.cnbc.com/2018/07/11/comc...y-fox-bid.html ![]() Only 39% Of Viewers Choose Live TV As Their Default Option – Study Dade Hayes The concept of channel surfing appears to be going out with the tide. Rather than flipping on live TV to see what’s on, viewers are increasingly defaulting to on-demand sources like SVOD services, according to a new study by Hub Entertainment Research. In the latest edition of its annual “Decoding the Default” report, Hub found that only 39% of viewers tune into live programming from a traditional pay-TV provider, down from 47% last year. On-demand sources, collectively, were the first choice for 48% of viewers. “That’s not the same thing as saying people never watch live TV,” said Jon Giegengack, a principal at Hub who is one of the authors of the study, in an interview with Deadline. “But it shows that people have been conditioned that SVODs are the inverse of appointment TV. They can watch it when they want.” For viewers aged 18-34, the pattern is more stark — only about a quarter (26%) of the demo lists live TV as a default, compared with 35% a year ago. One clear influence on consumer behavior is the increase in TV sources — the average person has 4.5 distinct sources to choose from (including linear TV, DVR, VOD, Netflix, etc.). That number is up from 3.7 in 2014. Among viewers 18-34, the number is higher, at 5.1 sources — plus, Hub found that fully 50% of 18-34-year-olds subscribe to at least two of the “big three” SVOD services, Netflix, Amazon or Hulu. Even older generations accustomed to the “clicker” have turned away from live TV as a default. About 56% of viewers 55 and older listed live as their first choice, but that’s down from 66% a year ago. “We’ve been watching live TV drop steadily as a default source since we first conducted this study in 2013,” said Peter Fondulas, a principal at Hub and co-author of the study. “But this is the first year where we’ve seen a sharp drop among older consumers too, which has huge implications for the monetization of linear TV in general. As online, on-demand platforms continue to become mainstream, live viewing has become the exception rather than the rule.” The study is based on data collected in June from 1,933 US consumers with broadband who watch at least one hour of TV per week. One significant change in methodology from the 2017 study, Giegengack said, is the use of the one-hour threshold. Hub used to use five hours of viewing a week, which skewed results toward more avid TV viewers. The battle of the streaming services revealed some interesting results in the study. The number of viewers who said they are using Hulu more than they were a year ago reached 58%, compared with 48% for Netflix. (Call it the Handmaid’s effect.) Also, 12% of viewers said they are using Netflix less than a year ago, compared with 10% who reported using Hulu less. https://deadline.com/2018/07/only-39...dy-1202425625/ ![]() Internet to Remain Free and Fair in India: Govt Approves Net Neutrality Pankaj Doval • Mobile operators, internet providers and social-media companies cannot engage in, or seek, preferential treatment of content • The move is being seen as progressive as it will not allow any operator, internet service provider or internet giant to create a monopoly on the internet In a decision that will ensure that netizens continue to have free and fair access to the internet, the government on Wednesday approved the principles of net neutrality in India + . “Any deviations and violations of the rules of net neutrality – which come into effect almost immediately – will be met with stiff penalties,” telecom secretary Aruna Sundarajan told TOI. Under net neutrality, online access is unrestricted and non-discriminatory. The only exceptions are new and emerging services such as autonomous driving, tele-medicine or remote-diagnostic services, which may require prioritised internet lanes and faster-than-normal speeds. A committee will look into the possible exceptions for “critical services” which will also be defined keeping in view the basic tenets of net neutrality. Sundararajan said the inter-ministerial telecom commission, which met on Wednesday, gave the go-ahead to net neutrality in the country. Net Net neutrality has become a contentious issue across the world as social media giants and mobile and internet providers seek greater control on delivery of content and services to customers. It is feared that handing out greater and unchecked control to them will lead to monopolies and situations of paid prioritisation, both of which will stifle the start-up culture and new innovations. The US, the world’s biggest internet economy, is yet to take a clear stand on the matter. In May, the US Senate voted in favour of keeping open-internet rules as it attempts to overturn regulator Federal Communications Commission’s decision to repeal net neutrality rules, something seen as difficult in view of challenges at the House of Representatives or the White House. TIMES VIEW All those who believe in a fair marketplace should welcome the reiteration that the principles of net neutrality will be upheld in India. This will ensure that those who control the pipes through which data flows – between providers and consumers of content – cannot favour some providers over others. The government now needs to ensure there are no loopholes that could result in an uneven playing field – for instance, companies that own both broadband and produce content should not be allowed to distribute their content free, by not charging for the data. Conversely, other content providers should have the same free access to distribution. As per the net neutrality rules in India, mobile operators, internet providers and social-media and internet companies cannot engage in, or seek, preferential treatment as there will now be prohibition on any kind of interference in the treatment of content, including practices like blocking, degrading, slowing down or granting differential speeds or treatment to any content. Moreover, any efforts to create zero-rated platforms have now been blocked. Zero-rated platforms + , which had earlier been tried (by companies such as Airtel and Facebook) but barred, offer only a certain category of services and websites as free, thus creating paid layers and stifling competition and innovation. The government’s decision is being seen as progressive as it will not allow any mobile operator, internet service provider or online/social media giant to create monopolies on the internet by getting specialized treatment by paying for it. The rules of equal access will be maintained and no company can buy special treatment for itself or its services. Industry analysts said that net neutrality rules will help the culture of startups and innovation as access to the internet and delivery of services will be the same for everyone. “Smaller companies will have the opportunity to grow unhindered with no fear of bigger rivals stifling their opportunities by paying for specialized treatment,” a government official said. Sundararajan said that net neutrality will come into force through a notification by the telecom ministry, and companies will need to adhere to its principles. Changes to the licensing norms for companies will be made to factor in the new-age rules. The telecom secretary, who also heads the telecom commission, also said that internet traffic management by mobile companies will be monitored in the new regime. “The telecom department will decide on traffic management rules, and will seek recommendations from sector regulator Trai on the same.” The government has also decided for the formation