Why I don’t like the EFF

The EFF (Electronic Frontier Foundation) does some decent stuff, and does some work to help protect freedom of speech on the internet. But, once you know that pro-piracy crusaders like Cory Doctorow and Lawrence Lessig are associated with their organization, then it should raise some red flags. Doctorow, for example, has sold “I pirate music” t-shirts on his website, and promoted books teaching people how to pirate and not get caught. Looking at EFF’s stance on issues, it becomes clear that they are (as an organization) taken a pro-piracy stance on things. This is the reason I could never actually support their work. It would be great to see a more moderate version of the EFF, one that doesn’t take a pro-freeloader / anti-creator stance.

Recently, the EFF began promoting “Real Net Neutrality”. Here’s what they say:

“Tell the FCC: Don’t let Hollywood hijack the Internet”

Already with the title, the EFF is drumming up fear-tactics with words like “hijack the Internet”. What does that mean? It sounds scary. I can imagine all kinds of terrible things. What it actually means in this context is “Content creators are unhappy with rampant piracy on the internet. Current legislation would permit ISPs to not-deliver internet packets when they contain copyright-infringing material”. That’s a whole lot less scary, but the EFF clearly wants to use a scary phrase.

Last fall, the Federal Communications Commission proposed rules for “Net Neutrality” — a set of regulations intended to help innovation and free speech continue to thrive on the Internet.

But is the FCC’s version of Net Neutrality the real deal? Or is it a fake?

Buried in the FCC’s rules is a deeply problematic loophole. Open Internet principles, the FCC writes, “do not… apply to activities such as the unlawful distribution of copyrighted works.”

The net-neutrality bill would allow ISPs to throttle the unlawful distribution of copyrighted works? Gee, it’s a good thing the EFF has stuck out their neck to fight against this. Based on the phrasing, it almost seems as if the EFF thinks that piracy should be permitted as a part of “free speech”. Personally, I actually find it “deeply problematic” that the EFF thinks throttling copyright-infringement is a problem.

For years, the entertainment industry has used that innocent-sounding phrase — “unlawful distribution of copyrighted works” — to pressure Internet service providers around the world to act as copyright cops — to surveil the Internet for supposed copyright violations, and then censor or punish the accused users.

And the EFF uses the scary-sounding phrase “copyright cops” to describe the action of not delivering or slowly-delivering packets when people are involved in copyright violations. Since Net Neutrality is only concerned with the speed of the internet, it seems that slowing down/stopping the delivery of copyrighted material is equivalent to “censoring” and “punishing”. Stopping copyright infringement is not censorship. The fact that the EFF would describe it as censorship tells you a few things about where the EFF stands — and it’s against the creators.

From the beginning, a central goal of the Net Neutrality movement has been to prevent corporations from interfering with the Internet in this way — so why does the FCC’s version of Net Neutrality specifically allow them to do so?

The claim that “from the beginning, a central goal of the Net Neutrality has been to prevent corporations from interfering with [piracy]” is historical revisionism. I support net neutrality, but not when it involves copyright infringement. (To use a page from the EFF’s playbook, perhaps we could say that the EFF is attempting to hijack the Net Neutrality legislation to make the world safer for piracy.)

Besides, if the EFF believes that the goal of Net Neutrality is to let everything flow freely, then they should take a real stand and tell us that child pornography is part of “free speech” and ISPs should never be allowed to interfere with its transmission. At least then, they would be consistent.

“Tell the FCC that if it wants to police the Internet, it first needs to demonstrate that it can protect Internet users and innovators by standing up to powerful industry lobbyists. Sign your name here to demand that the copyright-enforcement loophole be removed.”

This is clearly a false dichotomy. The EFF wants to make the internet safe for piracy, but it does this under the cloak of saying that the FCC isn’t standing up to “powerful industry lobbyists”? Whether you think big-business has too much influence in government doesn’t mean you can just trample over the legitimate rights of copyright holders. That’s the equivalent of saying that Oil Companies have too much influence on the government, and therefore, people should be allowed to steal all the gasoline they want until the government stands up to “big oil”.

The EFF really needs to straighten out their act and stop going out of their way to side with freeloaders.

