Mark Pesce describes himself as “an inventor, writer, theorist, very minor TV personality” (he’s a regular on the ABC’s New Inventors). He is also a major personality in Australian twitter circles. Yesterday Pesce penned an excellent opinion piece connecting two recent Australian court cases. In one a judge ruled that tasteless sexual depictions of Simpsons cartoon characters should be considered child pornography. In the other case, a man was found guilty of distributing child-abuse materials. What he had actually done was pass on a link to a video of a man swinging a baby. He had nothing to do with the creation of the video, but simply shared a link to a video that thousands around the world had already seen.

Now each of these cases in isolation may well be legitimate interpretations of Australian law, but taken together the implications are rather ridiculous. As Pesce observes:

[It] means that viewing a clip of The Simpsons on YouTube will soon be as illegal as watching it on television. In particular, videos showing the various times Homer has strangled Bart – which exist – would be very illegal, the equivalent of the most severe child abuse materials. And God help you if you should flip a link of that video to one of your friends. That’d be “distributing” child-abuse materials, because, where we are now, distribution has expanded to include link-sharing.

Another Australian twitter luminary, Stilgherrian, is fond of seeking out modern day inheritors of King Canute (not Stil’s preferred spelling) who try to turn back the tide. So it seems that Australian courts are joining the RIAA, television stations and the Australian Government in vying for the Canute mantle and attempting to put Pandora’s internet back in the box. They should face reality and give up. As Pesce says, we have reached the end of the age of the gatekeepers.

Back in August, muxtape, a popular music playlist site, was forced to close by the Recording Industry Association of America (RIAA). Now mixwit have announced that it is closing too. The only explanation offered was as follows:

We’ve put a year of work into Mixwit so this choice wasn’t taken lightly. I won’t go into the details of our situation but state simply that we boldly marched into in [sic] a position best described as “between a rock and a hard place.”

Reading between the lines, it looks as though they too have fallen at the hands of the RIAA. Under the cover of claims to be protecting artists, claims that do not bear close scrutiny, the RIAA is building an impressive track-record of stifling innovation. While it is possible to take comfort from the fact that attempts to stem the tide of progress always fail in the end, it is nevertheless frustrating to see the suffering of victims of this pernicious organisation in the meantime, whether those victims are single mothers sued for file-sharing or the creators of sites like muxtape and mixwit.

While these sites appeared to be on shaky legal ground from the start, that seems to be a reason to change the rules to fit the new technology, not the other way around. Larry Lessig eloquently summed up the issues years ago in his presentation <free culture>, and the challenges he laid down then are yet to be addressed. I can only hope things begin to change soon and, in the meantime, I hope that blip.fm does not become the next victim of the RIAA.

A topic that the New York Times visits from time to time is that of income inequality. In the United States, the gap between the highest and lowest earners has been increasing over the last 80 years or so. A recent article returns to this theme and provides further insight into the trend. It cites research from the new book “Unequal Democracy” by Larry M. Bartels, which indicates that income inequality has increased far more under Republican presidents than under Democrats.

The table below shows average annual changes in income in the US from 1948 to 2005 across a spectrum of wage earners. (This is done by dividing the data into percentiles; for example, 40% of the population earns less than the 40th percentile wage and 60% earn more). Over this period, under Republican presidents high income earners (95th percentile) saw their income grow an average of almost 2% each year, while the wages of low income earners (20th percentile) grew by less than 0.5% each year. In contrast, under Democrat presidents, there was much less variation across the income spectrum and low income earners in fact saw slightly higher rates of income growth than high income earners. Under Republicans the income gap widened, while under Democrats it tended to contract.

Annual Average US Income Growth 1948-2005*

This inspired me to attempt a similar analysis (with a bit of prodding from a regular Mule reader). Unfortunately, the Australian Bureau of Statistics (ABS) have only surveyed income distribution over an 11 year period from 1995-2006. Over all but the first year of this period, the Liberal/National Party coalition was in power and John Howard was Prime Minister. This makes a comparison of income inequality under Coalition and Labor Governments impossible. However, it does allow us to see whether or not income inequality increased under the recent Coalition Government as it did in the US under Republican presidents. The table below shows the average growth** in real weekly earnings of Australians (where “real” means adjusted for inflation). Income data is taken from the ABS Household Income and Income Distribution survey, and the inflation adjustment used the ABS Consumer Price Index (CPI) to express wages in terms of their equivalent in 2006 dollars.

