Swefilmer case might follow Sanoma / Playboy into the rabbit hole

Followers of the intracacies of copyright law will know that a core requirement of infringement is the communication to a new public.

The global nature of the internet however can be taken to mean that once something is available anywhere online it is therefore not an offence to re-publish it.

In the current Swefilmer case leave has just been granted to apply to the ECJ for a ruling on this point and the case has been suspended.

If this goes the way of Sanoma / Playboy the rights holders are going to need to adjust their approach to IP protection and allocate resources to tracing and stopping the "first seeders" rather than the aggregators even though it is mass distribution that really does the damage to exclusivity.

Pepper the Robot - do you want fries with that ?

When Softbank placed 1000 of its new emotionally intelligent robots (Pepper) on sale for $2000 each they sold out in under 1 minute. It has also just been announced that Pepper has secured a number of jobs in Pizza Hut across Asia taking orders and payments.  Next stop USA and Europe.

Take a look at the video of Pepper talking to Rory Cellan-Jones in Estate Agent mode. She is very cute and if we assume a shelf life of 3 years would cost about $55 dollars per month.

As previously commented on automation has been creeping up on us since the dawn of the digital computer  but suddenly this starts to look like mass job replacement on an industrial scale as opposed to tools which help people do their jobs more efficiently.

News that Apple supplier FoxConn recently replaced 60,000 staff with Robots in a single factory supports this view. Estimates vary by work sector but in some sectors such as call centre activity 75% of jobs are expected to be replaced by automation and respected surveys show 45% of jobs will be lost in manufacturing.

All good maybe - more time to loaf around, watch some TV and idly sip on a cold beer while pondering the facts of life. The slight flaw in that brief sketch of nirvana is the complete lack of earned income to support those worthy activities.  On a macro scale will the politicians be able to maintain the types of distinctions they enjoy between the workers and the shirkers and the deserving and un-deserving poor as the tax base shrinks faster than a EU politician can claim his expenses ?

600 factories in Kunshan Province in China are looking at similar proposals and since average local annual income is @$4000 per annum if the numbers work in China they are a no-brainer in Europe and the UK.

The rapid rise of inequality and emergence of a global "elite" has a tang of Feudalism about it but in reality free market capitalism was dead and buried when the banks were bailed out by the taxpayer during the financial crisis. That issue however has not really gone away and in the US a new group is in place to address this - Take on Wall Street - who argue that since the crash 90% of the income growth has been captured by the top 1%.

If predictions are correct on automation inequality is about to become much more severe due to high levels of unemployment and these will make the issues around the financial crisis look small by comparison.

However - top prize will go to the hacker who breaks in to Pepper's operating system while she is talking to customers.............................

CERT-UK identify massive increase in new releases of ransomware in last 8 months

Between January 2012 and October 2015 there were 33 new releases of ransomware.

In the last 8 month this figure has jumped to 70 showing the rapid rise of pre-packaged off the shelf tools for hackers.

Ransomware delivers a virus into a system (often via a phishing email) which locks the system up totally and destroys data unless a ransom is paid within an agreed period.

The only realistic defence against this is regular offline backups of material to a secure location.

Law enforcement agencies such as the Met Police and City of London Police strongly advise against the payment of ransoms.

DeepWeb and SurfaceWeb: What lies beneath ?

There is a popular misconception that Google and the other mainstream search engines index all the content that is out there on the web (if you are prepared to dig enough). In fact, Google / Bing etc only access the surface web in much the same way that a trawler with a drag net only picks up the fish fairly close to the surface.

Perhaps, like experienced fishermen, they don't want to go too deep for fear of what might end up in the net.

Estimates vary but a very popular statistic is that the DeepWeb is about 500 times larger than the SurfaceWeb. This might seem absurd but lots of government data is stored out there in a way that is not visible to the search engines.

A part of the DeepWeb that has attracted a fair bit of media attention is the DarkWeb which can only be viewed as part of the Tor network. The websites on this section of the web have a .onion title albeit that this is not a recognised domain like a .com.

