Afternoon roundup

The afternoon's closing of the browser tabs:

• Markets in everything: pretending to be other people so they can have a vax pass and you can have eight shots. Some people are willing to pay $200 to have a 60x increase in their odds of real bad stuff when they catch Covid. FFS. 
• The TVA is getting back into nuclear power. One of these units, the BWRX-300, looks to have a generation cost around NZD $75/MWh. That's getting into viable-in-NZ territory. 
• With zero notice, Statistics New Zealand killed NZ.Stat: the interface for access HES and a few other datasets. Infoshare is thankfully still available. I'm talking with other folks about setting up an external mirror of Infoshare, in case SNZ does this kind of thing again. Crazy. Will be writing my Newsroom column next week on it. Statistics New Zealand found however many millions of dollars it took to run a roadshow across the country on whether and how they should be measuring spiritual wellbeing, but wound up five versions behind on core systems. Priorities man. 
• RBNZ running inflation at 5.9% lets Labour claim generosity with a 6% minimum wage hike.
• Councils that like to plead poverty oughtn't put resource into this kind of thing. 
• Superb piece by James Graham summarising the lit on rent control. I expect to point to it a lot in future. 
• Shutting down immigration did not kickstart the Oz economy: Grattan institute.
• More evidence that moderate alcohol consumption is associated with higher wellbeing later in life. 
• UK rules mean Reddit and Twitter will either have to block adult content in the UK entirely, or come up with an age verification setup. Couldn't they just answer some simple questions that only adults can answer instead?

Lockdown porn

Just imagine being the kind of person who frets about porn consumption during lockdown.

The Herald has this fun bit from Friday's document dump:

Massive spike in porn and online harm

The day New Zealand went into lockdown, there was a massive spike in PornHub's traffic.

In a briefing on online harms from the Minister for Internal Affairs Tracey Martin, a graph from Pornhub showed a 20.6 per cent increase in their New Zealand traffic when the country moved to alert level 4 on March 25.

It dropped back to 4.8 per cent increase by March 29 but then crept back up to 15.8 per cent on April 2.

Tracy Martin's Porn Filter

My column over at Newsroom this week ($) (ungated) went through some of the likely problems if the government goes ahead with Tracy Martin's mad scheme for a national pornography filter.

A couple of years ago, I wrote a short report making the case that New Zealand is the world’s last sane place. Or, at least, if it’s going mad, it’s going mad more slowly than the rest of the world. Perhaps I was too hasty. Internal Affairs Minister Tracy Martin this week told Newshub about the government’s plans for protecting children from online pornography. Newshub reported that the government is looking to the United Kingdom as example, and that nothing is yet ruled out. Some things should be ruled out. Let’s have a look at what has been going on in the United Kingdom, and why it is a bad idea to follow their example.

The Great Firewall of Britain

The UK has a long history of internet filtering. In the 2000s, the government encouraged ISPs to block access to websites blacklisted by the Internet Watch Foundation as potentially including child pornography – not unlike New Zealand’s Digital Child Exploitation Filtering System.

The implementation of the filter did come with a few problems. In one famous 2008 case, clients of ISPs using the filter were barred from editing any page on Wikipedia because the Wikipedia page for a Scorpions album included an image of that album’s cover; the decision was reversed a few days later. New Zealand’s Child Exploitation Filtering System has not had similar problems.

From 2013, the Great Firewall of Britain became rather more stringent. David Cameron’s government sought to protect people from pornography by changing the defaults. Previously, those who wished to prevent anyone in their home from accessing pornography would need to turn on filtering, whether by subscribing to an ISP providing a filtered experience, or by purchasing a service like NetNanny.

Under Cameron’s changes, the default switched. Everyone’s internet access would be filtered to prevent access to pornography. Those who wished an unfiltered experience would need to inform their Internet Service Provider that they wished to have access to pornography.

But, perfectly predictably, the filter went a bit wider than pornography, and included websites relating to alcohol, smoking, suicide, anorexia and more. One reader of my blog, Offsetting Behaviour, reported that about half of the blogs linked by fellow Kiwi blogger Lindsay Mitchell were classified as adult content and were blocked – none of those sites could reasonably be considered objectionable. He could not opt-out as opting out required having a UK credit card with a UK postcode as proof of age.

In 2014, the UK Council for Child Internet Safety began implementing a whitelist to deal with overblocking. Overblocking occurs when the web filters erroneously identify a website as pornographic. Overblocked sites included suicide prevention websites, drug advice, sexual education and sexual health sites and more.

The UK is looking to tighten things further, with a requirement that pornography websites verify the ages of those visiting their sites; noncompliant sites would be blocked by the Great Firewall. How would sites check visitor ages? Wired reports that credit cards, passports, or drivers’ licence details could suffice. But there are a lot of dodgy websites out there providing access to free but copyright-infringing pornography, coupled with a risk of a malware infection for your computer. It seems a bad idea to force people using those sites to provide material that could easily be used in identity theft.

If New Zealand government wishes to follow the UK down this rabbit hole, the government will have more than a few problems it will need to solve.

It will need to develop a comprehensive list of sites deemed pornographic and consequently requiring age checks, as well as processes for whitelisting sites mistakenly listed as pornographic. What would the appeal provisions be for sites wrongly listed? Many foreign-based sites simply won’t care if Kiwis no longer have access to their pages and will not undertake any kind of costly whitelisting process.

It will need to develop a trustworthy mechanism for age verification. This is not a simple problem. If the government requires foreign websites to collect personally identifiable details on Kiwis, what obligations would those sites face under New Zealand’s privacy regime? How could we tell whether those obligations are being met? What recourse might a Kiwi have in case of breach? And, if the foreign site was compromised and Kiwis’ passports or drivers’ licence details used in age verification were then used in identity theft, where would liability lie? The latest messes over at the Ministry of Culture, where passport details of hundreds of kids applying for a programme were compromised in a data breach, might give the government pause.

