Sunday Train: Rescuing the Innocent Amtrak Numbers from SubsidyScope

Burning the Midnight Oil for Living Energy Independence

A few weeks back, SubsidyScope, "launched by The Pew Charitable Trusts, aims to raise public awareness about the role of federal subsidies in the economy", pursued its mandate into transport subsidies, coming out with a study with the headline figure of $32 subsidy per passenger for Amtrak.

Why Amtrak? Why not provide a headline figure on federal subsidy per motorist or airplane passenger? Critics of the report suggest that the answer is simple - consider, for instance, Charleston WV mayor Danny Jones:

Jones admits Amtrak relies heavily on subsidies, but so do other modes of transportation, he said.

"I think it's just easier to see how much of it's subsidized with Amtrak," he said.

And there is a lot of merit in that. Further, SubsidyScope is not focusing on Government subsidy, but on Federal subsidy. Not only is it harder to analyze government subsidies to driving and flying, given how many direct and indirect subsidies there are to take into account - but many of the subsidies are at the state and local government level, so for SubsidyScope's purposes they "don't count".

Even granting the grossly flawed mandate of looking at government subsidy without considering social benefit and of looking at only the Federal portion of that subsidy - SubsidyScope's analysis have a further glaring flaw, in that they do an entirely static analysis. This was pointed out shortly after the release of the study by Robert Cruickshank at the California HSR blog in his post of 27 October, 2009, How Much Per Driver Did US Freeways Lose?:

The number one flaw of the Pew report, by far, is it does not compare 2008 numbers to previous years. The report merely examines Amtrak route performance in 2008 alone. As you all remember, 2008 was a rather interesting year for American transportation. Most passenger trains - from Amtrak to the local subways and streetcars - experienced significant spikes in ridership as a result of the spike in gas prices.

Any study of 2008 passenger rail that does not take into account these effects is not credible. At all. And a study that doesn't even compare to past years is a joke.

Robert Cruickshank uses information from the Capital Corridor Joint Power Authority to show that even before the spike in ridership due to the Oil Price Shock in 2008, a 100% increase in state subsidy over the past decade has been met by a 269% increase in ridership, with four times the number of trains and the state subsidy per passenger mile dropping from $0.33 to $0.18.

Of course, the SubsidyScope analysis further confuses the issue by headlining subsidy per passenger, rather than subsidy per passenger-mile. This is, of course, absurd: it treats trips from Harrisburg to Philadelphia, from Washington DC to New York, and from Chicago to Seattle as each delivering identical "travel" benefit.

Indeed, Amtrak's figures themselves (p. 11, right) reveal that Federal subsidies are a declining share of Amtrak revenue.


Focusing on the Amtrak Routes

SubsidyScope extends its analysis to routes by by taking Amtrak figures on route performance, and then allocating costs that are not allocated by Amtrak to the routes, with a principle cost being depreciation.

The way that Subsidyscope does this is by working out the total unallocated costs, dividing by the number of passengers, and subtracting those from the per passenger profit/loss derived from Amtrak route information.

That is, if one passenger travels from Chicago to Fargo, North Dakota, Mayor Jones travels from Charleston WV to Chicago, and a third passenger travels from Providence, Rhode Island to Boston, each of them are considered to be participating in the same depreciation of Amtrak equipment and right of way.

This is, of course, absurd. Some services run in Amtrak corridors, others run in private railroad corridors paying an access fee. Charging depreciation of the Amtrak owned corridor to the passenger where the access fee is included in operating costs is obviously absurd. Charging the same depreciation of Amtrak trains to the passenger between Providence and Boston and the passenger between Chicago and Fargo is just as absurd.

Considering passenger miles instead of just passenger counts is better - indeed, it may be the most reasonable rough estimate for depreciation of Amtrak trains. But it still suffers from the problem of counting the access fee paid to operate on private rail corridors, and then allocating the corridor a share in the depreciation of the rail corridor owned by Amtrak.

Clearly SubsidyScope's analysis is grossly and obviously biased against those routes that run in private corridors and in favor of those that run on Amtrak-owned corridors. It makes a mockery of any pretense of SubsidyScope that it is analyzing the "profit and loss" of specific routes when it makes these capital adjustments.

Indeed, one wonders whether there is an ulterior motive in this gross analytical mistake. For any going concern with some business lines relying on its own infrastructure and others relying on paying access fees for infrastructure owned by someone else - just spreading depreciation uniformly between the different business lines is either gross incompetence or an effort at deliberate deception.

Not having any information to the contrary, I will make the charitable assumption, and presume that SubsidyScope is merely being lazy and grossly incompetent in their adjustment for depreciation.

Whether ascribed to incompetence or to malice, Subsidyscope's analysis is clearly useless for improving our understanding of rail capital cost issues. However, this does not mean the analysis is entirely useless. They do collect the Amtrak route information on operating revenue per corridor and match it up with profit/loss per corridor prior to engaging in their absurd gymnastics in allocating depreciation.

That means that they have collected information that can be used to infer operating recovery ratios by route - that is, the ratio of operating revenues to operating costs (Amtrak's "operating ratio" is cost/revenue, rather than revenue/cost).


Pity the poor numbers, they didn't make SubsidyScope do it

So this is a boring old data report posting. I earnestly apologize for that, but after grasping what a hatchet job SubsidyScope did in terms of their reporting on profit/loss on a per line basis, I just had to go in and see what I could do to recover some information from their shambles.

With respect to operating recovery, there is one flaw inherited from the slanted frame within which SubsidyScope operates. Since they ignore state and local subsidies, that means they treat state subsidies for state-subsidized services as part of revenues. For purposes of computing operating ratios, they should be excluded.

Now, I am going to do something similar to what I have just blasted SubsidyScope for doing, and do a simple pro-rata allocation of the total state subsidy share of state corridor route revenues to each state corridor route. In my defense, I will say:

• first, I know this is less than ideal, while SubsidyScope writes up a much more egregious pro-rata allocation as if it gives a precise answer;
  
• second, if anyone has the specific subsidies on a specific corridor, I will happily enter it into that corridor, and adjust the balance of pro-rata shares to reflect that; and,
  
• I am doing this analysis for free on a couple of Sunday afternoons, while someone got paid to make this kind of rough, back of the envelope calculation for SubsidyScope
  

If you are looking for something over and above looking at the operating ratios that I have rescued from SubsidyScope's numbers abuse - well, I hope you have already found it. The balance of this post is just a glance at these numbers.


The Northeast Corridor

The Northeast Corridor trains stand on their own. Of course, when running on track owned by Amtrak, access fees will be lower - and at the same time, this is where the bulk of capital depreciation on corridor infrastructure itself will be located. Still, according to SubsidyScope's figures, the entire Northeast Corridor yields an operating surplus.

The tables are set up with routes with operating recovery ratios at or above the total for the group in the left hand column, and those below the group's operating recovery ratio in the right hand column.

Northeast Corridor	Op Ratio	Northeast Corridor	Op Ratio
NEC Overall	158%
Acela	183%	NE Regional	139%

The State Corridor and State-Subsidized Routes

Corridor trains include the largest number of services that are eligible for direct replacement with an Emerging/Regional HSR service, as well as services that can be started relatively early in the development of the Steel Interstate system.