SilkRoad was the most famous site on the Tor network / dark web and was involved in almost all the illegal activities that spring to mind. The FBI and Europol have closed down a number of versions of the site (proving that nothing is 100% anonymous) but tribute sites continue to spring up.

Both the DeepWeb and DarkWeb present big challenges to both Governments and Law Enforcement all over the world.

Both the Deep and DarkWeb's have proved invaluable to individuals fighting against oppressive regimes which stifle free speech. The value is precisely because these networks are free from censorship. Anne Frank would have been posting to the DeepWeb rather than scratching away at her diaries in Hitler's Germany.

On the other hand it seems pretty absurd that a specific search engine exists on the DeepWeb to search for and supply illegal drugs.

The statement that one man's terrorist is another man's freedom fighter neatly captures the problem here. The internet is global and the standards across the globe are not consistent. Large corporations have exploited these different standards in respect of tax and regulation and the criminal fraternity are doing so in respect of criminal and civil (or common) law.

The Budapest Convention on CyberCrime seeks to address this issue and start to enforce common standards but at this point it only has 50 signatories worldwide and Russia, China and India are notably absent.

A search engine now exists called Onion City which allow access to the Dark Web without using the Tor Network. This is probably a good thing as increased visibility should facilitate regulation.

Looking forward it will be interesting to see if if the first attempts at global regulation of the internet (which is obviously required) will go for the highest common factor in terms of standards or the lowest common denominator.

Top obvious passwords in Linked In hack: 750,000 people used 123456

Recent information has been released relating to the 2012 Linked In hack. Hopefully, given that this relates back to 2012, this information is badly out of date but below is an indication of how common very easily hacked passwords are;










Password

123456       : 753,305 people
1234567     : 49,652 people
12345678   : 63,769 people
123456789 : 94,314 people

Cert-UK publish data for 2015-16 - cyber incidents increase by 85% in 12 months

Cert-UK has released data recently which paints a picture of rapidly growing cyber crime combined with the increased popularity of easy to use "off the shelf" hacking tools.

As you can see malicious code makes up the lions share of reported incidents with a further breakdown below of the types of malware that are proving the most common.

Cyber data released recently shows variations and the NTT report released at the end of April 2016 showed a decrease in DDoS attacks while Cert-UK has seen that number increase.

Taking a helicopter view what is clear is that as hacking and cyber attack becomes de-skilled the volume of attacks is rapidly increasing.

Cert-UK saw the greatest increase in Phishing as a form of attack and predicted that in 2016 Ransomware would dominate. In addition there is a very high probability of a major cyber attack on national infrastructure.

IT departments often bamboozle their line managers in respect of the security or otherwise of their systems and processes - especially if the line managers are not digital natives.

In fairness to IT departments many of the core risks are entirely people related and have no technical aspect to them but either way the knowledge that most internet connected IT systems are extremely vulnerable in spite of the machine that goes "ping", is reaching a much broader audience.

SyntaxNet and ParseyMcParseface - what do you see ?

Last week Google supercharged the artificial intelligence and machine learning landscape by releasing, for free, an advanced natural language understanding system. The technical term for breaking down a sentence into chunks a computer can understand is parsing and hence ParseyMcParseface. Take that sports lover as an old friend of mine used to say. No chilling effects here but a red hot acetylene blowtorch.

Detailed information on this and the free software download can be found HERE

On one level this is an amazing advance which will allow developers and coders all over the world to benefit from capabilities they could never have developed themselves. This could lead to various challenges being solved in a much shorter time frame related to health, food supply etc etc and the greater good.

Perhaps the various commercial businesses who were developing similar technologies but cannot afford the "free model" will be less positive about this as a blowtorch is taken to all the revenue projections in their carefully polished business plans. Game over at a stroke probably (briefly delayed until the advisors have found a suitably padded exit of course).

A combination of Google's DeepMind artificial intelligence and the software identified above appears to put Google well ahead of any potential competitor or government. Let's hope benevolent dictatorship is the end game here and that there is not a less positive ghost in the machine lurking somewhere in the code.

