Late last year in Washington something of consequence happened: Two federal agencies decided to jointly regulate consumer privacy issues. And just this week, dozens of consumer and privacy advocates are pushing one of those agencies – the Federal Communications Commission – to vigorously enforce consumer privacy rights.
Given the turf-conscious nature of Washington, the success of last year’s unusual agreement is deserving of critical review. There are high stakes for American consumers who expect privacy violations to be policed properly. For businesses in the converging communications, Internet, and app spaces that rely on their ability to use customer data, doubling the number of privacy cops could create significant headaches.
Traditionally, the Federal Trade Commission (FTC) has been the lead agency for consumer privacy issues. The U.S. has a handful of consumer privacy laws that are sector- or industry-specific. For example, there are statutes on the books that provide authority to regulate the data of health care patients, students and minors. For nearly everything else the FTC has a sort of catch-all consumer privacy enforcement authority not authorized by statute but built up principally over the last 25 years through a series of policy pronouncements and enforcement actions against companies. The FTC uses its core power to police unfair or deceptive trade practices when companies do not live up to their own statements concerning, and promises regarding, their collection, sharing, usage and protection of their customers’ personally identifiable information. Unless a separate privacy statute grants regulatory authority to a different federal agency, the FTC has assumed it is the privacy cop on the beat.
At the recent Consumer Electronics Show (CES) in Las Vegas, there was plenty of high-tech gadgetry on display — from virtual-reality goggles to the latest incarnation of the hoverboard. But one of the hottest tickets was an hour-long conversation with a couple of D.C. wonks.
CES President Gary Shapiro hosted back-to-back fireside chats with Federal Communications Commission (FCC) Chairman Tom Wheeler and Federal Trade Commission (FTC) Chairwoman Edith Ramirez to discuss consumer privacy. It’s a topic that has tech executives grinding their teeth in frustration.
Thanks to a recent memorandum of understanding triggered by the Open Internet Order (“Order”) and signed by the two agencies, there are now two cops on the privacy beat.
The order redrew privacy turf when the FCC finalized it this spring. The main purpose of the order was to classify the Internet as a utility under Title II of the Communications Act in the interest of cementing net neutrality. What most of the mainstream press didn’t pick up on at the time was that the order also greatly expanded the FCC’s authority to investigate and enforce perceived privacy violations by broadband companies.
Hoverboards are a phenomenon like we’ve never seen before — and a troubling trend for entrepreneurs. The two-wheeled menaces seemed to come out of nowhere and became instantly popular. But just as quickly, it’s become clear that the boards are incredibly dangerous. Not only are plenty of people getting seriously injured on them, but many of the boards are bursting into flames.
But there’s no one to turn to if all of those injured, angry owners wanted to file a class action lawsuit. The boards were developed incredibly quickly, then manufactured and sold directly from various factories in China. No one company has a corner on the hoverboard market and for the most part, no one really has any responsibility for the product.
“Being a sustainable company is not the goal for these folks,” says Tucker Marion, professor of technological entrepreneurship at Northeastern University. “They just want to make money for a year or two off of a product.”
This is the opposite of the way most entrepreneurs view building their businesses. Most founders want to build businesses with good reputations that will be around for the long haul.
So how do you compete against companies that are happy to jump into a market, make a quick buck and disappear just as quickly?
Depending on whose numbers you believe, the U.S. supplement industry is either a $12 billion or a $37 billion industry. That’s big by any standard. About half of all adults take some kind of vitamin. To date, food and health companies have mostly ruled the market. Now Silicon Valley is getting in on the action with something called nootropics, which could open a whole new market for tech entrepreneurs.
Put simply, nootropics are supplements that promise to make us smarter. They have been around since the early 1970s and are made up of things like caffeine and vitamins B6 and B12 — substances the U.S. Food and Drug Administration approves as dietary supplements and classifies as GRAS (generally regarded as safe).
