RIAA, YouTube, China: Plotting New and Creative Ways to Separate You From the Internet

The Recording Industry Association of America has apparently found out the hard way what other organizations, like the mafia, have known for years: The American legal system is for pansies.

If you want to get something done, don’t bother with the courts. It’s expensive, it’s time-consuming, and it’ll air out all your dirty laundry. If you really want results, you’ve gotta use back-room strong-arm tactics.

For example, the RIAA used to take the almost gentlemanly approach of suing you if they caught you illegally sharing music. They might still do that, of course, but their latest technique is to convince your ISP to just shut off your service — no more Internet for you. Recent reports indicate that a few ISPs — Cox and AT&T, for example — are actually playing ball. They’ll forward along two warnings, then just shut off your service. It’s not clear how closely they’re following the RIAA script, though. Comcast told us it sends warnings but doesn’t shut customers off; AT&T and Cox had no comment.

ISPs that play along risk getting their hands dirty with the awful PR the RIAA has kicked up by suing music fans. It could also backfire legally, according to attorney Jonathan L. Kramer. If an ISP agrees to cooperate with the RIAA but perhaps lapses in its responsibility to forward a warning or two, the RIAA could just turn around and claim the ISP is on the side of the file-sharers.

They’ve sued single moms, they’ve sued deceased persons, don’t think they won’t sue a telecom. Instead, Kramer recommends ISPs avoid getting involved and stay put in their nice little bubble of immunity.

Listen to the podcast (15:11 minutes).

Warner Mutes YouTube

There’s a chilly wind blowing through YouTube. After failing to arrive at an agreement in its licensing dispute with Warner Music, YouTube either muted or deleted thousands of videos that might or might not have violated copyrights associated with Warner tunes.

Like, to name an example that has a lot of people royally peeved, the video a teenage girl uploaded of herself at the piano, playing and singing along to “Winter Wonderland.” Seriously, if there’s such a thing as fair use, wouldn’t it cover this?

Well, we talked to some lawyers who said, in essence, probably not. The teen could play and sing her heart out in the living room for family and friends, but once she uploads a video of the event, it apparently becomes commercial content. Not that the little lady would make any money off it — but YouTube could through its advertising efforts.

China’s Old Tricks

The Chinese government has banned YouTube throughout the country, but not over the disappearance of “Winter Wonderland” girl.

Apparently, it didn’t like new video footage showing Chinese police officers brutalizing Tibetan monks during last year’s uprising.

Censorship is not uncommon in China, of course. The country blocks any number of Internet sites it considers objectionable, and sometimes even tortures and jails people who post things it doesn’t like on the Web.

China is able to cut off access selectively because the Internet is routed to central servers that it controls. It simply blocks all the IP addresses associated with a particular site. Still, there are ways to bypass the country’s great firewall, such as calling a dial-up access number in the U.S.

Doesn’t require all that much tech savvy, but a person’s got to be highly motivated — and very brave — to go that route. Catching the latest vid on YouTube won’t be worth the risk for most of China’s population.

Escape to Gamer-Land

There’s nothing like a little imaginary violence to take your mind off of the carnage in the economy. The same need for escapism that drove our parents and grandparents to the movie theaters when hard times fell upon them is now driving the video game industry.

It’s earned gaming the label of “recession-proof,” a tag that seems pretty well deserved. Game companies reported a 14 percent boost in software sales in February, and consoles saw a 10 percent increase in sales for the month. Nintendo’s Wii held onto its sales lead, having worked through its problems meeting demand, which appears to be staying pretty strong.

The companies are doing what they can to keep demand high, of course. One of the latest tactics is offering games as on-demand downloads. Great — just what I need, another reason not to leave the house.

Who Needs a Console?

If you’re a hardcore gamer, you probably spent several hundred dollars on your console alone. Add to that the cost of peripherals and games, and you’re looking at some serious money. Or maybe you’re more of a PC gamer, with the latest overclocked, liquid-cooled thingamajig adorning your desk and emptying your wallet. Got a Mac? No good games for you, buster!

A startup company that recently revealed itself at the Game Developers Conference, OnLive, is looking to throw that conventional wisdom out the window — yes, even the part about Mac gaming sucking.

The concept behind OnLive is that it can do all the graphics processing on the server and deliver the entire gaming experience online, whether you’ve got an Alienware box or a 13-inch MacBook. Add a little converter that’s the size of a deck of cards, and you can play on your television as well.

The brains behind OnLive is Steve Perlman, who was an early scientist with Apple before working with Sega and Nintendo. After that, he formed WebTV, which was bought by Microsoft. That definitely would explain OnLive’s multiple-platform approach. Too bad he never worked at Sourceforge — then maybe there’d be a Linux version as well.

Blockbuster Deal

If you’re a movie fan, the appearance of a large, red envelope in your mailbox means another welcome arrival. If you happen to work for Blockbuster, however, those envelopes probably have you seeing red.

It’s the competition Blockbuster has been dealing with from Netflix that has dulled the video-rental chain’s fortunes of late, but now Blockbuster has a new partner to take on the threat.

TiVo and Blockbuster signed an agreement that will have Blockbuster-supplied movies streaming over TiVo set-top boxes and into people’s homes — no red envelope needed. Additionally, Blockbuster will sell TiVo’s digital video recorders in its stores and on its Web site.

The deal couldn’t come at a better time for Blockbuster, which recently had to accept emergency financing in order to pay its bills after losing US$359-million in the fourth quarter. If Blockbuster doesn’t stop seeing red and start seeing green pretty soon, it’s liable to turn black-and-blue.