What might DeepMind and all this software have to say on the concept of democracy, the EU referendum or even The Donald ?

10% of Amazons "workforce" are now robots

Amazon now employs about 230,000 people worldwide and has over 30,000 very cute Kiva robots whizzing about the distribution centres. Press reports suggest they are very keen to grow that number.

Take a look above at the robots in action.

If these Kiva Robots did not exist we can speculate that Amazon would perhaps hire another 30,000 people and pay the payroll taxes etc that would go with that. Perhaps some of the people replaced by the Kiva Robots are now entirely dependent on the government for support in their local jurisdiction.

As a purely theoretical exercise we could assume that these workers would have been paid an average of $25,000 per year which was taxed at an average of 20%. Over ten years this is a loss of $1,500,000,000. No account taken here if additional state support is needed.

From a perfectly reasonable Amazon perspective they are making the supply chain as efficient as possible and meeting the perceived needs of the consumer

With companies such as Rockwell Automation (global sales $7 billion) entirely focused on automating industrial processes it is safe to assume that we are at the start of a pretty rapid acceleration of the shift to automation and robotics operating with a degree of AI.

It must therefore be a very interesting debate with companies such as Amazon as to how much tax they pay in any jurisdiction given that they can massively reduce the tax bill by introducing more robots. No doubt companies such as Amazon will struggle over time with the fairly thin argument about being based in an offshore jurisdiction but they can counter that by stripping out the local workforce and replacing it with robots.

Politicians are in for a pretty tough time as it seems possible that automation on a mass scale will have an even greater impact on the average person than globalisation and the democratic process will start to come under massive pressure if all the wealth becomes too concentrated in the hands of a few global highly automated companies and their shareholders, directors and employees.

The free market philosophy is going to have to work very hard to defend itself if inequality starts to edge up further and the support of the middle class for Trump in the USA suggests tempers are already running pretty hot.

NetFlix up 100% in 2 years NewsCorp down 23% - internet vs traditional TV

With NetFlix hitting over 80 million subscribers the nights are drawing in for the traditional operators. Below, in no particular order, are some of the key differences between the 2 distribution models which while mostly irrelevant to the consumer make an impact on the business models.

1. Internet delivery is by default global while traditional TV has always been highly regional.
2. Barriers to entry for internet TV are very low indeed while merely getting an EPG slot for traditional TV is difficult and expensive.
3. Traditional TV infrastructure is command and control based with a limited level of true interactivity. Internet delivery is far more open, difficult to control and with very high degree of potential interactivity.
4. Traditional TV remains a more stable platform for the delivery of very high volumes of live content. Once multicasting is fully enabled on IP networks this will probably change.
5. Micro payment for content is far easier and cheaper on internet TV.
6. It seems that the monthly price point for internet TV is under £10 per month while traditional TV manages to edge up to £50 per month at the moment.
7. Internet TV requires virtually no installation and it plug and play. It does require a high speed broadband connection.
8. Advertising rates on traditional TV are significantly higher.
9. Audience metrics are capable of being far more accurate on internet delivered TV as the return path is in place.

For those who believe the market is never wrong the judgement is clear - a mainly traditional operator such as News Corp has seen its share price fall 23% over the last 2 years while NetFlix has seen its share price increase by 100%.

NetFlix hits 81.5 million subscribers worldwide

The shares may have fallen @15% in trading on weaker forecasts but it is a big win for NetFlix to hit 81.5 million subscribers for an internet only streaming service.

In the USA Netflix has more than twice the number of subscribers as Comcast and it makes Sky in the UK on 12 million subscribers look like a tiddler.

With Amazon launching monthly subscriptions the battle is well and truly on but NetFlix would be a very attractive merger partner for an old style media company who missed the boat initially on the digital age. Good news for the internet streamers but there are bound to be more casualties in the traditional TV world.

Good night Vienna for (client) confidentiality

There is a really strong moment in Jurassic Park when the character played by Jeff Goldblum delivers the line "they were so pre-occupied with whether they could they didn't stop to think if they should".

