Wall Street Journal columnist Holman Jenkins has a terrific, wide-ranging interview with Google CEO Eric Schmidt in today's paper that is well worth reading. One thing worth highlighting is Schmidt's comments on the "economic disaster that is the American newspaper." He argues that, "The only way the problem [of insufficient revenue for news gathering] is going to be solved is by increasing monetization, and the only way I know of to increase monetization is through targeted ads."

Absolutely correct. It's a point that Berin Szoka, Ken Ferree and I tried to make in PFF's mega-filing in the FCC's "Future of Media" proceeding in early May, and Berin and I stressed it in even more detail in our piece on"Chairman Leibowitz's Disconnect on Privacy Regulation & the Future of News." The key takeaway: If Washington goes to war against advertising -- and targeted advertising in particular -- then there will be no future for private news. As we stated there:

The reason for the indispensability of advertising is simple: Information (including news and other forms of "content") has "public good" characteristics that make it is very difficult (and occasionally impossible) for information-publishers to recoup their investments. Simply put, they quite literally lack pricing power: Whatever they charge, someone else will charge less for a close substitute, inevitably leading to "free" distribution of the content, even though the content is anything but free to produce. Advertising is the one business model that has traditionally saved the day by rewarding publishers for attracting the attention of an audience.

Thus an attack on advertising is an attack on media / news itself. And yet Washington is currently engaged in an all-out assault on advertising, marketing, and data collection efforts / business models.

Incidentally, Google recently submitted comments with the Federal Trade Commission in reaction to its Staff Discussion Draft about the future of journalism and laid out their views on many of these issues. More importantly, as summarized on pg. 30 (of the pdf) of this Newspaper Association of America filing to the FTC, Google has proposed an interesting monetization model that utilizes Google Search, Google Checkout and DoubleClick ad server, "to build a premium content system for newspapers." Worth checking out. Kudos to Google for taking these steps and to Schmidt for again stressing the importance of targeted advertising for the future of media.

Was the Tenenbaum Statutory-Damage Verdict Unconstitutional? Only If College Guys Are Irrationally "Risk-Averse...."

On July 9th, Judge Nancy Gertner issued an Order holding that the $22,500/song jury verdict assessed against file-sharing, oath-violating, evidence-concealing, family-framing willful mass pirate Joel Tenenbaum was unconstitutionally excessive. Judge Gertner then reduced the award by 90% to $2,250/per song—the maximum award that her Constitution would permit. See Sony BMG Music Ent. v. Tenenbaum, 2010 U.S. Dist. LEXIS 68642 (D. Mass.).

But those who get their copyright news from the Internet might be shocked that the record labels have just dared to appeal Judge Gertner's allegedly brilliant legal analysis. After all, Public Knowledge hailed Judge Gertner's reasoning as a triumph of common sense. And at the blog TechDirt, Mike Masnick gushed, "Gertner knows this is going to be appealed, and she put a lot of effort into making the case for why this ruling was excessive, in hopes of having her reasoning help carry the later appeals."

Such fawning is silly. Judge Gertner's reasoning is far too profoundly flawed to have much chance of surviving appellate review. I will thus note three defects in Judge Gertner's analysis that should prove fatal. None is merely technical; all involve basic disregard for settled law, the facts, or reality itself.

Interesting article in the New York Times today about how the radical media activist group Free Press is now working with an organization called The Harmony Institute toward the goal of "Adding Punch to Influence Public Opinion." The way they want to "add punch" is through entertainment propaganda. The Times article notes that Harmony's mission is "aimed at getting filmmakers and others to use the insights and techniques of behavioral psychology in delivering social and political messages through their work." And now they want to use such "behavioral psychology" and "political messaging" (read: propaganda) techniques in pursuit of Net neutrality regulation.

More on that agenda in a second. First, I just have to note the irony of Harmony's founder John S. Johnson citing "The Day After Tomorrow" as a model for the sort of thing he wants to accomplish. According to the Times interview with him, he says the movie's "global warming message [and] rip-roaring story, appeared to alter attitudes among young and undereducated audiences who would never see a preachy documentary." I love this because "The Day After Tomorrow" was such a shameless piece of globe warming doomsday propaganda that it must have even made the people at Greenpeace blush in embarrassment. After all, here is a movie that claims global warming will result in an instantaneous global freeze (how's that work again?) and leave kids scurrying for the safety of New York City libraries until a quick thaw comes a couple of weeks later. (Seriously, have you seen that movie? That's the plot!) So apparently we can expect some pretty sensational, fear-mongering info-tainment from Harmony and Free Press.

But here's what's better: Do you know who produced "The Day After Tomorrow"? Oh, that's right... Rupert Murdoch's News Corporation financed and distributed that movie!! The man that Free Press casts as the nefarious media overlord set to take over all media and program our brains gave us the greatest piece of radical environmental propaganda of modern times. Now, which does that prove: (A) Rupert Murdoch is hell-bent on programming our minds to embrace a sweeping global warming regulatory agenda, or (B) Rupert Murdoch is out to entertain people and make money? If you answered B, congratulations for being a sensible person. If you answered A, then click here now to start giving money to the Free Press!

