24) Hackers and Posers

June 22-23, 2006

“Who are you and what do you need?”

It was a rather jarring way to start the morning. This obviously wasn’t the quiet pirate lair of my youth. All I had wanted was a danish and quiet cup of coffee before the conference got officially underway. Karen Kaplowitz, however, would have none of that. She headed DCIA’s member relations and took her job very seriously!

“You didn’t come all this way to eat donuts with your coworkers,” she said insistently. “What do you do? Who do you want to meet?”

“I’m Bob Way and this is Clay Price. We’re from HackBack Media. We registered yesterday over the phone.”

“Ah! The hacker guys! I’ve been waiting to meet you…”

One day before…

“I’ll call and register us for the conference,” Clay said as I was setting up the laptop. “Who should I tell them we are with?”

I hadn’t even given it a thought. We didn’t have a company name. We weren’t even really a company yet. Just two guys who fell down a rabbit hole.

“Shit, we’re going to need business cards too,” I told Clay.

We brainstormed company names for the better part of an hour. Each one screamed, “Two guys making shit up the day before a conference…” How do you capture what you’re about in a name, when you’ve barely an idea what you’re about?

“So why don’t we just use the cards you showed me the other day?” Clay asked trying to calm my exasperation. “You know, the HackBack ones?”

“HBM is a publishing company whose sole project is an interactive fiction website about hackers trying to destroy the copyright industry. How are we going to explain that? It won’t make sense to anyone…”

“Who cares?” he said in soothing Clay style. “We just need a temporary name. We can change it later. And we’ve got about 30 minutes to get something to Kinkos if we want to pick them up on the way to the airport.”

As usual Clay was right. The card design was already on my computer. All it took was a quick cut and paste to make him Vice President. An email to Kinkos and we’d beat the deadline by a good five minutes.

“You know these cards say ‘Fiction Taken Seriously?'”

“Just go with it!” Clay replied. “We’ll probably hand out three. Who is going to notice us. We’re nobodies.”

“OK hacker guys, What’s your business? Who am I going introduce you to?” Karen demanded.

It was a lot more attention and animation than I’m used to before coffee. I could hardly muster a reply.

“Advertising,” I said. We’re working on consumer-centric advertising models.

“Good!” she said. “Now we’re getting somewhere. Come meet Rick Vandervoorn,” she continued without even taking a breath. “He’s in advertising too. You three have breakfast together and talk.” It was less a suggestion than a command.

Fortunately, Rick turned out to be a nice guy. Oddly though, he was confidently selling a product I found baffling. He called it an ultramercial. It was an advertisement permanently stuck to a song or video. You could share all you wanted using P2P systems, but every time someone tried to play a file, it showed an advertisement that couldn’t be skipped.

“The media companies love it!” he exclaimed. “They get to track every time someone plays the file *and* each time they get paid!

“Have you ever used a P2P system?” I asked curiously. It was clearly the most retarded concept I’d ever heard of. No self-respecting peer would ever foist such crap on another peer. It was worse than the corrupt and malicious files the RIAA was currently injecting into P2P searches.

“Yes,” he said. “We test using all the major systems.”

“No, I mean do you share? Do you interact with the P2P community? Why on earth would they want this?” I queried incredulously.

“It’s not driven by what consumers want. What they want is illegal,” he dismissed. “This is about what advertiser’s want. More importantly, it’s about what the media companies want. The fortunate side-effect is that it makes sharing legal, and that is what consumers’ want! It is a win for everyone.”

“WTF?” I thought to myself. Making us consumers happy isn’t even a goal? Just occasionally a fortuitous side-effect. What an odd way to run a business.

“Bob, Clay!” I heard as soon as we’d stood up. “I’d like you to meet Fritz Attaway.”

Marty Lafferty had founded the DCIA and knew everyone. As we walked up I overheard him say, “These are two hackers with some very disruptive ideas.”

“Nice to meet you,” I smiled. In this context being seen as “disruptive” felt an honor. I reached out to politely exchange cards just in time to hear Marty say, “Fritz is Executive Vice President and General Counsel for the Motion Picture Association of America.”

Gulp! So much for anonymity…

Walking the floor with Charles Baker, Michael Weiss and Sam Yagan made it impossible to avoid the turning heads. Everyone, it seemed, had shown up either to court the P2P pioneers or to keep an eye on them. Yet as they watched, there Clay and I were at the center of it all.

“Who are those guys?” I keep overhearing.
“Oh, they’re the hacker guys…”

It was hard not to smile at our growing quasi-notoriety.

