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.
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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