{"id":67,"date":"2005-06-28T04:33:46","date_gmt":"2005-06-28T11:33:46","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/index.php\/archives\/2005\/06\/28\/grokster\/"},"modified":"2005-06-28T04:33:46","modified_gmt":"2005-06-28T11:33:46","slug":"grokster","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2005\/06\/28\/grokster\/","title":{"rendered":"Grokster"},"content":{"rendered":"<p>What does Chris Rock say?\u00c2\u00a0 I LOVE black people, but I HATE niggers?\u00c2\u00a0 I LOVE people who try to make it easier and cheaper for people to acquire music through the establishment and utilization of new technologies, but I HATE pricks who don&#8217;t have an innovative bone in their bodies and just want to piggyback on the efforts of others to make money, not caring whether they&#8217;re selling music or wrenches.<\/p>\n<p>If you think the Grokster decision is a referendum on P2P, you just haven&#8217;t read it.\u00c2\u00a0 Rather, it&#8217;s a referendum on SCUMBAGS!<\/p>\n<p>That&#8217;s what Grokster and Streamcast are.\u00c2\u00a0 Shawn Fanning was eager to create a system for people to acquire music.\u00c2\u00a0 Grokster and Streamcast just wanted to sell advertising.\u00c2\u00a0 Don&#8217;t forget, Napster never sold advertising spots or spyware, the company was solely about music.\u00c2\u00a0 Oh, they wanted to hijack this music and charge people for its acquisition, but the court said no go, and the company went out of business.<\/p>\n<p>The problem with the major labels is they equated the illegal behavior with the technology.\u00c2\u00a0 The court in the Napster case did NOT say it was illegal to distribute songs via P2P networks, just that you couldn&#8217;t do it without a LICENSE!\u00c2\u00a0 So, armed with this ruling, you&#8217;d think the labels would establish LICENSED P2P.\u00c2\u00a0 But NO!!\u00c2\u00a0 They believed they&#8217;d stopped the future, and could confidently retreat into the past.\u00c2\u00a0 And if there WAS any further distribution of music online, it was going to be on THEIR terms.\u00c2\u00a0 You could either RENT IT, or&#8230;\u00c2\u00a0 Well, that&#8217;s ALL they wanted to do until Roger Ames met with Steve Jobs and bullied Universal into licensing the iTunes Music Store before suing file-traders.<\/p>\n<p>But it&#8217;s not about the iTunes Music Store, which now Universal and the other majors embrace with relish.\u00c2\u00a0 You see the iTMS doesn&#8217;t deliver what the public wants, it doesn&#8217;t REPLICATE Napster, it doesn&#8217;t deliver unlocked files for a cheaper price than CDs.\u00c2\u00a0 Rather, you purchase an inferior product to the CD, at a price sometimes in EXCESS of the disc.\u00c2\u00a0 So, not having solved the problem, not delivering what Napster demonstrated a DEMAND FOR, other people moved in to fill that void.<\/p>\n<p>When GM comes out with a hot new car, Ford imitates it.<\/p>\n<p>Better yet, when GM and Ford and Chrysler demonstrated demand for SUVs, what did the Japanese, caught flat-footed, do?\u00c2\u00a0 Did they SUE the Detroit manufacturers?\u00c2\u00a0 Look for LEGAL solutions?\u00c2\u00a0 No, they just built BETTER SUVs, and now both GM and Ford&#8217;s debt is junk and Toyota is eating up their market share.<\/p>\n<p>You see, it&#8217;s BUSINESS, not law, that matters.\u00c2\u00a0 If someone demonstrates a better way, and that method has no patent or copyright protection, you IMITATE IT!\u00c2\u00a0 Something the backward execs in the music industry refused to do.\u00c2\u00a0 Believing that the Morris Levy winning through intimidation\/it&#8217;s my ball, you play my game world still existed.\u00c2\u00a0 But it doesn&#8217;t.<\/p>\n<p>Maybe if the major labels had sued code, the 0&#8217;s and 1&#8217;s that make up software programs, they MIGHT have had a chance at eviscerating their perceived problem.\u00c2\u00a0 If they sued the Internet into submission, got it so TECHNICALLY people couldn&#8217;t trade files.\u00c2\u00a0 But these bozos just sued the scumbags who spread the software, not the software itself, which is now in the hands of millions of users.\u00c2\u00a0 It&#8217;s a pyrrhic victory.\u00c2\u00a0 Grokster and Streamcast die, P2P lives.<\/p>\n<p>Justice Souter&#8217;s got no problem with P2P, he says so.\u00c2\u00a0 He&#8217;s got no problem with the Sony Betamax decision.\u00c2\u00a0 He&#8217;s just got a problem with CROOKS!\u00c2\u00a0 People who try to bend the law to make their behavior appear legal solely so they can reap financial reward.<\/p>\n<p>Read the case.\u00c2\u00a0 The behavior of these two companies is so heinous as to defy defense.\u00c2\u00a0 They were not teenager hackers creating cool software, rather they trolled the old Napster in its dying days, telling its users to come to THEIR house to trade copyrighted material next.