Category Archives: Crowdfunding

My Awesome Announcement

I hate tooting my own horn but this is one of the proudest moments in my still short social media law career.  Please forgive the somewhat staged presentation but those who know me know that if I’m going to tell a story I need to make it interesting.

I was at the University of Texas Co-op’s law school location last week browsing the Nutshell books.  (Go with me, people.)  For those of you not in the legal profession, congrats on that by the way, know that the Nutshell series is put out by West Academic (one of the biggest names, if not the biggest name, in the legal publishing world) and is a fantastic resource for an overview of legal issues in a particular topic.  They aren’t casebooks–larger books with often edited cases to look at judicial rulings on certain areas.  Nutshells get right to the point and provide essential information on the overall legal topic.  I used more than one when I was in law school and as a practicing attorney.

But I noticed something was missing from the Nutshell section.  Can you spot it?

Can you spot what's missing?

Can you spot what’s missing?

That’s right, there’s no Social Media Law in a Nutshell.

Let’s fix that, shall we?

I’m proud to announce that I will be writing Social Media Law in a Nutshell for West Academic.  My co-author, Thaddeus Hoffmeister, is a professor of law at the University of Dayton School of Law and has previously published a book on social media in the courtroom.  His knowledge of social media litigation, evidence uses, and applicability in criminal cases will combine with my information on the marketing, content, employment and other social media uses to make this a comprehensive review of social media across all legal channels.

Doing this as a Nutshell book feels perfect right now.  There isn’t a wealth of case law on social media issues, but there are certainly cases out there.  In some areas the most fascinating legal issues are taking place outside of a courtroom so a Nutshell allows us to cover those topics in ways a casebook couldn’t.  Plus, when the movie rights get picked up we all agree that Hugh Jackman can play me.  He’s just a more talented and better looking version of me who can also sing and dance and has a better accent.  The resemblance is uncanny.

I’m not sure when the book will be released but it certainly won’t be until 2015 at the earliest.  Rest assured I’ll let you all know as the process unfolds.

Yesterday I published the 100th blog post here on SoMeLaw Thoughts.  When I look back at how much has changed in social media since I started writing about it, not just my own professional involvement, it’s staggering.  I feel incredibly lucky to take this journey and contribute to the field as well as participate in a line of books that I personally value.  To join the ranks of the Nutshell books blows my mind.

Thanks to all of my readers and friends on social media who have pushed/pulled/heckled me along the way.  An even bigger thanks to my family for putting up with my little side projects.

Now, if you’ll excuse me, I’ve got some writing to do.

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Iceholes: How The ALSA May Win The Battle But Lose The War

You know what we do to bad ice on a pedestal?

The biggest surprise hit of the summer is not Guardians of the Galaxy but rather the megaviral smash Ice Bucket Challenge benefiting the ALS Association. Rather than be thankful for this windfall the ALSA has recently decided that they should own this challenge and prevent any other cause or organization from using it. What do you think they are, a charity?

Oh yeah, they are.  Then maybe they should start acting like it and not a bunch of selfish iceholes.

First, some background. The ALSA did not create the ice bucket challenge. The gimmick has been around for a long time. In fact, when this latest round started over the summer it began as a challenge to dump a bucket of ice water on your head or donate $100 to a charity of your choice.  It was only when the challenge first passed to professional golfer Chris Kennedy that the donation was flagged for the ALSA and the individuals he tagged kept the charity when they made their videos.  Later, there was a significant wave of ice bucket activity in Boston due to native ALS sufferer Pete Frates and concerted actions by the Red Sox organization.  Facebook’s data team’s analysis shows that Boston does appear to be the epicenter of the challenge going truly viral.