Australian Weekly Income 1995-2006*

While this period was a time of strong economic growth for Australia, wages failed to keep up with inflation across most of the income spectrum (only the 30th and 40th percentiles saw their wages increase in real terms). While the lowest earners (10th percentile) did see the biggest decline in real earnings, there was in fact very little variation across the percentiles. Below is a graphical representation of real wages for each of the percentiles, which reinforces a picture of very stable wages across the population over the course of the Howard years.

Australian Income Percentiles 1995-2006*

While the data is too limited to make conclusions with much statistical significance, it does appear that the Coalition, our (rough) equivalent to the Republicans, have not pushed up income inequality in Australia.

If anyone knows of a longer data series, let me know and I’ll extend the analysis.

* All figures are adjusted for inflation.
** The figures are compound annual growth rates.

This evening I caught up for a chat and a couple of beers with Dan Walsh, the technologist behind the scenes of the Australian social news site Kwoff.

For those not familiar with social news sites, the idea is that users submit links to interesting news articles (or blog posts, funny photos, videos or anything else that tickles their fancy) and then other users can vote for the stories they enjoyed reading. The most popular stories then float to the top where they are easily found by visitors to the site. This is a classic example of the Web 2.0 technique of crowd-sourcing.

The grand-daddy of all social news sites is digg. While digg has an enormous user-base at its disposal, the sheer number of American users means that there is a strong US slant to most of the stories. That is fine if you want to keep up on the latest on Obama or McCain, but it is hard to find Australian stories on digg. It was this realisation that prompted Dan Walsh, Stephen Mayne and Greg Barns to launch Kwoff. And they are not the only ones to go down this route: Bronwen Clune’s site norg also aims to harness people power for news aggregation in Australia.

I first came across Kwofff when I spotted a mysterious “K” among the sharing icons at the bottom of a news story on news.com.au. Since then, I’ve been a regular visitor to the site, submitting stories, voting and, I have to confess, doing the odd bit of promotion of Stubborn Mule pieces. Kwoff is still in its infancy, having launched just prior to the election last November, and will need to attract more users in order to reach its full potential (and to be commercially viable). Nevertheless, it is already a handy way to get a  snapshot of stories of the day around Australia.

The Australian Recording Industry Association (ARIA), after taking a look at sales for the first half of 2008, has run crying poor to the Herald Sun. While they have not yet released these figures to the public, they presumably continue the trend evident in published figures for 2006 and 2007.

Australian Music Sales

Nothing here is particularly surprising, but nor should it be particularly alarming. Sales of physical media fell by more than $60 million from 2006 to 2007, driven largely by the fall in CD album sales. In percentage terms, CD singles fell further, but this was more than offset by increased sales of digital tracks. So it appears that Australians are embracing iTunes and other digital music sellers. This is despite the fact that the music industry here seems more focused on combating piracy than promoting digital outlets. Sales of digital music grew by more than 40% and at that rate, if the 2006-07 trends continue, digital sales will exceed physical sales in under five years!

SonyBMG chief, Michael Smellie recently conceded that the Australian music industry has “missed the boat” in the digital age. The result is that Australian music-lovers are missing out on the benefits of innovations in music sales and, I would argue, the industry is forgoing revenue opportunities as well. By way of example, Apple’s challenges with music licensing in Australia were such that the Australian iTunes Store opened a full two and a half years after the US store. Music subscription services such as Pandora and Rhapsody are yet to sort through this licensing mire and are forced to block Australian visitors to their sites. I suspect that the likes of APRA and PPCA are not helping very much with this process, when they really should be embracing initiatives like these. The best way to fight music piracy is to provide decent legitimate options for people who are prepared to spend money on their music.

Rhapsody is a particularly good indicator of where digital music is heading. For a monthly subscription fee of around A$15, users are given on-demand access to an enormous library of music. Combined with a network music player (such as a Squeezebox or Sonos), a service like this can dramatically change the way people listen to music. A band or track comes up in conversation? Fire it up on the stereo, whether you’ve ever owned it on CD or not! There are benefits for the industry too. Subscriptions tend to be sticky: just think about your mobile phone bill. It is estimated that 25% of Australia’s 8 million households subscribe to pay TV. There is no reason that subscription music services should not aim to achieve the same penetration rate, if not higher, particularly since there is no directly comparable free to air competitor. At $15 per month, the resulting revenue would come close to monthly sales of CD albums in 2007. The sooner ARIA and APRA understand this, the better for everyone.