The most striking feature that emerges from SubsidyScope's information is the cluster of corridor service that are in the neighborhood of 60% operating recovery. A package of structural improvements - and, obviously improving effective trip speed will be a critical improvement - that can bring a "typical" corridor service from 60% to 100% operating recovery would bring the majority of routes and the corridor services as a whole into or close to an operating surplus.

The reasons for setting up the table into columns relative to the average for the group is for exploring the factors that help explain operating ratio. The table can be split in terms of above and below average length, or frequency, or population per route mile, or population per hour, or average on-time performance, and it can be seen at a glance when a factor tends lines up with the operating ratios. But that analysis will wait for some later set of Sunday afternoons.

While the average operating ratio for the State Corridor trains is not affected, bear in mind that the following involves a pro-rata distribution of state operating subsidies.

Corridor Route	Op Ratio	Corridor Route	Op Ratio
Corridor Services	58%
Chicago-St. Louis IL/MO	79%	Blue Water MI/IL	55%
Newport News DC/VA	77%	Zephyr IL	54%
Carolinian NY/NC	71%	Vermonter VT/DC	54%
Illinois-Saluki IL	70%	Albany-Toronto NY/ONT	54%
Adirondock NY/Quebec	69%	Capital CA	53%
Heartland TX/OK	67%	Piedmont NC	52%
Hiawatha IL/WI	66%	Empire NY	48%
Ethan Allen NY/VT	65%	Missouri River MO	45%
Downeaster ME/MA	64%	Pennsylvanian PA/NY	43%
San Jaoquins CA	61%	Wolverine MI/IL	39%
Keystone PA	61%	Springfield Shuttle MA/CT	32%
Cascades OR/BC	61%	Hoisier State IN/IL	15%
Pere Marquette MI/IL	59%
Pacific Surfliner CA	59%

The Long Distance Services

The long distance services are the ones that can gain the most converting the Strategic Rail Corridor Network into a network of Steel Interstates. Faster and more reliable Electric Rapid Rail service might be more important in terms of reducing cost per mile as in increasing ridership. Wages and salaries are 54% of long distance operating costs, and wages are paid per hour, not per mile - the faster the trip speed, the lower the labor cost per mile. And fuel and utilities is another 17% of operating costs, where electricity is less expensive on an equal-energy basis and electric locomotives are more energy efficient.

The Auto Train stands head and shoulders above the typical long distance route in terms of operating recovery, and would seem likely to have an operating surplus if run on a Steel Interstate.

Of course, our two main long distance transport systems run on operating subsidies, so that it would be biased to expect that long distance trains ought to break even when cars and planes are not expected too. However, even if we expect to continue subsidizing these operations, raising the operating recovery ratios allows us to leverage more transport service with the same level of subsidy. That is, consider a service operating on the basis of 40% service revenue, 60% subsidy. If that same amount of subsidy is maintained, then in terms of operating costs alone:

• 50% operating recovery allows 1.2 times as much service
  
• 60% operating recovery allows 1.5 times as much service
  
• 70% operating recovery allows 2 times as much service
  
• 80% operating recovery allows 3 times as much service
  
• 90% operating recovery allows 6 times as much service
  

I am not sure what combination of fuel prices and service improvements are required to get these services up to operating break-even - or even whether we ought to be targeting operating break-even. However, it seems quite likely that the operations on a Steel Interstate system would allow the majority of the routes below to get into the range of 70% operating recovery.

Long Distance Route	Op Ratio	Long Distance Route	Op Ratio
Long Distance	49%
Auto Train VA/FL	85%	Silver Meteor NY/FL	47%
Empire Builder	61%	Capital Ltd DC/IL	45%
Palmetto NY/GA	55%	Coast Starlight WA/CA	45%
SW Chief IL/CA		Crescent NY/LA	44%
City of New Orleans IL/LA	49%	Texas Eagle IL/TX	43%
		CA Zephyr IL/CA	43%
		Silver Star NY/FL	41%
		Lake Shore Ltd MA|NY/IL	41%
		Cardinal DC/IL	34%
		Sunset Ltd LA/CA	23%

Conclusions

I have few conclusions, other than dismay that Pew would finance work like the work that SubsidyScope has turned out without demanding its money back. However, I do expect that I will be able to take these tables and find the key factors that tend to drive operating recovery up toward the direction of operating break-even.

Midnight Oil - River Runs Red
   Unauthorized Protest Concert at Exxon HQ

Weekend Bike Blogging: Bike Boxes I Can Believe In

In the store, or at the airport, a "bike box" is a box that is supposed to have a bike inside of it.

However, at an intersection, a "bike box" is when you make a space at an intersection ahead of the "traffic stop here" line. They are often combined, as in the picture, with a "protected by paint and optimism" bike lane. In some cases for traffic lights that are tripped by stopped vehicle detectors, as in the YouTube clip below, they include a more sensitive stopped bike detectors in the bike box, so that the sensitivity of the regular vehicle detector does not have to be adjusted.

Looking at the overall concept, as [http://bikexprt.com/bikepol/facil/stopline.htm John Allen does in A LOOK INTO THE "BIKE BOX"], this is yet another case of, probably subconscious "if only we could kill off these cyclists we wouldn't have to worry about them" thinking by traffic planners.

One thing the bike box does is amplify the encouragement of the regular "protected by paint", aka "kill the cyclist", bike lane to pass stopped motor vehicles on their right side. This is a practice that you can get away with day after day, but sooner or later you are going to end up trying to go straight when a car is trying to turn. And given the fact that the car is risking its pain job and you are risking an extended stay in the hospital, that is a monumentally stupid habit to pick up. Its bad enough that "protected by paint" bike lanes encourage this habit - the "protected by paint with a prize at the end" is even worse.


Watching the Danger Live on YouTube

The second thing the bike box does is allow the cyclist to get to the left hand side of the lane "in the safety of the bike box" - which is to say, "protected" by the paint of the vehicle stop line. Picking up the Bike Box Youtube in the third example, we can see how effectively the main vehicle stop line protects the bike box from incursion by motorists - as in, not at all.

At 1:00 into this clip is a safe passing on the right - because the car is turning left. But in a single share traffic lane, if the left turning car is in the left part of the lane, the cyclist can pass just as safely without requiring a bike lane at all.

At 1:15 into this clip, and then again at 1:40, we see the key to designing Bike Boxes as if we want cyclists to live.

In the first case (1:15), a cyclists could have used the bike lane to try to sneak around the car to get into the bike box to get in front to prepare for their left turn. But then, what if the signal changes "mid-sneak"? Either they try to get the car a left hook - and the cyclist of course loses whether they are receiving or delivering a right or left hook - or they have to wait until traffic is clear to merge left. Safer, and worst-case-quicker, to simply merge left behind the car and wait to turn left.

Indeed, lots of cyclists sneaking around the right to get in front of cars for left turns, and sometimes getting caught, could well encourage drivers to encroach on the bike box to prevent it.

In the second case (1:40), a cyclist arrives at the bike box, stopping on the bike indicator to trigger the signal. A car pulls in behind, and then a cyclist pulls in behind the car - instead of trying to sneak unsafely into the bike box on the right hand side of the car.

