The Rise of a Networked-Economic Giant; or Everybody Wants to Go to Heaven, But Nobody Wants to Die

In Yochai Benkler’s book The Wealth of Networks, he explored the internet’s potential in transforming human society by comparing behavior of people living in advance economies between a industrial mode of information production and network mode of information production. In some ways it is a repackaging of the common, copyleftist argument about freedom–“free as in free speech, not free beer.” However, Benkler raises a contention that a networked, non-proprietary approach to creating valuable, marketable information can be just as good, if not superior to a classical, industrial mode of production of information. Benkler does this through both economic ally and in social and political terms. While his example of the open-source movement in the software industry is a common banner that copyleftists rally under, the generalized approach Benkler used to explain the situation can be applied across-the-board, to most, if not all, useful information that is produced today under an industrial mode of information production.

Taking a bottom-line, cynical approach, I ask: Is Google’s long-term strategy as a business entity to create a niche in the market and in the landscape of copyright law, a sustainable goal? While the public cannot be certain what goes on in Google’s board meetings, one can reasonably construe their recent actions, marketing strategies, and overall philosophy to suggest several things:

1. If one can fairly presume that Google is full of smart, intelligent managers, lawyers, and businesspeople, then their success thus far these past few years means a switching of gears that they are going to be in this business for the long haul. Google has not existed even for 10 years, and many years less in the eyes of the public (and investors). Given their position as a leader in the internet-related industries, they now have the wherewithal to take new kinds of risks and pioneer the future in this mostly uncharted area of business and law.

2. Jessica Litman’s Digital Copyright lays out a solid foundation and a rather cynical view of US copyright law. In part, she argues the current statutory regime is the direct result of many elaborate and complex negotiated-for bargains between the traditional players in the copyright industry. While Litman, Benkler, and many others warn the senselessness and unfairness of applying laws meant to enforce economic competition between businesses to everyday Joe and Jane, the fact that Google (and the majority of players in the higher level of abstraction of the internet market–to exclude telecom interests and ISPs from the picture) had no say during the late 1990s round of legislative negotiation, it leaves new players in new media little choice in dealing with laws that are designed keeps the old players in power. Indeed, this entire school of thought did not start to mature until years after the passage of the DMCA. (Perhaps talk about Yahoo here?)

3. Are Google’s lawsuits a form of impact litigation? No doubt, by bringing novel and new issues before courts, Google is trying to set laws in favor to itself. In fact, if Litman is right, the court may be the only real legal venue where Google can seek relief; and especially if the legislative process is as slow as Litman (and in the history of US copyright law) claims. But as a rule, outside the court room, lawsuits have deep and complex implications for businesses. One of the key implication is in the battle of mindshare. (Bruce Keller’s presentation about the ad-based model of Google and the comparison to TV and radio elicited in me a feel of irony in light of the big picture.) Google is viewed in the eyes of the public directly, and its good will with the public affects its earnings in a very direct way (as opposed to book publishers or the Author’s Guild, as examples of Google’s opponents). Thus, Google has a stake in swaying the law to embody a wider fair use, or more free use, in alignment of public interest. Google can paint its opponents in a light of how established players, lacking that judicial agility, fight to retain the way they do business against innovative technology. It is both a marketing ploy and a legal strategy.

4. This ties in with the perceived, Lessig-like argument about fair use. It is generally accepted that a business method relying on a legal interpretation of fair use is an extremely risky one. While that never stopped VHS and Betamax manufacturers, the full force of the copyleftist argument is that some of the new things we can do through new media seems to violate the section 106 bundle of rights, they shouldn’t. These uses should not even be “fair use,” but free, un-infringing use. However short of legislative changes, Google’s only alternative is to have a court declare that it is “fair use.” Once realized that these reforms are very pro-public and against the interests of the established, entrenched corporate interests in old media, the public will tend to rally towards Google, its free services, and its vision of a freer informational future.