Nobody is exactly sure why the challenge has reached its current level of popularity, but that’s true for most viral hits in the social media age.  Sure, the videos are funny. And having one person tag several others to participate makes for an exponential reach. And having the challenge somehow associated with charity so we all think we can have fun while helping out a worthy cause makes it seem nice too. There are even a scattering of super serious videos in the mix depicting a bit of what the disease means to its victims and their families. We can identify all the elements but we still don’t know what made this challenge go viral like it did.  Heck, even I did one.  Although I’m not linking it after the reasons behind this post.

That doesn’t really matter though. It doesn’t matter that we can’t explain why it went viral; it went viral. It doesn’t matter that perhaps the amount of money we give to charities is out of proportion to the impact of the disease as IFLScience linked in a Vox article infographic; there is no doubt this is a horrific disease and increased attention to it is a good thing. It doesn’t matter that ALSA only spends a small percentage of its budget on research; it performs several other valuable services and all charities have to spend a lot of money to ultimately make more money in the end.

Here’s what does matter: the ALSA was given the greatest gift of their life in terms of this ice bucket challenge.  Donations are through the roof.  Yesterday they reported making over $94.3 million in donations in just the last month.  Last year, in the same time period, they received around $2.7 million.  Rather than just say thanks or give the tearful Sally Field “You like me, you really like me!” Oscar acceptance speech they decided to go another direction. They decided to take that warm fuzzy feeling we’ve had from watching or making these videos and donating to a worthy cause and pour a giant bucket of ice water on our flames of altruism.

As first reported on the Erik M Pelton & Associates blog, the ALSA filed an application with the US Patent and Trademark Office to be granted a trademark for the term ICE BUCKET CHALLENGE as used for any charitable fundraising.  They also filed an application for ALS ICE BUCKET CHALLENGE but it’s the main application that should make people furious.  Heck, it made me enough to write a blog post on a Thursday night and I never do that.

Filing a trademark for the term “Ice Bucket Challenge” would allow them to prevent any other charity from promoting a campaign that the ALSA had fall into their lap.  The ALSA did not create this concept.  They did not market this campaign until it already went viral.  They have no responsibility whatsoever for this going viral.  If the ice bucket challenge had found a connection to the American Heart Association or the American Cancer Society then it could have gone just as viral.

What on earth could make the ALSA think they should have any right whatsoever to prevent someone else from using this challenge?

I can’t think of a good reason.  I can think of reasons, mind you.  They just aren’t good.  Fortune was able to get a statement from ALSA spokesperson Carrie Munk:

The ALS Association took steps to trademark Ice Bucket Challenge after securing the blessings of the families who initiated the challenge this summer. We did this as a good faith effort after hearing that for-profit businesses were creating confusion by marketing ALS products in order to capitalize on this grassroots charitable effort.

Sorry, ALSA, but that excuse doesn’t hold water.

First, obtaining the blessings of the families who created this challenge is nonsense.  Even if you got permission from everyone who ever did an ice bucket challenge–SO WHAT?  This was a charity drive.  You think the first charity to earn a million dollars from a bake sale should get to stop all other bake sales?  Because that’s what filing a trademark on the challenge is an attempt to do–you’re trying to stop any other charity from using the term for fundraising.

Second, you heard some shady companies were making money off the Ice Bucket Challenge?  Wow, that must be weird.  To think there are these companies just sitting around making money off something they didn’t create.  JUST LIKE YOU.  Who cares if someone makes an Ice Bucket Challenge shirt and sells it?  If it says ALSA on it or has your logo you can already go after them without this new trademark application.

The ALSA’s actions are atrocious and reprehensible.  They may have raised a ton of money this summer but it could all backfire over a move like this.

But here, ALSA, I’m going to be nicer than you appear to be.  Here’s a way for you to cover your cold, soaked behinds and spin this in a favorable way.  What you should have done is post on your website the day you filed the application, saying that you are only doing so to protect all charities from shady profiteers but that all charities would be free to use the mark forever for no charge if you received the trademark.  The fact that you didn’t tell anyone about the application and only commented when it was called out on social media (by the way, you’ve heard about this social media thing and how a lot of people use it, right?) you can just blame on being so busy counting all your money.  It’s a bad excuse, but maybe it can save some face.