So while the bike box is a death trap, an aware cyclist can easily avoid the trap. For the expert cyclist, who uses it optionally and when appropriate, it offers the convenience of being able to trip the traffic signal. On the other hand, an inexperienced or confused cyclist is more likely to be killed.

Surely a bike box that is less likely to kill the inexpert cyclist can be designed?


Painting a Safer Bike Box

The idea of using the bike box to enter from the right and then get positioned for a left hand turn is a clear kill-the-cyclist idea. Consider the example from John Allen, pictured to the right. The bike box in the top right, which is already occupied, is not likely to have a car seeing a new green and driving through a cyclist lining up to turn left. The bike box in the bottom left, though, which is empty, is more inviting for a cyclist to go around right to get left - and sooner or later, there will be a car that is looking up to see green and then down to see the cyclist too late.

So that is the first thing to get rid of. That does not mean the bike box should not exist on the left hand side. It is safe for a cyclist who has already merged left to occupy that slot waiting for the light. Its just encouraging death or injury to try to sneak in "over the top" of traffic waiting on the light.

This means, of course, that there should be two boxes - with the space between barred to cyclists.

If there is a "protected by paint" bike lane, the solid line should not extend to the box. Instead, left turning cycle traffic should be warned to merge left safely for a left turn, and then straight through traffic warned to merge into the traffic lane to pass through the intersection. Before the start of the bike box, a cycle lane should be marked "right turn only" - and only of there is a cycle lane to turn directly into - because the only time it is even plausibly safe to pass cars on the right is if turning right inside of the traffic lane.

Indeed, in a "turn right on red with caution" state like here in Ohio, there is no need for a traffic indicator in that case - a right turn only bike lane turning into the a bike lane is a cyclist that can look out for crossing cyclists heading to the bike lane. Its only the through and left turn cyclist who needs the signal tripped.

So, that's my idea of a better bike box. It does not encourage habits likely to get novice cyclists killed before they have a chance to become experienced cyclists. It retains the advantage of having a dedicated cycle trip detector. It supports left turning cyclists positioning themselves so through motor traffic can pass them safely to their right. And it allows marking between the left and through bike boxes that indicates far more clearly to the driver not to encroach on the box.

REM: Stand Thing about Direction
 : : :Wonder Why You Haven't Before

Friday Hours of Action against Rupert Murdoch's Newscorp

Burning the Midnight Oil for Breaking the Silicon Cage

This is week 3 of the Hours of Action against bootleg streaming by servers from inside Rupert Murdoch's NewsCorp media empire.

Act on Friday, 4pm and 10pm Eastern, 1pm and 7pm Pacific.

Part of the point here is to Call Out Rupert and NewsCorp on their institutionalized Hypocrisy, as Rupert goes around lecturing countries on Copyright Piracy while various crevices of his media empire are passively streaming bootlegs in competition against serious and audience-friendly efforts to adapt to the New Media economy.

Part of the point is just to attack Rupert and and the senior executive management of Newscorp for being a bunch of dirtbags.

Part of the point is an experiment in whether the blogosphere can be of use for more than a talkshop and campaign season ATM machine for politicians claiming to be "progressive".

And part of it is curiosity - I am, after all, one of the minority of economists with an interest in how the real world economy works and evolves, beyond the blinkered confines of calculus-based models of non-evolving mechanical systems.

If you want to know more, there's a remote chance I've already said it, so check out the "story so far" links below.


What the Action is and How to Participate

The Action consists of charging the MySpaceCDN servers, owned by NewsCorp Subsidiary 20th Century Fox, a "tax" by requesting that they do the same thing for us that they are doing for the bootleg anime streaming sites - stream the file. Bandwidth costs money, and while any one of us as an individual cannot use a noticeable amount of bandwidth, if we all do it at the same time, and bring our friends in on the action, it can start to add up.

How to participate. Note that you should be sure that you are on a broadband system without a bandwidth surcharge - the point is to impose a Direct Citizen Tax on Rupert's media empire, not to impose a tax on participants.

What you do is emulate the process that the streaming players use - except by skipping the streaming playing, you have greater ability to download multiple streams at the same time. Right click on the links and save them to disk. For the first one, create a temporary directory to save them into. Then when they are downloaded, delete the temporary directory.

Each file will be about 60Mbyte-80MB, so if your hard drive space is limited, you could, if you wished, download a batch, delete the downloads and empty your trash, then repeat.

I've already emailed Hulu.com, copied to MySpace and 20th Century Fox, to alert them to the bootleg streaming taking place from MySpaceCDN servers. So you could also, if you wish, send an email to media@Hulu.com and ask them whether they are serious about continuing as an ad-supported free streaming, and if they are, whether they have been forwarding these links to the copyright owners for action, or else requesting that NewsCorp, one of their owners, takes action itself to remove the bootleg streams they provide in competition with Hulu.com's licensed streams.

The links are a long list below the rundown on the diaries posted on this issue over the past three weeks as I have been learning things and passing them on.

Act on Friday, 4pm and 10pm Eastern, 1pm and 7pm Pacific.


The Story So Far

Episode 1: Can the Teaspoon Model stand up to Bloodsucker Streaming Sites?:
I relate my encounter with the free anime streaming site, as their complaining about being forced to stop linking to FUNimation streams hits twitter streams that I follow. When the complaint hit twitter, it turned out that there is a segment of the anime fanbase that is opposed to bootlegs anime streams in competition with the licensed streams that actually provide revenue back into the industry - which is facing much of the same turbulence in the evolving New Media economy that the magazine and newspaper publishing industries are. I speculate on whether a fan-based system might be able to protect the ability of legit anime streaming sites to make a go of it.

Episode 2: Direct Action against Fox ...: In investigating the economics of bootleg streaming, it struck me how many of the streams seem to be hosted at 20th Century Fox servers - part of Rupert Murdoch's NewsCorp media empire. And so came the idea of Operation Direct Action Citizen Starving Artist Protection Tax, OK! (Operation OK! for short). 13 people vote to go ahead, so I decide to charge ahead.

Episode 3: Rupert Murdoch has the Biggest Pirate Base in the US Anime Market: I did further exploration, sampling the first episodes in each series on the site from the #'s and A through F (for FOX). It turned out that MySpaceCDN and MySpace were not just common free streaming hosts - they were the most popular free streaming hosts. It has since become clear that calling it a Pirate Base is confusing - Rupert's servers are more accurately a Pirate Support Base. That is, they do not do the piracy itself, they just either tolerate or are incompetent at suppressing the use of their facilities by people that they themselves label as "Copyright Pirates".

Episode 4: Direct Action: Charging Fox Noise Owner Rupert Murdoch a Pirate Base Tax: In the second week, I did not do a lot of writing, as I was learning how to script the process of datamining for more efficiency in harvesting links. I did, however, share a video on the debate at the leeching anime stream site by MarzGurl.

Episode 5: Is Rupert Murdoch Picking His Partner's Pockets ...: After harvesting the links for all the series I can find that are competing against legit streams, it becomes clear that I underestimated the importance of MySpaceCDN, at least for the case-study site. I speculate whether these servers are so open to streaming bootleg anime because there is some financial incentive more critical than the success of the Hulu.com joint venture - the "Pickpocket" hypothesis - or whether its just because NewsCorp is not structured to be able to cope efficiently with this kind of issue - the "Dinosaur" hypothesis (NB. the Dinosaur of the meme, not necessarily the Dinosaurs as they actually existed). I lean toward the Old Media Dinosaur explanation.