of a multi-stakeholder body for the monitoring and enforcement of net neutrality. “Apart from government officials, this will have representatives from telecom companies, internet service providers and those engaged in internet-of-things platforms,” Sundararajan said. The grounds for net neutrality and free and fair internet was laid by Trai which in November last year recommended that internet access in India should remain non-discriminatory with no restrictions in the delivery of content through practices such as throttling of speed, blocking, paid prioritisation or preferential treatment. Trai chairman R S Sharma has also advocated for the introduction of net neutrality principles in India. “The overarching goal for us has been that internet must remain an open platform, unhindered by any entity, so that users and customers have a choice to access content of their liking… Nobody owns the internet and thus it should be available to everyone. We seek openness and integrity of the internet.” As the internet economy gains in size and influence across the world, there have been increasing concerns with relation to the potential for discriminatory treatment of internet traffic by the entities that control access to the internet. Also, some of the internet giants may buy their way through to a preferential environment at the cost of other companies and startups. https://timesofindia.indiatimes.com/...w/64948838.cms ![]() China’s Largest Music Streaming Business is Planning a US IPO Jon Russell Fresh from Spotify’s unique direct listing in the U.S., another huge streaming service is about to follow suit and go public in America. Tencent Music Entertainment (TME) has nothing like the global profile of Spotify, but China’s top streaming service is heading for the U.S. public markets according to a filing made this weekend by parent company Tencent, the $500 billion Chinese internet giant which plans to spin the music business out. At this point, specific financial details around the listing aren’t being released, but past reports have suggested that it could raise as much as $1 billion and give TME a valuation of $30 billion. That would be quite a jump from its most recent $12 billion valuation and certainly not guaranteed given that others from China, including Xiaomi, has fallen short of ambitious IPO valuation targets. But there’s precedent here since Tencent made a similar move last year when it broke off China Literature, its digital books business unit, and listed it in Hong Kong with some success. Hong Kong had also been mooted as a destination for TME, but the Tencent filing stated the firm’s intention to “spin-off by way of a separate listing… on a recognized stock exchange in the United States.” While it seems unlikely that Tencent will follow Spotify and adopt a direct listing — which ditches with the conventional process of an IPO price and engaging banks — it may well call on its rival for pointers since they are both mutual investors. The duo announced an equity swap deal in December that could see them team up on business in the future. At the time it was certainly a sign that both sides were getting into shape to go public, and TME’s IPO would wrap that up. https://techcrunch.com/2018/07/09/te...-plans-us-ipo/ ![]() Streaming Services Account for 75% of All Music Listening in 2018, Up from 50% in 2016 Prachi Bhardwaj Anyone who knows anything about today's music culture knows that streaming is the preferred form of music consumption. But on Friday, figures from Nielsen showed how far streaming come in the span of two to three years. The Mid-Year Music Report revealed that in the first half of 2018, Americans streamed 403 billion songs, via both video and audio services. That's almost 100 billion songs more than what they streamed in all of 2015, when streaming accounted for as much as half of US music revenue. Comparing apples to apples, as this chart from Statista does, streaming accounted for 25% more of the United States' total music consumption in the first half of 2018 than it did during the same period of time in 2016. In fact, streaming accounted for three times as much of American music consumption in the first half of 2018, as physical album sales, digital album sales, and digital track sales combined. https://www.newstimes.com/technology...c-13067681.php ![]() Billboard’s Charts Used To be Our Barometer for Music Success. Are they Meaningless in the Streaming Age? Travis M. Andrews Drake and Kanye West — two reigning kings of pop music — both flooded the American consciousness with music this summer in strikingly different manners. West released a series of seven-track albums, including one bearing his name and one collaboration with Kid Cudi. Drake, meanwhile, dumped the contents of his hard drive on streaming services as a 25-track behemoth titled “Scorpion.” Both approaches might seem ostentatious, but they also hinted that pop artists might be using some savvy trickery to manipulate the charts. If that’s the case, it worked. Despite lackluster reviews, Kanye’s “Ye” charted at the top of the Billboard 200 albums chart. He also set a record: Every single song debuted in the Top 40 of the Billboard 100. Perhaps that’s because it was only seven tracks, which encouraged listeners to spin (stream) it again and again. Perhaps that was Kanye’s plan. And, despite its own lackluster reviews, Drake’s “Scorpion” utterly decimated current streaming records. It broke the one-week U.S. streaming record for an album in a mere three days, eclipsing Post Malone’s “beerbongs & bentleys,” which earned the record less than two months prior. It debuted at the top of the Billboard 200, and garnered a record-breaking 745.9 million U.S. streams in its first week. It also became the first record to globally generate 1 billion streams in a single week. Perhaps that was inevitable, given the sheer amount of songs listeners had to work through. Perhaps that was Drake’s plan. These records aren’t surprising. Instead, they’re a function of the charts desperately trying to figure out how to rank music in the streaming age. Billboard added streaming songs as one of the metrics for its charts in 2012, leading the Recording Industry Association of America and Nielsen to follow suit. The criteria have changed several times in the interim — just last month, the company made changes to weight paid streams on services like Spotify over unpaid ones on jukebox-esque services like Pandora for the Billboard 100 singles chart. Meanwhile, for the Billboard 200, 1,500 streams of any songs on one record equals one listen to that record. As the charts struggled to come up with a streaming equivalent to an album purchase or a song download, the media has been awash with headlines touting the latest record-breaking chart numbers. Artists such as Adele, Beyoncé, Taylor Swift, Drake, Kanye, Lil Wayne and Post Malone are constantly breaking each others’ records, leaving bands such as Prince, the Rolling Stones and ABBA in digital obscurity. Beyoncé performs onstage at Coachella on April 14. (Kevin Winter/Getty Images for Coachella) All these headlines spark a few questions: If records are being broken every time the chart-bearers change the rules, then do they mean anything? Is it fair to compare Beyoncé and the Beatles? It was harder to purchase “The White Album” than to put a stream of “Lemonade” on repeat, after all. And if not, what happens to the way we conceive of the history of popular music? Meanwhile, are those shifting metrics altering the actual music we, the consumers, are receiving? Since their inception in 1958, the Billboard charts served