The DMCA (at Cornell’s Legal Information Institute)

The digital millennium copyright act (DMCA), copyright law’s online presence, attempts to grasp several areas in its provisions including: (1) “transitory” digital communication, (2) system caching of others’ work, and (3) systems serving as repositories of other’s content. Although the DMCA applies equally to most parties, it has become the main weapon of the RIAA, MPAA and copyright-holding media conglomerates in their fight against online infringement.

Section 512(c) of the DMCA is one of the most hotly contested: the “Safe Harbor” provision. This part of the DMCA exempts ISPs and other content-hosting services from copyright infringement liability — if they agree to behave in particular ways. These behaviors include:

(1) Upon notice, “act[ing] expeditiously to remove, or disable access to, the material;”

(2) “Upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.”

While choosing to not comply with these behaviors does not automatically make these content-hosts “guilty” of copyright infringement, it is very desirable since most groups would choose to avoid any litigation. In this way, some copyright holders have pressured large hosting sites to take down “potentially infringing” material without having to actually bring a suit. These are usually called “DMCA takedown notices”.

But what does this have to do with power laws?

Section 512(c) of the DMCA (”Safe Harbor”) is the battleground over the long-tail copyright-infringers. The task of managing DMCA-compliance for the millions of users in the long-tail is infeasible — it would be much easier to pay attention to the “short head”, the content hosting sites, and use their exponentially greater size to enforce the DMCA.

http://www.washingtonpost.com/wp-dyn/content/article/2007/03/28/AR2007032802057.html

In the above “Letter to the Editor”, Google responds to Viacom’s general counsel accusation that YouTube should not receive Safe Harbor protection for various reasons including profit generation and active policing of some content. The Viacom general counsel admits the burden that pursuing each individual would place on copyright holders — and thinks that this is not right. Google responds by pointing out that the shifting the burden to hosting services would completely change the face of the DMCA, and that this is an issue for Congress.

Both are somewhat right.

As discussed in class, normal law distributions do not capture certain phenomena correctly. Online infringement should be modeled as a power law / long-tail activity, if just for the sheer number of minimally participating internet users (who may just download copyrighted content) and the recognition of a much smaller number of extremely large hosting sites like YouTube, Flickr, MySpace, etc. Viewing infringement as a power law activity suggests that viewing the average site/user as a moderate infringer is incorrect.

Pursuing Takedowns is a Burden on the owners.

Viacom is right. That seems to be the reason they’re so eager to shift the burden to the short head — where they can leverage the short head’s exponentially greater size to effect takedowns. However, takedowns are not fixing the problem, it is a remedy and it ignores the fact that, for the most part, these sites are not producing the content themselves — the long tail is. Kicking a seedy dandelion.

The Short Head would not be any less-burdened — and that’s not the law.

Google is also right. These copyright-holders seem to be asking for special changes to the way the DMCA works and a shift toward closely policed online media. While the Internet allows a leveraging of power law participatory communities, there is no inherent reason that the few largest parties should be culpable for the actions of others. And what about innovation? As we know, information cascades are an important part of online social and business interaction, and they can be extremely fragile. Network externalities and direct-payoff effects drive P2P, social networking sites, online advertising and many other lucrative businesses. Burdening these hubs, the platforms (the short head) with network effects, could have a very negative effect beyond the scope of copyright infringement.

Many other posts on this blog have introduced important examples of online information cascades and network effects. The DMCA seems to be a legal battleground for understanding how power law distributions should be treated.

In a recent New York Times editorial “The Rich Are More Oblivious than You and Me,” Richard Conniff examines how the rich and famous lose touch with the world and questions if this loss is due to their powerful position in a (social or money) network. He cites a study led by Stanford Professor Dacher Keltner that examines if group leaders tend to over compensate themselves for their performance. In the study, groups of three were assigned a survey to complete while one person was chosen to be the manager of the group.

At the end of the study, five cookies were left on the table and more often than not, the leader grabbed the last cookie. The leader was also “more likely to eat it with his mouth open, spew crumbs on partners and get cookie detritus on his face and on the table,” as Conniff writes. The results of the study suggest that “getting power causes people to focus so keenly on the potential rewards, like money, sex, public acclaim or an extra chocolate-chip cookie… they become oblivious to the people around them.”