Episode 6: The Teaspoon Model Versus Rupert Murdoch's Pirate Support Base: I report on the results of an experiment I conducted on Monday, emailing NBC/Universal and Disney/ABC for their comment on what might be motivating NewsCorp to be so lax in controlling for bootleg stream competition from NewsCorp's own servers, including as "proof" a long list of links. The email was also cc'd to the copyright control addresses of many of the primary hosts that the bloodsucker streaming site streamed from. Veoh.com, Imeem.com and Megavideo.com emerged as "White Hats" that pro-actively cleaned out the bootleg files without having to be forced to do so by threat of lawsuit.

In this episode as well, I passed on the news that traffic at MySpace has fallen off so much that Google appears likely to be paying $100m than originally expected in its exclusive search advertising deal with NewsCorp when NewsCorp bought MySpace. Some might feel this makes the "Pickpocket" hypothesis more likely, but I still lean to the "Decrepit Old Media Dinosaur" hypothesis.


The Legit Anime Streaming Distributer

I previously intermixed links to the corresponding legitimate streams with the list, but this week, I will instead put the links to the series from legit Anime streaming distributors being undermined by NewsCorp here, and the (long) list of MySpaceCDN links itself below.

Crunchyroll series:
11Eyes, The Book of Bantorra, Aoi Hana, Asura_Cryin, CODE GEASS: Lelouch of the Rebellion, Fairy Tale, Hanasakeru Seishonen, Miracle Train, Naruto Shippuden, Sasameki Koto, Shugo Chara, Sora No Otoshimono, Tegami Bachi: Letter Bee, White Album.

Full financial interest disclosure: I am a Crunchyroll paid subscriber, so if they go bankrupt, I am out some part of my $7 monthly subscription fee.

Many of these series are also available at Joost, where you can also find FUNimation titles.

Hulu.com Exclusive: Bleach


The List

Act on Friday, 4pm and 10pm Eastern, 1pm and 7pm Pacific.

11 Eyes ep-2 http://cache01-videos02.myspacecdn.com/227/vid_2efe0de4c3624cf59de17cbd5950b399.flv
11 Eyes ep-1 http://cache01-videos02.myspacecdn.com/178/vid_b959ed011b8442a585e9f4d7a7a68622.flv
Armed Librarians: The Book of Bantorra ep-5 http://cache01-videos02.myspacecdn.com/140/vid_952b79e569a54cd69c6c00078280e33d.flv
Armed Librarians: The book of Bantorra ep-3 http://cache01-videos02.myspacecdn.com/199/vid_5c4dd294f806414da629d5e93295bc92.flv
Asura Cryin' ep-12 http://cache01-videos02.myspacecdn.com/114/vid_a9ade428de84445b9c83f9ced317409e.flv
Asura Cryin' ep-11 http://cache01-videos02.myspacecdn.com/176/vid_bbba16750165472d925628206e0d17c7.flv
Asura Cryin' ep-10 http://cache01-videos02.myspacecdn.com/148/vid_59b9ec299ac24983a9a5c8263b7c19eb.flv
Asura Cryin' ep-9 http://cache01-videos02.myspacecdn.com/140/vid_b33490ed48e14b9db8be41e3f7e6e0f7.flv
Asura Cryin' ep-6 http://cache01-videos02.myspacecdn.com/123/vid_b2a0db2bdb23478688852f72053a5ae1.flv
Asura Cryin' ep-5 http://cache01-videos02.myspacecdn.com/234/vid_15a9efe835794c4d8a97a7d3664ec0a6.flv
Asura Cryin' ep-4 http://cache01-videos02.myspacecdn.com/124/vid_d5b01cc47243425a9a5b0a4cb3637550.flv
Asura Cryin' ep-3 http://cache01-videos02.myspacecdn.com/167/vid_6d492fdd5f5d4c8da0d88f636c370352.flv
Asura Cryin' ep-2 http://cache01-videos02.myspacecdn.com/98/vid_1729385c8f864416a3cfae177cf58855.flv
Asura Cryin' ep-1 http://cache01-videos02.myspacecdn.com/124/vid_3622c8db50264463bdc2179195ac5c15.flv
Code Geass 24 and FINAL http://cache01-videos02.myspacecdn.com/25/vid_17b938a32bb4b54e49b04e584f00fb1e.flv
Code Geass ep-22 http://cache01-videos02.myspacecdn.com/33/vid_142b9ab034b342a5affea9fe9fa3b039.flv
Code Geass ep-21 http://cache02-videos02.myspacecdn.com/71/vid_a49dff28a91a4b0d811dddc38c6c2bc4.flv
Code Geass ep-17 http://cache02-videos02.myspacecdn.com/94/vid_2380a32f12bb4e5db5b171e2b01d67e8.flv
Code Geass ep-15 http://cache02-videos02.myspacecdn.com/65/vid_753ac55a47824092a692f215d333cdf2.flv
Code Geass ep-7 http://cache02-videos02.myspacecdn.com/67/vid_2f046b61bcde4971b5b155a7f19efc77.flv
Code Geass ep-3 http://cache02-videos02.myspacecdn.com/81/vid_b1b14079297a4b0ca4996399133fd78f.flv
Code Geass ep-2 http://cache01-videos02.myspacecdn.com/26/vid_3cb84c50773ee6e7c8613443755a96e5.flv
Code Geass ep-1 http://cache01-videos02.myspacecdn.com/22/vid_afe26aa5e49fe5cb77fbef25eac14e4f.flv
Fairy Tail ep-3 http://cache01-videos02.myspacecdn.com/176/vid_a1fa4b76325b44dcbe611390159d480f.flv
Fairy Tail ep-2 http://cache01-videos02.myspacecdn.com/211/vid_1d948466bef443769e32331e58c5b30f.flv
Hanasakeru Seishounen ep-24 http://cache01-videos02.myspacecdn.com/238/vid_ea68368edccc46b081e762d29fcd10b6.flv
Hanasakeru Seishounen ep-23 http://cache01-videos02.myspacecdn.com/224/vid_5d422caa1af7459d9e37f22146ea488e.flv
Hanasakeru Seishounen ep-22 http://cache01-videos02.myspacecdn.com/135/vid_10c157b8c9a340e697538f062cc89c37.flv
Hanasakeru Seishounen ep-21 http://cache01-videos02.myspacecdn.com/113/vid_1fe1292c865a49ad95360aec73f8cc95.flv
Hanasakeru Seishounen ep-20 http://cache01-videos02.myspacecdn.com/123/vid_6f5db1b0f1184cf4895844a3cbb6bc17.flv
Hanasakeru Seishounen ep-19 http://cache01-videos02.myspacecdn.com/225/vid_2a975e75dab44baa885c74252914fbfe.flv
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The Teaspoon Model Versus Rupert Murdoch's Pirate Support Base

Burning the Midnight Oil for Breaking the Silicon Cage

Two weeks ago, I speculated on applying the "Teaspoon Model" to the problem of protecting small, niche, video streaming markets faced:

• on the one hand with Copyright Protection laws focused on protecting the cash flows of large media distribution middlemen; and,
  
• on the other hand, with a plague of bloodsucking bootleg streaming sites, surviving on miniscule revenue flows because they leech off of everyone - not just the creators of the work themselves, but also fansub and video-rip groups that make the content availbale for download, and free stream hosting sites for the streaming itself
  

Refer to the lovely Shakespeare's Sister for the teaspoon concept itself - the idea of this application is:

So this is what I was thinking. Perhaps a small, struggling company that wanted to reduce the density of the cloud of bloodsucking flies draining the work of the artists who create this material of market value could gain leverage not by trying to find the Super-Teaspoon - but by recruiting a supporting group, each armed with ordinary teaspoons.