I guess I’d pictured the crowd differently. More as a gathering of Pirate Captains raging against the industry and spilling secrets about the next big peer-to-peer offensive. Hopefully with a few dramatic rants to put fire into the collective belly of the millions under siege by lawsuits…

Instead, I kept meeting industry wonks, lawyers, and technology suck-ups. Either folks, like Fritz, who hated P2P because it had cost the industry control. Or folks like Rick, who promised, if the industry would license them content, they could wrestle back control.

What seemed entirely missing though, was the viewpoint of the millions of human peers that currently made up the major P2P networks. That total vacuum made my consumer centric questions stand out all the more.

“Did I miss something? The only thing peer-to-peer about your system seems to be the fact that users pay your bandwidth bills. How is that an advantage for us?”

“What exactly are you improving? You seem to just be layering inconvenience onto P2P files that I already find optimal.”

“How exactly are Bertelsmann and I peers? You seem to be dictating all the terms. And if we are peers, why does the money always flow your way?”

I wasn’t making up quips just to be contrary, these were the replies hundreds would have made had they been invited. Some were insightful some were flippantly sarcastic. It was the nature of the culture I’d been immersed in for three years.

Curiously, every time Clay or I made some suck-up on the dais squirm, two genuinely interesting folks would come over to shake our hands. “I was thinking the same thing,” they’d say, “but I really can’t speak up. We’re looking for licensing…”

Everyone claimed to be “targeting” P2P users but few really empathized with them. It was not coincidental. Sam Yagan summarized the industry logic quite concisely. “There seems to be one central question,” Sam said in his keynote.

“Will we always have to compete with free?”

The official answer so far, of course, has been “No, we won’t always have to compete with free.”

If indeed open file-sharing can be truly contained…, then very little entrepreneurship is needed.

In other words, once the industry didn’t have to compete with free, they no longer had to care one wit about user opinion. In the absence of alternatives, all consumers would have no choice other than to accept what was offered.

Sam said all this with a tinge of skepticism. His over arching point was existing P2P systems were a great forum from which “to try winning the hearts and minds of consumers.” One that would be squandered if P2P users were dispersed to “darker” nets.

His was a subtile point lost on most. But it was, after all, the very reason Clay and I had come all this way.

“Excuse me…” I asked after Sam finished, “Say I could mathematically prove the industry conjecture wrong. Say I could show definitively that they will always have to compete with free. Is anyone actually working on that problem? Is anyone here actually trying to outcompete free content?”

It was the only time I’d heard this audience of self-promoters fall silent.

As we stood up for the break I felt something pressed into my palm. “Hi my name is Aydin Caginalp and this is my partner Renee Brissette. This is what we do,” he said looking down at the thumb drive. “When you have time, I’d really like to hear about what you do.”

“Who was that?” Clay asked.

“I have no idea. The drive says, Alston & Bird. Just another lawyer I guess…”

I wasn’t bluffing about eternally competing with free. It was the industry’s worst nightmare and I already knew unequivocally how to make it so.

But, we hadn’t come to re-pick that fight. Clay and I intended to end the war in a way that benefited both consumers and the industry. Yet every time someone from the industry spoke I had second thoughts.

Over lunch Ted Cohen explained that EMI had expected the iTunes experiment to fail. Everyone was really quite pissed that Steve Jobs had locking them into 99 cent sales. The future was supposed to be monthly subscription plans like Rhapsody.

All I heard was, “Clink, thump, clink.”

Sony gave a particularly clueless presentation about their vision of DRM everywhere. They touted that every computer, TV, mp3 player and phone on “your home network” would “seamlessly collaborate” to phone home for “permission from Sony” on each play of a file. You could move files around and share among friends all you wanted. Sony will only bother you for money when you choose to play something.

My stomach felt the previous tub-thumping all over again.

“How can so many smart people seem so clueless?” I remember asking Clay as I stuck the thumb drive into the laptop later that evening. “Is Michael Weiss really the only one left who gets it?”

“Holy fuck, Clay!?!?”

“Huh?”

“This guy Aydin brokered the deal selling BMG to Sony for 1.6 BILLION dollars!!!”

“Cool!” Clay said. “Let’s get him to help!”

It was all getting more than a little intimidating. Charles, Fritz, and now Aydin. In two days we’d turned from anonymous nobodies into troublesome provocateurs known to every prominent lawyer in the war.”

“You know,” Clay said smiling. “This is awesome! I’m totally out of cards and we still have a day to go! I think we’re stuck with the HackBack name…”

 

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