The practice recently gained attention after some first person accounts of the cost-saving wonders of Netflix showed up in a library trade publication and on a blog.

Scheele Memorial Library Concordia College in New York saved around $3,000 by buying two Netflix subscriptions, which gave the library 16 rentals at a time in addition to being able to stream content online.

"The streaming movies have been a great success; instead of students waiting for the one DVD on reserve, they can go to the computer or into the library's film viewing room, where we have a Roku player set up, and watch the movies on our flat screen TV. The amount we save just having the instant play is significant; it's almost like having multiple copies of the movie on reserve," librarian Rebecca Fitzgerald said.

The Netflix subscription takes care of popular titles that students want so the library can spend its budget on "more acadamic materials," she said.

Netflix isn't thrilled about this. The films are protected by copyright against anything but "personal and non-commercial use," and Netflix does not offer institutional subscriptions, a representative told the Chronicle of Higher Education. (To get around this, one library got its own credit card.)

The librarians seem to know what they were doing was not completely kosher, although some argue that the law is open to interpretation on this point.

Netflix "frowns upon" this type of use, said Steve Swasey, Netflix' vice president of corporate communications, but indicated no plans to enforce the rules. "We just don't want to be pursuing libraries," he said. "We appreciate libraries and we value them, but we expect that they follow the terms of agreement."

But the libraries turning to Netflix are not just at small schools. The University of Washington, which has more than 47,000 students, is among schools advertising their Netflix subscriptions on library websites, The Chronicle of Higher Education reported (the page has since been taken down). With so many schools stuck for funding in the current recession, Netflix may feel pressured to act more aggressively to keep this from becoming a widespread trend - and that could end up costing libraries dearly.

If you haven't been following the story (see our initial coverage here and here), the short summary goes like this: Chicago resident Firas Alkhateeb created an image that showed President Obama wearing the makeup of the Joker. He used an image of the President snagged from TIME magazine's October 23rd, 2006 cover. After uploading his photo to Flickr, an unknown third party doctored the image some more adding the word "socialism" beneath the picture. This doctored image started showing up plastered across cities nationwide as well as on numerous political bloggers' websites.

Flickr, after having received a DMCA take-down notice, removed the photo from Firas' account. They did this despite the fact that the image could easily be argued to fall into the grey area of "political parody" and the copyright infringement claim itself comes from a character with a questionable background himself and not, as it turns out, from TIME magazine, DC Comics, nor the photographer who took the original photo. Instead, the supposedly infringed-upon party, a Mr. Edward Przydzial, is a freelance photographer whose only proof of his claim comes from a LiveJournal post dated Oct. 9th. Blog posts are easy to backdate which makes the claim questionable in the eyes of the law.

To make matters worse, the case highlighted a problem with Flickr's takedown policy which appears to be "delete first, ask questions later."

Flickr User Suggests a Policy Change, Flickr Agrees

While for the most part Flickr is standing behind their actions, saying that the law leaves them no choice but to remove images upon receipt of a takedown notice, they have been open to discussion about better ways to comply with the letter of the law without impacting the Flickr community so much as before.

In a forum posting on the photo-sharing site, a Flickr user by the name of "The Searcher" debating the company's DCMA policy, offered the company a suggestion. Instead of simply deleting the photo page in its entirety, the company should just replace the image itself with a blank that reads "this image has been removed for copyright issues," wrote the user. Flickr's director of community Heather Champ replied saying she liked the idea and would push it up the food chain. And that she did.

According to her follow up post, Flickr decided to make a change to the way they handle takedown notices and, going forward, they will no longer delete the entire photo page, just the image itself. A screenshot of how this will look is posted here and, as suggested, it will feature text that reads: "This image has been removed due to a claim of copyright infringement."

As Champ explains, this notable change will preserve the photo's metadata while still complying with the law. Other policies remain the same. For example, members will still be warned, by way a private message, who is making the claim against them. Flickr will remove the image from the site and will store it so that it can be replaced in the event that the U.S. Copyright Team gives them the go-ahead to do so. Now, however, the existing title, description, comments, tags, notes, etc. on the original photo page will remain available and the photo can still be added to sets and groups. Champ says Flickr will also be reaching out to the copyright teams in other parts of the world to see if they're interested in enacting the same policy. (The current policy is specific to the U.S. where the DMCA law is enforced.)