<\/p>\n<p>And that&#8217;s what the case turns on.\u00c2\u00a0 If you build your business on inducing infringement in this heinous way, you&#8217;re fucked.<\/p>\n<p>So, where does the behavioral line lie?<\/p>\n<p>Expect the labels to litigate that for five to ten more years.\u00c2\u00a0 But, reading the Supreme Court decision, know that they have an uphill battle.\u00c2\u00a0 It would be HARD to find offenders as egregious as Grokster and Streamcast.\u00c2\u00a0 What about the hacker who creates something in his bedroom for FUN?\u00c2\u00a0 Or Bram Cohen, who wrote BitTorrent, who came RIGHT OUT and said it was illegal to trade copyrighted material with his software, who did NO inducing.\u00c2\u00a0 By the standard of today&#8217;s decision, it looks pretty good for Bram.\u00c2\u00a0 For his behavior was COMPLETELY DIFFERENT from Grokster and Streamcast.<\/p>\n<p>We live in a land of laws.\u00c2\u00a0 The only goal of the Supreme Court is to interpret those laws.\u00c2\u00a0 They don&#8217;t make the laws up, they just apply the facts to the Constitution and the statutes that exist.\u00c2\u00a0 Furthermore, the Supreme Court chooses to hear very few cases.\u00c2\u00a0 To the point where many legal questions go undecided.\u00c2\u00a0 In other words, if you&#8217;re depending on the law to protect your business model, you&#8217;re in trouble.\u00c2\u00a0 Technology moves just too fast.<\/p>\n<p>Today&#8217;s decision is not about the content companies winning, or the P2P companies losing.\u00c2\u00a0 That&#8217;s not how the Supreme Court works, that&#8217;s not what&#8217;s at stake here.\u00c2\u00a0 Rather, the question was, were these TWO companies possibly liable for copyright infringement.\u00c2\u00a0 The Court said it was possible, there should be a hearing on the facts.\u00c2\u00a0 The Court DID NOT say the labels are entitled to maintain their business model, that P2P must die.\u00c2\u00a0 To believe EITHER of these things is true is to misunderstand the ruling.<\/p>\n<p>Then again, most people blowing the hardest are not attorneys.\u00c2\u00a0 Certainly not attorneys without a vested interest.<\/p>\n<p>All that was established today was that decentralized P2P CAN be liable.\u00c2\u00a0 Not that ALL decentralized P2P is liable.\u00c2\u00a0 And, it&#8217;s not liable because it IS P2P, but because the owners of the company acted in a heinous way.<\/p>\n<p>Make no mistake, the labels wasted a ton of money here.\u00c2\u00a0 This is not a vast improvement on the decision they got in Napster.\u00c2\u00a0 But it&#8217;s four years later.\u00c2\u00a0 And now, HUNDREDS OF MILLIONS of people have P2P software on their desktops, and it&#8217;s been proven that suing THEM has no impact on the number of people trading files, actually it&#8217;s INCREASING!\u00c2\u00a0 So, we already know the people are liable, but they&#8217;re sill doing it.\u00c2\u00a0 Put the distributors of the software out of business, but their applications are, like roaches, impossible to eradicate.\u00c2\u00a0 In other words, the labels have won the battle but lost the war.\u00c2\u00a0 Today&#8217;s victory was a sideshow.\u00c2\u00a0 No more likely to cause Wall Street to embrace Warner stock than Edgar Bronfman, Jr.&#8217;s lame proclamations that the iTunes Music Store and the new Napster would herald new profitability for the industry.<\/p>\n<p>It&#8217;s simple.\u00c2\u00a0 In order to emerge victorious, you&#8217;ve got to know your enemy.\u00c2\u00a0 File-trading as presently practiced is mass copyright infringement.\u00c2\u00a0 But, it&#8217;s the most exciting way to discover and acquire new music.\u00c2\u00a0 Anybody who uses the software knows this.\u00c2\u00a0 But, the people suing do not.\u00c2\u00a0 They live in a world where &quot;computer&quot; is a dirty word.<\/p>\n<p>The lesson of Grokster is NEXT TIME there&#8217;s a technological breakthrough, don&#8217;t try to sue it into submission, rather, MONETIZE IT!\u00c2\u00a0 But, throughout history old, decaying empires fight to hold on to what they possess rather than enter a scary, unclear future.\u00c2\u00a0 We&#8217;ve seen this movie again and again, the old die, and the new take over.\u00c2\u00a0 Why the music business thinks it&#8217;s any different is beyond comprehension.<\/p>\n<p><\/p>","protected":false},"excerpt":{"rendered":"<p>What does Chris Rock say?\u00c2\u00a0 I LOVE black people, but I HATE niggers?\u00c2\u00a0 I LOVE people who try to make it easier and cheaper for people to acquire music through the establishment and utilization of new technologies, but I HATE pricks who don&#8217;t have an innovative bone in their bodies and just want to piggyback 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