a window to pop music history. Along with statistics collected by RIAA and Nielsen, they offer a road map of what tunes, musicians and genres Americans found interesting enough to consume en masse. But they’ve always been at least something of a mirage. “When the Beatles were around, there were horrible records of who sold what,” Donald S. Passman, author of “All You Need to Know About the Music Business,” told The Washington Post. “Nobody knew how many records were sold in retail, only how many were shipped to the store. So the charts were based on shipments.” Smelling opportunity, many record companies would simply send out a bunch of records. Even if they ended up getting half of them back, the albums would climb the charts. As Steve Knopper — who recently added a chapter on the streaming age to his book “Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age” — put it: “There was a lot of hanky-panky going on, with record labels lobbying the stores. In the old days in the record industry, there were a lot of interesting ways of goosing the charts.” That might still be the case. SoundScan, a technology for tracking music sales and airplay, appeared in 1991 like a sonic boom. Suddenly, the charts were being fed actual, reliable statistics. Things didn’t remain simple for long, though, since the introduction of the iPod meant the rise of digital downloads, which Billboard began tracking in 2003. Then came streaming, which Passman called “the most fundamental, radical change I’ve seen in the music business” in his decades working within it. Billboard has tried to stay in front of the game, constantly reconsidering how to react to new technologies. The company is always considering what a song download is worth, what the difference is between a stream and a radio play, etc. “What we do is we react to the marketplace around us. I think we were fairly nimble on downloading and even more so on streaming to make sure we’re reflecting where the music consumer is going,” Billboard’s senior vice president of charts and data development Silvio Pietroluongo told The Post. “Where that will end up, though, I don’t know.” He pointed out that streaming changed the actual manner in which we listen to music (once again). “When streaming started, the idea was people would pick the tracks they wanted to hear, but now they’re being fed songs like a jukebox,” Pietroluongo said, referring to curated playlists and Internet radio stations. And Billboard has to “look at whether these actions should be treated differently.” Because, much like those record stores, some artists appear to be gaming the system. “I think there’s kind of an emphasis of just constantly flooding the market with songs, rather than building up to a big album,” Knopper said. Kanye appeared to do this with his recent seven-track albums, as did Drake with “Scorpion.” And, speaking of Drake, he’s done it before, with 2016’s record-breaking “Views.” As Pitchfork’s senior editor, Jillian Mapes, wrote at the time: “There were many factors as to why “Views” ultimately broke single-week streaming records . . . By allowing individual song streams to count toward the album tally in Nielsen and RIAA data, there is an actual incentive for Drake to tack the nearly-year-old “Hotline Bling” onto his already saggy album because “Hotline Bling” is popular, and by virtue of that fact, it will continue to rack up streams.” It’s a knotty issue for Billboard, because streaming is more than a passing fad. It has ostensibly replaced both physical and digital album and single sales. In the first 15 years of the aughts, album sales fell from 785 million to 241 million, according to the Harvard Business Review. As a result, music journalists often find themselves excitedly comparing things that are inherently incomparable. Michael Jackson performs during the Super Bowl halftime show on Jan. 31, 1993 in Pasadena, Calif. (George Rose/Getty Images) “Can you say Kanye is as big an artist, being this successful in streaming, compared to Michael Jackson in the ’80s or the Beatles in the ’60s?” Knopper said. “That seems like apples and oranges. … It’s a completely different type of success and consumption.” Even if you could, would the comparisons matter? Do the charts even matter to most consumers? Maybe — but probably not. “They matter to record companies in terms of market share and clout,” Passman said. But “I don’t think consumers really read the charts anymore.” Cultural critic Chuck Klosterman agreed. “I don’t know if serious or even casual music people care that much about any musical statistic outside of what is currently the number one song in the country . . . I think a lot of people who are drawn to studying the charts are the kind of people who are drawn to statistics.” And the charts only focus on a frozen moment in time, not lasting cultural impact. Consider this: If someone asked you what was the most popular song in 1972, you’d probably hop on over to the Billboard charts and find that Gilbert O’Sullivan’s “Alone Again (Naturally)” and Roberta Flack’s “First Time I Ever Saw Your Face” dominated the year. That might be puzzling, since Don McLean released “American Pie” — a song that endures today — that same year. “If you’re looking at charts to understand music history, the best analogy is using statistics to understand sports history,” Klosterman said. “You’re looking at something that numerically seems simple but it’s completely impacted and changed by the era it comes from.” Plus, he added, like all statistics, “charts can be used in any way you want them to be.” “It does seem that as often as the charts are used to validate someone’s importance, they’re just as often used to show that temporary interest in any kind of art is ephemeral and kind of meaningless,” Klosterman said, pointing to Prince and Led Zeppelin as an example. One could easily point to Prince’s five No. 1 hits as proof of his pop dominance. Simultaneously, one could point to the fact that Led Zeppelin never had a No. 1 hit as proof that singles don’t matter, since they’ve become one of the most pervasive rock bands in American history. Maybe Kanye was inspired by the biblical number, and maybe Drake was ready to drop a Big Statement double-album. But it’s hard not to wonder what would have happened if Zeppelin had released “Physical Graffiti” in the streaming age. https://www.washingtonpost.com/news/...streaming-age/ ![]() Revolution at 3.5″: Inside Vaporwave’s Mini-Boom of Floppy Disk Releases Why the nostalgia-saturated labels subgenre is reviving the long abandoned format Christopher R. Weingarten Sterling Campbell had co-founded a cassette label and a VHS tape label in Ottawa, but needed a new creative outlet after moving back to Cornwall, Ontario, to be closer to his daughter. “I was like, ‘I need to start something up for myself here,'” he says. “‘What’s the most ridiculous thing I could do right now?'” The answer was Strudelsoft, the label that the 36-year-old bills as the first vaporwave imprint dedicated exclusively to releasing music on 3.5″ floppy disk. The misty, Internet-fueled subgenre has long thrived on nostalgic physical formats. Vaporwave’s sound, often produced by slowing down and/or reverb-drenching existing songs to walk the line between the sentimental and the sinister, is a perfect match for cassette tapes, those beloved relics of hissier times. Now a boomlet of patient and creative label owners are recovering an even more esoteric medium: the Eighties and Nineties artifact once used for Windows installations, AOL trials and sessions of Doom. “Floppies are cheaper than cassettes, they don’t have to be