Making Free Money Online

California’s SB 1411, which adds a layer of criminal and civil penalties for certain online impersonations, goes into effect starting today. The consequences include a fine of up to $1,000, and/ or up to a year in jail. So don’t go and do something crazy like impersonate Google CEO Eric Schmidt on Facebook. There may be consequences.

The full text and a summary of the bill are below. There’s a good overview and analysis of it as well, on ZDNet. The state has created a new crime, and a new section is being added to the penal code.

There has to be intent to harm, intimidate, threaten, or defraud another person – not necessarily the person you are impersonating. Free speech issues, including satire and parody, aren’t addressed in the text of the bill. The courts will likely sort it out. Hopefully without my direct participation.

SB 1411, Simitian. Impersonation: Internet.

Existing law makes it a crime to falsely impersonate another in

either his or her private or official capacity, as specified.

Existing law also makes it a crime to knowingly access and, without

permission, alter, damage, delete, destroy, or otherwise use any

data, computer, computer system, or computer network in order to

devise or execute any scheme or artifice to defraud, deceive, or

extort, or wrongfully control or obtain money, property, or data. For

a violation thereof, in addition to specified criminal penalties,

existing law authorizes an aggrieved party to bring a civil action

against the violator, as specified.

This bill would provide that any person who knowingly and without

consent credibly impersonates another actual person through or on an

Internet Web site or by other electronic means, as specified, for

purposes of harming, intimidating, threatening, or defrauding another

person is guilty of a misdemeanor. The bill would, in addition to

the specified criminal penalties, authorize a person who suffers

damage or loss to bring a civil action against any person who

violates that provision, as specified. Because the bill would create

a new crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local

agencies and school districts for certain costs mandated by the

state. Statutory provisions establish procedures for making that

reimbursement.

This bill would provide that no reimbursement is required by this

act for a specified reason.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 528.5 is added to the Penal Code, to read:

528.5. (a) Notwithstanding any other provision of law, any person

who knowingly and without consent credibly impersonates another

actual person through or on an Internet Web site or by other

electronic means for purposes of harming, intimidating, threatening,

or defrauding another person is guilty of a public offense punishable

pursuant to subdivision (d).

(b) For purposes of this section, an impersonation is credible if

another person would reasonably believe, or did reasonably believe,

that the defendant was or is the person who was impersonated.

(c) For purposes of this section, “electronic means” shall include

opening an e-mail account or an account or profile on a social

networking Internet Web site in another person’s name.

(d) A violation of subdivision (a) is punishable by a fine not

exceeding one thousand dollars ($1,000), or by imprisonment in a

county jail not exceeding one year, or by both that fine and

imprisonment.

(e) In addition to any other civil remedy available, a person who

suffers damage or loss by reason of a violation of subdivision (a)

may bring a civil action against the violator for compensatory

damages and injunctive relief or other equitable relief pursuant to

paragraphs (1), (2), (4), and (5) of subdivision (e) and subdivision

(g) of Section 502.

(f) This section shall not preclude prosecution under any other

law.

SEC. 2. No reimbursement is required by this act pursuant to

Section 6 of Article XIII B of the California Constitution because

the only costs that may be incurred by a local agency or school

district will be incurred because this act creates a new crime or

infraction, eliminates a crime or infraction, or changes the penalty

for a crime or infraction, within the meaning of Section 17556 of the

Government Code, or changes the definition of a crime within the

meaning of Section 6 of Article XIII B of the California

Constitution.

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.



For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.



...



Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.



We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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