Controversy swirled last week on allegations that Last.fm’s parent company CBS gave the RIAA user data for possible use in civil and criminal cases. All those involved in the story have denied these allegations, though Techcrunch stands by the story.

It’s impossible to filter the he-said she-said right now, so instead let’s look at all the good that can come from the RIAA looking at Last.fm’s data. First, it’ll be almost impossible to make any case based on the data – Last.fm shows what music people listen to, but not the source (whether its legal or pirated). Instead, the RIAA could use this massive amount of data on real listening behavior to find new revenue streams and marketing opportunities. The RIAA could see exactly who likes one thing and then listens to another, helping to plan concert schedules and other events (like they already do with piracy data).

What would be even better is if the music industry took this data and used it to find new musicians and bands that fit the listening tastes of music fans (the ones listening). Using actual user actions can be much more efficient than focus groups or other market testing, but rarely is that data available. Of course, this is another benefit of the internet’s cheap and easy distribution – easy market testing. Post a new song to Last.fm or YouTube and see what happens. Do a little self promotion and you might have the next Susan Boyle on your label.

Of course, the RIAA won’t do any this. They’d much rather claim they’ve stopped suing people then continuing on suing. More money there than actually finding new business models.

As Hulu adds Disney to its video fold, some seem to be calling this a loss for YouTube. But YouTube and Hulu are very different video sites and hopefully will continue to evolve so as to co-exist peacefully for the benefit of all web video kind.

YouTube is the video site for the masses. Anyone can upload anything for any reason. It makes the site excellent for finding something, whatever that may be. And that makes it an excellent service for many people, from content creators trying to get noticed to guys filming their dog do funny things.  Hulu is the standard for premium, professional content from the legendary gatekeepers of entertainment.  Even as the two imitate each other, there is more than enough space on the World Wide Web for both.

Yes, YouTube is adding premium content and using much of Hulu’s interface. That’s good for everyone – Hulu has a great interface. But Hulu will never add the breadth and freedom of YouTube. Similarly, much of Hulu’s content providers refuse to give up the control a closed system provides (including, still bizarrely, blocking out most of the world from viewing the page).  Much of the apparent concern for YouTube comes from the higher ad rates Hulu gets for its premium content, but of course, this puts mistaken value on the content itself rather than the experience and the community.

Hulu is an excellent experience, when they aren’t blocking access, but it lacks the community that makes YouTube thrive.  While Google has yet to figure out how to monetize the community, there are still millions of loyal video makers and watchers devoting hours of their time to the making the site more enjoyable and valuable.  Already we’ve seen unique ways YouTube can be a tool for increasing wealth and marketing, from the recent Susan Boyle excitement (which increased sales of Les Miserable CDs) to the amazing Wario Land: Shake It video game ad (you must click the link to experience it fully). Plus, YouTube videos now allow links, allowing for some interesting new opportunities.

Obviously, I like YouTube, and I have some problems with Hulu. Basically, web video, like most aspects of the web, is not a zero-sum game. Just because Hulu gets something does not mean YouTube loses. YouTube finds its own market and its own success because of Hulu, not in spite of, and vice versa.  That’s called competition. And it’s a good thing.

Two Domino’s Pizza employees posted a video of themselves spitting on food, putting cheese up their noses,, and violating several health codes while preparing people’s food.  The video, posted on YouTube, became a sensation with more than one million views, spreading discussion to blogs and Twitter.  The New York Times today even profiled the threat social media plays for Domino’s and other companies.

I’ll still buy from Domino’s. Hopefully this is an example of two really bad actors and not reflective on the company. But this is a huge PR nightmare where even if Domino’s isn’t directly at fault (legally or morally, that we know of), it is still responsible to remedy this tragedy, making amends to the public for what it’s employees did.

Social media was used to damage Domino’s brand. Domino’s can use social media to repair the damage.

First, admit fault. With a press conference posted to YouTube and news outlets. Admit employees were not properly supervised, incentivized, and educated, and then outline how all these things will be fixed for the future.  Also publically compliment the rest of the Domino’s sales staff. We know Domino’s hiring is not the most rigorous, so oversight is important.

To repair its brand, Domino’s would best be served by opening up it’s serving practices to the world – through YouTube. I don’t mean hidden cameras showing you don’t trust your employees (that will only invite more trouble). Instead, show how much you value your employees by encouraging each store to make it’s own YouTube video about their favorite pizza creation.  So every Domino’s outlet will have the chance to create a special pizza, which customers can buy, and see online how the staff came up with and made that pizza.  This shows Domino’s trusts its employees to serve its customers’ best interests, and it gives something special to customers in the form of unique and special pizzas, customized for their location.  Domino’s can collect all these videos onto a YouTube channel and even make a U.S. map with links to the videos of locations closest to you.