OK, so let's get back to Free Press and what they are up to with the Harmony Institute (which I originally thought was an online dating site). Free Press apparently hired Harmony to research public attitudes about Net neutrality and how to influence them. Harmony's Johnson tells the Times they got interested in the Net neutrality because Free Press and the Pacific Foundation paid them handsomely to do so. And it appears Free Press got their money's worth.

Over at MediaFreedom.org, a new site devoted to fighting the fanaticism of radical anti-media freedom groups like Free Press and other "media reformistas," I've started rolling out a 5-part series of essays about "The Battle for Media Freedom." In Part 1 of the series, I defined what real media freedom is all about, and in Part 2 I discussed the rising "cyber-collectivist" threat to media freedom. In my latest installment, I offer an analytical framework that better explains the major differences between the antagonists in the battle over media freedom.

Understanding the Origins of Political Struggles

In his many enlightening books, Thomas Sowell, a great economist and an even better political scientist, often warns of the triumph of good intentions over good economics. It's a theme that F.A. Hayek and Milton Friedman both developed extensively before him. But Sowell has taken this analysis to an entirely differently level in books like A Conflict of Visions: Ideological Origins of Political Struggles, and The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy. Sowell teaches us that no matter how noble one's intentions might be, it does not mean that those ideas will translate into sound public policy. Nonetheless, since "the anointed" believe their own intentions are pure and their methods are sound, they see nothing wrong with substituting their will for the will of millions of individuals interacting spontaneously and voluntarily in the marketplace. The result is an expansion of the scope of public decision-making and a contraction of the scope of private, voluntary action. As a result, mandates replace markets, and freedom gives way central planning.

Sowell developed two useful paradigms to help us better understand "the origins of political struggles." He refers to the "constrained" versus "unconstrained" vision and separates these two camps according to how they view the nature of man, society, economy, and politics:

"Constrained Vision"	"Unconstrained Vision"
Man is inherently constrained; highly fallible and imperfect	Man is inherently unconstrained; just a matter of trying hard enough; man & society are perfectible
Social and economic order develops in bottom-up, spontaneous fashion. Top down planning is hard because planners aren't omnipotent.	Order derives from smart planning, often from top-down. Elites can be trusted to make smart social & economic interventions.
Trade-offs & incentives matter most; wary of unintended consequences	Solutions & intentions matter most; less concern about costs or consequences of action
Opportunities count more than end results; procedural fairness is key; Liberty trumps	Outcomes matter most; distributive or "patterned" justice is key; Equality trumps liberty
Prudence and patience are virtues. There are limits to human reason.	Passion for, and pursuit of, high ideals trumps all. Human reason has boundless potential.
Law evolves and is based on the experience of ages.	Law is made by trusted elites.
Markets offer benefit of experience & experimentation and help develop knowledge over time.	Markets cannot ensure desired results; must be superseded by planning & patterned justice
Exponents: Aristotle, Adam Smith, Edmund Burke, James Madison, Lord Acton, F.A. Hayek, Ludwig von Mises, Milton Friedman, James Buchanan, Robert Nozick	Exponents: Plato, Rousseau, William Godwin, Voltaire, Robert Owen, John Kenneth Galbraith, John Dewey, Earl Warren, Bertrand Russell, John Rawls

Earlier this year, while I was preparing this mega-filing to the Federal Communications Commission in its "Future of Media" proceeding, I read Uninhibited, Robust, and Wide-open: A Free Press for a New Century, by Lee C. Bollinger, who is the president of Columbia University. I had planned on reviewing it since I try to review almost every book I read, but it was hard for me to believe that anyone would take this book too seriously, so I just moved along.

I hate to be that dismissive of any text but this is a book, after all, that proposes the creation of a massive U.S. propaganda machine. Bollinger doesn't just want our government to help out a bit at the margins like it currently does; he wants the State to get under the covers, cuddle tight and become intimate lovers with the Press. And then he wants the Big Press to project itself more, especially overseas, to compete with other State-owned or subsidized media enterprises. Again, it's a propaganda machine, pure and simple. In a new Wall Street Journal editorial today entitled, "Journalism Needs Government Help," he argues:

To me a key priority is to strengthen our public broadcasting role in the global arena. In today's rapidly globalizing and interconnected world, other countries are developing a strong media presence. In addition to the BBC, there is China's CCTV and Xinhua news, as well as Qatar's Al Jazeera. The U.S. government's international broadcasters, like Voice of America and Radio Free Europe, were developed during the Cold War as tools of our anticommunist foreign policy. In a sign of how anachronistic our system is in a digital age, these broadcasters are legally forbidden from airing within the U.S. This system needs to be revised and its resources consolidated and augmented with those of NPR and PBS to create an American World Service that can compete with the BBC and other global broadcasters.