Because right now you look like a bunch of iceholes and I resent every penny I gave you.  Not for the good work you’ve done, which is a lot, or the families you’ve helped, which are numerous, but for being greedy instead of generous, selfish instead of, you know, charitable.

Update Aug 29: The ALSA has withdrawn their trademark application. Good.

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Filed under Celebrities, Crowdfunding, Facebook, Social Content, Social Tracking

Wish I Was Legal

It’s a movie.

I’m a social media law geek.  I have long accepted this fact and it shouldn’t be a revelation to you since you’re, you know, reading a blog about social media law.  So nobody should be surprised that when I attended a movie premiere for Wish I Was Here last week and everyone took out their smartphones to take pictures of Zach Braff and Donald Faison I, instead, took pictures of the disclosure form and privacy warning.  Because I’m geek like that.

I was a backer of Mr Braff’s Kickstarter campaign and paid to get two tickets to the Austin premiere and Q&A session.  I am not a superfan of Mr. Braff–I thought Garden State was okay and I only watched a season or two of Scrubs–but I do think he’s a talented actor and saw him perform in Twelfth Night at Shakespeare in the Park.  I was also intrigued by the Kickstarter project, being the first high publicity original movie to be funded after Veronica Mars.  I sent my money, read the updates, and watched the backlash roll in with curiousity.

There were four items of interest that struck me regarding social media law at the movie premiere.  I’m going to tell you three of them.  Just kidding, here’s all four.

photo 11. The release form

I’ve enclosed a picture of the consent and release form that all attendees were required to sign prior to entering the theater.  Much of it is standard for a movie screening where filming will take place if they may use the footage for behind the scenes featurettes.  But the item that jumped out to me is the item IN BOLD ALL CAPS.  Because, you know, that’s what bold all caps is supposed to do.

That text reads

I agree that to the extent I make any statements about the content including via social media or other public forums (e.g. Facebook, Twitter, Blogs, etc.) that such statements (“Statements”)…IF THE STATEMENT IS MADE ON SOCIAL MEDIA OR ANOTHER PUBLIC ON-LINE FORUM, I WILL DISCLOSE NEXT TO MY STATEMENT(S) THE MATERIAL CONNECTION BETWEEN MYSELF AND FOCUS FEATURES (I.E. I SAW THE PICTURE FOR FREE AT AN ADVANCE SCREENING

This statement is for participants to comply with the FTC Endorsement Guidelines.  They’re even explicitly called out in the next sentence of the release but they aren’t IN BOLD ALL CAPS so you might have missed it.

That’s a great call-out for such a long release form.  It may be the only sentence you actually read if you’re handed this page and given a minute to sign before getting out of the hot Texas sun into the air conditioned theater.  Although I may quibble with some technicalities (I paid for the tickets via Kickstarter so it wasn’t free, and I paid Zach Braff’s group not Focus) I’m a professional quibbler so I’m willing to focus on the positive.  A good call-out for a venture they know will get mentioned on social media.

photo 22. The consent sign

This sign was posted inside the theater before you could get to the orchestra seating and visible from the stairs leading to the balcony.  While I understand the need for something like this, heck I’ve drafted a few in my career, I also think this sign goes a bit overboard.  First, the release was already in the signed form that everyone had to fill out before they got inside so this is duplicative at best–but as a lawyer I can appreciate having multiple points where consent was gained just in case a lawsuit comes up (especially after DVDs have been produced).

I take less issue with the repetition than I do with the scope–while the signed form seems more targeted in the consent, this poster goes a bit overboard.  Sure, it’s easier to print a sign with less language like YOU GIVE ME ALL THE RIGHTS! RAWR! it also goes beyond the scope of the event.  According to this sign, Focus Features can now use my photograph to publicize an entirely different movie or event and that doesn’t help anyone.