There'd have to be at least one person at the company actually sending out the letters to the sites streaming the bootlegs - but they would be far more effective if backed up by ten or twenty people contributing a couple of hours a week tracking down where the material is located. Indeed, the "white hats" could drop in info on where to get the material legally while at the bootleg bloodsucker streaming sites, including the proliferating opportunities for legal free streams.

Tonight, I consider an experiment on the Teaspoon Model in action.



The Sunshine Experiment

What I did at the beginning of the week was to send an email for comment to NBC/Universal and Disney/ABC on whether they had any comment on the hosting of bootleg streams by FoxNews servers (specifically, MySpaceCDN and MySpace domains) in competition with legit streams from Hulu.com, their joint venture with NewsCorp:

Dear Disney and NBC/Universal,

I am sure that you are aware that there are severa reports of Hulu.com joint venture partner executives saying that Hulu.com will be forced to move to a paid content model.

As an economist engaged in research in the New Media Economy, I have been looking at the competition with legitimate streaming sites from bootleg streaming sites. These sites rely on off-site free hosts for their bootleg streams. My research of these hosts indicate that they collect stream links from anywhere they can find them, but that when videos are taken down, they upload videos to their preferred free video hosting site.

I was surprised to find that the preferred free video hosting site for these uploads at the bootleg site that I am data-mining for their streams is the MySpaceCDN servers, registered by 20th Century Fox, a subsidiary of NewsCorp, a joint venture partner for Hulu.com.

While I am sure that the administration of the MySpace servers takes down videos on receiving a DMCA notice, they do not appear to act on other forms of information to remove bootleg material competing against Hulu.com.

My working hypothesis is that in their business model, being pro-active in identifying and removing bootleg media streams in competition against Hulu.com is not worth the trouble, as it costs resources while the fact that MySpace is less aggressive in identifying and removing bootlegs than YouTube and Veoh attracts traffic to MySpace that might otherwise be at risk of moving to FaceBook.

However, I cannot find any public comment by their joint venture partners, Disney and NBC/Universal in particular, on the apparent contradiction of Hulu.com moving to a paid content model while one of the joint venture partners appears to have a tolerant approach to bootleg material streamed freely in competition with Hulu.com.

I include below the links to bootleg streams in competitition with the Hulu.com streaming shows "Naruto Shippuden" and "Bleach". You will note that these are two of the four most popular streams in the:
http://www.hulu.com/channels/Animation-and-Cartoons/Anime
channel. In my research, I am focusing on Anime as the anime fanbase have been early adopters of video media technologies from the 1980's and the first fan-subtitled animes circulating on VHS tape.

I previously brought some of the streams hosted at MySpaceCDN servers to the attention of the registered owners of these servers, to no effect. By contrast, a number of the Veoh.com links that this free streaming site links to have been removed in this past two weeks.

You can confirm for yourselves that the MySpaceCDN servers and other MySpace have in the past year become the dominant streaming source for both of these series, taking over from an earlier reliance primarily on video.google.com, and combined with a pattern of filling in for earlier individual shows that have been taken down at other streaming sites.

Note that the bootleg streaming site in received an order to Cease and Desist linking to bootleg FUNimation streams, or else there would be far more Hulu.com series represented at this site. I also include samples of series streamed from the legitimate streaming site "Crunchyroll", including both series currently airing in Japan and being simulcast at Crunchyroll, as well as examples from their back catalog.

I also include two examples of less popular Hulu.com series that are primarily hosted elsewhere.

Yours,

The Sunshine element was that I cc'd the email to the ownership and administration email of the MySpaceCDN domain as well as the various Violations, Support and DCMA email addresses I could glean of free video streaming hosts providing the bulk of the streaming that the bootleg anime streaming group relies upon.

And of course, the balance of the email was a list of over 580 links to bootleg anime streams. Less than a week later, 368 of those streams are no longer live.


The Video Streaming White Hats

What I found remarkable was that many of these video streaming hosts shut down almost all the clips in the list. And while I have not received a single email in response, there are a number of indications that this was in response to receipt of the email - for example, videos added after I compiled the original list are not taken down, or a link in a series accidentally omitted remaining live while all the surrounding videos that appears in the stream are taken down.

From the perspective of a small niche streaming site, directing a part of its narrow margins to paying license fees to the creators of the work, these are the real "white hats" - streaming sites that are pro-active about taking out the garbage, so that there is no need to go through the process of issuing Cease and Desist orders. If the four hosts in the White Hat Honor Roll continue to behave in this way, as small but determined fan support group could quickly teach bootleg anime leech sites to not even bother with any videos appearing on these sites:

• Veoh.com: 48 streams in the list, all 48 removed, for a 100% hit rate
• Imeem.com: 76 streams in the list, 75 streams removed, for a 99% hit rate
• Megavideo.com: 71 streams in the list, 60 streams removed - and of the remaining 11, 9 are directed to a domain that appears to be licensed to stream the material, for a 97% hit rate
• YouTube.com: 19 streams in the list, 16 down and 4 remaining up, for an 84% hit rate. For YouTube, all of the streams remaining up were from a single series. Given the attention that YouTube receives as the one-time Bootleg Video Central, this might be just the turnover that occurs with YouTube streams. On the other hand, with their automated video fingerprinting system, it may reflect the video producers that have signed in to have their content protected.
• Honorable Mention: Broadcaster.com had 17 streams in list, and I recorded 15 streams as unavailable. However, as this site comes up as "presently unavailable", the question is whether those other two streams are streaming from Broadcaster.com, or were instead already replaced by other streams between the time I harvested the links and the time I checked which episodes were still streaming.

The Hit and Miss Parade

However, there is also a substantial Hit and Miss parade, where a substantial number of the streams have been taken down, but a substantial number remain up, which may well indicate that the site is receiving official C&D notices from the rights holders. Some look like it lines up with the list of individual series, so that the rights holder may have been forwarded the list - others are in a more random pattern.