5. The nature of a internet search engine cannot be reduced to the like of a yellow pages or any analogous argument someone may make in court as a biased counsel. The web itself has been transformed entirely by search engines; Google’s success alone is more than enough to testify to its significance. It can be fairly said that ultimately Google is a middleman in the balance of consumers, creators, and middlemen, but how will the courts appreciate the value Google adds to our economy today? How will the courts appreciate the value of YouTube? MySpace? Will it go the way of Grockster; or the VHS?

Conclusion: What does Google stand to lose if they do not press on at this time? This is the $64,000 question, but does sound business sense means anything in an industry that is fast-changing, dynamic, and highly developing? With high risk comes high rewards. The fact that Google is such a threat to traditional players in consumer media (and an ever-growing list of other traditional players), there are reasons to believe this is going to be the case only if Google breaks the ties of the legislative binds that hinders it as a corporation in competition with other economic entities interested in the same slice of the consumer pie. Why say yes to licensing when you can always say yes to licensing later? The cost of litigation plus even a poor settlement seems little when the entire future of the world’s information industry is in the balance. To call Google’s attorneys as “believers” is probably more fitting rather than calling them prophets, but that is exactly what is in the balance for them.



The above is a rough outline of what I plan to write in a week’s time into a short paper. (And forgive the random references that I make with no clear meaning as to what it refers to, just for my own sake.) The relevance to all things anime is small but it’s an answer to a question plaguing the content industry. The internet has long since been the worst kept secret to wealth in this information revolution. How do you make a buck? How do we work with fansubbing to make a buck?

Indeed, if what keeps fansubbing alive is the monetary barrier to bring a suit to a wide range of people all over the world, to sue potential customers of Kadokawa Shoten, Bandai, MediaFactory, King Record, and what have you…

1. Why hasn’t there been more concerted effort to bring “fansub groups” down?

2. Fansubbing has evolved. But where will this go next? To elaborate, since the days where we pipe text through a genlock to mail SVHS tapes in a SASE envelope to today where we can produce MTV-style parodies with Aegisub and put it on YouTube, things has changed. The legal liability and economic incentives changed. The use changed. The users changed. And it will continue to change. I find it disturbing that I have to make a distinction between fansubbing in various contexts.

3. What other relevant questions can we ask? What are all the stakes? Whose stakes are important? To whom?

What I would really apperciate are references and critiques if you can throw them my way. I’m still in mid-research, so to speak, so that sort of stuff can be very valuable for me. Pretty please?

8 Responses to “The Rise of a Networked-Economic Giant; or Everybody Wants to Go to Heaven, But Nobody Wants to Die”

  • dm

    Such a long essay really deserves comments, but… it’s hard for a comment to do it justice?

    I think you need to talk a bit about the Google actions you mean — to some degree, I think the Youtube purchase is a distraction for your argument (despite its emerging presence in anime distribution). What public benefit do you see from that twisting of the copyright laws? Contrast that with Google’s “scan all books and make them searchable” project (google for: “Kevin Kelly New York Times Magazine Google” to get an article about it). There’s a copyright violation worth fighting for, with a clear public benefit — a modern day Library of Alexandria.

    If you’re not familiar with it, Kelly’s article is a little “gee-whiz” (Kevin Kelly embodies “gee whiz”, but in a good way), but it’s still an interesting article, and I think you’ll like it.

  • omo

    Thanks for the Kevin Kelly article. It’ll be a nice source of footnotes :) Actually, I do plan to talk in detail about the YouTube acquisition. Bruce Keller, as I mentioend, is the top dog lawyer for the publishers in theirs (and the author’s guild) lawsuit against the Google Library Project (or what used to be), so I’ve heard more than enough about that.

    What do you mean the Youtube purchase is a distraction? I’m curious for any and all counterarguments to what I may be saying.

  • dm

    Youtube as distraction: w-e-l-l, I’m going to push back and ask how it is not a distraction? You’ve researched and thought about it more than I have, so you may have some insight where Google might be going with that. If so, you should highlight it in your essay, but beware building castles on top of speculation about what Google might be up to (they might be up to something completely different).

    Another option is to contrast the Youtube situation with the Library of Googlandria.