And if the government wishes to leverage its existing RealMe online identity system for age verification, might we worry about whether the government is keeping track of everyone’s viewing habits? If Winston Peters was unhappy about his superannuation details being leaked, we can imagine what Shane Jones might think about the dangers inherent in this proposal.

During 2016’s Parliamentary Select Committee hearings on Uber, Parliament proved itself to be completely ignorant of the basic details of the technology at play. Any Select Committee hearings on the proposed pornography filter promise to be at least as entertaining. I look forward to hearing whether the Select Committee knows whether the letters V, P, and N might have any relevance to their proceedings.

But all of it risks New Zealand’s coveted status as the world’s last sane place.

For some reason, Newsroom pulled the line about Jones's internet browsing history. I've here provided the unfiltered version.

A beclowning to come

Remember how Parliament beclowned itself in the Committee hearings about Uber? They fundamentally didn't understand the technology or how it worked.

If this makes it as far as select committee, we can at least console ourselves that the hearings will be entertaining.

New Zealand could follow the United Kingdom in bringing in age restrictions for online pornography and blocking websites which refuse to comply.

Department of Internal Affairs Minister Tracey Martin, who also holds the children's portfolio, says young people are being "bombarded" by internet pornography and she wants censorship laws to be strengthened.

"This is a really, really big issue to New Zealand and we are going to have a serious conversation about it," she told the Herald.

"And I hope to make sure we have this conversation in this term of Government."

Martin supports the approach of the United Kingdom, which has ambitious - and controversial - plans to introduce mandatory age verification for pornographic websites later this year.

Interesting questions could include:

• How will government develop a list for a Great Filter? Does it know about the problems in the UK's list and age verification setup? 
• How does this mesh with New Zealand's privacy regime? If a foreign website is compelled to collect personally identifiable details on Kiwis that they would never otherwise wish to collect, what obligations do they face under our privacy regime? How can we tell whether those obligations are being met? What recourse might a Kiwi have in case of breach? Could a Kiwi sue the government if information produced under state compulsion were leaked and used inappropriately? 
• Does the government know what the letters V, P, and N might together mean in this context?
• What will be the appeal provisions for sites wrongly listed as being pornographic in nature, and age-blocked? Would they impose undue burden on millions of website owners, and on every Kiwi who wants to find information on topics where bots do a hard time in knowing it when they see it, from sexual health to breast cancer?
• If they follow the Brits in having "porn viewing codes" issued to those over the age of 18, what do they do when somebody leaks the code number and tracked viewing habits of Cabinet Ministers? Like, if Winston Peters is worried somebody leaded his Superannuation details...
• Will our porn-watching habits be included in IDI? 
• Why does the government think there is any market failure here when parents can already make use of parental controls if they wish?

When a scam comes together

What a beautiful little scam.

Pornoscams have been around for a while. First, an industry came up harvesting settlements from folks too embarrassed to have themselves named in suits for downloading the likes of "Nude Nuns with Big Guns." I'll claim a bit of prescience in having predicted this as a potential business model for porn in the age of Tube sites.

This one's as good. And, it displays some Kiwi ingenuity.

Porn site users are being conned by scammers using the New Zealand police logo.

New Zealand's finest are warning the users of adult websites the scam, which interrupts a users web session, has nothing to do with them.

The message featuring the police logo appears on their computer screen saying they have been fined for using the x-rated site and need to enter banking details and pay an instant fine.

Police have received a handful of calls about the scam from people believing the message is from them.

In at least one case a person's computer was frozen and they were advised it would remain frozen until they paid the fee into the account.

Police says they have no association with any of the websites and suggest users avoid accessing such sites. 

Calling Bruce Schneier...

Even more clever might be this twist on the scheme.

Some places make it illegal to host or view computer-generated pictures purporting to display minors; some places say fiction isn't a crime. So you can get arrested for looking at the Microsoft Paint pictures somebody drew of the Simpsons, depending on where you are. Get a server in a place where it isn't illegal to host fiction or CGI representations that are illegal to view in other regions. Watch the IP logs for people coming in from countries where viewing that content is illegal. Take their IP address and the browser stats that are basically a unique identifier, or close to it. Then put up the "We will contact the police in your country if you don't pay up" warning. People would know that the current Kiwi operation is a scam because looking at pornography isn't really illegal, and there's no way that the NZ Police would run this kind of instant-fine scheme. But the one I'm proposing... you could make pretty credible threats. Run the site for a few months without the extortion part so it can get a decent page rank for that kind of thing. Make sure there's no malware on the site or anything that might put off would-be targets. Then run the extortion scheme.

I am not advocating that anybody do this. It might be evil, depending on what you think about people who like to read stories about pedophilia, and whether you think reading fiction about pedophilia or looking at CGI pictures of same is a complement or a substitute for actual pedophilia. But it would be clever and it would work. I'm not even sure if it would be illegal to do it - it would have to depend on the jurisdiction from which you're hosting.

Come to think of it, I'd be surprised if nobody were already doing this. It looks like $20 on the sidewalk.

HT: Luis

Kreskin, again

Back in 2010, I made a few predictions about where the pornography industry was heading with the effective death of copyright.

One of these came true last year. I'd predicted that somebody would figure out a copyright litigation extortion scheme where the threat of being publicly named in lawsuits for having illegally downloaded pornography with embarrassing titles would induce people to settle up rather than face public humiliation. I wrote:

An alternative litigation strategy that could work would be use of copyright infringing honeypot sites whose viewers would then be threatened with copyright lawsuits for downloading pirated content, with threat of public disclosure of everything the viewer had been watching. I suspect a lot of viewers would pay up rather than have notice served to them at work and the whole list of viewed videos read aloud, for example.

And that basically came true with the litigation around "Nude Nuns with Big Guns"; Patri Friedman was hit with one of their letters.