tediously dubbed, they look appealing, they’re available in a lot of colors and have cool designs that people like,” says Matthew Isom, 40, of San Diego plunderphonic vaporwave label Power Lunch, who notes that floppies also cost substantially less to ship overseas than cassettes. There are less convenient aspects to the format, of course, but floppy aficionados have found ways to work within its limits. “I discovered, after playing around, that you can actually release about 11 minutes and 38 seconds of 8-bit audio MP3 on a floppy disk,” says Campbell, who has released six floppies so far via Strudelsoft. “The first one that I did was this vaporwave artist called Cat System Corp and I had a run of like 20 floppy disks. And it fuckin’ sold out in 8 seconds.” Campbell sourced his first batch of disks on eBay. When that proved too expensive, he sent a call to the employees at the contract manufacturer where he works in IT. He followed that up with a post on Canadian classified site Kajiji, where he offered to pick up floppies from peoples’ homes. He wagers he currently has about 400 or 500 floppy disks in his basement. “You find some interesting stuff on them, like pictures of I Dream of Jeannie and Gilligan’s Island,” he says. “People’s family photos and stuff. I found, actually, a Trojan virus on one, which was called hotguy.exe. Good thing I didn’t click on it.” Vlad Maftei, 29, of Constanța, Romania label Sea of Clouds hit up his country’s online marketplace, Okazii. “Guys will have thousands of them in their house, and they’re giving them away for very cheap,” he says. “So I met with a bunch of shady dudes in alleyways and got a whole bag of them. … I think the biggest challenge for me definitely was some of the floppy disks were so old and written and rewritten so many times, by the time I got to them they weren’t really working anymore. And sometimes I had to try to write an album five or six times on five different floppy discs until I found one that finally worked.” Despite – or because of #– the obscure format, these labels’ floppy disk releases often sell out promptly. “I released it one evening, and woke up in the morning and it had sold out,” Power Lunch’s Isom says of Eggo Jams by Sponge Person, released in a few cassette editions and a run of 20 copies on “waffle-yellow floppy disk.” “People love that release. It’s a collaborative work between a few different vaporwave artists, so it’s sort of done anonymously, but it’s probably a bigger success than any one of those single artists have ever done.” “The thing about it is, people in the vaporwave scene love physical releases,” Campbell says. “You got guys in the Vaporwave Cassette Club on Facebook that post up these cassette tape collections that are worth thousands of dollars. It’s insane. And a lot of these people, I don’t even think a lot of ’em play the shit. They just kind of put it on their shelf.” The original explosion of musicians releasing floppies occurred during the mid-Nineties, when discs were sometimes packaged alongside CDs as a way of providing bonus content, like for tech-savvy plunderers Emergency Broadcast Network and Billy Idol’s industrial misstep Cyberpunk. Sony’s “Music Screeners” series featured 3.5″ disks with video clips and screensavers for artists like Cyndi Lauper, Michael Jackson and The The. By the aughts, however, floppies were mostly the domain of European electronic acts and subterranean experimental groups. The 2010s have seen occasional use of the format among big-name noise acts #– Eighties cassette pioneers like the New Blockaders, GX Jupitter-Larsen and Maurizio Bianchi have all released floppies within the last decade – and experimental labels like Hungaria’s Floppy Kick. Miami Vice’s Culture Island, released in 2012 in an edition of 25, is generally regarded as the first vaporwave floppy disk – “and apparently it’s just fuckin’ insane to get ahold of,” says Campbell. Even retro-minded jazz-funk group (and Kendrick Lamar collaborators) BadBadNotGood got in on the fun when their label Innovative Leisure wrote a 40kbps mp3 of non-album track “Up” onto 100 floppies before the release of their 2016 album IV. “We would mysteriously place them in different locations around the world, whether it was a coffee shop, boutique, record store, and then we would take a photo of the floppy, tag the location and some lucky fans received a nice surprise,” says Innovative Leisure co-founder Jamie Strong. “Now it sells for $40-$50 online. Maybe we should do another run?” Beyond the obvious nostalgia factor, the floppy is a natural fit for vaporwave, music that is often lo-fi even before it’s compressed down to fit into such a tiny space. “One floppy holds 1.44 megabytes of data. So, the most I’ve been able to fit on one was three songs,” says Sea of Clouds’ Maftei. “They were compressed to hell, but still very listenable. I listened to them from the floppy and I couldn’t complain. It sounds good enough.” But floppy heads say the utilitarian aspect is important, too. “It’s even cheaper to get into floppies than it is to get into cassettes,” says Isom. “Cassette players, they’re not really manufactured anymore, and the prices are going up on used ones. They’re getting scarcer, they don’t always work. It’s a little daunting. But a floppy drive? 10, 15 bucks and they’re ready to go. Pretty much anybody can afford to get into doing this.” The bottom line? “It takes up a lot of your time,” Campbell says of the process of collecting, ripping and mailing Strudelsoft’s catalog. “And sometimes I wonder if it’s worth it. But then of course it’s worth it, you know? ‘Cause I got a fuckin’ floppy disk label.” https://www.rollingstone.com/music/m...-trend-666085/ ![]() A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To Greg Satell In 2000, Reed Hastings, the founder of a fledgling company called Netflix, flew to Dallas to propose a partnership to Blockbuster CEO John Antioco and his team. The idea was that Netflix would run Blockbuster’s brand online and Antioco’s firm would promote Netflix in its stores. Hastings got laughed out of the room. We all know what happened next. Blockbuster went bankrupt in 2010 and Netflix is now a $28 billion dollar company, about ten times what Blockbuster was worth. Today, Hastings is widely hailed as a genius and Antioco is considered a fool. Yet that is far too facile an explanation. Antioco was, in fact, a very competent executive—many considered him a retail genius—with a long history of success. Yet for all his operational acumen, he failed to see that networks of unseen connections would bring about his downfall. Over the past 15 years, scientists have learned much about how these networks function and how his fate could have been avoided. A Social Epidemic When Hastings flew to Dallas and proposed his deal in 2000, Blockbuster sat atop the video rental industry. With thousands of retail locations, millions of customers, massive marketing budgets and efficient operations, it dominated the competition. So it’s not surprising that Antioco and his team balked at simply handing over the brand they had worked hard to build. Yet Blockbuster’s model had a weakness that wasn’t clear at the time. It earned an enormous amount of money by charging its customers late fees, which had become an important part of Blockbuster’s revenue model. The ugly truth—and the company’s achilles heel—was that the company’s profits were highly dependent on penalizing its patrons. At the same time, Netflix had certain advantages. By eschewing retail locations, it lowered costs and could afford to offer its customers far greater variety. Instead