While in class we talked about many of the upsides of being in a powerful position in a social network, we did not talk about downsides. Perhaps being “above” everyone else in the network or realizing ones own power makes the most powerful abuse their power. It is interesting that social status could increase personal, and somewhat intangible, negative traits.

Links:

“The Rich Are More Oblivious than You and Me” by Richard Conniff

http://www.nytimes.com/2007/04/04/opinion/04conniff.html?

_r=1&adxnnl=1&oref=slogin&adxnnlx=1175815554-

IuPVpuN3GpR8EAALzCnRmQ

Dacher Keltner Ph.D., Stanford University Professor

http://psychology.berkeley.edu/faculty/profiles/dkeltner.html

http://www.mercurynews.com/breakingnews/ci_5580010?nclick_check=1

It was recently announced that Google signed a television ad sales partnership with Echostar, a satellite-TV company. With their most successful invention of Generalized Second-Price Auctions in web-based advertising, they are looking to use their online selling techniques for selling TV ads.

         There are some capabilities that Google plans to implement into TV advertising. One of which is to display of the clickthrough rate, or the number of people who watched a commercial. Googld will also allow personalized preferences about the audience of the advertisement, the geographic area, or the time in which the ad would be displayed on TV.

        Second-Price Auctions proved very useful for web-based advertising, but could they make the same impact on TV-based advertising? The one big difference between the two is that TV-based advertising is about selling time slots, so the timing in which the auction begins and ends is even more important. This auction method will certainly optimize the seller’s payoffs while giving the consumers the opportunity to compete with each other to gain the ideal slot. Certain slots should be valued at a starting price, because time slots such as the Super Bowl commercials are already highly valued, while other slots do not deserve a starting price. Nevertheless, many people (Google stockholders) are confident that Google’s new implementation onto TV advertising will create huge revenue and success for the company.

http://www.businessweek.com/investor/content/feb2003/pi20030228_4861_pi044.htm

This article describes how certain companies were able to survive in a weak economy because of network effects. Due to network effects, companies with more users using their products are in a very strong position. This is because new users will tend to follow the leader in the industry. Also, current users will continue to use a market-leading product because switching to a different product would be difficult and expensive. The article calls this “customer lock-in.”

Several examples of companies benefiting from customer lock-in are given. Microsoft with Windows and Sony with the Playstation 2 are examples. Also eBay benefits from network effects and lock-in. As the number of buyers increases, a seller will get more bids and thus a higher price for an item. As the number of sellers increases, a buyer has a greater selection of items to choose from. eBay benefits from an increase in the number of users because it gets paid for each transaction that occurs. So, the article concludes that as more people use eBay, these buyers and sellers “become increasingly locked in.”

Power Law Distributions in Real and Virtual Worlds

The above link is an article that compares the pattern of size of global domains to the geographical distribution of the global population. One of the interesting points made in this article is that web pages are often closely linked to the economic and technological growth of countries. This is not surprising since more technologically advanced nations will inevitably spawn a greater amount of internet content.

Recently, it has been predicted that, despite its apparent arbitrariness, the sizes of Web sites and hyperlinks between them follow known distributions of growth phenomena such as those observed for cities and regions

Thus, the assumption here is that as certain regions become more developed and known to the outside world, they begin to show a greater presence on the internet. In other words, countries that acquire more power in the information world, also gain greater representation in the virtual one. Rank-size was used to determine the size of the web pages and it turned out that most of them followed power law distributions. As the results demonstrated, many of these web pages were fairly accurate estimates of the real world.

In general, as Web sites clearly form an integral part of social and economic development, their sizes and contents are likely to reflect the distribution of population and the urban geography of the real world

Thus, the information gained from their distribution can be used to construct an estimate of various aspects of a country. For example, many websites that have endings specific to their countries can be used to predict a large number of factors, such as GDP, income, population, and many other economic factors. However, for huge international domain names (very often ones ending in .com) this information can be slightly misleading because it might represent global company’s that outgrew any specific country and can be viewed almost as separate entities. This type of data should be taken into account, but it does not have a significant effect on the overall outcome.