The Hit and Miss Parade includes:

• The MySpace.com domain itself had only 21 streams in the list, with 14 down and 7 remaining up, for a hit rate of 67%
  
• MySpaceCDN.com: 241 streams in the list, with 110 streams removed and 131 streams still up. However, of the 110 streams removed, 43 have special circumstances - for instance the streaming page was in the process of being updated, so it may have been an stream that was already down. Of the 191 streams with no special notes, 67 were removed and 122 remain up, a hit rate of 35%
  
• Guba.Com was very lightly used, of only 7 streams, 4 are down and 3 remain up, for a 58% hit rate

The Black Hats

The Black Hats are the sites that showed no turnover of files whatsoever. These are the sites that a fan-based Teaspoon Brigade will have to be collecting stream links and forwarding the streams to the rights holder for batch Cease and Desist orders to halt streaming of bootleg material:

• LiveVideo.com: 30 streams in the list, all 30 remain up, for a 0% hit rate. It should be noted that LiveVideo was omitted from the original cc list and was notified in a separate communication. However, while LiveVideo is one of the few sites that claim to accept communication regarding copyright violations from people other than the copyright holders, there is not yet any evidence that it acts on that information.
• Google.com: 85 streams in the list, 14 now down, 71 still up for a hit rate of 16% - and the streams still up include an extensive portion of the back-catalog of Naruto Shippuden, the most popular series streaming at Hulu.com. Google.com was the only recipient of a cc' that responded - with a form letter response regarding the information required for a formal copyright complaint, indicating that they glanced at the email and put it into the form-letter queue.
• SevenLoad.com: with only 8 streams in the list, this is either a host that gets around to scrubbing bootlegs eventually, or simply not a preferred host for the bootleg anime streaming site providing the information, but of those 8, only 2 went down, with 6 still up, for a hit rate of 25%.

Moving Forward

One thing that is clear is that a 100% hit rate is by no means necessary in order for the Teaspoon Model to work in this particular shadowing fringe lying outside the US Anime market.

This is one key difference between this area and peer-to-peer downloading. With peer-to-peer downloading, if some well-organized crackdown was to miss a single potential seed, once the existence of that seed would made public, the community of those interested in the material would quickly re-create the copies.

With the leech bootleg streaming sites, what they offer is the organization and easy access to a stream from some central streaming site - if the stream is taken down, their only recourse is to either find another copy or to upload a copy of their own. But if they find another existing copy, that only helps hunt down the extant copies on streaming sites around the net, while far more time and effort is required to upload a new copy then is required to note the link address and report that information to the rights holder and streaming host.


The Puzzle Regarding MySpaceCDN - and One Possible Answer

It is still a puzzle that MySpaceCDN is not in the ranks of the White Hats. Indeed, if MySpaceCDN was to simply take down the bootleg streaming it does competing against Hulu.com, a NewsCorp Joint Venture, it would have shown a hit rate above 80%.

In Is Rupert Murdoch Picking His Partner's Pockets ..., I adopted the working hypothesis that the enterprises in Ol' Rupert's media empire are just Old Media Dinosaurs that just are incapable of reacting at the pace required to keep up in a field like this.

However, recent news will likely add fuel to the fire of the "Pickpocket" hypothesis. And that is that a lack of hits at MySpace is likely costing MySpace on the order of $100m. See, the purchase of MySpace was financed at a profit with an exclusive contract with google - except there were guarantees required MySpace's hit traffic:

MySpace Traffic Drop Costs News Corp About $100 Million, By Eliot Van Buskirk, November 5, 2009
The MySpace social media network’s traffic has dropped so much that it will fail to satisfy a minimum traffic level crucial to parent company News Corp’s three-year $900 million advertising deal with Google, inked in 2006, that made Google the exclusive search advertiser on MySpace — then the world’s most popular social network.

News Corp. executives bandied about three different estimates of how much of the Google’s $900 million MySpace will not take in, due to the shortfall, but a consensus emerged that the penalty will be in the neighborhood of $100 million.

As the Financial Times points out, this Google ad deal covered News Corp.’s estimated $580 million purchase of MySpace. The site’s failure to provide the deal’s minimum traffic level is bad news for News Corp., which otherwise reported a generally positive outlook due to its movie studio and cable channels, which currently generate 85 percent of the company’s revenue.
...

Under the PickPocket hypothesis, MySpaceCDN servers are not taking the aggressive, pro-active attitude to "taking out the trash", because it does not want to alienate users in the fight for market share with FaceBook. The story from Wired, however, casts a different light on the issue - the conflict between long-term, strategic goals and short-term revenue.

After all, MySpace has conceded defeat in the market space it once dominated, and is trying to leverage an advantage it build up for another market space:

Rather than compete against those social networking heavyweights, MySpace intends to double down on what has always been a core strength: the millions of artist pages on the site, which dwarfs the catalog of other music services, because it includes so many unsigned (and, for that matter, signed) bands. MySpace’s new strategy, already known before the earnings call, will be to realign the site as an entertainment destination rather than a place where people keep up with friends and family.

If the strategy works, it will likely involve MySpace leveraging video in addition to music. MySpace Video currently boasts over 20,000 music videos, television shows and other videos, but faces entrenched competition from YouTube that could be even fiercer than Facebook and Twitter are on the social networking side

In the short term, being more passive about copyright protection than YouTube and the main second tier video streaming sites will drive a larger number of hits in the direction of MySpace, reducing the penalty it faces in its advertising contract with google.

However, it is clearly not in NewsCorp's long term interest to encourage the proliferation of bootleg videos on its site. One the one hand, bootleg videos cannot attract the mainstream video ad-streaming that, at the very least, pays the web serving and video streaming bills for a video streaming site, so that whatever other income it attracts does not have to cover those basic operating costs. With MySpace's long term strategic direction, they need to encourage the creators of original work to use MySpace to publicize themselves - they certainly do not need to be streaming bootleg anime on behalf of leach sites where a link to MySpace does not even appear.

Indeed, if the MySpaceCDN servers were in the hands of a media empire that was not such an Old Media Dinosaur, anybootleg anime that it learned off streaming in competition against its own joint venture would be replaced with a short trailer advertising the legitimate stream on site - and a bootleg that was not streamed at the joint venture would be replaced by a trailer for MySpace as a video and music entertainment stop - an a Google link to search for legitimate streams and other legitimate sources of the anime title, to make Google happier with MySpace.

I am still skeptical that NewsCorp is deliberately adopting a passive attitude toward cleaning up the trash at MySpaceCDN, putting its financial interests in MySpace traffic ahead of the financial interest of its Joint Venture with NBC/Universal and Diensy/ABC - but the news that a shortfall of MySpace hits is costing Rupert $100m certainly does add to the plausibility of the alternative working hypothesis.

The candy store paupers lie to the share holders
They're crossing their fingers they pay the truth makers
The balance sheet is breaking up the sky
So I'm caught at the junction still waiting for medicine
The sweat of my brow keeps on feeding the engine
Hope the crumbs in my pocket can keep me for another night
And if the blue sky mining company won't come to my rescue
If the sugar refining company won't save me
Who's gonna save me?

Is Rupert Murdoch Picking His Partner's Pockets ...

... or is NewsCorp just an Old Media Dinosaur that cannot keep up?

Burning the Midnight Oil for Breaking the Silicon Cage
In Orange 5pm Wednesday, EST

Breaking the Silicon Cage is for breaking down those barriers that prevent us from leveraging the full potential of the netroots for progressive populist action - whether that involves using the internet for collaboration on works to be delivered live on the street, or breaking down barriers between different social networks on the internet itself.

The latter is what we have here. The progressive blogosphere, if people are to believe our words (though not always our actions) is an enemy of Rupert Murdoch and his Iraq-Invasion-supporting, Conservative-Politician-electing multinational media empire. We in the US know him primarily for the Faux News Channel, but in the UK and Australia they know him for his grossly biased newspaper oligopolies.

Now, if Progressives were indeed intent on taking power (something Cassiodorus questions), we would be eager to take any shots at Rupert Murdch's Media Empire that we could.