Addendum, January 16:
Please see my recent post about the EFF’s attitude towards piracy where they say: “there is no evidence out there that “Internet piracy” is leaving us with fewer creators or fewer copyrighted works”. (In other words: piracy is not a problem; there is no need to address the piracy issue.)

EFF: Piracy Not the Problem – “Piracy is the red herring of the digital music distribution debate” (Ironically, that statement was made at the peak of the Music Industry’s sales – in 1999. The past ten years have seen music sales decline by over 50%.)

EFF releases tool to detect if your ISP is throttling BitTorrent.

EFF defends the makers of Morpheus, Grokster, and KaZaA against a lawsuit brought by the record companies. (Admittedly, I’m doubtful that the creators of P2P software should be held liable, but I wouldn’t want to support them in court, nor could you argue that they were naive about creating anything other than software for the purpose of sharing copyrighted material.)

At Wired magazine: “The EFF vigorously urged the Copyright Office to authorize jailbreaking, which in this case is hacking the phone’s OS, and hence allowing consumers to run any app on the phone they want, including [pirated applications and] those not authorized by Apple.”

Dave Winer, an early supporter of the EFF:

I gave $5000 to the EFF when they started, I think it was in 1990, with the noble goal of protecting freedoms as our technology and culture move online. I think I have supported every cause the EFF has adopted since then, but that’s no longer true. I gave this a lot of thought, believe me, and had a long email exchange with Brad Templeton, the chairman of the EFF board of directors, and think they have become as radically polarized as the entertainment industry, and like Hollywood are now working against the interests of those they were meant to serve. The issue appears to be copyright, and it appears that the EFF believes there should be no copyright….

The problem with the EFF position is that in order to remain consistent, they have had to say that copyright doesn’t exist — if a policy or law restricts what a user can do on the Internet then that is a bad policy or law. The courts can’t agree with the EFF. I don’t agree with the EFF.

Hollywood, Box Office Numbers, and Piracy

This article came up on Slashdot today.

“Claims by the MPAA that illegal downloads are killing the industry and causing billions in losses are once again being shredded. In 2009, the leading Hollywood studios made more films and generated more revenue than ever before, and for the first time in history the domestic box office grosses will surpass $10 billion. … [N]either the ever-increasing piracy rates nor the global recession could prevent Hollywood having its best year ever in 2009. With an estimated $10.6 billion in consumer spending at the US and Canadian box office, the movie industry will break the 2008 record by nearly a billion dollars.”

They reference a TorrentFreak article claiming that domestic box office numbers are higher than ever — and, therefore, movie piracy isn’t having any effect:

Claims by the MPAA that illegal downloads are killing the industry and causing billions in losses are once again being shredded. In 2009, the leading Hollywood studios made more films and generated more revenue than ever before, and for the first time in history the domestic box office grosses will surpass $10 billion.

Those despicable Hollywood liars. Additionally, these kinds of stories seem to be an annual occurrence (What piracy crisis? MPAA touts record box office for 2007, What piracy? Movie biz sees record box office in 2008).

But, I don’t consider TorrentFreak to be a reliable source, and expect a big dose of spin coming from them. Too bad they didn’t provide any statistics so that we could see the trends. That’s okay. I will. Shown on the right are the total domestic (US and Canada) box office numbers, according to BoxOfficeMojo. The dollar amounts are in millions. (Hollywood Box Office, the original source for the $10.6 billion estimate has adjusted their estimate downward to $10.5 billion.)

Okay, you might see some trends here. There’s some pretty strong growth from 1980 until around 2002. Then, after 2002, the box office revenues hover between $9 billion and $10 billion a year.

Let’s take a look at those numbers in chart form. Strong growth up until around 2002, then some leveling off. But, the movie industry is still growing, right?

Well, if you consider that inflation is around 4%, you start to wonder if the movie industry is keeping up with inflation. What happens if we take a look at these same numbers and adjust for inflation using the Inflation Calculator?