The twist now is that these pills are being repurposed, repackaged and sold to Silicon Valley and Wall Street overachievers who work long hours. In December, venture capital firm Andreessen Horowitz announced a $2 million seed investment in Nootrobox — a nootropics company that markets its pills in attractive little glass bottles labeled “Rise,” “Sprint” and “Yawn.” A product called “Go Cubes” is gummy coffee bites. San Francisco-based Nootrobox bills itself as the leading name in nootropics and biohacking, but it’s just one of many firms manufacturing nootropics.
Today, we are closer than ever to that dreamy, sci-fi-ish reality of being able to watch anything we want, whenever we want, wherever we want on the device of our choosing. Services like NetflixNFLX -3.39%, Amazon and Hulu (also known as online video distributors, or OVDs) have made apps the norm for streaming video. And thanks to apps from pay-TV providers, and from programmers like DirecTV’s Sunday Ticket, HBO GO, WatchESPN and FXNOW, many “TV” viewers can use their cable, satellite or IPTV subscriptions to watch shows on any device in any way they like.
So what exactly is broken about this system? Most viewers would say nothing. There’s fantastic content available 24/7, and it’s more convenient than ever to consume. This sounds like a complete win for consumers in an era that is undoubtedly television’s golden age 2.0.
The emergence of the iPhone ushered in the era of the app, which was heartily embraced by consumers. We now live in an app-based society where the majority of our lives happen online. Food delivery via telephone has gone the way of the dodo; today we can push a few buttons and order from Postmates or DoorDash instead. No longer do we need to stand on a street corner and flag a taxi, as Uber and Lyft have got us covered. If you’re a music fan, nearly gone are the days of buying and spinning CDs; today a slew of apps stream your favorite artists or help you discover new ones. And television is becoming no different. There is a way to deliver television content without the need for a box. Even AppleAAPL -2.86%’s Tim Cook calls apps “the future of television.”
SAN FRANCISCO, Dec. 15, 2015 /PRNewswire-USNewswire/ — As the Copyright Royalty Board prepares to weigh in on the future of online music royalty rates, by a 4-1 ratio Americans think that labels and industry groups should get a smaller piece of the revenue pie according to a new CALinnovates survey.
The survey of 1,092 Americans found that 53 percent believe that “labels and industry groups should get a smaller slice of the pie so the artists and streaming companies can make a living.” That is compared to only 12 percent of Americans who said, “streaming companies should be forced to pay more so that the labels and industry groups can keep their share.”
At stake with the pending Copyright Royalty Board is how revenues from online music should be divvied up. Music labels and performing rights organizations have argued that streaming companies should have to pay more, while others have argued that the labels and industry groups should loosen their hold on the industry so that streaming companies can continue to innovate, which will benefit the entire music ecosystem.
One thing is clear: Americans want to see songwriters and artists get paid. 78 percent said musicians should make the most money from the sale of streaming music. They also put the labels and industry groups last in the order of priority: only 9 percent believe they should make the most money from streaming music.
Music royalty payments are at an all-time high. So why are artists turning on the streaming companies?
According to the companies that collect royalties for songwriters and publishers, times are good. ASCAP and BMI, the two performance rights organizations (or PROs) that represent almost all songwriters and publishers, are falling over each other to brag about how much money they’ve collected.
In March, ASCAP announced that it was the first PRO in the world to report $1 billion in revenues. The nonprofit boasted of “historic high” distributions of over $883 million to its members. In September, BMI also announced “record breaking revenues” of $1 billion with digital revenues exceeding $100 million for the first time ever.
And yet, songwriters and musicians are complaining loudly that they aren’t getting their share of the pie. They are demanding royalty rate increases and a larger direct cut of streaming companies’ revenues, which already operate at half-mast by paying out 50% or more of revenue to royalties.
Where is this disconnect coming from? On the one hand, it seems like streaming is the engine that is finally starting to turn things around for the suffering music industry. Consumers are embracing platforms like Pandora, iHeart and Soundcloud instead of piracy and as a result, they are once again paying for music with subscriptions or by willingly listening to ads.