I don’t think Focus would use my photo to publicize a different movie, mostly because I thoroughly enjoyed Reign of Fire and therefore have horrible taste in movies, but also because this is more likely just a defensive consent.  If someone were to sue for being on the DVD then the company has a signed release form and this poster to use in their defense.

Still, even though I may be the only person who read this sign (and definitely the only one to take a picture of it), I have to wonder what would happen if someone took issue with the consent.  I paid for the tickets to the premiere–that’s what the Kickstarter event promised me.  There is some general language in the Kickstarter campaign that if a reward conflicts with laws they’ll work to give you a substitute, but it isn’t a conflict of law for me to attend without giving consent to filming.  Just a small thought–perhaps they had a special area reserved for non-consenting audience members or they figured the odds were so low of this being an issue it wasn’t worth developing a plan.  I just find that kind of thing interesting.

3. The backlash

During the Q&A session after the film, one man asked Mr. Braff if he experienced any backlash over the funding.  The response was along the lines of “Where have you been?  Did you contribute and then go off-line for a year?  Did you just land from the space station and thought, ‘Hey, I can still make the premiere!'”  It was funny and the audience’s reaction showed they were all aware of the backlash as well.

The answer was interesting as well.  Mr. Braff explained how his world is all about getting films financed and when something is your world you unrealistically expect that other people will know something about that world.  So when the backlash started rolling in about the Kickstarter project he suddenly realized that people didn’t really understand how films are financed and why Kickstarter could help him.  So that was a lesson learned, but ultimately something he wasn’t concerned about since his fans and other interested parties did back him and that mattered more.

Mr. Braff did express some concern over the backlash regarding Kickstarter itself–specifically that people attacked him for taking money away from other Kickstarter projects that could use the money more.  He said that Kickstarter was quiet at first but later spoke up saying that high publicity projects like this do draw attention to the platform and ultimately bring in new users who end up funding more projects–the net being more money shared with more projects.  I can’t find a link to Kickstarter’s statement but that makes sense and is also probably a lesson learned for future high publicity projects.

4. Reflecting on the social world

At the end of the Q&A session, Mr. Braff and Mr. Faison sang “Guy Love” as a special treat to the audience.  They said it had been a while since they performed it and don’t get a lot of opportunities to sing it together so everyone should record it.  And so they did.  This was my view of the song:

photo

Working in social media I often take for granted the world of information and connections we have at our fingertips.  But every once in a while it strikes home.  When I looked at the event before my eyes I wasn’t watching the stage, I was looking at all those phones.  Yes, in my head I realized everyone probably has one, but it takes events like these for that to sink in sometime.  Seeing everyone recording the event, having their own perspective and building their own memories and being able to share it with all of their friends as well.

That’s awesome.  That’s social media.

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Filed under Celebrities, Copyright, Crowdfunding, FTC Endorsement Guidelines, Social Investment, Social Platforms, Terms and Conditions

Top 10 Social Media Legal Concerns For 2014 (Plus A Bonus!)

2014 legal risks include the very real possibility that you drop a crystal ball on your foot. This will hurt.

I’ve been privileged enough to be connected with a variety of brilliant, articulate social media attorneys around the country.  Recently one of them asked the group for their top social media legal concerns (not necessarily those of their respective employers) and in great blogging tradition I thought “I can totally steal that and make a blog post out of it!”  But, being all lawyerly, I asked for their permission first.  And then I turned it into a list because the moment you put a number on something the lizard part of your brain takes control of your clicking finger and you cannot resist.  You know it’s true.

All links are provided by me to help provide some context or background or additional reading.  But I didn’t make any links a numbered list because then you’ll never come back.

Without further obligatory filler text, here are the top 2014 social media legal concerns.  Read the whole thing and you’ll get a special bonus at the end.  It’s like the extra scene at the end of a Marvel movie except there’s no Nick Fury.  Probably.