China's CCTV and Xinhua news? Qatar's Al Jazeera? Really?! As Jeff Jarvis rightly asks in his terrific response essay, "No American BBC,": "In what sane world is the Chinese government's relationship with news a model?" Indeed, this is frightening stuff. Has Bollinger not studied the Chinese system of state media meddling? Needless to say, it's not pretty. And while I would agree that the BBC model shows that some State-funded media can be quite impressive and free of most meddling, that's not been the case across the board.

TechDirt Errs Again: Copyrights Are the Definition of "Market Forces" in Action.

I just read the latest Deep Thought from the editor of the blog TechDirt, Mike Masnick, who must be the only person, other than Her Majesty Queen Elizabeth II, who often uses the royal "we" when expressing a personal opinion. In Pushing for More Stringent Copyright Laws Is the Opposite of Allowing "Market Forces" to Act, Masnick rants that granting legally protected private exclusive rights, (a.k.a., "private property rights"), to private producers of socially valuable resources like expressive works will thwart what Masnick calls "market forces":

[I]t's flat out wrong to say that copyright (or patents, for that matter) are about "allowing market forces" to act. By definition, copyright and patent laws are the opposite of allowing market forces. It's the government stepping up and providing monopoly rights because they believe (rightly or wrongly) that basic market forces don't work in those areas and, thus, the government needs to step in and "correct" some sort of imbalance.

This is all--as Masnick might put it--"flat out wrong...." Economists and the economically literate know that if we want "market forces" to encourage the consumer-driven private production of any resource (including expressive works) then we must grant exclusive rights to private producers of that socially valuable resource. In other words, property rights---government-granted, legally protected exclusive rights--are required to use "market forces" to encourage the production of any resource.

I've been so busy trying to cover breaking developments related to Washington's new efforts to "save journalism" (FTC) and steer the "future of media" (FCC) -- see all my recent essays & papers here -- that I forgot to do a formal book review of the book that is partially responsible for whipping policymakers into a lather about this issue: The Death and Life of American Journalism, the media-takeover manifesto by the neo-Marxist media scholar Robert W. McChesney and Nation editor John Nichols. Their book is horrifying in its imperial ambitions since it invites the government become the High Lord and Protector of the Fourth Estate. [For an in-depth look at all of McChesney's disturbing views on these issues, see: "Free Press, Robert McChesney & the "Struggle" for Media."] Anyway, I put together a formal review of the book for City Journal. It's online here and I've also pasted it down below.

_____________________

A Media Welfare State?

by Adam Thierer

Imagine a world of "post-corporate" newsrooms, where the state serves as the primary benefactor of the Fourth Estate. Billions flow from bureaucracies to media entities and individual journalists in the name of sustaining a "free press." And this new media welfare state is funded by steep taxes on our mobile phones, broadband connections, and digital gadgets.

Sound Orwellian? Well, it's the blueprint for a press takeover drawn up by Robert W. McChesney and John Nichols in their new book, The Death and Life of American Journalism. McChesney, the prolific neo-Marxist media scholar who teaches at the University of Illinois at Urbana-Champaign, and Nichols, a journalist with The Nation, aren't shy about their intentions. Along with Free Press, the absurdly misnamed regulatory activist group they co-founded, McChesney and Nichols outline a self-described "radical" agenda for what they hope will become a media "revolution." And, shockingly, some folks in the Obama administration are listening.

Send In the Clowns: A Review of Oberholzer-Gee and Stumpf's Copyright and File-Sharing (Part 1)

And where are the clowns?
Quick, send in the clowns…
Don't bother—they're here.
—Judy Collins/Stephen Sondheim, Send in the Clowns

Recently, Nate Anderson of Ars Technica published File-sharing has weakened copyright—and helped society. This story's title summarizes the thesis of a "new" paper by those Grokster-loving, Free-Culture-Movement Professors, Felix Oberholzer-Gee and Coleman Strumpf (collectively, "OGS"). Their "new" paper is entitled File-Sharing and Copyright. Fortunately, their non-sequitur thesis does not follow from their clown-car collection of factual, legal, economic, and historical errors that poses as "scholarship."

Indeed, I just published a blog post and a longer paper to show that those who listen to the likes of Oberholzer-Gee merely end up accusing the Government Accountability Office of decades of wrongdoing by celebrating the "positive economic effects" of criminal racketeering. The blog post is entitled, Why Copyright Industry Costs-of-Piracy Studies Correctly Ignore the "Positive Economic Effects of Criminal Racketeering; the paper is entitled, Punk'd: GAO Celebrates the "Positive Economic Effects of Counterfeiting and Other Criminal Racketeering.

Wow: A Bipartisan, Legislative/Executive Call for Private Solutions to the Challenges of Internet Counterfeiting and Piracy