I also predicted that the industry would shift away from content that easily fed Tube sites and towards higher end product and bundling with ancillary services:

Longer term, I'd then make the following prediction, albeit with relatively low confidence: a low end market dominated by freely supplied amateur clips that has commodity status, with hosting sites trying to drive click-throughs to higher valued ancillary services; and, a higher-end market where a much smaller number of performers are able to generate fan loyalty for purchase of higher-priced bundles and attendance at touring events.

I refined that:

I still expect that we wind up with a segmented market where the clips sites mostly host amateur or very cheaply produced content, but where a few star performers are able to capitalize on acquired fame by selling props from the set, touring, or providing higher end experiential goods

So, how's that looking? Louis Theroux surveys the porn industry. What's left is going upmarket:

Those movie companies that remain are focusing increasingly on high-end product, trying to beat the illegal sites by providing something like a cinematic experience. There is a flight into "quality". In an uncanny echo of a recent BBC slogan, they are embracing the idea of "Fewer, Bigger, Better". For some, this means more female-orientated scenes with less angry sex. Hence A Love Story. For others, it means parodies – of popular TV shows and recent blockbusters.

And what about ancillary services?

Women supplement their income by stripping and doing live shows over the internet, shot from home on their webcams. One evening I visit one of LA Direct's top performers, Kagney Linn Karter – star of Racktastic and Pound Round – at her house as she prepares for her bi-monthly live show. Her boyfriend and full-time assistant Monte is hanging up her dresses while Kagney bathes and puts on her makeup. Monte and I then retreat to the kitchen where he tidies and wipes down surfaces while Kagney strips on her bed and masturbates in front of the strangers viewing her through her laptop. Forty-five minutes later, she emerges. "Well, I made a hundred dollars," she says brightly.

It's an open secret in the porn world that many female performers are supplementing their income by "hooking on the side". It's also called "doing privates", as in private bookings.

Theroux is pessimistic that the industry will be able to sustain itself over time.

Think about the category of product that Theroux says seems to be doing well: female-oriented product and parodies. The kind of product that you can imagine couples buying together. Theroux wonders:

And there is also the wider question: do those who use porn not, perhaps, owe it a little something? Should those who download it not be ready to pass on a little cash incentive to the business? And if not, why not? Does the stigma attached to porn make it OK to steal it? These questions underpin a much bigger dilemma being faced by all media: how do you sustain an industry that provides a certain standard of product – be it journalism, music, or mainstream movies, or X-rated movies – when more and more consumers are in the habit of downloading content for free? In the world of porn, the answer is: you can't.

I'd think of it rather as that the stigma increases the full cost of paying for product for those with joint credit cards where one partner may disapprove of the good's consumption. That fixed cost pushes towards piracy. And it also helps explain which sectors of the industry are doing less poorly: those where individuals are purchasing a good more likely to be consumed jointly.

Hit the "pornography" tag for prior posts on this interesting industry. Self-regulation regimes around condom use and partner reporting is particularly interesting.

Psychic externalities

Specify that I receive large psychic benefits when prudes are compelled to purchase pornography - their discomfort brings me mirth. Specify further that lots of people share these preferences, but transactions costs prevent us from getting together to pay prudes to go and purchase pornography. In such cases, regulations mandating the purchase of pornography can be efficient.

At least that's the lesson I take from Chris Auld's description of a paper by Curry and Mongrain. The paper discusses blue laws, like those in Alabama, where prohibitions on the sale of vibrators may be efficient: the prurient make their purchases discreetly by mail-order and prudes are shielded from the existence of sex shops. If it's the transaction's visibility that is the main cause of prudish distress, then regulation ought target visibility rather than the transaction itself.

I'm happy to admit the possibility of efficient regulations of this sort in theory. But there is absolutely no reason to expect that real world morality regulation has any efficiency basis. Even evidence of majority support for the regulation is wholly insufficient: meddlesome preferences are much cheaper to indulge at the ballot box than they are in the market. To wit: a voter need only receive epsilon disutility from a prurient act to favour banning that act, while the ban can impose very large costs on those thereby constrained.

Logrolling sometimes helps us in this kind of case: if the median voter only weakly supports a measure that would impose heavy costs on a minority, the minority can pay the majority off through other policy concessions, so long as folks' minority/majority status isn't constant across all policy dimensions. Policy outcomes then move to reflect mean rather than median voter preference and are closer to efficiency. But where the minority bearing policy costs would also incur sanctions from the majority if identified as part of the minority group, those trades seem a lot less likely to obtain.

I'm reminded of Jennifer Roback's work showing how southern racists were able to achieve at the ballot box segregation outcomes they were unable to achieve in the market. To recap: racist southern whites wanted segregated streetcars. But it was too expensive for the streetcar companies to run segregated cars: the increased ticket revenues from white racists didn't compensate sufficiently for lost black custom and, especially, increased running costs. White racists effectively weren't willing to pay enough for tickets to segregated streetcars, so the market didn't provide them. But casting a racist ballot is individually costless. And so streetcar segregation was mandated through regulation.

When I see folks going to the ballot box to enforce their preferences over other peoples' activities, my general presumption is that transactions costs isn't what's keeping meddlers from seeking less coercive options. The ballot box is just cheaper when a majority has weakly meddlesome preferences, regardless of efficiency.

If I had to bet, the Alabama ban had less to do with the psychic disutility experienced by Alabamans on driving by a sex shop and more with helping to ensure a separating equilibrium in migration.

And, for the libertarians out there, purely free market systems aren't immune to meddlesome preferences either: they're just more likely to indulge the strong preferences of meddlesome minorities than they are to indulge the weak preferences of meddlesome majorities.

But if Curry and Mongrain are right, Auld points a way forward in liberalization:

The insight here helps to explain morality laws more generally. Laws against gambling, drugs, and prostitution often take the form of prohibiting various transactions or activities in public rather than outright prohibitions, and enforcement is often targeted at the open display of these behaviors. People commonly violate morality laws, but they also exhibit discretion in doing so, as the model predicts. And in times and places where puritan ethics are more prevalent, there are more and stronger laws against private behaviors which violate puritanical norms.

