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BenjaminDorr

Warren & Brandeis

My previous assertion on privacy and technology was the following: because we haven’t developed the value of privacy in US political and cultural thought in the same way that US society rallies around free speech, we haven’t imbued our technology or market transactions with the value of privacy protection . To use an example, if we aren’t going to get that miffed about extraconstitutional warrantless wire taps, then how can we be outraged over personalized ultra-savey grocery store coupons?

Although I think it’s true that society would benefit from a deeper philosophical understanding of privacy and personal liberty, my assertion also borders along that Orwellian slippery slope pervading the arguments of right to privacy proponents and often turning off more moderate citizens. More importantly, my assertion also ignores the historical legal context that got us here. We can start in the modern era with Warren and Brandeis who breathed new life into privacy via the common law. Note that this borrows heavily from the first chapter of my college thesis from May 2001 and owes a great deal to the influence of Viktor Mayer-Schönberger who pushed me to differentiate between societal desires for privacy and its normative state.

In their famous 1890 Harvard Law Review article, The Right to Privacy, Samuel Warren and Louis Brandeis conceived a modern notion of privacy asserting a “right ‘to be let alone'” for protection of the “inviolate personality.”[1] Upset by the ravenous nature of journalists and gossip columnists (Ye Olde TMZ), Warren and Brandeis laid out an argument for a right to privacy based on the common law that protected against intrusion of the private sphere. At the time, mass urbanization had brought large groups of people closely together, and new technology such as photography allowed for a new kind of public intrusion into one’s private sphere. Warren and Brandeis argued that “the intensity and complexity of life, attendant upon advancing civilization, have rendered necessary some retreat from the world, and man, under the refining influence of culture, has become more sensitive to publicity, so that solitude and privacy have become more essential to the individual.”[2]

Because “only a part of the pain, pleasure, and profit of life lay in physical things,” it was natural for law to move from the protection of tangible objects to intangible objects as they were recognized.[3] Warren and Brandeis were drawing a metaphor between the ongoing expansion of laws protecting intellectual property rights to a right to protect private information not just private property. Still they went further. The right to privacy of personal information did not derive its power so much from the protection of intellectual property, as the protection of intellectual property derived its power from the right to privacy.[4] Furthermore, they argued privacy was not property, “unless that word be used in an extended and unusual sense;” Warren and Brandeis saw fit to call the traditional relationship between privacy and property, a “fiction.”[5] This was an extraordinarily progressive reconceptualization of the individual citizen, and it stemmed from technological advancement shining just a slightly different light on society. As our use of technology also does today.

The Right to Privacy would have a profound effect on the relationship between the citizen and government in the 20th Century through a series of US Supreme Court decisions. As well, Warren and Brandeis’s use of the English Common Law, a principle not uncommon to jurisprudence in the 19th Century, opened up and redefined the world of privacy torts wherein an individual’s rights to privacy did not arise “from contract or from special trust, but [as] rights against the world.”[6] As this series of posts continues, with breaks for sillier matters, I will examine this history and the split between the rights-based (or deontological) thinking that largely governs our actions as citizens in the public sphere and the utility-based (or teleological) thinking that largely governs market transactions between individuals (including those wily individuals, corporations).

[1] See generally Samuel D. Warren and Louis Brandeis, “The Right to Privacy,” Harvard Law Review 4 (1890): 193-220. The origin of the phrase ‘right to be let alone’ is duly accredited to Judge Cooley.

[2] Ibid., 196.

[3] Ibid., 195.

[4] Ibid., 205.

[5] Ibid.. 213.

[6] Ibid, 213.

 

YouTube: Meet the New Boss

One of my projects over the past few months has been working with the Internet and Interactive Entertainment research team at Jefferies & Co. on in-depth industry research.  The latest report I helped write was on YouTube, and if you are in the content business, especially involved with a Multi-Channel Network (MCN) or thinking about investing in one, I would recommend a close read as it relates to MCN viability in building higher margin businesses.

One of my stock lines about the digital media industry in the aughts has been: media companies should have acted more like ad networks, and ad networks should have acted more like media companies. The short version of this is that both types of companies are in the business of aggregating audience attention against which they sell advertising. (I have a long version with “the math” if anyone wants to hear it.) To compete in a world where digital platforms claim outlandish reach figures, media companies needed a larger audience to sell to traditional brand advertisers (and video too, of course). At the same time, ad networks which usually had large reach needed greater control over content to sell to brand advertisers so as to boost pricing, margin, and prevent being squeezed out by programmatic as the world shifted in response to practically infinite inventory.

