Category Archives: Business models

CC Licenses, APIs and Content Stacks

I just read an article in Wired that pushed a lot of my buttons, and illustrates a number of the points in my talk at the PACA conference two weeks ago.

A company called Pro Populi has used some AOL data to create a new service that makes the data available in new ways, notably on a mobile platform. The data is published by AOL under a Creative Commons license which allows for reuse in an nearly unlimited number of ways, as long as credit is given.

At first I thought this was a story about people unwittingly giving away the store. As I have been writing recently, I think that many people are granting very broad licenses to use their content when they post on social media. This can come back to bite you when someone starts to build a new service with your data in ways you aren’t expecting.

This is a particular problem for media companies that publish stuff to other social media platforms. If you are a media company pushing your content online to Instagram or Facebook, you may find that the content shows up in competing products that you exercise no control over (and get no revenue from). The story in Wired uses this as the lead – AOL publishes database, and company scrapes up the whole thing, reformats it, and builds a new service with the data.

But buried in the 12th paragraph is the real story – the business implications of the Application Programming Interface or API. APIs allow one company to make their data available to another user, service, device or application. And they come with their own terms of service, with implications that few people understand.

On the surface, an API seems like a great way to short-cycle development. You can wire up the content or service into your own in a matter of minutes, hours or days, instead of months or years of development. It’s creating phenomenal growth as data stacks and business models are remixed on the fly.

But APIs typically come with take-it-or-leave-it usage terms. When you build with APIs, you run great risk that the service which is offering the API-fed data will simply turn off the spigot. If your business depends on the live link to the data that APIs provide, you are at the mercy of the provider. And that’s the story here, the one that Wired buried.

Welcome to APIworld. Over the next few years, APIs are going to become central to the battle for commerce and business development, particularly in the media realm. We’re going to be seeing this story a lot in the next few years, as more people find that they have built their businesses on agreements they did not even know they were making.

David Byrne and the Independent Creator

I’m peeling this post off of a discussion I’m having on Facebook with Leora Kornfeld, who writes about Disintermediation as a Harvard Research Associate. I think this message is an important one for all independent creators to be thinking about as all content-based industries are changing around us.

Here is David Byrne’s Oped in The Guardian. In it, he argues that new media consolidation on the internet is squeezing the economic sustainability out of music broadcast.

And here’s my take on it:
I think he has a point about the economics of the new aggregators. It’s a little ironic to see a reference to the good old days of the record company fairness, since they were the posterboys of IP robber baronism. 

Now, it’s the tech aggregators turn. It may be an even less fair arrangement, due to a confluence of factors. The end result will probably depend on whether the winner-take-all model topples, or whether it stands. 

Also it’s probably more accurate to say that the new model is sucking the economic sustainability out of the middle and bottom rungs of a professional art form. Whether that translates to the “life” or not is a different question. 

Of course, both of the above questions are linked. Do new disintermediation models spring up to get around the reintermediation™ of Amazon and Pandora? Jeff Goldblum would say that life will find a way.

You’ll see many people in the tech world shrug and say, “Get used to it.” But this ignores the fact that there is no one single natural order of things. The rules (laws) governing business practices set the playing field. And those rules are set by governments.

When radio was new technology, for instance, payola was outlawed. This law was instrumental in the development of music businesses in the radio age. Without these laws, the record companies would have had an even tighter stranglehold on the entire industry and could have required even more onerous contractual terms.

Monopolies deform the marketplace, generally to the detriment all outside stakeholders. Disintermediation is undermining the power of the existing content oligarchies, but reintermediation is apparently on track to bring an even greater concentration of wealth and power into fewer hands.

Along the way, these companies will work to bend the rules in their own favor. So I don’t think that stakeholders outside the new oligarchy should simply “get used to it.” Our laws are ill-equipped to deal with the challenges of the digital age. And we should not leave the law-writing only to those with the highest concentration of wealth and power. History teaches us that they will try to increase their power by tilting the playing field. 

It’s possible that these companies will be prevented from becoming true monopolies through some market-based limiting factor, such as hubris, incompetence or outside competition. But it’s also possible that they win the winner-take-all game.

In that case, as with the monopolies of the last century, it may fall to governments to limit the power of these companies. It’s important for independent creators to stay informed and to advocate for their own best interests.

The Instagram Papers

DAM Useful Publishing and ASMP have just released The Instagram Papers, a collection of essays about the current Instagram Terms of Use, and the rights that they give the company.  The company claims a right to do nearly anything with the photos and videos uploaded to the service, including to sell them, forever.

TheRightToTerminate

In response, we have put out an open call for a meaningful right to terminate social media contracts. We believe that the right to sublicense your photos and identity should be something you can revoke, if the company’s practices become objectionable.

Over the next few months, ASMP will be working with other organizations to advocate for this basic contractual right. If you are interested in lending your name or your organization’s name to the effort, you can contact me here.

Here’s a link to the complete papers, which are available for free download and distribution.

 

 

Instagram creates terrible new user agreement

 

I’m generally not alarmist about web rights boilerplate, since there is often a lot of ambiguity. Nothing ambiguous about this. (Item 2 in Rights, emphasis added.)

Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.

Note that this includes minor children.

If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.

Oh, and you agree to indemnify them in case of breach of privacy. (That means you agree to pay their legal team in the event one of your subjects sues for being included in a viagra advertisement).

(Item 4 in Rights)

You represent and warrant that: (i) you own the Content posted by you on or through the Service or otherwise have the right to grant the rights and licenses set forth in these Terms of Use; (ii) the posting and use of your Content on or through the Service does not violate, misappropriate or infringe on the rights of any third party, including, without limitation, privacy rights, publicity rights, copyrights, trademark and/or other intellectual property rights; (iii) you agree to pay for all royalties, fees, and any other monies owed by reason of Content you post on or through the Service; and (iv) you have the legal right and capacity to enter into these Terms of Use in your jurisdiction.

And this part in Indemnification:

You (and also any third party for whom you operate an account or activity on the Service) agree to defend (at Instagram’s request), indemnify and hold the Instagram Parties harmless from and against any claims, liabilities, damages, losses, and expenses, including without limitation, reasonable attorney’s fees and costs, arising out of or in any way connected with any of the following (including as a result of your direct activities on the Service or those conducted on your behalf): (i) your Content or your access to or use of the Service; (ii) your breach or alleged breach of these Terms of Use; (iii) your violation of any third-party right, including without limitation, any intellectual property right, publicity, confidentiality, property or privacy right; (iv) your violation of any laws, rules, regulations, codes, statutes, ordinances or orders of any governmental and quasi-governmental authorities, including, without limitation, all regulatory, administrative and legislative authorities; or (v) any misrepresentation made by you. You will cooperate as fully required by Instagram in the defense of any claim. Instagram reserves the right to assume the exclusive defense and control of any matter subject to indemnification by you, and you will not in any event settle any claim without the prior written consent of Instagram.

Note that this language seems to grant a license to the actual photograph, and not just the copy uploaded to Instagram. If they could find a high-res version somewhere, they may have the rights to that also.

The only opt-out is to delete your account.

The changes take effect January 16, 2013.  So, what does one do?  Well, I don’t see much option except to delete the account.  And if your tween or teen child has an instagram account (and many of them do), you’ll want to think about blocking that.

Instagram claims the rights to any photos uploaded after January 16th in perpetuity, regardless of whether you delete your account later.

(Cnet article here.)

This is breathtakingly horrible.