    I suppose a lot of Youtube remixes have the same artistic expression as music videos (me, I only seem to go to Youtube for “highlights of CSPAN” and animated Gundam toys dancing to anime music). But then there are people using Youtube as a form of cable TV, and watching entire episodes.

    The book-scanning project is poised to be a treasury for all mankind. Pretty amazing. Inspiring, even. But Youtube? Where’s the public benefit to balance the creators’ rights?

    Did I hear that Youtube is going to start sharing ad revenues with the people who post videos? Or is it just some videos? That’s a business model that might work for both content creators and the public.

  • omo

    Fair enough.

    One way where this all come together is in the $. The Library of Googlandria is not a public interest project. It’s by all means a new way to make $$$ (now if it would make $$$ is another question). Youtube already has proven to be profitable in some ways (but also questionable at the end of the day).

    If I was a book publisher and want to sue the hell out of Google, I would argue that Booksearch is not poised to be a treasury for all of mankind; no more than having no copyright law is. It will rob authors and publishers the possibility to turn their content into profit in the internet world. For starters, Google flat out copied, en masse, without permission. Second, their “derivative” creation of this searchable database, while great for mankind, is terrible for the creators of those works because it’s a flat out violation of their copyright protection.

    In that aspect, YouTube is just another flavor of the same argument that movie and tv show makers can make. One important and extremely valuable aspect of YouTube is its tag & search feature, as well as popularity ranking. Do people use youtube to find videos of works that interest them but they’ve never heard of? I sure did.

    The real difference between the two is the “library” layer. Books are not really different than videos in the scheme of copyright protection in light of digital media. But Google Booksearch had the cooperation of several university libraries. Lawyers have a tough time to dismiss them as petty consumer pirates, but punk kids that upload episodes of broadcast TV to YouTube are not different than libraries in the greater scheme of information flow. It’s just that copyright law carved out a niche for libraries since they existed as an organized lobby group back in 1907 or 1978.

  • dm

    But… there are two levels of Library of Googlandria, aren’t there? There are the out-of-copyright works, which Google will serve up wholesale, then there are the still-in-copyright works, which Google will only provide limited access to, but which will benefit publishers and scholars by giving their works greater visibility and distribution. Google gives you a paragraph, from which you determine tha the work is relevant/interesting, so you go out and obtain it through copyright-honoring means?

    If I were a publisher offered this agreement, I’d be handing my stuff over to Google already scanned in and cleaned up. I’d also be thinking about how I could revive books that are suddenly in demand as a result but not in stock.

    I guess there’s another wrinkle: Google is pushing the “find the copyrighted material and tell us about it” problem onto the publishers as well, I think?

  • omo

    Right, but that doesn’t nullify the first problem about google’s own copying. The distinction is that YouTube is a “dirtier” venture is well taken. But even so, Google Booksearch, if found to be legally OK, will go on to the next level and attach more $ incentives.

    The “library” argument for Google isn’t so much that they only give you excerpts to works they have no rights to, but that there will be books that they will not be able to get rights to because no one knows who really has the rights to it, or no one can get to the people that do. The second layer of liability (infringing use vs. non infringing use; or youtube vs. google booksearch) is much less serious in the landscape of copyright law since that’s something between us punk kids and people like the RIAA.

    This is how VHS copiers were found to be legal in the first place, despite its extreme potential as a tool for copyright infringment. Imagine that? Without it we will have no fansubbing.

  • dm

    The “no one knows who has rights to it” is where Google’s “you tell us you own the copyright, and that you don’t want it up, we’ll take it down” comes from, I think? In a sense, Google is rescuing these orphaned works — works that would be forgotten otherwise. It will be interesting to see how that works out in the courts (but more power to them).

  • omo

    Well, they’re putting their necks on the line to “rescue” these orphaned works, but what for? Companies don’t put hundreds and millions of dollars on the line to rescue obscured, orphaned books. It’s a guaranteed way to get yet another hundreds and millions of dollars sued off your backs in a shareholder derivative suit. And Google Booksearch is not worth that much. It isn’t like the technology and resources is the problem. It’s the legal minefield.

    And thus I go looking for a convincing reason.

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