This chart shows the inflation adjustment in the third column and the Inflation-Adjusted (2008) domestic Box Office numbers in column four. Once you take the inflation adjustments into account, you can see that 2009 wasn’t the best year ever. The best year ever for the movie industry was 2002. If box office revenue reaches $10.5 billion this year, after adjusting for inflation, it will be the fifth highest year, behind years 2001-2004. Here’s a chart of these numbers:

Once inflation is taken into account, the 2009 box office numbers are about 9% lower (or $0.8 billion) than 2002 numbers. (Hm, that’s a few years after music industry revenues also peaked*.) On average, movie box office revenue increased by $177 million/year between 1980 and 2002. Then, on average between 2002 and 2009, it has declined by $114 million/year. Yes, this could be a short term dip in revenue (like the slump in the early 1990s), but had revenue grown at the same rate between 2002-2009 as it had between 1980-2002, revenues would be $2.0 billion (20%) higher in 2009.

If we wanted to go one step further, we could also point out that the US and Canadian populations have grown from 227 million and 24.5 million in 1980 to 305.5 million and 33.9 million in 2009, an increase of 35%. Based on that, we can see that the movie industry’s growth in the past 30 years has been based on population growth. Per-capita spending has fluctuated a bit, and has declined by 14% since 2002.

Per-capita inflation-adjusted domestic box office:

It’s not a horrible downturn, and it is similar to the decline seen in the early 1990s, but it’s also not an argument that piracy isn’t hurting the movie industry, nor is it “shredding” the claims that movie piracy is “causing billions in losses”.

I should also point out another interesting bit of spin. The Ars Technica article linked at the top says: What piracy? Movie biz sees record box office in 2008. Looking at that headline, it looks all wonderful for the movie business, doesn’t it? But, once you look at the inflation-adjusted numbers, you can see that 2008 numbers ($9.63 billion) were the worst numbers since 2000, and per-capita spending was the worst since 1997. Funny the tricks you can play when you don’t adjust for inflation.

* Graph of the music industry downturn since 1999:

Battlefield Heros Free-to-Play/Pay-to-Play

I remembered hearing about Battlefield Heroes a while ago. It was an interesting idea: they were making a decent-looking first person shooter, and it was free to play. You could buy stuff in-game, but it was just avatar customization stuff that had no effect on the gameplay. The question I wondered back then was: would avatar customization make enough money for them to pay salaries? It seemed unlikely. One possibility is that they’d get millions of players, but keep their servers load lightweight (people would play peer-to-peer, which would cost them nothing). Then, even if a few percentage paid for avatar customization, they might do okay. But, it would require phenomenal success (in terms of the number of players). I thought I’d keep an eye on them, just to see what happened.

Well, recently, they announced some changes in their system. You can still play for free, but the changes make it harder to do well in the game unless you’re paying for in-game upgrades. The game has two ways to get upgraded weapons: Valor Points, which you earn by playing; and Battle Funds, which is what you get when you pay real-world money. The new update effectively reduces the value of Valor Points and increases the value of BattleFunds.

I’m going to give them the benefit of the doubt here, and say that they thought their business model would work, but after a while, decided they needed to boost their revenue. It didn’t really seem possible for them to survive on just avatar-customization alone. The whole “pay real-money for in-game upgrades” is quite a balancing act. On one extreme, players pay money for purely aesthetic changes (avatar customization). You get lots of players, people are happy, but the company is earning very little money per player. On the other extreme is a system where you can’t be an effective player in the game without paying money — the game is really a demo unless you pay some real-world money. You get fewer players, and people get more resentful over the bait-and-switch of “free to play, oh wait – you’re nerfed unless you pay” which harms the company/game reputation, but the company earns more money per player. Then there’s the balancing act of staying in the middle ground – trying to earn enough to survive and pay employees, but avoiding guilt and negative stigma of the bait-and-switch. I guess I’m not that surprised to see them shift towards a stronger pay-model, since their initial business-model seemed overly optimistic.

Link: EA restructures Battlefied: Heroes pricing; fans enraged

Penny Arcade TV?

I stumbled on this while reading Penny Arcade: they’re doing a video-blog/Reality Show*, but only for a limited time. Click the image below to see the videos.

* They’re calling it a “reality show”, but I don’t see any physical challenges, infighting, or any disgusting “eat this live snail/spider/scorpion” contests, so I think it’s more similar to a ‘day in the life’ documentary.