Overall, the community received the news positively, even though it still allows Flickr to eschew any responsibility of investigating the validity of DMCA copyright claims themselves. The company will continue to delete away no matter who asks, it seems - a move that drew ire from Techcrunch's Michael Arrington who said they should have checked with their lawyers first before yanking the image. Photographer and rival service Zooomr exec Thomas Hawk also questioned whether the removal was simply sheer incompetence on Flickr's part.

Ultimately, the change is a good one. It's better for the online community and the photographer whose image is removed, while still respecting the rights of the supposed copyright victim. However, the real problem here may not be how Flickr deals with copyright claims, but the DMCA law itself.

If you haven't been following the developments in this case closely, here is a quick recap: Firas Alkhateeb, a 20-year-old student in Chicago, created an image that showed President Obama wearing the makeup of the Joker from the last Batman movie. To do so, he used an image of Obama that appeared on the cover of Time magazine on October 23, 2006. According to the LA Times, he uploaded this picture to Flickr on January 18, 2009. By August, someone added the word "socialism" underneath the picture, and it was widely circulated among political bloggers and also started to appear on posters at political rallies.

So far, so good. Even if you don't agree with the politics behind this picture, this is what the online mashup culture is all about. By the middle of August, however, Flickr received a DMCA take-down notice, claiming that the image infringed on somebody's copyright. Complying with the law, Flickr deleted the image from Alkhateeb's account. The problem, however, is that Flickr never shared who actually initiated the take-down notice.

Fake Take-Down Notices on Flickr: They Work

It is starting to become clear now that the take-down notice that Flickr and Alkhateeb received was completely bogus. According to Thomas Hawk, it didn't even feature the name of anyone who owned the copyright to any part of the image. PDN has verified that neither Time magazine, nor DC Comics, nor the photographer who took the Time magazine cover image filed this claim. These are the parties that could potentially claim that their copyright was violated by this image, even though, because this is a parody, their legal claims would be on shaky ground. Instead, the name on the document, according to Hawk, is "bogus."

To make matters worse, Flickr user 3e actually verified that Flickr really doesn't check the names on these notices. 3e just submitted a claim to take down one of his own pictures with a "once-off email address, using the name 'Joe Blow' and giving no identifying information other than an obviously fake address ("Anytown, USA")." Flickr happily obliged and 3e's photo was gone within hours.

If you don't like a picture on Flickr for any reason, you can just have it deleted by sending a DMCA take-down notice. We can only hope that Flickr will institute a better verification process in the near future.

As of now, Flickr doesn't even have the capability to restore an image after it has been deleted. YouTube, which probably has to deal with far more DMCA take-down notices every day than Flickr, at least offers users a recourse to have videos restored if the copyright claim can't be verified.

About the Photo

The posters that popped up across the country were based on Alkhateeb's photo, but had the TIME magazine logo and branding removed and had added the word "socialism" at the bottom. Alkhateeb wasn't responsible for these changes - a yet-to-be-identified person is behind the posters' creation.

In fact, you may be surprised to hear that the Obama/Joker image wasn't even meant to be political commentary, according to Alkhateeb. That's quite ironic given that it has now embroiled him in this intense political debate. Instead, says the college student, he was just messing around after discovering an online tutorial that explained how to "Jokerize" photographs using Adobe Photoshop. It seems that Alkhateeb doesn't particularly care about politics himself, having chosen to abstain from voting in November since he felt his state (Illinois) was already sewn up and decided before the polls opened. His views on Obama aren't particularly one-sided either. Alkhateeb favors the democratic viewpoint on foreign relations but tends to side with Republicans on domestic issues.

In a recent L.A. Times profile on Alkhateeb, it's reported that the photo generated over 20,000 page views during the time it was hosted on the photo-sharing website Flickr.com. However, as of last Friday, Flickr removed the photo from their site. Why? Alkhateeb says he received an email from the company stating it had to be taken down due to "copyright infringement concerns." (Apparently, TIME magazine wasn't too happy seeing their brand associated with this sort of political commentary.)