These insights also suggest ways in which reforms of morality laws might be politically feasible. First, laws which attempt to enforce discretion rather than prohibit use may be acceptable to people who experience psychic externalities from others’ use. Make vibrators legal, but prohibit billboards advertising vibrators. Make drugs legal, but only to be sold in plain packaging from government outlets. Generally, permit the behavior which causes the psychic externality, but to whatever extent possible make it illegal not to be discreet when engaging in that behavior.

A second way to reform policy in the long run is to attempt to change preferences. Puritan preferences are anti-social: The puritan benefits when others are harmed by laws reducing behaviors the puritan considers immoral. Everyone becomes better off when anti-social preferences become less prevalent, just as everyone is better off when more people have pro-social preferences. In papers such as Dixit (2008), pro-social norms endogenously evolve through education. In the long run, reducing anti-social norms, through education or through other mechanisms, may be the only feasible way of reforming morality laws.

Auld's likely right that marijuana legalization has a better chance of happening if coupled with bans on public display; purchases then take place by mail-order and consumption in private.

But imagine if New Zealand's homosexual law reform in the 80s had been advanced by reformers who thought their most likely chance of success lay in legalizing homosexuality, but only in private; public homosexual displays of affection would remain illegal. It's certainly plausible that homophobic opposition to legalization was more motivated by psychic disutility experienced by prudes on seeing public homosexual displays of affection than by the knowledge of what might go on behind closed doors. But legalization and openness helped build the environment in which civil unions became possible - those with mildly meddlesome preferences realized they had friends who were good people and who were homosexual. And opposition eroded. Requiring that acts earning prudish disapprobation remain closeted hinders the erosion of anti-social preferences. It still might be best policy where alternatives are truly blocked. But it sure ain't great.

Self-regulation and pornography

Folks are taking entirely the wrong message from the latest HIV scare in the pornography industry. Here's The Press (AP wire story):

If the initial case is confirmed, the group will ask two generations of the person's sexual partners to get tested, meaning those who had sex with the performer and the sexual partners of those who had sex with the performer.

The voluntary industry shutdown affects porn producers in the San Fernando Valley, the heart of the multibillion-dollar American porn industry, and includes Hustler and Evil Angel's productions.

The porn industry was shut down similarly in late 2010, after porn actor Derrick Burts was diagnosed as being HIV positive.

Burts said he had worked in the porn industry for only seven months before being told during a routine test at the AIM clinic on October 8 that he had contracted the HIV virus, which can lead to AIDS.

Burts has since gone on to advocate for the mandatory use of condoms in porn with the AIDS Healthcare Foundation.

The health advocacy group and state workplace safety officials say state law mandates porn performers to use condoms to protect themselves under the same set of rules that require nurses to wear gloves in hospitals when dealing with bodily fluids.

First, the industry knows who has performed what with whom and when. So when regular testing shows a performer has HIV, they can immediately run tests on everyone who's performed with that actor, then on anybody who's performed with those actors, and so on.

Alexandre Padilla argues, reasonably, that if condom use were mandatory in the California porn industry, there would be two perverse effects. First, production would leave the self-regulating and relatively safe conditions there and go elsewhere; there is consumer demand for films with unsheathed actors. Second, producers in California would have a hard time mandating regular HIV testing: it could be deemed an unreasonable job condition if other abatement mechanisms are in place. Where condoms fail occasionally, risk could then increase.

Copyright shakedown: Friedman edition

A year ago, I wrote that we might expect pornography producers to start seeing copyright lawsuits as a profit center.

A month ago, Camelot Distribution Group started sending out infringement notices alleging that the recipient had downloaded "Nude Nuns with Big Guns" and that he would be publicly named in a lawsuit as having downloaded the film unless he settled out of court. They seemed to reckon on most folks paying up quietly rather than have their names associated with such titles.

And yesterday Patri Friedman received his letter in the mail. If Camelot's litigation strategy relies on accused folks being too embarrassed to want to fight the charges, they might have picked the wrong guy.

Update: time constraints are more binding than shame constraints. Prediction: Camelot won't pursue things further with Patri.

I'm Kreskin

Or at least Dick Puddlecote says so. Last year I suggested a route for pornography producers plagued by copyright infringement: litigation as profit centre. I wrote:

An alternative litigation strategy that could work would be use of copyright infringing honeypot sites whose viewers would then be threatened with copyright lawsuits for downloading pirated content, with threat of public disclosure of everything the viewer had been watching. I suspect a lot of viewers would pay up rather than have notice served to them at work and the whole list of viewed videos read aloud, for example.

TechDirt linked to the piece; perhaps some folks in the industry saw the suggestion. Check out the litigation strategy on Nude Nuns with Big Guns:*

On March 7, Camelot Distribution Group, an obscure film company in Los Angeles, unveiled its latest and potentially most profitable release: a federal lawsuit against BitTorrent users who allegedly downloaded the company’s 2010 B-movie revenge flick Nude Nuns With Big Guns between January and March of this year. The single lawsuit targets 5,865 downloaders, making it theoretically worth as much as $879,750,000 — more money than the U.S. box-office gross for Avatar.

At the moment, the targets of the litigation are unknown, even to Camelot. The mass lawsuit lists the internet IP addresses of the downloaders (.pdf), and asks a federal judge to order ISPs around the country to dig into their records for each customer’s name.

It’s the first step in a process that could lead to each defendant getting a personalized letter in the mail from Camelot’s attorneys suggesting they settle the case, lest they wind up named in a public lawsuit as having downloaded Nude Nuns With Big Guns.

A hearing on that request is set for April 13. In all probability none of the alleged downloaders know it’s happening.

Welcome to the future of Hollywood, or at least the less glittery outskirts of Tinsel Town that produce art films, exploitation flicks and porn. Over the past year, small-budget film producers have nearly perfected a slick, courtroom-based business strategy that’s targeted more than 130,000 suspected movie downloaders.

...

