NEXT - Nexicon’s Corporate Blog

The RIAA is abandoning their lawsuit wagon for graduated response. It makes me both happy and sad at the same time, considering Nexicon tried to sell that concept three years ago to them and others. I guess it takes time for large organizations to realize their paths are not generating positive change for their controlling entities. Now that this graduated response thing raises questions. Do the ISPs really want to carry the cost for this? The latest article tells me that AT&T and Comcast are actually endorsing this model and are eager to get this pilot up running. The question I ask is “Have Comcast and AT&T forgotten their core business model?” They are in a volume market, and their key to survival or profit is obtain daily, respectable client growth. In fact, that is what controls the valuation of their respective companies also. With this graduated response I can’t see any other outcome for them except losing subscribers – they will alienate the fans instead of the RIAA! Should we praise the RIAA for being smart to push the bad image ball over to the ISP?

Here at Nexicon our opinions are as strong as ever. And while I hate to say it, in another three years I hope I don’t have to be telling you “I told you so.”

We have to realize that the end users (or pirates as the RIAA calls them) are the fans/users/consumers of the products they are accessing. At the same time, they represent the cause of piracy escalating to the level, which hurts the industry today. After working in the industry for 15 years, I am now working with some of the smartest people I ever have. These people know what they are doing. But, rather becoming dated, they must EVOLVE like the rest of the human race and become part of the trends and technology like the rest of the world.

In fact, for the music industry, their primary partner is the technology market, and the innovations that are created daily in that industry hold the key to the content delivery for the music business – and essentially the survival of the music business. We at Nexicon believe that the ISPs play a crucial role in the “new music age” of enjoying songs online, but the graduated response tactic is the wrong approach. If I were still operating my ISP, I would not like to carry the costs for the music industry by enforcing piracy laws while losing my own subscribers’ loyalty.

Maybe the RIAA has some leverage to promise the ISPs (aka “content”). But that will not make a difference at the end of the day. We are talking money here, and the numbers for an ISP are driven are by subscriber loyalty — the key to their volume business. Let’s take a real world example to emphasize this point. If I needed Internet service at my house, would I choose Comcast or Verizon FiOS? First of all, since I like to download, FiOS is already attractive for me. (For those of you who don’t know, FiOS is an Internet, telephone, and TV service that is presently offered in some areas of the US by Verizon). Then, on top of my inclination for FiOS, when I read articles like this blog, I would of course avoid Comcast for any cost I can because I don’t want to get my connection turned off. Subscribers will learn this very quickly. Actually, they already can. There are already listings on the Internet related to choosing an ISP. This is critical for the ISPs. The fact that the ISPs went public with an announcement like this makes me wonder if the ISPs are now controlled by the same people that controlled the music industry when it turned down the Internet as a core media for their future distribution 8-10 years ago.

During the writing of this blog over the last few days, some interesting things have developed. In regard to the case at hand, AT&T and Comcast now deny their original statement and say they will not support graduated response. Wow. They grew smart fast. Maybe the person sitting next to me on the plane to Maryland was an ISP executive looking over my shoulder.

We at Nexicon are of the strong opinion that the ISP and music industries need to sit back and think about what they really want to achieve and landscape of the future. Right now, their now-halted attempts they to scare the public, they are only making it harder to enforce anything related to copyrights. It is comparable to telling a toddler he can’t do something – in response he will do it. If you tell him he can do something – in response he won’t. It’s reverse psychology.

The industries need to realize that people on the Internet take the liberty to break laws because they are laws that are not really enforced by authorities. After looking at my latest blog about our success in combating child pornography, what if we told you that the same people downloading music, movies, and other content are also downloading child porn. Wow, now this is starting to get interesting. Graduated response is not viable anymore. Volume enforcement is the only thing that works just like in the real world. Policing in numbers and unpredictable locations is what is most effective.

At the end of the day, the fans are most important because they are spending the dollars (or should be spending the dollars for what they’re illegally downloading). Since graduated response will alienate the fans, do we think that the artists/labels/studios want this? Do book publishers want this? I was under the impression that they wanted to make money on the content not alienate the fans? Things are getting interesting…

I feel the year for Nexicon is here. While we have never doubted ourselves, we now have proof that all our hard work — all of our blood, sweat, and tears over the years — is finally coming to fruition.  Once again I have to thank all the people that have supported us over time and continue to support us now. Our confidence that all fronts of Nexicon will get to the point where we all want it to go this year could not be higher.

Last week law enforcement in a European country performed a pilot test of a Nexicon product to help enforce laws online. We served as an interface for the law enforcement officers that showed people downloading child pornography. As demand increases due to limited online enforcement, this problem becomes an even more pressing issue all over the world. It leads to the exploitation of children. We also uncovered more severe material during this pilot such as human trading. Yes, it sounds awful, and happens on the Internet protocols that we monitor. The demand for illegal porn results in human trading and the human trafficking of young children. I must note that we are not talking about 16-18 year olds here, but 5-12 year olds.

Today is a proud day for our young company. Within one week of launching the Nexicon pilot, law enforcement was prepared to go with “guns blazing” on the doors of the located address. Information the law enforcement agency received directly from MARC provided all of the evidence they needed to get a subpoeana to support their actions. It is amazing…. Nexicon busted a small child pornography network in a large European country. We directly impacted the lives of children all over the world in a positive way and helped to combat a growing problem that stems from missing security and the lack of enforcement of Internet laws.

As I am write this blog, we are preparing more cases to help enforcement again attack more child pornography targets. It is a very good feeling when receive insightful feedback from law enforcement. They tell me that they witness people sitting in the interrogation room who are shocked at how in the world the law enforcement suddenly became computer experts and actually have the knowledge, data, and intelligence they need to enforce the law.

Let me share something with you. I recently opened Nexicon’s Earthview module in our DigitalRanger product and viewed many people around the world downloading illegal child pornography. While it makes me sick to my stomach, at the same I am optimistic because I know we can provide actionable and indisputable evidence of pornography targets to both federal law enforcements as well as to the cyber-crime units of countries around the world. We can help combat this horrid act like never before.

Taking the practical application of this Earthview module a step further, just imagine all of the applications and efforts this product can help. A kindergarten school could subscribe to our system and get intelligence on their neighborhood’s downloading activity to warn parents. The possibilities are truly endless and help give me much confidence in our company. Consider Nexicon today: We are healthy. We are “showing teeth.” We are hiring while other companies are scaling down and crumbling in these tough economic times. Why? Because the market is responding to our product, and very intelligent prospects — and customers — are validating our efforts. We look forward and are thinking long term and about true global market reach.

I want to close with something that may scare you all, though this may be a good thing because it may spur some action on this critically important issue of child pornography. The image below from EarthView displays illegal child pornography download in the past 14 days:

I hope all of the readers of my blog can sleep a little better tonight knowing that not only is Nexicon a viable business, but we also help our society uphold high moral standards. We hope to build Nexicon into an icon to which many can look up to in the corporate world.