of charging to rent videos, it offered subscriptions, which made annoying late fees unnecessary. Customers could watch a video for as long as they wanted or return it and get a new one. Netflix proved to be a very disruptive innovation, because Blockbuster would have to alter its business model—and damage its profitability—in order to compete with the startup. Despite being a small, niche service at the time, it had the potential to upend Blockbuster’s well oiled machine. The Threshold Model While Netflix’s model clearly had some compelling aspects, it also had some obvious disadvantages. Without retail locations, it was hard for people to find it. Moreover, because its customers received their videos by mail, the service was somewhat slow and cumbersome. People couldn’t just pick up a movie for the night on their way home. Still, customers loved the service and told their friends. Some were reluctant at first, they actually liked being able to browse movies at the store and pick one up at a moments notice, but others jumped right in. And as more of their friends raved about Netflix, the laggards tried it too, fell in love with it and convinced people they knew to give it a shot. Network scientists call this the threshold model of collective behavior. For any given idea, there are going to be people with varying levels of resistance. As those who are more willing begin to adopt the new concept, the more resistant ones become more likely to join in. Under the right conditions, a viral cascade can ensue. The best way to understand thresholds is to look at the diffusion of ideas model formulated by Everett Rogers in the 1960’s. While ideas usually take hold in small niches of innovators, they can often spread to early adopters, who are only slightly more resistant to join in. Once they’re on board, those in the early majority begin to feel comfortable giving it a try. As each threshold is past, the next group becomes more likely to adopt the new idea. That’s how disruption happens. Unfortunately, this effect is devilishly hard to quantify. Duncan Watts, a pioneer in network theory, is quick to point out that social dynamics tend to be idiosyncratic and it’s not always clear exactly where thresholds exist. Still, you can use conventional marketing analysis to evaluate whether an idea is spreading to new groups or just growing within a niche. It is not clear whether Antioco’s team did such an analysis or not, but by 2004—six years before the company went bankrupt—he sensed that Netflix had become a significant threat and sought to change his firm’s policies. Yet how he went about doing that sealed his, and ultimately Blockbuster’s, fate. A Different Network Altogether Once John Antioco became convinced that Netflix, and to a lesser extent Redbox, was a threat, he used his authority as CEO—as well as the credibility he had earned by nearly doubling Blockbuster’s revenues during his tenure—to discontinue the late fees that annoyed customers and invest heavily into a digital platform to ensure the brand’s future. Antioco’s article in Harvard Business Review describes what happened next. While he convinced the board to back his plan, one of his lieutenants, Jim Keyes, led a rear guard action. He pointed out that the costs of Antioco’s changes — about $200 million to drop late fees and another $200 million to launch Blockbuster Online—were damaging profitability. Eventually, an activist investor, Carl Icahn, began to question Antioco’s leadership. Antioco lost the board’s confidence and was fired over a compensation dispute in 2005. Keyes was named CEO and immediately reversed Antioco’s changes in order to increase profitability. Blockbuster went bankrupt five years later. Icahn would later write: “Keyes felt the company couldn’t afford to keep losing so much money, so we pulled the plug. To this day I don’t know what would have happened if we’d avoided the big blowup over Antioco’s bonus and he’d continued growing Total Access. Things might have turned out differently.” So the inability to understand the networks that would determine his fate struck John Antioco twice. First, he failed to realize how quickly a niche idea could snowball into a viral cascade. Second, he failed to construct a network that could carry his ideas of change throughout his own organization. Strategy In A Networked World For all the excitement surrounding online social platforms such as Facebook and Twitter, we really haven’t scratched the surface on the networks we encounter in real life: The networks of consumers that make up our brands and industries as well as the organizational networks that determine how things get done—or don’t get done—in our enterprises. And it’s imperative that we start thinking about them more seriously. We need to stop acting as if there is a recipe for business—like a cake or a casserole—and start thinking in terms of how factors are connected. The structure of those unseen connections, their context and how they relate to our objectives increasingly makes the difference between success and failure. Unfortunately, there are no definitive answers. As Duncan Watts told me, “You have to test and learn as you’re going along, but if you understand how networks work and are willing to invest resources into researching the ones that affect your business, you can significantly improve decision making.” Watts points to recent research done at Facebook as an example how a well designed study can reveal much about how influence spreads through networks. He also notes that that digital trails left by emails and electronic calendars can be very useful for mapping organizational networks. Fortunately, we have far more tools today than Antioco did then. The irony is that Blockbuster failed because its leadership had built a well-oiled operational machine. It was a very tight network that could execute with extreme efficiency, but poorly suited to let in new information. Antioco’s fatal flaw wasn’t one of intelligence or capability, but a failure to understand the networks that would determine his fate. https://www.forbes.com/sites/gregsat.../#552a986c1d64 ![]() FIFA Investigating Saudi Arabia for Pirating World Cup Games The FIFA statement “Urges the authorities of Saudi Arabia and of the different countries where these illegal activities have been observed to support us in the fight against piracy” FIFA says it is preparing to take legal action in Saudi Arabia against pirate broadcasters illegally showing World Cup matches in the kingdom. In a statement, issued only four days before the end of the tournament, football’s governing body also called on Saudi Arabia and other countries to crack down on illegal broadcasts, AFP reported Wednesday. FIFA’s decision comes after it was urged by Qatar’s beIN Sports to take action after the broadcaster said its exclusive rights to show matches in the Middle East had been compromised by a pirate channel in Saudi Arabia, known as beoutQ. “FIFA has observed that the pirate entity named ‘beoutQ’ continues to illegally use the 2018 FIFA World Cup broadcast signal,” read the statement. “Accordingly, FIFA has engaged counsel to take legal action in Saudi Arabia and is working alongside other sports rights owners that have also been affected to protect its interest. FIFA urges the authorities of Saudi Arabia and of the different countries where these illegal activities have been observed to support us in the fight against piracy,” the statement added. Last month, Saudi Arabia claimed it had confiscated more than 12,000 pirating devices in the country. Doha-based beIN secured rights to broadcast all 64 World Cup matches