In contrast to the the RIAA’s much-criticized and now-abandoned war against music pirates — which targeted 20,000 downloaders in six years — the movie lawsuits appear to have been designed from the start as for-profit endeavor, not as a deterrent to piracy.

...

Rights groups and defense lawyers are rankled by the large-scale, semi-automated character of the litigation.

“This is a mass copyright litigation machine,” says Lory Lybeck, a Seattle attorney representing dozens of the defendants. “Most people don’t want to have a public lawsuit against them for Teen Anal Nightmare 2, so they settle.”

Using an outside contractor, like the U.K. firm GuardaLey, the companies start by trolling BitTorrent sites for the films in question, and dipping into the active torrents, capturing the IP addresses of the peers that are downloading and uploading pieces of the files.

...

It’s an efficient model for winning settlements: the movie downloaders face the prospect of defending against a federal lawsuit, possibly thousands of miles away, and having a third party rifle through their computer. A quick settlement is even more appealing in cases involving pornography, where a defendant who chooses to fight likely will see their name on a public court docket.

That’s the predicament a 38-year-old Houston, Texas, man finds himself in. A defendant in “West Coast Productions v. Does 1 – 5,829,” (.pdf) filed in Washington, D.C. in January, the man was notified by Comcast this month that a subpoena is seeking his information in connection with Teen Anal Nightmare 2. He has a month to challenge the subpoena.

The man, who spoke to Threat Level on condition of anonymity, says he wants to fight the allegations. But to do so, he likely would have to litigate halfway across the country, and his name might be exposed by the sheer act of challenging the subpoena.

“I didn’t download this,” he says. “I’m gonna fight this.”

...

But however controversial, the mass-litigation tactics appear to be working; defendants are settling the cases out of court, according to interviews with defense attorneys. Terms are confidential.

“Most of the people I represent settle immediately because they want this over,” says Illinois attorney Charles Mudd. “This is an abuse of the court process.”

Would you fly half-way across the country to defend yourself publicly against charges that you downloaded and presumably enjoyed "Teen Anal Nightmare 2"? Or any similar titles? (warning, obscene dialogue at youtube link) I think most folks, even if innocent, would quietly pay up.

It seems entirely possible to build a business model where the expected profits from litigation exceed revenues from actual film sales. Torrenting copyrighted movies is and should be illegal. But there's something wrong with a legal process that allows this kind of trolling lawsuit. IP addresses are hardly unique identifiers. And the innocent are more likely to pay up than to fight. The process needs fixing.

*Yeah, that phrase is going to bring in some disappointed readers on Google searches.

Wink wink, nudge nudge, say no more

You've always had the option to opt out of internet pornography. Lots of internet service providers advertise provision of specifically filtered services to keep porn out. Some ISPs provide nothing but filtered service. But you have to opt out: the default plans don't censor your pipe.

So most folks don't opt out unless they want to bind themselves against self-control problems, they want to keep the kids out of that stuff, or they want to make a symbolic statement against pornography and in favour of the ISPs that provide filtered service.

Some Brit MPs wish to reverse the default:

The biggest broadband providers, including BT, Virgin Media and TalkTalk, are being called to a meeting next month by Ed Vaizey, the communications minister, and will be asked to change how pornography gets into homes.
Instead of using parental controls to stop access to pornography - so-called "opting out" - the tap will be turned off at source. Adults will then have to "opt in."

...

Claire Perry, the Tory MP for Devizes and a keen lobbyist for more restrictions, said: "Unless we show leadership, the internet industry is not going to self-regulate. The minister has said he will get the ISPs together and say, 'Either you clean out your stables or we are going to do it for you'."

"There is this very uneasy sense for parents of children that we do not have to tolerate this Wild West approach. We are not coming at this from an anti-porn perspective. We just want to make sure our children aren't stumbling across things we don't want them to see."

More wonderful libertarian "nudge" paternalism from the Brits. Those who enjoy the stuff would still get it, but only if they explicitly sign up for it and presumably get put onto some government list of known pornography viewers which will presumably get out via Wikileaks within a few years. Then the journos could have fun looking at the lists of which prominent people have signed up for the uncensored stream and folks can snicker about their neighbours' viewing habits.

The big difference between the two default rules is that the opt out rules allow folks with "deviant" tastes to pool with those who are indifferent, while opt-in only selects those whose preference intensity is strong enough to be happy about being on the list. Nothing is currently signaled by failure to opt out but opting-in would say rather a lot: you're either a consumer of the product, or a very strong civil libertarian.

I'm going to bet that this doesn't wind up being implemented. Here's Hansard of the debate. The Minister seemed pretty lukewarm on pushing through regulatory changes; I'll guess that the latest reports are bargaining position for either getting ISPs to do more to push subsidized Net Nanny variants to folks who want them, or for concessions on other issues altogether. Dick Puddlecote is livid (rightly so) but I'd be shorting the iPredict contract at prices higher than $0.35. It's pretty disgusting that a coalition that includes the Lib Dems would be even making noises in this direction.

Legal Entrepreneurship

The guys behind this one may be geniuses:

Calling all YouPorn watchers! Two California men, David Pitner and Jared Reagan, have filed a class-action lawsuit over the site’s practice of “history sniffing,” or checking out other porn websites that visitors have been to through exploiting a Javascript security flaw.

I probably have this wrong, but I think US class action would let Pitner and Reagan claim to act on behalf of anybody who is potentially in the class who doesn't opt out - which they could get out of basic web stats data on overall traffic - then settle for legal costs and coupons for members of the class. If this works out for Pitner and Reagan, anybody who's been damaged by YouPorn's actions would have to notify Pitner and Reagan's law firm that they're viewers of pornography who want a coupon (presumably a week's free access to some pay site), while the law firm gets to keep whatever it charges as legal costs.

Ok, hands up you YouPorn viewers who would provide evidence to the law firm that you're a member of the aggrieved class? Anybody? Didn't think so.

The filed suit is here.