1. Use of Other’s Content

Jim Dudukovich, Coca-Cola (and proud Vespa owner): The recent $1.2MM jury verdict in favor of Daniel Morel regarding the use by Getty and Agence France-Presse of photographs Mr. Morel had posted to Twitter regarding the Haiti earthquake could be a seminal case regarding the danger of relying on a platform’s terms of service to re-use others’ content; the fact that the media was held liable certainly doesn’t bode well for marketers, who are not entitled to as great a license as the press.

Ryan Garcia, Dell: This is a big one because there are two areas where clients can get confused.  First, when content is marked “Public” by a platform that doesn’t mean the information is truly public.  At least not all the time.  Sometimes it means that, mostly it means the content can be freely shared within that platform.  Second, the convergence of social platforms such as Facebook purchasing Instagram leads some people to think that the content can be freely shared between platforms and that’s just not the case.  They are both teachable moments but you have to remove that misunderstanding quickly.

2. Changing Promotional Rules

Chris Irving, Publishers Clearing House: Keeping abreast of ever changing Facebook promotional rules and making sure Marketing understands the “relaxed rules” are not an invitation to do everything and anything.

Jim Dudukovich, Coca-Cola: Although this one goes in the opposite direction from Facebook’s, imposing greater restrictions on marketers’ ability to conduct promotions on the platform [Pinterest].

Ryan Garcia, Dell: It’s always important to keep up with the latest changes in platform promotion requirements.  Lucky for all my readers I have guides to Facebook’s latest changes (September 2013) and Pinterest’s latest changes (October 2013).

3. Disclosures for the Convergence of Social with Mobile

Brian Abamont, State Farm: How do companies go about ensuring compliance with all of the disclosure and notice expectations, not just in terms of actually including them but also the expectations as to how they are presented in a form factor that puts real estate at a premium and has more limited presentation capabilities (e.g. just in time notification and proximity of disclosures to content). How can this be addressed with little standardization across the mobile OS environments for these types of things?

Chris Irving, Publishers Clearing House: Helping internal clients interpret and understand scope of FTC ‘s updated Online Disclosure Guidelines (while at the same time trying to fully understand what they really mean myself!)

4. Privacy, Privacy, Privacy

Chris Irving, Publishers Clearing House: Working with cross sectional compliance teams on all things Privacy.  As our digital footprint continues to grow,  expanding efforts to insure that privacy is baked in at design and that best practices can keep pace with fast growth. Issues include online behavioral advertising, keeping privacy polices current,  keeping privacy highlights pages current, understanding changes to polices and what accompany disclosures are necessary . . . . .

Brian Abamont, State FarmI would also place a strong “seconded” support behind Chris’ point about privacy and add that the rules are changing at a rapid pace across not just federal/national levels but also various states and provinces across North America and the rest of the world.  Furthermore, in some cases, the rules have been created after an alleged offense and seemingly applied retroactively, at a minimum from a reputational standpoint.

Daniel S. Goldman, Mayo Clinic: Probably less a legal  issue (at present), though I think there will be increasing regulation over time.  I think the issue is the public’s increasing concern about the data that is being collected/monetized by social platforms and by commercial entities and what can be divined about them from that data.  This plays out across many spectrums.  The most obvious is the negative reaction to targeted/behavioral ads, but also reflects a concern about analytics that is done on data that is collected (e.g. the “Target Article”).  I think there is a growing public perception that there is a digital “permanent record” about all of us that companies are mining to sell them stuff.

5. Fraud Fighting

Chris Irving, Publishers Clearing House: Expanding efforts to fight scammers and fraudsters on the internet who would use our name to deceive. Efforts include enhanced consumer education, public private partnerships and supporting stronger criminal penalties in Jamaica where a majority of these scams are originating.