from Russia across the Middle East and North Africa region to 24 countries. It said it had been unable to reach a deal with Saudi Arabia to show the matches. BeIN said since last October beoutQ - using a signal from Riyadh-based satellite provider Arabsat - has been illegally transmitting its broadcasts. These have appeared not only in Saudi Arabia but also Morocco, Jordan and countries further afield, according to beIN. The piracy issue has surfaced at a politically sensitive time in the Persian Gulf, with Qatar boycotted by its neighbors, including Saudi Arabia, in a highly fractious 13-month long diplomatic and economic dispute. BeIN had urged FIFA to move as it claims it is unable to secure legal representation in Saudi Arabia because of the boycott. The piracy row has placed FIFA in an increasingly awkward position. Qatar is the host of the 2022 World Cup and its national airline, Qatar Airways, is one of the tournament’s major sponsors. However, in recent months intrigue has surrounded the apparently warming relationship between FIFA’s president Gianni Infantino and the Saudi crown prince, Mohammed bin Salman. The pair were widely pictured together at the first game of the World Cup, which the Saudis lost 5-0 to host Russia. https://financialtribune.com/article...orld-cup-games ![]() The Steven Spielberg of Porn Sues to Make Floridians Stop Pirating his Raunchy Videos Adiel Kaplan Pornography, as many people know, is largely free across the internet. But porn that purports to be classy? Dozens of Floridians are learning the hard way that the people behind some of the most popular high-end porn companies want them to pay. Strike 3 Holdings, the high-end porn production company that owns the popular sites Blacked, Tushy, Vixen and Blacked Raw, has just sued 60 anonymous Floridians for illegally downloading dozens, sometimes hundreds, of high-def films like "Hot Wife," "Racks 2" and "Ms. Tushy," demanding thousands of dollars per film for copyright infringement. The lawsuits, filed at the beginning of the month, are part of a national push of 1,200 cases the company is bringing across the country. Strike 3 Holdings' websites are run by Greg Lansky, a French-born, Beverly Hills-based porn producer known for his self-professed efforts to change the perception of porn into more of an art form. Lansky's brands have drawn attention in recent years for their production values: paying actors more and filming in high definition with Hollywood-style budgets and sets. They have won numerous adult film awards, and in legal filings the company states that Lansky "has been dubbed the adult film industry's 'answer to Steven Spielberg.' " The three-year-old company has built an impressive empire, with one of the highest paid-subscriber volumes of any adult website and the top-selling adult DVDs in the United States. Each site has a Netflix-like subscription paywall — but that hasn't stopped them from being plagued with the same issue porn-for-pay has faced since the dawn of the internet age: stolen content. Strike 3 has aggressively pursued people who illegally post its videos online to free YouTube-like porn hosting platforms, contracting with a company called xTakeDowns.com to send as many as 50,000 take-down notices (the equivalent of an internet cease-and-desist letter) a day. The take-down site has handled more than 12.6 million cases for the company and estimates that piracy of Strike 3's content is 6 percent of all adult piracy, xTakeDowns.com co-founder David Robertson told Rolling Stone in an April profile on Lansky. In September, Strike 3 launched a new tactic to fight piracy — going after individuals who illegally watch and share its videos through BitTorrent, a popular file sharing service where people can anonymously share music and videos, among other file types, often uploaded in violation of the content's copyright. It has been around since 2001 and often been at the center of the internet copyright debate. Companies that bring massive amounts of litigation against BitTorrent downloaders have been called “copyright trolls,” an unfavorable term that stems from the “patent trolls” known for buying up patents and filing lawsuits based on them without ever creating a patent or product themselves. South Florida has a long history of these cases. When copyright troll lawsuits took off in 2010, growing from 4 percent of all copyright cases to a peak of 58 percent in 2015, the Prenda law firm, which had a South Beach office, led the charge. The two lawyers behind the firm brought thousands of BitTorrent-porn copyright cases against IP addresses, then threatened massive charges and to reveal defendants' identities unless they settled quickly. The lawyers went as far as flying to porn conventions and hiring actors to film their own porn to be posted to BitTorrent so they could turn around and file lawsuits against the people who had downloaded the files. Between 2011 and 2014, they collected some $6 million in settlements before the feds stepped in. Both have been indicted. “There is no consistent definition of a copyright troll," said Mitch Stoltz, a lawyer with the Electronic Frontier Foundation who tracks online copyright issues, but, he adds, “they seem to be using essentially the same litigation playbook as other groups that we’ve called copyright trolls." The in-house counsel of Strike 3’s Vixen brand is Emilie Kennedy. She was one of the lead lawyers on the litigation campaign of Malibu Media, another porn company (which EFF has called a copyright troll) that in 2016 was the leading filer of copyright infringement cases nationwide. Strike 3 and other porn companies that use these mass litigation tactics differ from patent trolls because they create their own content. "Our ultimate goal is to just simply get people to pay for our content the right way," said Lincoln Bandlow, a lawyer who is coordinating counsel on all 1,200 cases. Thank you to the incredible women that have made this AEE week a HUGE success! You are all amazing artists and I feel blessed to know you. @nikkibenz @vickichase @therealkendrasunderland @theangelawhite @realnicoleaniston @foxy_locksy @baconbootyy @lanarhoades @true_beauty365 @misstoriblack @leighravenx A post shared by Greg Lansky (@greglansky) on Jan 27, 2018 at 1:24pm PST A typical Lansky instagram post from January. “A lot of critics, and I think some judges, are concerned that they’re doing this for revenue reasons and not deterrent reasons,” said Jeffrey Antonelli, a Chicago lawyer who specializes in defending BitTorrent cases and has represented anonymous John Does in hundreds of cases against Strike 3 and other porn and film companies. But much like with its porn, Strike 3 is attempting to differentiate itself from its predecessors in the porn copyright lawsuit world. Bandlow says the company isn't interested in revealing John Doe names or making money from the lawsuits, just in reducing copyright infringement. Even the employment of Bandlow, who works for Fox Rothschild — a national law firm of 800 lawyers and 21 offices — adds more legitimacy than other companies pursuing these cases have had. Strike 3 also differs from its predecessors in that it is not sending defendants threatening settlement demand letters. But there is a debate over how accurate the IP address identification services are. A January article in the Iowa Law Review titled "Defense Against the Dark Arts of Copyright Trolling" estimated that as many as one third of the people being sued in these John Doe lawsuits are innocent. Strike 3, Malibu Media and some independent film studios all use the same German online investigation