At least one of the two is not a truth-seeker

Ron Jeremy, possibly the world's most famous male porn star, has had regular debates across the United States with Craig Gross, pastor of xxxChurch, which tries to help folks stop watching pornography. Writes Gross:

I started XXXchurch.com 8 years ago, created a software called X3watch that is keeping almost 1 million people accountable online and I am most often known as the Porn Pastor. I have only had sex with one woman who happens to be my wife.

Ron says we are just alike. He has been with 5,000 women and I have been with my wife of 12 years almost 5,000 times.

Just alike… Well not really.

Ron is for porn and I am against porn. We are opponents on stage. In fact we have debated each other over 60 times in the last 4 years. We have debated at Yale, Ohio State, University of Southern California, Texas Tech, and in a few weeks we start the school year off with another debate at the University of Tennessee.

They have debated each other over sixty times.

It would be interesting to see those sixty debates and whether either debater's opening position changed at all in response to the other's position. They have failed to iterate to a joint position after dozens and dozens of repeated arguments about the same issue. At least one of them is not a truth-seeker (and see here).

Also interesting: lots of secular venues like universities will host these debates but very few churches will:

Why is the church so afraid to hear the other side? I think it would be a great outreach to bring the debate to a church but every time I pitch it to a church or Christian college they say, "We could never let him on stage at church."

I don't get it. But then again, these are often the same people who say I should not even be friends with him, let alone on a tour bus with him. I know Zacchaeus was a short dude in the Bible but how can we overlook that story and see the example Jesus set for us to go after people?

Two friends of mine, Miles McPherson and Ryan Meeks have agreed to do the unthinkable. On October 9, Ron and I will do the unthinkable and head over to The Rock, a church in San Diego. A few months later on March 5 we will bring the debate to Eastlake Church in Seattle, Washington.

Universities are at least nominally committed to truth seeking. Churches, less so.

It would be interesting to have before and after audience polling to see how many folks changed positions post-debate across the different venues.

CWF-RTB, NSFW update

Masnick at TechDirt picks up on the prior economics discussion of the end of effective copyright and the porn industry.

[Crampton] then suggests that touring is a possibility -- with online clips being used as enticement to come out and see "live" performances of some kind, though, I would imagine that might not fully work either. I would guess that for most -- "stripping" and "porn" aren't quite the same thing, and while I'm not familiar with how licenses for strip clubs work, I'd have to imagine that most don't allow actual sexual acts between people to happen either. Though, the Freakonomics article does say that some porn actresses use online clips to drive people to come see them strip -- which is a higher margin business.

Of course, a commenter suggests an even more obvious (though very illegal, mostly) form of CwF+RtB: prostitution. Though, that's got all sorts of problems as well.

What surprises me is that one of the more obvious models is mostly left out: straight up advertising. One thing that porn does well is attract a lot of eyeballs. In fact, plenty of online porn sites have supported themselves with advertising for ages. There's no reason for that to change. And, certainly you could think of interesting "tiers" that some top porn stars could use to attract people to pay for greater levels of access, such as private videos, chats and the like. A few months ago, someone had submitted a story about a porn star who was offering special packages on her website where she would attend sporting events with you (I believe for the Phoenix Suns), but I can't find that submission any more.

Either way, I have to concur with the initial analysis [Freakonomics]. Whatever the business model that comes out, it doesn't seem likely that porn is going away any time soon, even if copyright is totally ignored.

Advertising pays the clips sites, but it doesn't pay the content producers. Absent effective copyright, something else has to pay the producers. I still expect that we wind up with a segmented market where the clips sites mostly host amateur or very cheaply produced content, but where a few star performers are able to capitalize on acquired fame by selling props from the set, touring, or providing higher end experiential goods - the DVD costs $20, but the DVD plus dinner with the star costs $20,000.

Folks over in the comments section there had some interesting ideas for business strategy as well. They point out that there is already a pretty lucrative touring market for big name stars in adult entertainment venues. One commenter notes that "game used" memorabilia in sports has a big market; he's surprised it's not taken off in this context. I wonder whether there are regulatory barriers connected to health and safety issues, though presumably disinfectant would solve such problems. Another notes that one star has taken to occasionally advertising that she has two tickets to a Phoenix hockey game; folks could then presumably bid to go see the game with her. A third suggests "pay more to produce more":

For example, a famous porn actress could star in a free but short porn clip, with a possibility of 3 different ways it could be extended. Folks would pay .50 or so to vote for their favorite choice, and then a short time later the next segment would be free released as well, with yet another vote for the next segment.

Serialization of the show, with the next installment produced when enough micropayments have been received, and a chance to vote on ...plot developments... as incentive to pay - neat idea.

I'd appreciate it if any readers who pay more attention than I do to innovations in this industry (you know who you are) would report in if any of these start taking off.

Obscenity: In defense of Stagliano [updated]

Update: The case was dropped on technicalities due to an incompetent prosecution. Original post follows below.

I'm rather glad that the New Zealand Censor's office found that the issue of Norml News in which I had a short article was not a prohibited publication.

Surprisingly enough, things seem to be getting worse in the States, First Amendment or not. There, the anti-porn crusaders are out. I thought this sort of nonsense was going to end with a Democrat President facing a Democrat Congress. Apparently not. There's a pretty simple solution for folks who don't want to watch pornography: don't watch pornography. There's a pretty simple solution for folks worried about their kids watching naughty things on the home computers: any of the numerous censor software or censor ISPs that are out there. And, there's a pretty simple solution for folks worried about what other consenting adults do in front of a camera or what other folks then watch them do: fix your inefficient utility function. You'll be a more efficient producer of utility if you stop getting disutility from things that don't affect you directly.



From ReasonTV's blurb about the video above (which does contain some performers clothed in lingerie, your call whether that's worksafe for you):

"When did women exchanging bodily fluids and a little light bondage become the most obscene thing in the land?" asks Constance Penley, a University of California at Santa Barbara professor well-known for her classes on pornography.