Whoever is the current (or maybe former by now) head of IT / Security at Panama law firm Mossak Fonseca must be wishing nostalgically for the days of typewriters and attractive people reaching for the bottom drawer of the metal filing cabinet.

According to reports the data breach which is by some measurements the largest ever at 2.6 TB of data with documents going back to the 1970's was achieved through a breach of the security on the email server leading to the download of its entire contents. Since 1970 was pre-digital the decision must have been taken to digitize hard documents and add them to the servers.

One might expect a massive download of this type to be picked up by network monitoring systems and therefore it seems likely that the external hackers had some internal assistance - but that is speculation. The alternative is that no network monitoring was occurring which might leave you wondering what the IT dept were up to (other than watching dodgy online content and surfing social media).

As none of the documents were encrypted once breach had occurred it was very much "good night Vienna"  both for the clients of Mossac Fonseca and the concept of confidentiality between lawyer and client.

As a broader issue medical records and all other digitally stored content that is not encrypted must now be considered semi-public.

While 3TB may seem large (maybe 10 million docs) portable storage for this can be bought off the shelf for about £115. Any unhappy person in any IT department can simply walk out the door with sensitive data.

The ethics around the actions of Edward Snowden and the hackers involved in the Mossak Fonseca case are not clear cut and unless you are an ends justifies the means merchant they will always be in a grey area.

The key thing to now accept is that the old adage from Benjamin Franklin rings true "Three people can keep a secret, if two of them are dead."

Beware the typo...and the firesheep...to stay safe online

Phishing scams rely to a large extent on people not spotting small typos and therefore believing that an email or website is legitimate..............a clear example would be Google.om (which is an Oman registered domain). Believing a communication to be legitimate links are clicked, files downloaded, passwords shared etc which leads to financial loss or worse.

A recent review of the free hacking tools easily available online (passwords crackers, wireless hacking tools including the beautifully named firesheep, packet sniffers, keystroke loggers etc etc) re-emphasise the need to take online security seriously and check online communication with great care.

Beyond Google

The industrial revolution and steam age reduced the value of physical labour. Google has now set the bar pretty high for any aspiring knowledge workers. Essentially to deliver value you have to be able to deliver beyond what Google has to offer for free. What might the hourly rate be for a professional Googler ? Would a Google Scholar Googler get a premium ?

Imagine a researcher not delivering what could be discovered on Google in 30 mins and hoping to be paid for it ? Trust has a part to play and perhaps Googling the symptoms of pancreatic cancer would not be enough to head direct to the operating theatre.............but give automated eye scan based diagnosis a few years and we might be there.

DeepMind the Google AI project will really accelerate the erosion of value in knowledge work and challenge the value of many previously well protected professions.

Services going global may limit UK average earnings growth

Recent information from the Institute of Fiscal Studies suggests that the UK's current financial plan may not come in as forecast. It seems unlikely that this would surprise anybody.

However, digging into the figures there is a new pattern emerging which is causing a bit of general confusion among the pointy head economists and it goes something like this;

Normally as employment levels increase (as they have in the UK) this causes a shortage of labour which in turn drives its price up. These increased wages translate into greater tax revenues due to the progressive nature of income tax.

However this is not what has been happening. Average earnings are 7% under where the IFS expected them to be in 2016 which is a very big miss.

It seems possible that that the ability to get lots of projects done remotely via the internet by people based all over the world (often in a very low cost base) provides companies with an option they did not have before. There was a time, for example, when a logo design was a £2-3k investment whereas now numerous auction type websites will have good designers from all over the world competing to do the design for under £150. And the results are excellent.

This limits the options of the UK based graphic designers to argue for a bumper pay rise (or any pay rise) however good the client relationship. They do have the option to join the global pool online but work for a fraction of previous earnings.

Companies under pressure in the long shadow of the 2008 financial meltdown will find lots of ways to do more with less and it seems likely that accessing low cost skilled labour from a global pool via the internet will be one of them. Common sense suggests that countries like India where a monthly average wage is £200 will benefit whereas countries above the mean global average will suffer as the playing field levels off in a networked world.