The authors raise some interesting questions regarding the spread of content on the internet and how it can be used to map out the real world.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1463&CFID=8025570&CFTOKEN=89891895&jsessionid=a83076c1efdf21a1a202

The above article addresses the issue of how long social networking sites will stay popular. The issue is important because just like any other fashion or fad, they can come and go at unpredictable rates for not so obvious reasons. The article mentions Friendster and how it accrued to 20 million users in a relatively short amount of time, but quickly fell below 1 million when MySpace and Xanga started becoming popular. In this case, it appears that increased functionality was the cause of the mass migration; the technology to stream music and video became available and more viable as internet connection speeds increased, and users flocked to sites that had music and video capability, leaving sites like Friendster for other ones.

But now video and music sharing is rather ubiquitous. Virtually all networking sites have incorporated multimedia to attract and retain its users. It is now the era of “Web 2.0” and all social networking sites are jumping onto the bandwagon; Is increased functionality sufficient for a networking site to retain all its users for a long period of time? What other strategies are there to maintain long-term popularity?

Security and privacy concerns that have unexpectedly resulted from the popularity of social networking sites have spawned some ideas. As written in the above article:

One way to retain a site’s aura is to limit membership. For example, Bell notes that when Diesel jeans faced the problem of losing marketing cachet by becoming too popular, the brand cut back on the number of outlets it would sell to. Facebook tries to limit itself to college students. Social networks seem to operate best when they strike a balance between heterogeneity, which provides large numbers of members, and selectivity, which keeps the hordes focused and engaged in the site, he says, adding that social networking sites also must keep pace with technology and provide new features — for example, fast downloads. “To create stickiness you must have functional value and also community value. If either of those becomes diluted, you give people a reason to start looking elsewhere.”

One reason why limits and restrictions on social networking sites are “sticky” is because people feel creeped out when they realize how stalkable they are when anyone anywhere can read up on them. An example is mentioned in this article from Business Week:

Andrew Anker knew he had too many “friends” when business associates, looking to curry favor with his blogging company, began striking up conversations about his “cute” young daughter and his recent family outings. “It was a classic salesperson technique,” says Anker, “another way to create this creepy familiarity.”

So Anker, the general manager of consumer products at Six Apart, moved his blog to his California company’s latest product, Vox. It’s a social networking and blogging site with strict privacy controls, so users can limit who sees particular posts. Vox users can make some content available to the general public. Other posts and photos can only be seen by users designated as true friends, family members, or people in the user’s extended neighborhood (which includes friends of friends).

Since launching to the general public on Oct. 26, Vox has nearly tripled in size, says Anker. Its success indicates a trend among newer social networking sites, which are gaining traction not by focusing on the mass-popularity model that made News Corp.’s (NWS) MySpace famous, but by helping users connect with smaller, more specific, groups.

Basically, people feel more comfortable around others that they know and are familiar with, in real life and on the web. In some sense, a weblog “community” is more appealing than a weblog where everyone can see everyone else’s profile and pictures. As sites become more and more popular and have more and more members, users start to feel a little uneasy about the number of people they are exposing themselves to. Naturally, according to Debra Aho Williamson, also mentioned in the business week article, when something gets too big, people want to leave for a “smaller, more personable experience.” The article also cites examples of networking sites targeted more towards smaller but specific groups, such as Fuzzster for pet fanatics, Yub.com for shopaholics, and Mog for music lovers and artists.

The whole notion of maintaining popularity through limited membership seems a little counterintuitive at first. Just as in information cascades the cascade could go on for a very long time (in the absence of specialized “private” information that can break the cascade), we would expect that things that are popular will continue to become more popular, and those that are unpopular will become increasingly unpopular. Interestingly enough, this may not be the case for social networking sites when they reach a certain size, and the site may be better off in terms of long-term popularity if it starts implementing restrictions and/or begins to target a more specific audience (e.g. Facebook was cooler when high schoolers couldn’t join).

www2.wiwi.hu-berlin.de/institute/wt1/papers/2002/cascades.pdf

The ultimate goal of a majority of college students, myself included, is to eventually land the perfect job. There are a number of ways to achieve such a goal and there are several factors that come into play. These factors include, but are not limited to: whom you know, what you know, and information cascades. Yes, that’s right, the same theories about herding and blindly following the guy before you that have been discussed in our Info 204 classroom setting do in fact have an effect on your job application process. In their paper, “Information cascades on the labor market,” Dorothea Kübler and Georg Weizsäcker discuss their findings about the effects of information cascades on potential job applicants.