That question may be answered this week when porn producer John Stagliano's federal obscenity trial enters its second week. Stagliano faces up to 32 years in prison for distributing the adult films Milk Nymphos, Storm Squirters 2: Target Practice, and a promo reel for a trailer for Belladonna's Fetish Fanatic Five via his website for Evil Angel Productions (adults only).

(Full disclosure: Stagliano has been a donor to Reason Foundation, the nonprofit that publishes this website.)

Emboldened by the Stagliano trial, a group of anti-pornography organizations recently held an event to demand a new "War on Pornography." "We have a war on pornography and we're going to win it," declares Patrick Trueman, a former Department of Justice prosecutor and leader of the War on Pornography Coalition. "The pornographers know exactly what they're doing and they're not going to respond to anything but the stick of the law," adds Donna Rice Hughes, founder of Enough is Enough.

But Reason.tv speaks with others, including an adult film actress and fetish film director, who promise to resist the anti-porn crusaders. And there is a bigger issue at stake, says Marty Klein, author of America's War on Sex: The Attack on Law, Lust and Liberty. "The right to see South Park, may actually depend on the right to watch Butt Busters 3," says Klein. "If people want to have the right to do what they want to do, they have to protect the rights of other people to do what other people want to do."

"Obscenity vs. Freedom of Expression" is produced and edited by Hawk Jensen, field produced by Dan Hayes, with camera work by Dan Hayes, Hawk Jensen, Alex Manning, Joshua Swain and Zach Weissmueller. Production Assistants are Sam Corcos and Jack Gillespie. Approximately 7.30 minutes.

For a 2008 Reason.tv interview about the case, 
go here: http://www.reason.tv/video/show/517

To watch Reason.tv's Lady Chatterley, Milk Nymphos, & John Stagliano, 
go here: http://reason.tv/video/show/free-spee...

Go to http://reason.tv for downloadable versions of this and all our videos, and subscribe to Reason.tv's YouTube channel to receive automatic notification when new material goes live.

The Washington City Paper summarizes the legal arguments here. See also Kuznicki at the Washington Examiner.

The blue movie business has plenty of trouble besides censorship issues: the erosion of copyright. Folks feeling guilty about viewing Stagliano's work without paying for it may consider contributing to his defence fund.

CWF-RTB, NSFW and other acronyms

Mike Masnick at TechDirt argues that artists need build business models robust to the non-existence of copyright: they need to connect with fans and give them a reason to buy. I've previously highlighted his analysis of Trent Reznor's business strategy.

I wonder what he'd say about this recent Freakonomics piece on how the pornography industry is being hit especially hard by diminished effective copyright.

Whether harmful or not, YouTube’s success has unsurprisingly led to imitations. Among them are the hugely popular “porn-tube” websites like youporn.com, xvideos.com and pornhub.com. These aggregate short clips of both amateur and commercial pornography, posted by the site’s users. Like YouTube, a tremendous amount of content is made available for free. But there are important differences between YouTube and porn-tube, beyond the fact that the people featured on the porn-tube sites are naked. The effect of these clips on the porn industry is clear—and profound.

The biggest of the sites, Pornhub, is currently the 53rd most heavily trafficked site on the Internet. By contrast, CNN.com is No. 59, the website of the New York Times is No. 96, and vivid.com (the site of the best-known high-end porn producer in the U.S.) is No. 19,543. (YouTube is no. 3.) Sales of porn DVDs are collapsing, and the revenues of subscription-based porn sites are drying up. Vivid did sue one of the porn-tube sites for copyright infringement, but that suit was dropped in 2008 and the targeted site continues to operate. There is some talk within the porn industry of a coordinated litigation strategy a la the recording industry’s campaign against Internet file-sharers. But there are other insiders who note that copyright suits have done little to stop the implosion of the major record companies, and who despair of any litigation-based solution. And, unlike the record industry, pornography producers have shown no interest thus far in suing their customers for illegally downloading porn. The industry has preferred instead to appeal to customers’ better instincts – in this video, for example, a group of porn stars pleads with customers not to use the porn-tube sites.

I'm not going to copy the video for this post; go to Freakonomics if you want it.

So, what's then the future for internet pornography?

In short, the porn-tube sites probably won’t kill the porn industry. But they will change it. Production is likely to shift even more from “features” to short porn-tube-friendly clips. At the moment, the commercial porn industry, concentrated in L.A.’s San Fernando Valley, turns out more than 1,000 new feature films every month. This model probably cannot be sustained in a porn-tube world. Pornography is, in large part, a utilitarian product, and for most consumers, the purpose for which it is employed is served just as well by a five-minute porn-tube clip.

We can imagine at least two distinctive strategies emerging that will allow porn producers to survive in a market ruled by the porn-tube sites. The first would be to go upscale — to build a porn-industry brand by associating it with highly-paid stars and high production values. (CNN recently reported on a $4 million 3D porn film about to commence production.) And then diligently send legal notices and sue to keep your content off the porn-tube sites. Large, successful producers like Vivid seem already to be following part of this course. Vivid has two full-time employees sending out hundreds of notices every month demanding that porn-tube sites take down their copyrighted content, and they, along with several other large players, have discussed coordinated copyright lawsuits.

The other strategy is likely to be a much more significant part of the porn industry’s future. Many producers will take advantage of falling production and distribution costs to produce a huge amount of pornographic content catering to every imaginable sexual taste. Revenues may come from banner ads, or from click-throughs to sites offering services, like live chats and video on demand, that cannot easily be copied. The commercial producers will compete with amateurs, and also with entrepreneurs who use porn clips as advertisements for other, more highly paid services – for example, already many porn actresses use clips to attract clients to their more lucrative work in strip clubs. In any case, the pornography business is likely to become progressively lower-margin and competitive. Consumers will pay less, and get more.

All right, a bit of analysis now. The first proposed strategy, I'd argue, is doomed if it relies on suing all the potential clip sharing sites. Hasn't really worked in music.