SkyQ might be aimed at the silver surfers

Sky has decided to take an old school approach with the imminent launch of its premium Sky Q service. Generally Sky has been on the right side of all the big decisions and the timing of those decisions (going digital / HD / Sky Plus etc etc) but this one is quite a big call.

Essentially Sky has gone for lots of local storage & multiple tuners in the home with the ability to play that locally stored content on multiple devices in the house (and out of it where content can be sideloaded).

This appears to be going in the opposite direction to many of the web based services such as Amazon Prime and NetFlix who look to relying on very lite Apps and Dongles to get the content into the home and are more reliant on high speed connectivity into the home with centralized technology. Interestingly it also does not seem Sky have a desire to develop the Now TV proposition into a premium service which might have been expected.

One explanation might be demographics. Sky Q is possibly aimed at those over about 40 who are not digital natives but are generally more affluent. This group have probably never visited a torrent site or heard of CricFree. Now TV on the other hand goes head to head with the pirates and is targeted at a generation who are well aware nothing is exclusive.

If the above is correct how many of this older Sky Q group would want to watch TV on a tablet or phone or record 5 programmes at once ?

With BT launching 4K and the young challengers NetFlix and Amazon hot on their heels Sky appear keen to be seen to be innovating and if past performance is a guide to future performance this should be a success.

Internet wins the distribution battle with 5-16 year olds - they spend 50% more time online than watching TV

Arguably the means of distribution makes no difference to a consumer of content but even so the broadband internet seems to be confirming its place as the winner against conventional TV distribution.

It may be the ability to seamlessly access from any device (YouTube), the social interaction / network aspects or the nature of the material available. Zoella - the most popular Vlogger with 5-16 year olds has 10 million followers on YouTube - a dream audience for many small regional cable or satellite channels.

An example is here;

Children between the ages of 5-16 are spending 3 hours a day online against 2.1 hours in front of the TV. YouTube and NetFlix are the stand out winners with a blend of "normal" TV content and new formats.

Amusingly a number of terrified TV people have popped up in the media suggesting that traditional TV content is simply being viewed on the internet without acknowledging that internet content is now also being viewed on the TV.

If the consumer doesn't really care how the pictures get to them it is a very different matter for the media companies who create and deliver the content.

In the case of Zoella she needs decent video and audio equipment, some $100 editing software on a PC / laptop and a broadband connection. If really enthusiastic she can do the editing herself.

Creating this type of content in an old school TV environment you would need to get past the creative gatekeepers first, hire a studio, cameraman, editor etc etc etc - basically a non starter.

In the case of NetFlix going global was about adjusting some IP address ranges and extending the bandwidth / streaming agreements. The old school model would involve painful discussions on satellite time and securing decent slots on the EPG's controlled by others  - many in the pocket of the existing dominant distributors.

Fundamentally to distribute content on the internet is far less capital intensive but also it is impossible to control distribution to the same degree which lessens the reality of exclusivity. There is also far less scope for intermediaries to take a cut along the way. These factors fundamentally change a number of old school business models and will drive the cord cutting and cord never figures.

The return of the turntable shows that old technologies do not die but change and find a very different place in the market.

These new figures from Childwise shows convergence has arrived and will follow 5-16 year old's into adulthood.

Back to the future

With the comeback of the turntable might the typewriter be hot on its heels ?

As security concerns regarding the Internet start to penetrate more deeply into people's thinking might very confidential documents be kept "off the grid" all together ?

Encryption algorithms are not 100% secure - but effective enough for most applications - leaving a space when total technical security is required and a device which cannot be networked cannot be hacked in the technical sense. This does not eliminate the human factor in security (the typist for example) but narrows the attack surface.

The type of language used in the security industry is also pretty hard to fathom sometimes  for the non expert which would make a return to a simple solution such as a type writer even more understandable when absolute confidentiality is required. If Snowden had tried to wander out with 50 box loads of paper files he might well have been spotted.