What About Free Speech?

But isn't this sort of political commentary, political parody in fact, protected as a form of free speech? Noted photographer and blogger Thomas Hawk thinks it is, citing a precedent for fair use (Folsom v Marsh) which states "if you produce something that is transformative, and not derivative, then it's fair use." Although Hawk isn't a lawyer, he may be right on this one. Says Corynne McSherry, a senior staff attorney at the Electronic Frontier Foundation (EFF), a nonprofit that defends digital rights, Alkhateeb has a strong fair use defense if he was ever sued. "You really want to think twice about going after a political commenter," she noted.

This wouldn't be the first time Flickr got involved with political censorship. Hawk also blogged about how the site deleted the account of a user named Shepherd Johnson after he made critical comments about Obama in the Official White House Photostream back in June.

So is this yet another case of Flickr engaging in censorship? Or are they legitimately protecting themselves from these "copyright infringement" claims? (Flickr won't comment on this since a company policy prohibits them from discussing issues surrounding one particular user.)

What do you think about this issue? Share your thoughts in the comments.

Specifically, Oberholzer-Gee and Strumpf review some of the latest studies related to file sharing and music and bust some of the myths that the music industry is still pushing, including the idea that every download equals a lost sale. One study, for example, examined the iPod listening habits of 5,600 consumers and concluded that only 64% of the songs on these players had ever been played. It's unlikely that these users would have paid for the songs they never played.

The two researchers also argue that the fact that music was basically available for free increased a lot of consumer's willingness to buy MP3 players in the first place. According to another study, 65% of respondents said that they did no buy a CD because they had downloaded a free copy of a song, but at the same time 80% said that they bought a CD because they had sampled it.

In addition, the authors argue that mashups are likely to drive consumers to the original recordings and don't necessarily lead to lost sales either.

Number of Recordings has Doubled Since 2000

Oberholzer-Gee's and Strumpf's focus is not so much on whether or not the music industry is loosing money because of file sharing, but whether file sharing has deterred the production of music. While there are lots of arguments about the financial losses the music industry might or might not have incurred from file sharing, the production of music is clearly up (the number of recordings produced has doubled since 2000), and so is the demand for concert tickets (and the price of these tickets). As for films, even in countries where piracy is rampant (including South Korea, India, China), as well as in the U.S., the number of yearly film productions has only increased in the last couple of years.

This study, of course, comes as a crucial moment in the file sharing debate, as the Thomas vs. Capitol case is entering its final days (our report from earlier today). There, the music industry and the court are still working under the assumption that every copy is a lost sale.

If you have some spare time and an interest in this topic, you should definitely have a look at this paper. It's actually quite readable - especially for an academic paper by two economists - and short.

CC-licensed logo image used courtesy of Flickr user Rev Dan Catt.

BayTSP, a Los Gatos, CA-based company, is best known for putting the cease-and-desist smackdown on peer-to-peer copyright violators. The site serves infringement information forms to offending parties on behalf of the copyright holders. Think of them as the online debt collectors of the BitTorrent universe, with all the information security risk that implies.

If the information were secure, this might be fine. However, in some monumental lapse of judgement, the entire site was left open to search spiders and accordingly indexed by Google, allowing anyone with hackerish leanings ample opportunity to create all kinds of mischief.

A Google search for "'infringement information' site:baytsp.com" yields distressing results. Some of the pages have been removed, but you can still have a look at the cached versions:

Whoops!

Not only have the forms been online for Google and the waiting world to view; the forms could also be completed and submitted online by just about anyone.

More technically savvy tricksters could send infringement notices of their own. "And, on top of that," the TechDirt blogger writes, "some have discovered that BayTSP's site has some scripting vulnerabilities such that you could create a fake complaint and get people to, say, download malware or enter credit card data."

Although this recent debacle is simply one more PR disaster for the media industries themselves, my first thoughts were echoed by TechDirt commenter Mechwarrior: "Once this hits 4chan, it's over."