The lesson to learn – social media can be a dangerous weapon in the wrong hands. But in the right hands, social media can be used for just as much good.  Embracing open communication builds and rebuilds brands.

YouTube has rejected Senator John McCain’s request for the video website  to consider fair use when responding to DMCA takedown requests.

McCain posted campaign ads with clips from CBS and Fox news broadcasts. The two networks sent YouTube takedown notices, which according to the DMCA, they are legally obliged to respond to immediately in order to maintain safe harbor protections.  McCain voted for the DMCA in 1998 and now has to deal with the consequences.

This shows McCain and few in Congress truly understood the effects of the DMCA and likely the same can be said for most complex laws put on their desks.  The DMCA includes the excellent safe harbor provision that protects platforms from being liable for what users do (like YouTube shouldn’t be liable for copyright infringement of its users).  But the takedown notices have become an abused system stifling free expression and negative opinions. This is not to mention how anti-circumvention laws violate upheld fair use rights and stifle innovation.

When first passed, Congress probably thought they were protecting intellectual property. Their intentions might even have been noble. But these under-thought, one-sided laws are going to hurt innovation and creativity. And you could argue it’s hurting democracy. McCain can’t even get his own campaign ads on YouTube because the site is too scared of being sued over copyright infringement (too late).

Too often laws are passed to pander “look what I did” rather than look what we accomplished.  Did the admittedly rushed Patriot Act (which many politicians never finished reading) compromise our rights too much to keep us safe? How much is the new PRO-IP law’s Copyright Czar going to stop piracy? And when is this bailout bill going to turn my 401k into 401 million?

McCain shouldn’t be looking for special treatment from YouTube.  He wants to be president, so why doesn’t he act like a leader and champion changing a bad law? I don’t want a politician to have their own class of laws; I want them to make the laws we all have better.  We’ve got to stop and smell the roses, before we accidently ban them.

Comcast announced 250 gigabyte caps per month on all its customers.  While the cap is much higher than Time Warner’s 5 gig cap and more than 99 percent of its subscribers use, the precedent is scary for all interest users.

Much of internet innovation has unlimited usage to thank.  Web video, VOIP, online video games, and more have enjoyed years of breathing room to enter people’s homes.  With bandwidth caps, however high, every YouTube video comes with a price tag.

Comcast technically has a right to limit its network. The problem is a lack real competition.  I could only get Comcast in my last apartment. In my new apartment, I can choose between content filtering and slower AT&T DSL or Comcast. No other company is allowed in my building. So Comcast gets away with bandwidth caps. Time Warner gets away with it.  And the tiny few remaining cable providers get away with it too.  It’s a competition to taking away value from customers, not adding value.

Further, should Comcast and Time Warner want customers using more bandwidth? That would make us more reliant on their services. Already I’d pay a premium for speed (if I could find a place that offered FIOS) and as more people find use in online video and services, more people will want faster speeds with more bandwidth. Instead, Comcast wants to offer you less, charge you the same, and ignore the future. Never a good business strategy, unless you have no competition.

I just joined Skyfire’s private beta and my response is wow. Skyfire crams a full desktop experience into the tiny mobile screen for Windows Mobile with impressive speed and sleek design.  This includes full Flash support, putting all of YouTube and Hulu on your phone. Even Ajax and Java heavy sites like Google Reader run smoothly.  Many options are lacking in this early version, but the browsing experience is an impressive sign of browsing to come.

Skyfire’s compatibility works better than the iPhone Safari but lacks features needed to be the best.  You can’t change your start page (though the Skyfire homepage conveniently includes your bookmarks and history). There’s no tabbing or fit-to-screen zoom like on Opera meaning I’ll keep Opera around for text heavy sites.  The touch controls take some getting used to - the iPhone still wins on easy-of-use with multi-touch zoom. Most frustrating is the free browser needs to authenticate and closes if you loose your connection.

Unfortunately, Skyfire remains in private beta with no invites, so a lot of this is just me showing off. These many frustrations prevent Skyfire from becoming my default browser, but showing off YouTube and Hulu to my iPhone wielding friends makes it a must have application.  See screenshots after the jump.

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This week a french court ruled eBay had to pay $63 million to Louis Vuitton for not doing enough to prevent counterfeit goods on its website.  eBay is even liable for users selling legit products because Vuitton claims no one can resell its products.