An alternative litigation strategy that could work would be use of copyright infringing honeypot sites whose viewers would then be threatened with copyright lawsuits for downloading pirated content, with threat of public disclosure of everything the viewer had been watching. I suspect a lot of viewers would pay up rather than have notice served to them at work and the whole list of viewed videos read aloud, for example. Marginal Revolution links through to suggestions that malware installs may also be a revenue source; stories like this may work to push folks to the legitimate pay sites.

Going upscale could work if the inevitably-linked short clips successfully demonstrate that the higher-value production would be worth purchasing, but that only works to the extent that the sharing sites restrict themselves to short clips, which then depends on whether short clip or long clip viewers are more likely to click-through for ancillary services.

The second suggested strategy turns the product into a commodity - a loss leader for higher priced services. Not a great outcome either for performers. Especially when, at least according to comments on the Freakonomics piece, there are an awful lot of amateur performers who upload their materials for free.

I wonder whether things might not sort out more via a Masnick-style "Connect With Fans, Reason to Buy" strategy, albeit in Not Safe For Work form. Clips build brand for particular performers, who give reason to buy by coupling physical artifacts or other amenities with purchases of DVDs or online club subscriptions.

Opportunities here will be far more limited than for musical artists though. Music fans often gain utility by displays of fandom: wearing t-shirts or buttons or stickers that demonstrate the fan's affiliation with the artist and that mark the fan out for other fans of the same artist. The t-shirts tell the world "I'm the kind of person who listens to and affiliates with X." So while it's more than possible for Amanda Palmer to sell higher-end bundles including CDs, t-shirts, and other exclusive branded items letting fans show everyone in the world that they're fans of Amanda Palmer (another nice Masnick interview with Palmer here), porn performers might have fewer such opportunities as fans of particular artists may gain less utility from public displays of affiliation. Heck, even shameless economists have a hard time writing about this market without blushingly hoping that folks won't interpret interest in interesting economic problems with just a prurient mindset. The culture may have changed over the last fifty years, but not that much. In any case, performers could perhaps sell higher-value bundles including more discreet items: items worn by the performer, props from the set, and so on.

The other way for performers to monetize their celebrity from freely shared clips is through touring. In music, CDs become the loss-leaders for concerts; in pornography, filmed performance may become the loss leader for performances in various adult conventions and clubs.

Longer term, I'd then make the following prediction, albeit with relatively low confidence: a low end market dominated by freely supplied amateur clips that has commodity status, with hosting sites trying to drive click-throughs to higher valued ancillary services; and, a higher-end market where a much smaller number of performers are able to generate fan loyalty for purchase of higher-priced bundles and attendance at touring events.

In other news, the Australian clamp-down on pornography continues.

Results I don't believe [updated]

Kiwis almost never look for pornography on the web, a survey partly conducted by AUT University has found.

The survey of 1250 people in 30 countries showed that fewer than 5 per cent of Kiwis admit using the internet for pornography daily. More than 80 per cent said they never looked for sexual content on the web.

1250 people in 30 countries? 42 respondents per country if it's not population weighted; maybe a dozen Kiwis answered the survey if it was? Or do they mean 1250 people in each of 30 countries. [DPF, comments, confirms 1250 per country, phew!]

Alexa is a bit more forthcoming: 6 of the top 100 sites visited by New Zealanders are porn. #s 46, 64, 65, 66, 73, and 81, at least judging by titles or tags that are obvious in the Alexa headings. If folks are more likely to block tracking toolbars like Alexa when surfing that kind of content, then these results understate things. The one ranked #46 here is ranked #54 globally.

Or maybe the 5% in the survey really downloads a whole lot of content. But I doubt it.

Who runs surveys of 1250 people across 30 countries? The margins of error have to be huge!

Afternoon roundup

• Kanazawa asks whether the Russian tradition of children taking the father's middle and last name suggests something about Russia:

  The widespread practice of patronyms in Russia suggests that Russian men have historically had greater needs to be convinced of their paternity than men elsewhere (all of whom suffer from a degree of paternity uncertainty to begin with). Why is this? There are at least three (mutually nonexclusive) reasons for Russian men's greater needs to be convinced of their paternity. It could be: 1) Russian men's paternal investment was particularly more valuable, possibly because of Russia's hostile environment (Note that both Iceland and Russia are in very cold climate); 2) Russian men, for some reason, have had inherently lower motivation to provide paternal investment in their putative children; and/or (potentially precipitated by the fact that) 3) Russian women have historically been more likely to cuckold their husbands, by being more likely to have extrapair copulations and pass on their resultant offspring as their husbands'.

  I love that Kanazawa is always willing to go the extra mile in applying rat choice and evolutionary biology.


• Odd forms of collateral in Italy.


• The AIDS Healthcare Foundation sues porn producers in a bid to have condoms mandatory in pornographic films under health and safety legislation. HT: BoingBoing. Never mind that the industry already has effective self-regulation: abstract of Alexandre Padilla's relevant research below.

  This paper analyzes how self-interest and long-term profit expectations provided the necessary incentives for the adult film industry to self-regulate and to find mechanisms to minimize the risks of HIV outbreaks that could result from the asymmetric information and network effects that characterize the industry. With the help of the Adult Industry Medical Healthcare Foundation (AIM), the adult film industry developed a corporate culture to facilitate widespread coordination among members and to make the industry similar to a private club. First, I discuss the predicted effects of asymmetric information and network-effect problems on the industry in terms of HIV outbreaks. Second, I tell the story of AIM and present the policies the industry has adopted since AIM's creation to mitigate those predicted effects. In particular, I discuss how the industry managed the 2004 HIV outbreak without government intervention. Finally, I present statistics comparing HIV infection rates in the industry and general population as well as additional observations to assess the relative effectiveness of the industry in preventing and containing HIV outbreaks.

  Padilla further notes that mandated condom use would eliminate mandatory HIV tests as they then would constitute an unfair and illegal employment condition; much of the industry would be driven abroad or underground. In all those cases, the AIDS situation is worsened by regulation.