6. Increased Attention to “Commercial Creep” and Transparency

Jim Dudukovich, Coca-Cola: This manifests itself in a few ways, from the FTC’s workshop on native advertising and the search for answers as to what consumer expectations are and the scope of consumers’ ability to distinguish between editorial/creative content vs. sponsored content/branded integration, to the NY AG’s “Operation Clean Turf” (investigating and penalizing the practice of publishing fake reviews).  Not to mention the attention the NAD has placed on native advertising/transparency (eSalon and Mashable/Qualcomm).

7. Social Behavioral Advertising

Brian Abamont, State FarmTypically, [behavioral advertising] has applied to web based activities and were easily covered by privacy policy and “About our Ads” information pages.  As the level of information from social is much deeper than a typical web site visit and marketers looks to make more advanced use of that information, how do businesses present proper consent/disclosures in the social platforms?

8. Reputational Public Relations and Marketing on Social Media

Jim Dudukovich, Coca-Cola: We’ve seen more and more instances in which the speed of social media marketing has trumped judgment, and major brands, either directly or through agencies, and sometimes even accidentally, have pushed out messaging that they later regretted (and perhaps wouldn’t have published had they engaged in a more rigorous internal review process).

Jessica Fredrickson, Walmart:  Blurred lines between marketing and reputational PR. Our clients are increasingly using reputational “advertising” to promote our good works (#RealWalmart). Whether these messages translate into sales isn’t clear and how these messages should be managed through a review process and with appropriate disclaimers is not consistent. 

9. Changes to TCPA Express Written Consent Rules

Chris Irving, Publishers Clearing House: Providing internal guidance to clients on the changing TCPA consent requirements applicable to text messaging campaigns as well as the necessary vetting for third party ads appearing on our sites where there is phone collection.

10. Crowdfunding

Ryan Garcia, Dell: The JOBS Act changes continue to come in and we have a market where many more people are comfortable with Kickstarter and other crowdfunding platforms.  The possibility of actual equity investment for the masses, as opposed to paying for items that help fund a project, has huge positive and negative ramifications.  People getting upset over late deliveries for a Kickstarter project are one thing–thousands of equity investors being upset over the direction of a brand new company is another altogether. Here’s a longer post on the subject from Perkins Coie.

And here’s your bonus as promised in the headline (and at no extra charge to you!).  Here’s a list of the top social media legal issues as presented by Mark Bisard (here’s his Twitter because he’s social!), social media and general digital guru for American Express.  These are all the details he provided or else he could have been incorporated into the main list, but instead it’s a bonus list for you. And there’s 16 things here, which makes it approximately 60% longer than the list above!  Enjoy and happy holidays!

  • Year of the Hashtag
  • Selfie is word of the year (see reputational risk parallels with Obama photo)
  • Internet of Things  (TRENDnet and FTC workshop)
  • Virtual Currencies (Largely BitCoin but also push to have VC like Farmville regulated like other FIs)
  • Mobile-Social Convergence results in Net Domination (or staggering blow in battle between search and social)
  • Real Time Marketing (Oreo-SuperBowl and West Jet type marketing, Multi Screen viewing consumption trends, internal agile and lean ux organizational changes)
  • Evolution of Cause Based Marketing to Issue Based Marketing (I made this up, but think Haiti relief on over to the surge of woman’s issue ads like Pantene, Goldblox, and  etc)
  • Data Security (spooky Aaron’s rental case, Blackberry’s death means more BYOD, President’s Exec Order, zip code cases, Hacks on big social platforms, Living Social’s 50 million person breach, the largest financial data breach in history (160 million credit card numbers stolen, but damages still hard to prove for consumers)
  • Rise of Snapchat and rejection of FB offer (new kid in town?)
  • Reed Hastings – Netflix- SEC response
  • Platform, rules and feature changes (FB, Pinterest – FB buys Instagram, Yahoo buys Tumblr, Google buysWaze – iOS7, new gTLDs and wearables – offers and gaming platforms like Groupon and Farmville struggle)
  • Regulators do their best to catch up and evolve (FTC, FFIEC, SEC, TCPA, California, State Password Protection laws, and even P-1A Visa issues for professional gamers signal evolution)
  • Transparency is clear trend (Operation Clean Turf, Native Advertising workshop, FTC’s renewed interest in black hat search practices, FTC action against spammers
  • OPP – “Public” – AFP & Getty case, GoldiBlox v The Beastie Boys saga (we were right—there’s a difference between publicly “accessible” and “publicly available for any damn thing I want” – shocker I know)
  • Big Surveillance – Big Data (big news, little in the way of change – Big data becoming legit biz practice but still fighting rep battle, Tech Titans letter to President is interesting, Path case and use of ECPA’s Wiretap Act and Store Comms Act to attack Google and others also interesting)
  • The Wallet Wars I think are the biggest news of the year.  Huge array of players/participants, consumer options.  Ready to burst.  Regulators are weighing in.  Bigger than VHS vs. Beta.  Hopefully beta wins this time.