Shot Across the Bow?

Microsoft doesn’t sue very often, so when it filed not one, but two patent infringement complaints against GPS gadget maker TomTom, it created quite a stir.

It wasn’t long before TomTom started making some noise too, launching a countersuit accusing Microsoft of infringing several TomTom patents. Add to that a snowballing conspiracy theory — that Microsoft is using the lawsuits as a springboard for a major attack on the open source community — and you’ve got a lot of feathers flying.

Microsoft says it’s been trying to negotiate a license agreement with TomTom for more than a year. The fact that it went not only to the U.S. district court in Seattle but also to the International Trade Commission suggests it’s serious about the patent infringement claims.

And Microsoft has been showing signs that it’s seen the open source light, so if going after TomTom’s Linux-based patents is its way of launching a stealth attack, there’s clearly a disconnect at Redmond. Then again, maybe Microsoft expected TomTom would file a patent case against it, and it beat the little guy to the punch. Stay tuned — we’ll be watching this story unfold.

On the Outs?

Though handset maker Sony Ericsson had some success in Europe when it first started out a few years ago, the joint venture is beginning to look a little dysfunctional.

Sales have been horrible — they were down 23 percent last quarter. Losses are mounting — the next quarter may see the company more than $500 million in the hole. And it appears its North American president, Najmi Jarwala, just couldn’t take it anymore — he up and left the job.

So what’s Sony Ericsson’s problem? Forrester’s Charles Golvin told us Ericsson’s cooling off. It seems to be paying a lot more attention lately to the networks it runs for carriers, where the margins are better. Also, Sony cut itself out of a lot of lucrative markets by deciding to dump CDMA handsets, ruling out deals with Sprint, Verizon and other carriers.

Sony Ericsson is lagging at both ends of the market, with no high-end answer to the BlackBerry or iPhone, and nothing that stands out in the shallow end of the pool either. Though both Sony and Ericsson deny it, these problems have a lot of people speculating that pretty soon the joint venture will collapse.

Awaiting the Pre

The upcoming Palm Pre just might be big enough to save the company from dying when it finally goes on sale, but for now, it appears to be driving Palm’s earnings into the ground.

Since the company first showed off the phone in January, sales of other Palm handsets have frozen in anticipation of the Pre’s release. When’s that happening? All we know is it’s expected in the first half of the year.

Meanwhile, revenue for the company’s latest fiscal quarter fell 76 percent to $90.6 million, and losses shot up 74 percent to $77.5 million. CEO Ed Colligan called it “a challenging transitional period.” He also said the company is “poised to usher in a new era.”

So I guess what he’s basically saying is we’ve got ’em right where we want ’em. Investors seemed to share his faith.

Despite the company’s horrible performance, Palm stock actually climbed a percentage point. Guess they thought that CES presentation was pretty good too.

Startup Support

Venture capitalists might not be as adventurous as they were two or three years ago, but they haven’t stopped giving away money to entrepreneurs altogether.

In fact, right now might be the best time in nearly a decade to start a business, according to Spark Capital, a firm that boasts Novatel, Akamai and Twitter among its various investments. Spark has launched [email protected], a program that will give media technology startups in New York and Boston up to to $250,000 in seed money.

OK, so maybe it’s not quite in the same neighborhood as the millions in funding that just about any 22-year-old with a Stanford degree and a sketchpad could get by Segwaying down Sand Hill Road in 2006. But given the environment, cautious spending to start new enterprises sure does look a lot better than no spending at all.

Smart, Not Safe

Speaking of innovation, the idea of a smart power grid is pretty appealing. Tying IT directly to the electrical grid in order to monitor and report on activity would be a vast improvement over the 1960s technology that’s now in place.

It could help households and businesses balance their demand for electricity so power plants wouldn’t have to generate as much, and they would therefore emit less carbon into the atmosphere. But a smart grid also opens up potential problems.

See, if it’s got a computer attached to it, and that computer is attached to the Internet, someone could end up gaining access to that computer and could then control part of the electrical grid. Not a good scenario at all, but that’s exactly what researchers at IOActive are warning could happen in the absence of proper security procedures.

Basically, smart grid computers are vulnerable to protocol tampering, buffer overflows, persistent and non-persistent rootkits, and code propagation, according to the report. Those are pretty much the same things that could infect your laptop — except your laptop isn’t controlling the power grid for millions of homes. Just something to think about.

In the Weeds

President Obama tried to take his message to the grass roots via an online town hall, but he quickly found himself in the weeds.

The president, who admits to having done a Michael Phelps impression or two in his life, didn’t take the bait when asked if he planned to legalize marijuana. It wouldn’t be good for the economy, he said, and that’s his focus at the moment.

Despite the diversion, Obama showed himself to be a pretender to Ronald Reagan’s title of “Great Communicator.” Where Reagan held lots of press conferences, however, Obama is going one step further, taking his message directly to the people. The White House put out a call for questions, and millions of people responded.

Then, citizens were allowed to vote questions up or down, in true Digg fashion, with White House staffers making the final cut.

A tip of the hat to the 420 crowd, which was able to get its question to the very top of the list. Lazy they may be, but put them in front of a computer, they can click a mouse all day long, over and over, stopping only to stuff Doritos in their mouths.

Also in this week’s podcast: Salesforce catches the Twitter bug; Twitter goes after businesses’ business; Skype takes an enterprise approach.