An example of this hard to penetrate language is below from the OWASP top 10 pro active controls for 2016 (all of which are very sensible if you can understand them);

1. Verify for Security Early and Often
2. Parameterize Queries
3. Encode Data
4. Validate All Inputs
5. Implement Identity and Authentication Controls
6. Implement Appropriate Access Controls
7. Protect Data
8. Implement Logging and Intrusion Detection
9. Leverage Security Frameworks and Libraries
10. Error and Exception Handling

2016: Year of the Red Fire Monkey

2016 has some interesting features with a leap year, the summer olympics in Rio and the space craft Juno hopefully arriving on Jupiter.

In Chinese culture the New Year in February moves from the year of the sheep to the year of the red fire monkey. Much more exciting.

In the digital space I am going to make a few general predictions for review this time next year (hopefully broadly worded so that a degree of success can be claimed in any event).

1. Security of digital IP will move further up the agenda with large scale hacks continuing. Awareness will grow that increased resource needs to be applied to this sector and business models altered. Technology only solutions will be seen to be only one part of the puzzle.
2. The internet of things will accelerate even faster which feeds into point 1 above.
3. Automation via intelligent software will advance even more quickly biting into certain job sectors and again feeding into point 1. Analog only & and human heavy administrative models will be severely squeezed.
4. Governments will seek & secure much greater control over the internet via legislation and the sins of the past will weigh heavily on them in the freedom & privacy versus security debate.
5. A major consumer brand in the digital space will run out of cash due to an inability to monetize its user base
6. The fastest revenue growth will be in automated software based models with worldwide application requiring minimal human input. Some stars will emerge in this area in 2016.
7. The digital single market will play a role in the debate over whether the UK should stay in the EU and David Cameron will secure enough concessions for the UK to vote to remain in. With France sniffing around the politics of Le Pen, Germany would be insane to let the UK leave.

To end on a high note have a few laughs courtesy of Modern Family via YouTube..............

The Force Awakens - but not on YouTube

The much anticipated new Star Wars movie "The Force Awakens" provides an opportunity to get a snapshot of how effective the various anti-piracy initiatives of the Hollywood Studios are at this point.

The movie opened simultaneously worldwide which removes massive unmet demand spikes in delayed territories. The preview evening on Thursday night was reported to generate $50-55 million and the opening weekend looks to be on course the break the current revenue record of $208.8m held by Jurassic World.

A quick review of Google with a request for a free download of the new movie showed the following options on page one suggesting that perhaps Darth Vader / Kylo Ren is not managing the anti-piracy initiatives on the Google search platform.






































Some links look to have been removed using the Google DMCA process but this is limited at this point to 8 against the identified search terms


























YouTube by contrast seems very much under control with very little in the way of rebel activity being tolerated.

So a very brief summary would conclude that the "legitimate" platforms such as YouTube are under control, the outer reaches of the web are clearly not and the movie is likely to break all box office records.

Just for fun the best piece of Star Wars tribute video ever (IMO)

The liability aspect of handling personal data - 4% of turnover

It seems that Europe has had enough of companies processing personal data without appropriate consideration and safeguards in place.

Earlier this week wording was agreed for new data protection legislation which is expected to come into force in 2 years.

Key wording is that personal data must be "processed in a way that ensures appropriate security of the personal data, including protection against unauthorised or unlawful processing and against accidental loss, destruction or damage, using appropriate technical or organisational measures".

The agreed wording identifies the types of issues that companies might consider to meet this threshold;

1. Pseudonymisation / encryption of personal data
2. Ability to ensure ongoing confidentiality, integrity, availability and resilience
3. Data restoration post breach
4. Regular testing

The bottom line is that the profitability of data processing will drop as the costs of maintaining a secure digital environment are material and most businesses will face additional compliance costs. As a minimum companies who process personal data will require either in house or as a contractor an individual who can assess digital security risks sensibly and address problems (a data protection officer).

Amusingly the governments have secured broad exceptions to these rules even though they tend to make the greatest howlers in this area - see Edward Snowden.

On that note a clip from Catch 22...............