The current excitement about social networking and online video has reached another segment of the social structure with news that a convicted cocaine dealer has used You Tube to intimidate his brother from giving damaging evidence to prosecutors, using violent clips. I wonder whose copyright is on that stuff?

Makes the multibillion dollar giants Viacom and Google engaged at the courts seem civilized. Hopefully issues of copyright, responsibility, fair use and pursuit of business will now be argued and precedents will be set over the next few years. Or not; because they might decide to come to agreement, which would be shame because it would be great to have some standards.

The Sony Betamax decision, which held that Sony wasn’t responsible for what people did with their VCRs (specifically time shifting was fair use), and enabled the home video market that has become the largest single slice of the revenue pie, was a similar legal fight between the giants of commerce. Too bad the courts have become a place that only the biggest can afford to be in.

Meanwhile, the market continues to try to figure itself out. Last weeks announcement that  News Corp and NBC Universal would team to develop their own distribution channel, including leveraging Yahoo and Microsoft, indicates that the bean counters of the majors have concluded that the internet and world wide web are the distribution medium for growth.

I don’t know about anybody else, but I really don’t find the experience of YouTube or any of the other online services to be anywhere near as good as watching tv using my PVR. The pictures are small, the delivery impacted by many factors, and as far as user generated content is concerned, the production quality is consistently poor. The few exceptions are, well, exceptional.

So if you are like me, you watch stuff online because someone sends you a link, it gets referenced by your radio personality etc. It isn’t how you watch primetime television, the news, live sports or really any of the staples of  traditional television. I did hear a voice on the radio say that more people watch The Daily Show online than on cable, but I doubt it.

So just how are people using video online? Is it really replacing cable and television viewing? Well count on the smartest copyright holder I know of, Mark Cuban, to find out. In this post Cuban went and got data from Comscore that shows that people watch online video in the middle of the day. “about 50pct of all video viewing during WEEKDAYS (as opposed to 37pct for the entire week) happens from 7am to 5pm. Thats a big number.” Only 12 percent of online viewing occurs during Primetime. That falls to 6 percent on weekends. Evenings are still when people sit in front of the tube and watch tv.

Cuban goes on to speculate that a savvy television distributor will start selecting times when the online streams should be shut off. When you watch becomes as important as where or what medium you watch on.

Cuban also has a cogent analysis of the News Corp NBC deal, as well as the CableVision DVR lawsuit at his blog. As a copyright and fair use defender, his stake in ownership of both content and distribution, as well as his established successes thinking ahead mark him as a bell weather of this evolution.

It has been a long time since we went over a few fundamentals.
There is a reason that watermarking matters, and not just so that Hollywood oriented multinational media corporations can continue to dominate the content distribution. There are plenty of reasons that can and should happen.

It has to do with communication. It is important to remember that communication is the critical underlying human need and driver of much of what is happening in the world today. Ideas shared are the thread from which are woven culture, community and commerce.

I was reminded of this bouncing through the blogosphere. I got to hüdwnkd :: digital sehnsucht via Doc Searls, who pointed out this aspect of ”cultural capital”

“It is all fine and well if a person can use the buzzwords; Semantic Web, dereferenceable UDI’s, new ontologies, and so forth. But if they can’t communicate those ideas in a confidant and accurate manner to a large group of people who don’t understand them, how can they be considered valuable to the cause they’re trying to promote?”

This is the long term promise of the video revolution on the internet. No question that the migration of the mainstream motion picture products, whether you call it movies, television, or cable, to the delivery channel called the internet is going to drive the day to day economics of all that are party to it, to say nothing of numerous attorneys. Social networks fueled by user generated video will also drive a good proportion of perceived value through delivery of more defined targets for advertising.

However it is the possibility that each and every person with a solution will be able to communicate in a powerful way to others that holds the most exciting hope for what we so confidently call civilization. And while many will be able to afford giving away that communication, or use the medium as collateral marketing for what keeps them in food and shelter, many more will need to be compensated. Copyright, and compensation of the author, producer and publisher, to say nothing of the distributor, will continue to be a critical component of a lively culture, communities of all sizes and compositions, and the commerce that has come to be synonymous with vibrancy of culture and community.

The goal is a free and lively commons, where ideas as well as products move easily and transactions are encouraged, and fluid. SmartMarks are an integral part of that vision of a better future, where those committed to the social contract are uninhibited and crooks get caught and prosecuted.

While I haven’t posted in the last ten days, it isn’t for lack of material or references. In fact, in might be that the wave of digital content distribution crashing over existing business models, with those evil pirates riding their dark net powered vessels on that wave is almost more than a full time reading effort can keep up with. “digital content distribution” now Googles over 56 million results. “Piracy ” shows over six thousand results just in the News category alone. The fact is that there is other business to be done than just point and comment, and I apologize for not being out here doing the pointing and commenting.

And there is some interesting news. Who would think that dogs could be applied to the content piracy problem? Well apparently the MPAA, who have loaned two black labs to Malaysia to sniff out counterfeit optical discs! “It took around nine months and $17,000 to train the dogs to detect polycarbonates, chemicals used in the disc manufacturing process,” said Mike Ellis, regional director for the MPAA.

Naturally what I like about this effort is that the focus is on catching crooks. And although the commitment is monetarily small, nine months to work up a new technique is pretty significant in this instant gratification world, although it certainly isn’t anything like the time frame required to bring watermarking to the forefront.