You would be surprised how much your past experience will effect your ability to land a subsequent job. While you are sitting in that uncomfortable chair, sweating it out as your interviewer looks over your application, he or she, after skimming over your academic accomplishments, moves right down to the work experience section. While a consistent job record in the past signifies that prior employers received favorable signals about your abilities, periods of unemployment are attributed to the fact that previous potential employers chose not to hire you. “Thus, an applicant who receives good offers in the beginning of her career can become a “star” whereas a bad start without good job offers can make subsequent employers unwilling to hire a worker. In this sense, information cascades may dominate a worker’s career.”

In an interview, you give a potential employer a signal, either positive or negative. Furthermore, an employer, based on your resume, can see if previous employers chose to accept or reject you as an applicant. In this way, the information cascades discussed in this paper are exactly the same as those discussed in class; the only difference is that in the real world, several other factors come into play. This paper, through a payoff analysis, also discusses the optimal choices of an employer and an applicant. Some of the findings discuss how re-employment probability depends negatively on the duration of unemployment. However, “the main new feature of this paper is the introduction of endogenous signal qualities, leading to an asymmetry in the occurrence of successful and unsuccessful employment histories.”

In conclusion, after several pages of mathematical proofs and payoff matrixes, it was shown that after receiving two positive feedbacks from past employers, the third is much more likely to hire you without solely relying on your interview signal . That is not to say that an interview won’t ruin things, but past experience weighs much more heavily in your favor of finding a job. Though these findings seem pretty commonsensical, only after learning about information cascades did I truly appreciate the worldly effects and applications of such theories. The mathematical proofs and conclusions found in this paper reinforce what my parents always said, which was to “get ahead in the beginning” and “let your hard work payoff as life goes on.”

In most American major leagues, the All-Star game is a long-standing tradition, where the league can showcase the best talent from all of its teams, in the form of a generally meaningless competition. In my favourite league, the NHL, there have been, as of this season, fifty-five All-Star Games, usually pitting players from the NHL’s two conferences against each other. While an enjoyable event, the All-Star Games have been derided as unnecessary, uninteresting (note that little physical play occurs at these friendly matches), and detrimental to the flow of the season. The NHL, wishing to reach out to its fans in order to increase support of the game, changed the way all-stars were to be selected. Fans were invited to fill out a form on the NHL’s website listing who they would like to be in the game’s starting lineups. Most importantly, the system allowed fans to vote as many times as they liked.

Noticing the ease at which one person could pile on votes, a campaign was started by members of popular hockey-related forum HFBoards.com to have Rory Fitzpatrick, an unspectacular defenceman currently playing for the Vancouver Canucks, be named as an All-Star Game starter. Fitzpatrick had not stood out to any appreciable degree, and the nomination was meant more of a joke than anything. However, the idea gained steam, and soon was noticed outside of the forum.

With local, and eventually national, news picking up the story, Fitzpatrick’s vote tally rose very quickly. The campaign gained the attention of prominent hockey personalities, such as Wayne Gretzky and Don Cherry, and most influential voices were quick to weigh in with what they felt. As for Fitzpatrick himself, he was flattered, and shied away from the attention. His teammates, however, humorously decided to join in on the voting.

In the end, he finished in third place, one place shy of a guaranteed starter’s position, and was not invited to the game. However, the campaign had made its mark, receiving the attention of hockey fans and journalists throughout the continent. I feel that this is a prime example of the way network effects can incite the general population to do strange and humorous things that they would have most likely done differently, or not at all, if few others were doing it. While writing in joke names at the ballot box has been going on since the invention of the ballot box, very rarely has it made as pronounced an effect as it did here. And while automated tools for voting very quickly in short time spans, taking advantage of the NHL’s shoddy security, were made available, the number of people required to have Fitzpatrick finish in third was still quite staggering. Had the campaign been confined to the forum, with few people outside receiving any information about it, this whole brouhaha would have never occurred.

As I looked for an article related to network effects, information cascade, and related topics, I searched for articles related to collective behavior, and found this interesting article by B. E. Aguirre, E.L. Quarantelli, and Jorge L. Mendoza. The link is located below:

http://www.udel.edu/DRC/Aguirre/publications/ag32.pdf

The article is entitled, “The Collective Behavior of Fads: The Characteristics, Effects, and Career of Streaking.” It is a little old, first published in 1988, but I still found it very interesting and very applicable to the things that we are discussing in class.