So following this strategy, media companies would use their valuable brand umbrella to sell media that wasn’t their own (like an ad network), managing margin and inventory risk against their own content creation. And ad networks would invest in owning content and building audience to manage inventory risk and drive CPM and margin upwards. Both parties could use whatever programmatic stuff they wanted, but in the high CPM brand/video world this would be more likely private exchange selling than it was buying inventory on shitty public exchanges or audience through nefarious development engines.  I unsuccessfully pushed for building audience tools and owning content when I was still at Rhythm while watching the rise of the MCNs with more than a little interest. With the benefit of time spent not looking for some way to win (or survive), I’m pretty sure that the path from network to media company is difficult to impossible.

MCNs are not unlike online video ad networks themselves, but represent one evolutionary step toward a media company due to its talent relationships. An MCN will put together sales contracts to represent individual content creators. An MCN will provide technology support, usually in the form of marketing and analytics to drive audience. And maybe an MCN will bring content creators in as employees or fund and produce the content under its auspices. Their very existence owes somewhat to rules YouTube put in place for ad networks selling against content creator inventory in the first place. As a result, MCNs hold a closer relationship to the talent than a premium ad network does (see also Tremor, Yume, etc.) while aggregating similar volume and generating a similar gross margin to an ad network due to the “YouTube Tax” of roughly 45%.

The argument that MCNs can grow their margin completely rests on them acting more like media companies and finding higher CPM, higher margin distribution for their talent relationships. I love this idea because I wanted to do it, but now I’m hard pressed to think of any network over the years that has made that transition and also seen a significant exit. There are too many pressures in low-end, programmatic, ad tech, and there is too much competition in traditional media.  Sometimes strategic ideas just don’t make sense given a time window, capital requirements, and return requirements. That Disney would pay $950 million for Maker to accelerate something they could have done themselves still baffles me. Disney could have had access to the same talent pipeline with a little work, and at some point the venture capital financing engine will get tired of funding MCN losses resulting in lower acquisition values.

There’s definitely a business for content creators on YouTube, although I think increasingly it means handing over monetization to YouTube and trusting in their sales team. In terms of the MCNs, the only company making a lot of money on YouTube is YouTube, and the smartest media company, in my opinion, has been Dreamworks who has made small, targeted investments in YouTube with a specific audience and content personality.  I do keep discussing the idea of building YouTube without YouTube with those in the industry, but my fear is that we’d end up doing what YouTube has done: replace one media gatekeeper with another… meet the new boss, same as the old boss. It’s what Jonathan Zittrain, Woody Allen, and CBS have been trying to tell for so long.

Read more about YouTube here.

Prop 46 and Political Philosophy

Around the time you start to enjoy sparkling water, you might find yourself choosing talk radio on your morning commute on occasion no matter how much you love music. Sure, sometimes you still put a punk anthem on repeat to fantasize about what you never say to your boss in the upcoming meeting. But at 6:30am, adulthood beckons you to turn to 88.5 instead of one of the more advertising friendly dial selections. “Katy Perry. Taylor Swift. Kanye. All your top 40 hits on Sexy Hot 88.5.” See it doesn’t work. 88.5 screams middle to upper middle brow. Or rather it suggests politely over chai: NPR. They may or may not agree with Malcolm Gladwell, but they certainly have an opinion.

And when you choose NPR, you will only be cheered up by the notion that your hopeless life seems less hopeless than the world at large. When politicians can’t agree about bureaucratic overreach in cases of college sexual violence perpetrated by students on too many prescription drugs now available because of doctor shopping and Internet drug stores whose client lists were illegally tracked by the NSA, and someone has written a folk song in response to Jonathan Franzen’s opinions on this crucial issue, you’re likely to wonder why the hell you didn’t turn to Sexy Hot 88.5.

Recently here in the Bay Area on NPR there was a debate over California ballot proposition 46 which would provide three primary regulations from my understanding: 1) it would raise non-economic claims from medical malpractice in line with inflation for folks who do not have significant steady income (kids and old people, for example); 2) it would require doctors to check a database for first-time patients before prescribing Vicodin or Oxycontin or any of that good stuff; and 3) we’d randomly drug test doctors to make sure they weren’t taking too much Vicodin or Oxycontin before removing the wrong gall bladder. (Wait, I’ve just been told we only have one gall bladder.)

The proposition is supported by trial lawyers, the teamsters, Erin Brockovich (still around?), and some consumer organizations. It’s being fought by lots of corporations, every medical organization in the universe (these guys are fans of clubs, sweet jebus), and in a strange marriage, the Republican Party and the NAACP too. Color me and a lot of people confused. While the first initiative regarding non-economic gains would likely garner wide support because people like kids and feel sympathy for old people (both in theory, not the ones you have to take care of), the other two initiatives strike many (myself included) as overreaching, beyond where professional ethics go and beyond the pale of privacy. Not to mention I’ve always imagined surgery to be a little like billiards. Who isn’t better a little tipsy?