Then we have the other segments starting to show that they are bleeding. At the Game Developers Conference in San Francisco last week Todd Hollenshead, head of Doom 3 creator Id software has said “Rampant piracy is threatening the future of the PC games industry,” . Hollenshead called the PC piracy statistics “startling” and that people are not taking the problem seriously. “The community who love PC games needs to recognize they are poisoning the well we all drink from”.

So by going to the dogs, does that mean the motion picture industry is a leg up on the PC game business?

In the hotel sector, this announcement by Intercontinental Hotels Group about doubling the number of hotels they operate in China is dominated by concerns about copyright infringement, which they reckon is slowing the company’s growth rate in the booming China economy.

“It’s a big headache,” Edmond Ip, IHP’s greater China chief operating officer, told Reuters on Wednesday.

“There are hundreds of Holiday Inns out there. I can’t count there are too many. They are everywhere.”

So why copy a DVD when you can counterfeit a complete brick and mortar business? Will dogs be able to sniff out the fake Holiday Inn?

There is also news of enforcement efforts in Mexico, calls for harsher penalties and enforcement, particularly at colleges, and Harvard University’s refusal to police its networks. A company announced another P2P piracy killer, and Viacom followed up its pulling content from GooTube by suing them.

None of this was as remarkable, or really news, to me as this- Microsoft business group president Jeff Raikes speaking last week at the Morgan Stanley Technology conference in San Francisco, said “If they’re going to pirate somebody, we want it to be us rather than somebody else.”

Read the accounts to get the full context, but essentially he is saying by stealing Microsoft product, people are developing allegiance to the company’s products.

What is good about this isn’t that Microsoft is going soft on piracy, or that this indicates confusion by a company that spends a lot on DRM and other security technologies. What is good about this is that it hints that somebody inside the leadership at one of the major players in content distribution has a clue that the lesson of the piracy experience so far has been that companies that use the piracy model as collateral marketing make money. That is a long way from shifting to a philosophy of doing business differently, but it is encouraging none the less.

I am going back to the SmartMarks drum line now.

There is a great deal of buzz right now in both conventional and online media about GooTube, MySpace along with the start-up Joost, and their impact on conventional television. There is so much happening that it is hard to keep track, much less perspective, and by that I mean, keep in mind that none of the online video services come close to a volume of use, viewers, or revenue that conventional broadcasting does. The main reason for excitement here is GROWTH, and the potential for more.

The GooTube noteworthy element is the BBC removing its content, like Viacom did, but unlike Viacom, they have been posting the clips there themselves.

Not mentioned is how they have managed to make it difficult for the clips to be embedded elsewhere, which some have found annoying. IT makes sense really- keep control of the content and the viewer. Don’t let the content be just anywhere.

You also have Mark Cuban, owner of HDnet, and the Dallas Mavericks among other things, suggesting that the big media response to social media sites, and YouTube in particular is to overwhelm them with SPAM, tied to advertising of the big media. While I appreciate the concept, I have to agree with this poster who suggests that it is a form of brand suicide.

The reporting on MySpace of interest was this report suggesting that the wave for MySpace has already crested.. Provocatively titled “Life After MySpace” it suggests that new users will render MySpace “so Twenty Minutes Ago” and references a report showing that MySpace Video sessions are down 10% since December.

Frankly, I don’t think the value in MySpace is dependent or even remotely tied to the video function. It seems much more about the social aspects. YouTube on the other hand is all about the video, and unfortunately, fairly poor quality video at that.

That is why there is so much excitement about Joost. Besides having the pedigree of two home run hitters in the founders, Joost promises full screen High Definition long form over the internet. Won’t that be just like cable TV?.

So the question remains, what about the content owners who currently dominate conventional media?

Fox came out this week with the announcement, partnering with their affiliates to stream its shows on the affiliates’ websites, something they have done on their owned and operated stations’ sites since August. Good for Fox, advancing business with their established partners by building on the existing content and partnerships.

The rumor mill has Blockbuster buying their online site Movielink. Given the ambition of the distributors to get rid of the video rental shop, and that Movielink was their first toe in the water, this is an interesting development. Will Wal-Mart, Target and Netflix be the online retailers of content? Stay tuned.

Then there is the discussion of just what does the BitTorrent move to legitimate content distribution mean? . Charles Arthur in The Guardian, suggests that it might mean more piracy. “How now can they distinguish Bittorrent transfers that have the approval of the content owners, and those that do not? Illicit Bittorrent use could explode: “You can even search for torrents by putting in what you’re looking for, then adding ‘torrent’ in any search engine,” the site says helpfully.”

To which we say “SmartMarks!” Just this week a partner of USVO, Digimarc announced a patent for a technology to recognize copyrighted material on such sights and notify the owner. While it might seem that Digimarc is timely, it is significant that this patent was filed in 1998, long before any of today’s social networking or media sites were glints in their founders eyes, or imaginations. USVO began their watermarking effort in 2001. Similarly, the path toward a vibrant and open content marketplace will take time, and investment.

If the content marketplace is generating billions of dollars in revenue, and piracy in its various forms is costing an estimated 18 billion dollars, what exactly is the appropriate value of the solutions that will 1) reduce that loss and 2) enable the full exploitation of the digital content distribution technology?