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Filed under Commercial Activity, Consumer Protection, Copyright, Crowdfunding, Facebook, FTC Endorsement Guidelines, Google, Identity, Instagram, Laws, Pinterest, Social Content, Social Marketing, Social Media and the Law, Social Media Lawyers, Social Media Risks, Social Platforms, Social Tracking, Terms and Conditions, Twitter

Social Folding: Strength Under Fire

Close-up view of a sword made from folded metal. You should not try to fold an actual sword though because a) it would hurt and b) it probably isn’t going to get wrinkled anyway.

Kenny Rogers once famously sang you’ve got to know when to hold them and know when to fold them.  That lesson, it turns out, applies to more than just poker–especially when you consider a different type of folding and social media.  The folding I’m referring to is not how to fold a t-shirt in five seconds, although that is impressive.  Rather, I’m talking about metalsmith folding and the art of iterative policy making. If you’re unfamiliar with blacksmith folding I wouldn’t blame you.  There’s a quick 90 second video showing the process but here’s a quick description:

  • Heat up a piece of metal
  • Pound on it to make it compact
  • Create a small crevice in the metal
  • Bend the metal back around so that it’s a squatter, taller block
  • Pound on it until it’s back to the original shape

Blacksmiths would repeat this process hundreds or thousands of times.  The most legendary swords in the world are rumored to have been forged from steel that was folded millions of times.  The process has a purpose–by folding the metal over and over you ensured the most uniform piece of steel you could create.  Uniform steel was stronger than a blade having strong and weak parts that would break under pressure. But the only way to get a blade that strong is to put it under fire and beat the heck out of it.

That’s true for social media strategies and policies as well.  Your limits will be tested the moment you come under fire–keep going the same direction you were heading and you’re likely to make something break.  But if you can perform your own folding, figure out the value you want to develop, then you can make something stronger.

A classic example of this is Amazon’s controversy back in 2011 over a Kindle self-published book (don’t kid yourself if you think Amazon in general and Kindle specifically are not social platforms–they definitely are, albeit with different interactions than most other platforms).  The book in question was titled The Pedophile’s Guide to Love and Pleasure.  Although the text of the book may or may not have been a guide on how to commit pedophilia, the title certainly read like one and the Internet had no problem judging this book by its cover.

When news of its existence first broke in November of 2010, outrage flew across social and traditional media.  Amazon at first defended the book saying they did not believe in censorship and wanted to continue to sell controversial books.  But the controversy continued and Amazon had a choice to make.  Yes, they had a point in defending controversial books that others might be offensive, but they also had a large population upset that Amazon would make money off such a title.  Within days, Amazon had pulled the book.

It’s fine to have a mission and a strategy before that gets tested, but to continue with it in the face of public outcry is a different decision entirely.  There’s a famous quote that no battle plan survives contact with the enemy.  Most people take the obvious meaning of the quote–once you’re in the battle then all your plans go to hell.  But there’s another inherent reading–that even if you follow the plan to the letter, once you encounter resistance you are choosing to follow the plan for a different reason than why you made it.  You have new information which makes for a new decision even if it’s the same outcome.  In Amazon’s case, it led to a different outcome.  But no matter the end result, shaping your direction under fire should make your strategy stronger.  If it doesn’t, that’s probably because something just broke.