Of course, some of us (particularly of the older generations) will not be able to let go of our fetish for the physical artefact and so the demise of the compact disc will be a long, drawn-out affair. In fact, surprising though it may seem in a declining market, a new CD shop opened in my neck of the woods just last Saturday. Repressed Records joined So, Hum, Fish Records, Stikki Records, Egg Records* and (my favourite) Bravery Repetition & Noise on King St, Newtown alone. So, while shops catering to the latest pop releases will struggle to compete with digital alternatives, the CD will continue to sell in those shops that can command the loyalty of specific niches of music-lovers.

In one form or another, the music business has plenty of life left in it, despite the tales of gloom being peddled by the like of ARIA.

* Well, technically Egg Records is on Wilson Street and Stikki has recently moved to Enmore Road, but they are in what you might call the “greater King St area”.

As promised in my PubCamp Sydney post, I am now able to provide a brief glimpse of the Stubborn Mule on camera. Sticky Media’s Craig Wilson asked the probing questions while Gordon Whitehead rolled tape…or at least operated the video camera. Gavin Heaton (aka servantofchaos) was up first, followed by yours truly and finally Markus Hafner (aka eskimo_sparky) of Happener. That was all there was time for as the conference was about to begin.

I took an early mark today to attend some of the PubCamp Web 2.0 Media (un)conference in Sydney. Unfortunately I had to leave early and so missed the later unconference sessions, but I have a spy who promised to provide a detailed report. Still, there was enough in what I did see to make me glad to have made the (short) trip.

Proceedings opened with an address by organiser Jed White of itechne, followed by a series of short presentations, many of which were teasers for longer sessions later in the evening. The most animated of the speakers was Stephen Collins of acidlabs, whose presention, “Slouching towards intertwingularity” was a colourful rallying cry for the participatory culture that web 2.0 can create. One particularly thought-provoking observation was that the 100 million person-hours that have gone into creating wikipedia equate to the time spent by Americans watching ads on TV every weekend!

Things took a different turn with a panel discussion on new versus old media. All of the panel had a background in traditional media and some were still there. Some way into a somewhat staid discussion, a call was made to listen to the twitter back-channel. Quickly, Jed White brought up Summize and we were all able to follow the chatter. Although I have been on twitter for some time now and had heard about the back-channel effect at conferences, this was the first time I had seen it in action for myself. Not surprisingly, the twitterers were firmly in the new media camp and a rather confrontational atmosphere quickly developed. Panellist Kathy Bail, editor of the AFR magazine, had spoken of the importance of having sizeable editorial and journalist staff to support quality content. This was given short shrift: death to old media, their ivory towers and expensive lunches was the general theme from the floor.

This theme continued with a debate on whether new media is a “dagger in the heart” of content producers and distributors. Media veteran Richard Walsh spoke for the affirmative and new media enthusiast and CEO of Norg, Bronwen Clune took up the case for the negative. While the hearts of the people on the floor clearly lay with Clune, Walsh was the more polished speaker. He acknowledged that there was no going back to the old media ways and even that new media was good for the consumer. However, he was deeply concerned that where old media had developed a highly successful model for supporting journalists, musicians, film-makers and artists in their work, new media represented a threat to professional content producers. At the heart of this threat was what he perceived to be the erosion of copyright as consumers have increasingly been able to take content without paying the creator. Walsh also expressed the view that advertising always corrupts journalism and yet advertising is the only real revenue model for new media.

In a sense Walsh is right as many new technologies are disruptive and precisely because they allow new (usually young) blood to displace old. So new media is certainly a threat to established creators and an opportunity to new creators. Of course, established creators do not just consist of crusty old newspaper publishers, just think of Metallica’s attitude towards mp3 sharing. My own view is that erosion of the power of copyright has actually been accelerated by misguided attempts to clamp down on copying through digital rights management, law suits and extensions of copyright terms.

Nevertheless, some of Walsh’s points are worth considering. While young journalists, musicians and artists can disseminate their work faster than ever, will they ultimately be able to make a living, perhaps even buy a house and raise a family? Early on these things may not seem important at all, but perspectives change with age. In the case of music, people point to concert ticket sales as the answer, but what about journalists? Perhaps the answer is that citizen journalism will not be a full-time job. The question of advertising also troubles me. Independence of content from advertising has always been a challenge for old media, but will this become harder still with detail click-by-click measurement of the “value” of every story? Perhaps there is room here for a radical rethink of the public broadcasting model with a decentralised government funding model for truly independent new media content creation.

The other thing I should point out is that even before things got going, I was chatting to the guys from Media Hunter who then whipped out a video camera and began asking people about why they were there and what they though of web 2.0 media. So stay tuned for the Stubborn Mule on film (but don’t get too excited)!