company to identify IP addresses, sometimes including testimony from the same investigator in court filings. “My concern, like any defense attorney, is whether the data is valid,” Antonelli said. Bandlow says the rate of mistakes is very low, and Strike 3 readily drops cases when mistakes are found. How IP address identification works is a black box, so there is no hard data to say how frequent misidentification actually is. The majority of defendants settle, innocent or not, usually for between $1,000 and $8,000, as penalties for copyright infringement can get as high as $150,000 per film and the courts have been unpredictable about how they apply the law. “It’s a bit of litigation Russian roulette,” Stoltz said. https://www.miamiherald.com/news/loc...214634930.html ![]() Researchers Find that Filters Don’t Prevent Porn John Biggs In a paper entitled Internet Filtering and Adolescent Exposure to Online Sexual Material, Oxford Internet Institute researchers Victoria Nash and Andrew Przybylski found that Internet filters rarely work to keep adolescents away from online porn. “It’s important to consider the efficacy of Internet filtering,” said Dr, Nash. “Internet filtering tools are expensive to develop and maintain, and can easily ‘underblock’ due to the constant development of new ways of sharing content. Additionally, there are concerns about human rights violations – filtering can lead to ‘overblocking’, where young people are not able to access legitimate health and relationship information.” This research follows the controversial news that the UK government was exploring a country-wide porn filter, a product that will most likely fail. The UK would join countries around the world who filter the public Internet for religious or political reasons. The bottom line? Filters are expensive and they don’t work. Given these substantial costs and limitations, it is noteworthy that there is little consistent evidence that filtering is effective at shielding young people from online sexual material. A pair of studies reporting on data collected in 2005, before the rise of smartphones and tablets, provides tentative evidence that Internet filtering might reduce the relative risk of young people countering sexual material. A more recent study, analyzing data collected a decade after these papers, provided strong evidence that caregivers’ use of Internet filtering technologies did not reduce children’s exposure to a range of aversive online experiences including, but not limited to, encountering sexual content that made them feel uncomfortable.21 Given studies on this topic are few in number and the findings are decidedly mixed, the evidence base supporting the widespread use of Internet filtering is currently weak. The researchers “found that Internet filtering tools are ineffective and in most cases [and] were an insignificant factor in whether young people had seen explicit sexual content.” The study’s most interesting finding was that between 17 and 77 households “would need to use Internet filtering tools in order to prevent a single young person from accessing sexual content” and even then a filter “showed no statistically or practically significant protective effects.” The study looked at 9,352 male and 9,357 female subjects from the EU and the UK and found that almost 50 percent of the subjects had some sort of Internet filter at home. Regardless of the filters installed, subjects still saw approximately the same amount of porn. “Many caregivers and policy makers consider Internet filters a useful technology for keeping young people safe online. Although this position might make intuitive sense, there is little empirical evidence that Internet filters provide an effective means to limit children’s and adolescents’ exposure to online sexual material. There are nontrivial economic, informational, and human rights costs associated with filtering that need to be balanced against any observed benefits,” wrote the researchers. “Given this, it is critical to know possible benefits can be balanced against their costs. Our studies were conducted to test this proposition, and our findings indicated that filtering does not play a practically significant protective role.” Given the popularity – and lucrative nature – of filtering software this news should encourage parents and caregivers to look more closely and how and why they are filtering their home Internet. Ultimately, they might find, supervision is more important than software. https://techcrunch.com/2018/07/13/re...-prevent-porn/ ![]() Apple Releases iOS 11.4.1 and Blocks Passcode Cracking Tools Used by Police Chris Welch Apple today released iOS 11.4.1, and while most of us are already looking ahead to all the new stuff coming in iOS 12, this small update contains an important new security feature: USB Restricted Mode. Apple has added protections against the USB devices being used by law enforcement and private companies that connect over Lightning to crack an iPhone’s passcode and evade Apple’s usual encryption safeguards. If you go to Settings and check under Face ID (or Touch ID) & Passcode, you’ll see a new toggle for USB Accessories. By default, the switch is off. This means that once your iPhone or iPad has been locked for over an hour straight, iOS will no longer allow USB accessories to connect to the device — shutting out cracking tools like GrayKey as a result. If you’ve got accessories that you want to continue working after your iPhone has been sitting locked for awhile, you can toggle the option on to remove the hour limit. Apple’s wording is a bit confusing. You should leave the toggle disabled if you want your iPhone to be most secure. Apple’s decision to implement USB Restricted Mode is a boost to user privacy, but might again put the company at odds with law enforcement and authorities who want to access information stored on recovered or confiscated iPhones. “We’re constantly strengthening the security protections in every Apple product to help customers defend against hackers, identity thieves, and intrusions into their personal data,” Apple said in a statement on the feature. “We have the greatest respect for law enforcement, and we don’t design our security improvements to frustrate their efforts to do their jobs.” The company famously faced off with the FBI in 2016 over an iPhone connected to the San Bernardino terrorist shootings. Apple refused to build custom software that would have allowed the agency to bypass security measures designed to protect the encrypted data on all iOS products, fearing that such a “backdoor” would quickly fall into malicious hands and make millions of consumers vulnerable. The FBI dropped its case against Apple in March 2017 after revealing that it had managed to access information on the phone through other means. If that exploit was over USB, Apple has now effectively shut down that avenue of breaking into an iPhone. Aside from the introduction of USB Restricted Mode, iOS 11.4.1 is largely a release of bug fixes for the Find My AirPods feature and syncing with Exchange accounts. https://www.theverge.com/2018/7/9/17...cracking-tools ![]() Apple’s iOS Passcode Cracking Defense Can be Bypassed Using a USB Accessory Plugging in certain Apple accessories will reset the one-hour counter for USB Restricted Mode Nick Statt Apple released iOS 11.4.1 this morning, and with it came a new software mechanism that blocks passcode cracking tools favored by law enforcement. Called USB Restricted Mode, the tool renders the iPhone unaccessible to third-party software of any kind after its screen has been locked for one hour. That way, malicious