Now, I'm game, and a few others have expressed their interest, but for the most part the reaction of the blogosphere is a big, "why should I become outraged by that in particular". If the thousands of US service members and hundreds of thousands of lives disrupted - hundreds of thousands of Iraqis kills and millions of Iraqi lives disrupted - is too big a reason to grasp for being outraged at Rupert Murdoch and his media empire ... then be outraged for the mother (above right) of Cpl. Kareem Rashad Sultan Khan, Bronze Star, Purple Heart, killed in action in a War of Choice that Rupert Murdoch loudly banged the drum in favor of choosing.
__________________

Because rather than being serious in our antagonism with Rupert Murdoch and NewsCorp, rather than owning our antagonism, rather than recognizing that sometimes, some people are just committed to opposing almost everything you are committed to supporting and so much be attacked whenever they present a target of opportunity...

... it may well be that many members of the "progressive blogosphere" are only comfortable in acting when they have been manipulated into outrage. If someone else can push our buttons, and tick us off, then we can join in expressing outrage. If, on the other hand, we have to pursue our revenge against Rupert Murdoch's media empire with cold calculation, that's not the same. And, no, its not the same - it would be an indication that we are serious about taking power.

Because this is an issue that on its own merits is not likely to be a big button pusher in the progressive blogosphere. The eternal online temptation to sneer is too strong, and the opportunity to land a punch on the enemy is lost in the joy of being smugly superior to the line of the attack.


The Line of Attack

Because the line of the attack is US translations of Japanese anime. US distribution of bootleg anime has long been on the bleeding edge of the New Media economy, with VHS tape bootlegs of fan-subtitled Japanese anime series circulating in the 80's, early adoption of computer digital video in the 90's, and early adoption and a strong presence in peer-to-peer networked file sharing.

This was a fringe of the anime audience that the industry ignored in the US growth period of the 90's and early part of this decade. However, an industry that had become increasingly reliant on US licensing fees, with US sales reaching a peak of around $500m earlier in this decade, has been hit hard in the second half of this decade. The distribution of bootlegs through free streaming sites has cut growing swathes of the fanbase out of the audience for licensed work, and US sales have slumped to a figure closer to $350m.

Particularly hard hit have been the higher end US distributors that dub Japanese anime with US voice actors - considered essential for packaging a series for US broadcast, but representing a substantial fixed cost for a US distributor to take on with no guarantee of recouping the cost from increased sales. In the past few years, one long time US distributor, Central Park Media, has gone bankrupt, and another, ADV, restructured as Section 23 Films and spun off its dubbing division into a separate company.

OK, so what does this have to do with Rupert Murdoch?

One of the ways that the anime industry has been trying to cope with the rapid distribution of bootleg fansubs on streaming sites has been to make legitimate licensed streams available to fans, in a mix of ad and subscriber supported business models. Examples include Joost, with over 30 anime series available, and Crunchyroll, with over 100.

But of course, legitimate sites can only stream what they can license, while the bootleg streamers can stream anything they can find available on a free video stream host site. For example, Hulu.com focuses entirely on North American rights, and has a running fight with services that allow overseas access via US-based Internet addresses, while Crunchyroll.com faces constant irritation from overseas members when a show they want to watch is not available for streaming to their country.

And the bootleg streamers can survive on the miniscule revenues of web ads and donations, because they contribute nothing back to the creative artists, contribute nothing back to the "fansub" groups that translate and subtitle works as a community activity, and indeed do not actually do the streaming of the material itself.

The flipside of that, however, is that the bootleg streamers can only exist due to the tolerance of their activity by the free video stream sites or due to the ineffectiveness of enforcement efforts.

Which is what raises the question in the title: is Rupert Murdoch's MySpace video streaming tolerating bootleg anime streams, in order to attract more users in their ongoing fight with FaceBook (note if you click through to [http://www.joost.com/epg/us/shows/animation/anime/ Joost], you can sign in via Facebook) ... or is NewsCorp just an Old Media Dinosaur that is incapable of being fast enough on its feet to cope?

Because, as I began to document last week, and finished working out just this last weekend, Rupert Murdoch's MySpace servers, owned by 20th Century FOX, are the Pirate Support Base of preference of the particular bootleg streaming source that I have been datamining for stream host information.

In particular, looking at all series on the site that are available in a licensed free stream at either Hulu.com, Crunchyroll.com, or the AnimeNewsNetwork.com, the count of links as of 30-10-2009 by host server is:

• MySpaceCDN.com: 461, MySpace.com: 47, Total: 508
  
• imeem.com: 100
  
• google.com: 85
  
• megavideo.com: 81
  
• Source Hidden behind Local Link: 47
  
• LiveVideo.com: 39
  
• Veoh.com: 22
  
• YouTube.com: 18
  
• SevenLoad.com: 14
  
• TwitVid.com: 1
  
• Zoopy.com: 1
  

So in one part of his "trying to into the New Media Economy" strategy for his media empire, it turns out that Rupert Murdoch's MySpace is a major free streaming hosts for bootleg anime. Those in turn undermine the efforts of production houses and US distributors to provide US access to content shortly after Japanese airtime, while providing some income stream to keep the creative artists, producers, and translaters employed.

There is nothing that can be done to stop peer-to-peer file sharing, and so the market for DVD's is the market for people who want the DVD's. That genie is out of the bottle and cannot be put back in. But clearly, not everyone wants to or can work out where to download bootlegs, or how to get them playing on their system - that is why the bootleg streaming sites exist and attract an audience. There are those who prefers the simplicity of just browsing to a site and watching the show.

And that is the potential audience that Rupert Murdoch's MySpace is helping to divert away from the legitimate streaming sites.


The Pick-Pocket Thesis

One of Rupert's other ventures in trying to buy his way into the New Media Economy is Hulu.com, a free streaming joint venture between NewsCorp, NBC/Universal and Disney/ABC (there may be others - I'll be happy if you can add to that list of joint venture partners in the comments).

Which is where it gets weird, because when you look at the top four shows on Hulu.com by popularity, the list is topped by Naruto Shippuden - also available at Joost.com and Crunchyroll - with "Bleach" at number four. Hulu.com seems to be the sole source for legit streams of "Bleach".

Bleach is important for the bootleg streaming sites as well - in one it features as one of three series with direct links provided at the very top of every page.

And it is argued in some quarters that Hulu.com definitely needs more audience if it is going to be a successful venture. The Silicon Valley Insider at The Business Insider:

We have been skeptical that Hulu will receive enough of a revenue cut from its content and distribution partners to cover what we believe is a high cost structure. After conducting more research, we remain skeptical. It is not impossible that Hulu's model will work, but we continue to think it will be challenging for the company to turn a profit and build a sustainable business.

And there may be a fight over the business model brewing between NewsCorp on one side, and NBC/Universal and Disney/ABC on the other:

Here’s the skinny: A story on B&C’s Web site says Carey “hopes that it will move to a subscription model,” While Entertainment Weekly said Carey firmly stated the site would start charging in 2010. Whatever really happened, it was enough for a Hulu spokesperson to speak up — which hasn’t happened in the past over this issue — pouring cold water on the paid idea, at least for now:

Hulu’s mission has always been to help people find and enjoy the world’s premium, professionally produced content. We continue to believe that the ad-supported free service is the one that resonates with the largest group of users and any possible new business models would serve to complement our existing offering. There are no details or timelines to share regarding our future product roadmap.