This ruling makes eBay responsible for the actions of its users.  One of the only good parts of the United States’ DMCA are the Safe Harbors which means service providers, like eBay, cannot be held responsible for what its users do.  This allows websites and ISPs to focus on providing services and goods for users without worrying about legal responsibility if things are taken out of hand.  France doesn’t have the same protection.

The problem is somehow eBay is expected to know what’s counterfeit and what’s real.  A similar argument is being made against YouTube over copyright, claiming its too much work for copyright holders to police the site so YouTube should do it itself.  How is eBay supposed to know what’s allowed to be sold and what isn’t?

The judge presiding over the Viacom vs. YouTube case has ruled Google must hand over IP addresses and user names of its users and a list of the videos they watched, whether on YouTube or embedded on other sites (an estimated 12 terabytes).  Viacom is asking for this information to prove YouTube deals the majority in infringing material.

The result of this ruling is a privacy nightmare.  The Electronic Frontier Foundation has argued the judge’s ruing violates, ironically, the Videotape Privacy Protection Act that says the government can’t snoop your rental history (library books are fair game).  Google, however, has argued before that IP addresses aren’t personal data because they aren’t attached to a single person, says Google “in most cases, an IP address without additional information cannot [identify a user].”

Unfortunately, the IP address can get you pretty close.  It identifies the computer and location, including households and laptops.  The result isn’t just embarrassing users who watched far too much Dog on Skateboard videos.  It’s what does Viacom, the RIAA, and MPAA do with this list once its public.  Most of their effort in suing customers was finding the IP addresses.  Now Google’s handing them over on a silver hard drive.

Viacom obviously wants to analyze Google’s data itself, ignoring a study by Vidmeter.com that found copyrighted materials accounting for a fraction of YouTube viewership.  Based on their sample of more than 1.5 billion views of 6,725 videos, 9.23 percent were taken down.  Those remove videos accounted for only 5.93 percent of views.  You can read the full study here.  Viacom itself accounted for 2.37 percent of of views, the highest of for all content owners.  How they monetize that to $1 billion would be magic.

[Via Mathew Ingram}

To promote the film Tropic Thunder, Viacom created a funny video with stars Ben Stiller, Jack Black, and Robert Downey Jr. for the obvious purpose of creating some viral buzz. Because the video was genuinely entertaining, it became popular on several video sites, including YouTube. But Viacom has a pesky $1 billion lawsuit against YouTube. So Viacom sent a DMCA takedown notice to YouTube, but left the video up on other sites, like FunnyorDie.com.

I’m no lawyer (but I play one on my blog), but Viacom may have to keep its videos off YouTube for the risk that they prove to be a good thing, not a liability like the company claims. That would explain why Viacom is letting other sites keep the video - YouTube, for the purposes of its lawsuit, is to blame for any falling revenue or profits because of its disrespect of copyrights. If it’s discovered that disrespect of copyrights helps promote other parts of Viacom’s business, Viacom’s case would be weakened.

Techdirt theorizes Viacom never wanted this lawsuit to happen - it just wanted leverage in business negotiations with Google. Unfortunately for Viacom, Google wants to fight this case to make sure precedent is set to protect itself and other websites from these silly lawsuits.

Video embedded after the jump.

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Hoping to convince people of the grave injustice or simply to fill column inches, Viacom’s general counsel Michael Fricklas wrote an op-ed in the Washington Post presenting his company’s position on their lawsuit against YouTube.

Aside from their complete insanity (isn’t sister company CBS okay with YouTube showing videos), Fricklas tries to offer a logical argument likely aware of the PR nightmare this lawsuit could cause.  Obviously I’m a little bias against him, but even while trying to have an open mind, his argument falls flat on its face.

Fricklas relies on a bizarre reading of DMCA and are warped understanding of the internet and filtering tools.  The DMCA safe harbors, which Google and YouTube are likely to use as a defense, allow for content sites to not be held responsible for what users upload as long as complaints are responded to and cannot knowingly let inappropriate content be uploaded.  Fricklas claims, wrongly, that YouTube must know about copyright infringing videos because they know about spam and porn and hate videos.  What he doesn’t notice is the “Flag for inappropriate” link that allows any user to tell YouTube when these kinds of videos are uploaded.  Users police users in this content landscape.

Of course, Viacom would be considered one of the users in this equation, and that’s what they seem to not like.  Fricklas says it’s unrealistic to expect copyright holders to police the web for copyright infringement.  Google should do it - for everyone.  This might work out better for everyone, since Viacom has shown they barely understand the copyrights they hold.  Or did Congress do aware with fair use and no one told me?

Likely Fricklas isn’t presenting Viacom’s entire legal argument.  But protecting outdated business models by suing fans doesn’t seem like a viable defense.