third parties or law enforcement agencies can’t break into the phone using passcode cracking tools like GrayKey. However, researchers at cybersecurity firm ElcomSoft have found a loophole that resets the one-hour counter so long as you plug a USB accessory into the iPhone’s Lightning port, regardless of whether the phone has ever connected to that accessory in the past. Here’s ElcomSoft’s Oleg Afonin explaining the situation: “We performed several tests, and can now confirm that USB Restricted Mode is maintained through reboots, and persists software restores via Recovery mode. In other words, we have found no obvious way to break USB Restricted Mode once it is already engaged. What we discovered is that iOS will reset the USB Restrictive Mode countdown timer even if one connects the iPhone to an untrusted USB accessory, one that has never been paired to the iPhone before (well, in fact the accessories do not require pairing at all). In other words, once the police officer seizes an iPhone, he or she would need to immediately connect that iPhone to a compatible USB accessory to prevent USB Restricted Mode lock after one hour. Importantly, this only helps if the iPhone has still not entered USB Restricted Mode.” Afonin says you can even use Apple’s own Lightning to USB 3 Camera adapter, which goes for $39 on the company’s online store. (Afonin notes that the $9 Lightning to 3.5mm adapter does not work, however.) ElcomSoft is apparently in the process of testing other adapters, including cheap third party ones, to see which reset the counter. This seems not so much a severe vulnerability as just a mistake on Apple’s part. Afonin says as much, calling it “probably nothing more than an oversight.” Yet it does mean that law enforcement, if they so choose and feel like going through the effort, can design systems to bypass this tool as it is implemented today and continue using cracking tools like GrayKey. “With the release of iOS 11.4.1, the procedure for properly seizing and transporting iPhone devices may be altered to include a compatible Lightning accessory. Prior to iOS 11.4.1, isolating the iPhone inside a Faraday bag and connecting it to a battery pack would be enough to safely transport it to the lab,” Afonin concludes. https://www.theverge.com/2018/7/9/17...-usb-accessory ![]() iPhone Crashing Bug Likely Caused by Code Added to Appease Chinese Gov’t Apple fixed the denial-of-service flaw in update released Monday. Dan Goodin The iOS 11.4.1 update Apple released Monday was most notable for making it harder for law enforcement to access locked iPhones. On Tuesday, security researcher Patrick Wardle illuminated another fix. He said his fix addressed code Apple added likely to appease the Chinese government; this is the code that caused crashes on certain iDevices when users typed the word Taiwan or received messages containing a Taiwanese flag emoji. “Though its impact was limited to a denial of service (NULL-pointer dereference), it made for an interesting case study of analyzing iOS code,” Wardle, a former hacker for the National Security Agency, wrote in a blog post. “And if Apple hadn’t tried to appease the Chinese government in the first place, there would be no bug!” Wardle, who is now a macOS and iOS security expert at Digital Security, said he was perplexed when a friend first reported her fully patched, non-jailbroken device crashed every time she typed Taiwan or received a message with a Taiwanese flag. He had no trouble reproducing the remotely triggerable bug, which crashed any iOS application that processed remote messages, including iMessage, Facebook Messenger, and WhatsApp. Wardle did, however, find that only devices with certain region-specific configurations were affected. The iPhone’s notorious closed nature made analyzing the bug challenging. It helped to isolating the memory locations that stored a dereferenced null pointer and a faulty instruction that caused it. Wardle also relied on the iPhone’s restore image to pull some of the code libraries. He eventually found that the crashes were being caused by code that classified messages based on emojis they contained. He also noticed that the error seemed to be triggered when iOS had country codes that included China or language settings including Chinese (his friend’s phone specified the region as the US and the language as English, followed by Chinese.) The discovery ultimately led to a simple fix. Wardle explained: After two+ years of being unable to type “Taiwan” or being remotely DOS’d anytime her phone received an Taiwanese flag emoji, the fix (kudos to my friend Josh S. for the idea!), was simply to toggle the region from US to China, then back to US. I’m not 100% sure why (or how this fixed it), but I’m guessing it either set the “Country” value to “US” so the boolean flag (at byte_1b1c9bb00) was set now to 0x1, meaning CFStringCompare()` was never called... or, that the calls to CFLocaleCopyCurrent()/CFLocaleGetValue() no longer returned NULL, meaning a valid string was passed to CFStringCompare(). Wardle traced the likely purpose of the buggy code to documented iOS behavior that hides the Taiwanese flag from the emoji menu or from being displayed on the screen when the region is set to China. Apple didn’t respond to an email seeking comment for this post. Wardle also privately reported the bug to Apple. The flaw was indexed as CVE-2018-4290 and patched in iOS 11.4.1. https://arstechnica.com/information-...-chinese-govt/ ![]() This App Reads Wikipedia to Teach You about the Cities You’re Driving Through Just in case you were curious Shoshana Wodinsky If you’re a fellow Wiki-addict who loves obscure local trivia, there’s now an app that’ll read it to you. Developed by Malte Ubl, the tech lead for Google’s AMP project, the app detects a user’s geolocation and matches it with relevant Wikipedia articles. The app then reads the articles out loud, kind of a smart passenger who happens to know everything about the history of the town you’re driving (or walking) through. For the curious, the program also allows users to click through to find other interesting tidbits from nearby locales. It’s set up to work in Google Chrome, Firefox, and other browsers that support GPS and speech synthesis. The app was built using Glitch, a website started by Anil Dash last year that allows coders to make bite-sized web apps. ✨NEW✨ After wanting to have this for years, I just built this little app that will read you Wikipedia articles about the places you drive through on a road trip https://t.co/ODDy7UKrgE — Malte Ubl, Immigrant (@cramforce) July 6, 2018 “I made [the app] for myself, because I frequently drive through places and was thinking it would be nice to learn more about my environment while I have nothing better to do sitting behind the steering wheel,” Ubl told The Verge. However, the system isn’t perfect — according to comments on the initial Twitter posts, some people in Vienna, Virginia were read articles about Vienna, Austria — and people in Cambridge, New York heard about Cambridge in the United Kingdom, most likely because these are the first articles that pop up when one looks up these city names on the site. As Ubl mentioned in the Twitter post, he’s welcoming patches to fix these (and any other) issues. https://www.theverge.com/2018/7/9/17...location-facts Until next week, - js. ![]() Current Week In Review ![]() Recent WiRs - July 7th, June 30th, June 23rd, June 16th Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved. "The First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." - Hugo Black
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