The paper looks into the fad of streaking as if occurred on college campuses across the United States in the spring of 1974. The authors took data that had been collected in 1977 from 1,076 colleges and universities regarding incidents of streaking in the spring of 1974, then they looked at literature that discussed the characteristics, effects, and career of fads, and tried to see how the data matched the literature.

The authors looked at five different factors that they felt would affect the adoption of streaking at a particular school,(1) prestige of nearby schools at which streaking had occurred, (2) sanctions that had been brought against streakers, (3) mass media attention given to streaking, (4) complexity and heterogeneity, e.g. how many students participated, were there both males and female participants, etc., (5) and school heterogeneity. They then hypothesized that (1)the greater the prestige of nearby schools with streaking, the greater the chance a students at a particular school would adopt streaking, (2) the harsher the sanctions brought against streakers, the less inclined students would be to streak, (3) the greater the mass media attention to streaking, the more inclined students would be to adopt it, (4) the more complex and heterogeneous the streaking events were, the more inclined other schools would be to follow, and (5) the more heterogeneous the school, the more inclined it would be to adopt streaking.

The authors found that all of their hypotheses held true, except for the 2nd one. They found the opposite, the harsher the punishments, the more students were inclined to participate in streaking.

The authors concluded that their results supported the idea that fads are a type of “diffuse collectivity”, made up of both “diffuse and compact” groups, which I interpreted to mean they existed in a “small-world” social network. They conclude that fads cannot be dismissed as “aberrant, inconsequential, and irrational” since they are collective behavior, and their study can provide insight into all form of social movements.

The study of fads ties in very interestingly into our current study of network effects and information cascade. Fads are also discussed in length in “The Tipping Point”, and Malcolm Gladwell writes qualitatively about some of the factors that affect fads. This paper presented a much more quantitative model.

A personal anecdote as I search for a viable voIP service to call from my computer to my grandparents’ landline in Florida… and encounter network effect marketing along the way!

Skype is a rather popular program that offers free text chat, free calls to other Skype users, as well as a number of paid services such as SkypeOut and SkypeIn. Skype ran a promotion last year offering its SkypeOut service for free. I happily used Skype to call my grandparents during this free trial period, but once it was up, I searched for an alternative. After becoming frustrating with the quality of other free voIP services such as iCall, I decided to search for other alternatives. During my search, I stumbled upon a potentially promising service, the Gizmo Project.

Rather than market its service via a free trial like Skype, voIP provider Gizmo Project flaunts “FREE calls” on its website. But, there is a catch. In order to be eligible to make a free call to a landline or cellphone you must:

1. Download Gizmo
2. Signup for a free account and add all your phone numbers to your profile
3. Get each friend you want to call (for free) to do the same

Only then, can you make a free call to that person and even then, that’s not the fine print:

The All Calls Free calling plan applies when both call participants are active Gizmo Project users making a few phone calls per week with Gizmo Project. Free calls may originate from anywhere in the world, but must be to a qualifying number in one of the 60 countries for which the plan is offered. Calls must be made from the caller’s contact list to either the “home phone” or “mobile phone” number the call recipient included in his or her profile, and both parties must have shared each others profiles with one another.

Well, my grandparents aren’t going to do all this, so Gizmo was a no-go for my needs. It seems, however, that Gizmo is looking to capitalize on network effects in promoting its product. If I wanted to call other people, I’d have to recruit them as active users of Gizmo, thus the service grows. As more and more people sign-up, the more useful it becomes [a user’s payoff is directly proportional to the number of other users]. However, while Gizmo might take off in the future, I don’t see anyway they will reach a critical mass of users [a tipping point] with their current strategy. I don’t know anyone who uses Gizmo at this point, so there isn’t much incentive [zero payoff] for me to install another communication client on my computer (I already use AIM via GAIM, Google Talk, and the aforementioned Skype. Perhaps Gizmo might offer a free trial period like Skype did in order to attract a base of users and then go from there…

Conclusions

For two companies that make money through their premium services, profit is all about attracting a large user base to increase the probability that one of them will use a premium service if the need arises. So which company’s strategy is more effective? Well if Google Fight is any indicator, Skype is dominant: skype: 252,000,000 results; gizmo project: 1,370,000 results. Oh, and by the way, the free trial of Skype got me hooked on the great quality of the service and I recently gave in and purchased the SkypeOut Unlimited plan.