Seriously though, what does one do when one believes regulation is a necessary counterweight to greed/corruption, but overly prescriptive laws and bureaucracy chip away at the primacy of the individual? Scrooge McDuck’s Money Bin weighs a great deal, you know? But technocratic government and bureaucracy end up contributing eventually to the very problems that someone on the left would like to avoid, a devaluing of the individual… see also David Simon and The Wire. As much as it pains me, it seems like a bad law here is worse than no law.

Escape, Part One

During my travels and time off, I’ve read a great deal. Reading (and well, rummy) fill much more of the day when trekking in Nepal than hiking or sleep. Discussing novels is a downhill activity; when your step is light, you find your thoughts substantive and erudite. Uphill you only bray pop songs or curse or wheeze like a dumb pack animal carrying real, not imaginary, weight. These days my apartment looks like a library, and the kindle does too, as it either mocks or encourages with percentages left to read. Despite all this reading, both “great” and not-so-great books alike, my “escape” has instead engendered a reassessment of that very theme–fight vs. flight, perseverance vs. surrender, martyrdom vs. whatever the opposite of martyrdom is–in two books from my past.

The first book is from my childhood, this site’s eponymous I Had Trouble in Getting to Solla Sollew by Dr. Seuss, a surprisingly trenchant look at growing up and searching for false utopias. The other–Catch-22, Joseph Heller’s absurdist WWII dark comedy–I read in my late adolescence identifying a little too much with the “cynical idealism” of the main character Captain John Yossarian. I venture not to imbue these books with unmerited wisdom nostalgically. Instead, I intend to approach them with fresh eyes to see whether I can reconcile each author’s perspective on escape with the important decisions of, well, life. (Yes. Dr. Seuss and Joseph Heller. Deal with it.) Because while poor mopey Hamlet may have been most concerned with his famous existential quandary, his question could be seen as just an unnecessarily emo version of a more vexing and vital one that we all confront in the business of living. Solla Sollew and Catch-22 deal with THAT vital question posed 378 years later by a different London punk: “Should I stay, or should I go now?”

At some point soon, I will dive into this, and then you can decide if I’m crazy. In the meantime, I will continue to stretch my hips since my yoga teacher tells me that’s where my all of my fight versus flight emotions are stored.

Who here wrote a thesis? That’s nice. A lot of hard work went into that thesis. And no one is ever going to care. I wrote a thesis—this is true, I don’t lie—“Literary Progeria in the Works of Flannery O’Connor and William Faulkner.” Let’s just say that during my discussions with Pauly Shore, it doesn’t come up much. For three years after graduation I wanted to show it to everyone, and so I kept my thesis in the glove compartment of my car, so that I could show it to a policeman in case I was pulled over.”  -Conan O’Brien, 2000 Harvard Class Day Speech

About fifteen years ago, I wrote my college thesis on the rise of digital rights management (then called trusted systems) and targeted digital advertising as technologies that collectively protect intellectual property and promote data gathering at the expense of privacy, whose economic value (and legal protection) is hard to pin down. In my opinion, these technological advances cast a new light on the relation between speech, privacy, and property in American political thought, and as such, I felt we could use them to think more deeply about what we really value as human beings. Unfortunately, all we’ve really learned is how to value human beings according to their data footprint. I even got to go along for the ride (see also, my work experience).

One of the things I want to do with this blog (while I fight against a lot of bird traffic through Vent No. 5) is revisit my thoughts from fifteen years ago and update them. Because the issues haven’t really changed, and the rise of “big data” and the advertising technology industry has been more pervasive than just managing access to digital media—now our communication is ad-supported too. In fact, if anything, media has been a victim of the ad tech industry (a subject for another time). The normative state of privacy, especially in private transactions governed by Google, Facebook, Amazon, et al., may be dead for now, as they love to tell us. But the societal desire for privacy is alive, and it can be characterized, at its heart, by the rights-based thinking and philosophy that underpins the US Constitution.

Why do we support the First Amendment with such gusto and we often turn a blind eye toward violations of the Fourth Amendment? Why do we think of the First Amendment as a firmly American value that we take with us into the private sphere (where the right has no bearing), and we ignore the values underlying the Fourth Amendment when we transact there? Why do we build technology that supports free speech (bringing wonderful gains the world over), and then we ignore the right to privacy in the technology we build? Perhaps there’s a like a step function in the bill of rights. 100% of Americans like free speech. 50% of people like guns. No one gives one whit about quartering soldiers (Raise your hand if you even know what the Third Amendment protected. Thought so.)  and so on down. In my next post on this subject, I’ll delve into the history of a right to privacy with a special emphasis on Warren & Brandeis.