So, if Rupert Murdoch and NewsCorp are trying to push Hulu.com into some form of subscriber model, and at the same time they are faced with the power-law distribution of social networks in their fight for market share against Facebook, the "Pickpocket" thesis is:

• NewsCorp tolerates bootleg video except when required by law to act, because it serves their interests, even if it undermines the interest of Hulu.com under its current business model.

After all, the argument would go, they are not entirely troubled by the prospect of that market model failing if they expect it to fail anyway. Why devote effort to protecting the market audience of a lost cause?


The Dinosaur Thesis

Only considering a single hypothesis leaves a risk of looking for confirming evidence and overlooking contradictory evidence. And there is, after all, a second hypothesis that should be considered.

Suppose NewsCorp is simply an Old Media Dinosaur, is competing against itself through simple incompetence, which is just one more signal that it is doomed to fall as the oligopolistic market structures in both press and broadcast media that it was built upon are torn apart as we build the New Media Economy.

One of the tests of the "tolerance" scenario is whether any action is taken when information is passed on by someone other than the rights owner. The streaming host is legally required to act on a Cease and Desist order from the rights owner - but they are certainly permitted to investigate and take action no matter what their source of information is.

And so I have been passing my results on to the various streaming sites, to see what their reaction is. Many of the "minor sources" above react quite quickly. Indeed, if I had taken the count a week earlier, the count of Veoh.com clips would have been 50% higher, amd from my exploration yesterday and today, the count would be substantially lower again today.

Some sites show a splash screen that content was taken down due to copyright infringement. Others, such as Imeem.com, simply bring up the embedded video player with no content for it to stream.

The most interesting reaction is that of MegaVideo. Many of the MegaVideo videos have been replaced by a "copyright infringement" take-down notice. However, at least two bring up an entry portal into the iReel.com site - which appears to be a site for licensed streams of movies and shows, and which might indeed have a license to stream that particular show.

Exploration of the "Bleach" show, where Hulu.com has exclusive streaming rights, shows that some but not all of the MySpaceCDN streams have been taken down. In particular, those links referred to in an email to the site registration owner and administrator at the end of last week seemed to be in the process of being taken down - but while sites like Megavideo.com and Imeem.com have a reaction time of a day or two - the reaction time for MySpaceCDN.com seems to be more in the range of a week or two.

So, myself, I lean toward the "Dinosaur" thesis. Indeed, it would appear that few streaming hosts are as well placed to replace streams of bootleg anime with a pre-packaged stream that advertises the series availability on Hulu.com. At the very least, they can get rid of bootleg streams of episodes that they are hosting in competition against themselves in a timely manner. However, in practice, they are clearly slower in reacting than Veoh.com, Sevenload.com, Imeem.com and Megavideo.com - I had inadvertently omitted LiveVideo from the cc: list of the email I sent to NBC/Universal Disney/ABC, but I would not be surprised of LiveVideo.com is also quicker on their feet than NewsCorp.

They might defend themselves that I am using the wrong email addresses to contact them, but on the other hand I am just using publicly available registration, copyright violation, or Terms and Conditions violations contact addresses.

Still and all, they are, slowly, reacting. They just do not seem to have the ability to react as fast as the little mammals scurrying around their feet.


So, What Are We Supposed to Do About It

In the end, while anime fans might feel compelled to work out why NewsCorp is acting the way it does, the progressive blogosphere really does not. Whether they are one of the biggest Pirate Support Bases in the US streaming anime market because they are pursuing a dishonest game against their Hulu.com joint venture partners, or because they are simply not as competent at shutting down bootleg streams as their smaller, nimbler, New Media Economy rivals ...

... they still remain one of the biggest pirate support bases, which is a great big glaring contradiction with NewsCorp's aggressive and noisy public attacks on "copyright piracy". Indeed, Rupert Murdoch (note that the picture at the right is not from the event itself) has just recently lectured the Chinese on the subject:

"The embrace of the digital is as vital to China today as its decision 30 years ago to take its place in the global economy," he said. News Corp owns Dow Jones & Co., which publishes The Wall Street Journal. "Chinese media and entertainment companies have a remarkable opportunity to expand their international influence and revenues." But Mr Murdoch said "piracy will make it difficult for them to generate the profits at home that would fuel growth abroad."

... while he himself owns one of the biggest Pirate Support Bases for anime streaming in the Internet!

So the reason number one for the progressive blogosphere to make a big noise about it is simply that its a vulnerable point.

And if its publicized broadly enough, NewsCorp will have to take action to shut the Anime Pirate Support Base. If it is pushed hard enough to be picked up by any of the mess media, NewsCorp will have to come out denying that it is intentional, and declaring that they will take steps to shut down what they had no idea was happening.

After all, whether they are doing it because they are a Pickpocket or because they are an Old Media Dinosaur, they have to pretend to be a New Media Not-Pickpocket once the question is asked publicly enough.

But then there is the question - do they just shut down the streaming they are doing in competition with themselves? If they decisively defend their own streams, but do not take the same decisive action to stop infringing on the rights of Crunchyroll.com, Joost.com, or the AnimeNewsNetwork, then we have them on the hook for another kick of the story.

And then if we force them to take decisive action to shut down the Anime Pirate Support Base for all legitimate streaming anime - well, then we win. If the solution requires ongoing organized action by anime fans in defense of the modest income streams available from free streaming, as I suggested in The Teaspoon Model - that's for the mature segment of the anime fanbase to take on. The progressive blogosphere would declare victory and move on.

OK, now suppose that we raise a ruckus but not enough to make the Dinosaur move its feet. We still will have been on the right side of trying to defend the livelihoods of the creators, against the Digital Millenium Copyright Act which is of course biased toward the big media middlemen. And, indeed, whether we force Murdoch to act or not, any ammunition we can give to any of his enemies is a good thing. After all, much of the evil that Murdoch does is in the realm of propaganda, and if he does not change MySpace's status as a primary Anime Pirate Support Base, that is something to snipe at him with every time he sounds off on the issue of copyright.

And win or lose, working in coalition in support of the growth of a New Media Economy is a useful networking exercise. After all, these are people with skills that the blogosphere needs very badly when we hit the campaign trail. We have got an ocean of words, but to get through to more than 30% of the electorate, we need effective moving images with sound. And the fans of the section of the New Media Industry we would be coming to the aid of here - include numbers of people with effective image creation and video production skills.

Well, at least, if progressives are serious about pursuing power. If being "progressive" is about sitting on the sideline and complaining, not so much.

If you are interested in joining the fight, keep a watch out for the "PirateCorp" tag, do what you can to publicize the direct actions in the fight, and to push the story into the media.

And if you can come up with additional / better direct actions than the Friday download-a-thon, be sure to pipe up.

The rich get richer, the poor get the picture
The bombs never hit you when you're down so low
Some got pollution, some revolution
There must be some solution but I just don't know
The bosses want decisions, the workers need ambitions
There won't be no collisions when they move so slow
Nothing ever happens, nothing really matters
No one ever tells me so what am I to know

You wouldn't read about it, read about it
Just another incredible scene, there's no doubt about it