A more recent example of a strategy/direction coming under fire is the Kickstarter campaign for Above the Game.  From the initial project description it appeared to be just a typical book about how to better at getting to know the opposite sex.  If by opposite sex you mean women.  The author said that about half of the content for the book came from essays he had posted on Reddit.  The project went largely unnoticed (but successfully funded) until a blog post about 12 hours before the project closed pointed out some of the actual content on Reddit.  The blog post does a good job of highlighting some of the more alarming content–this is not a happy, friendly dating guide but one that encourages behavior that probably shouldn’t be encouraged.

Kickstarter found out about the blog post two hours before the project was set to close and apparently lacked the ability to suspend the project–the decision was to either let it continue or cancel it there.  They let it continue.  But shortly after it was funded, and upon further consideration, Kickstarter posted a fantastic apology and said that entire genre of projects (seduction guides) would no longer be welcome on their platform.  They pulled the project page but provided a link to the web archived version.  They explained that they did not have the ability to cancel the funding once the project closed but that their preference to side with creators and the short time frame led to their bad decision–and they did say it was a bad decision.  Kickstarter also announced a sizable donation to RAINN.

The apology seems to have worked–most press coverage has been favorable.  The circumstances do seem favorable for Kickstarter since the project description seemed innocent enough but the actual content was not discovered until the last minute.  But this kind of heat gave Kickstarter the opportunity to assess its own values and policies and make something stronger as a result.

So the next time your social media strategy or policy or terms come under fire, and they will, of course deal with the situation but also recognize it as an opportunity to create something stronger.  Like metal, removing social media imperfections can only be done under fire.  So get a thick apron, a big hammer, and be prepared for the process.

 

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Filed under Crowdfunding, Ebooks, Social Content, Social Media Policies, Social Media Risks, Social Platforms, Terms and Conditions

Zach Braff Explains Why The JOBS Act Matters To Social Media

This + $Millions = Movie

Zach Braff is making a new movie thanks to social media.  The star of Scrubs has starred in several movies over the years but has only written, directed, and starred in one full length theatrical film, Garden State back in 2004.  That’s about to change with the launch of his Kickstarter project to fund a new movie, Wish I Was Here.  The project requires funding of $2 million but only one day in it has raised nearly $1.5 million.  It might even be fully funded by the time I finish writing this post.

Braff’s successful Kickstarter project comes on the heels of another record-breaking Kickstarter project for the Veronica Mars movie.  That project is not only the most funded movie project on Kickstarter (the second highest film raised just over $800,000) but also shows the power that social media, crowdfunding in particular, can have on an established industry like making movies.  Kickstarter has been used to fund hundreds of movies from documentaries to comedies to unofficial Star Trek fan pics.  Veronica Mars was the first time a major Hollywood studio allowed Kickstarter to participate in its development.

Series creator Rob Thomas had the idea for the film and ensured the series star was interested, then pitched the concept of launching the Kickstarter project to the studio that owned the Veronica Mars franchise.  Warner Bros. approved of the concept, essentially telling Thomas and the fans that if they raised $2 million then the movie was a go (and WB would distribute the film, another huge hurdle for actually seeing movies once they’re made).  The project gave itself 30 days to reach its funding goal; it raised $2 million in less than a day.

This is not to say that all Hollywood financing will shift to Kickstarter.  Nor does it make any star’s project instantly successful–the Veronica Mars project succeeded and Braff’s looks highly likely to succeed but another TV star, Melissa Joan Hart, has a Kickstarter project with a deadline of May 26 to raise $2 million.  To date is has raised a bit over $36,000.

Kickstarter funding does have the ability to connect fans of characters or stories and put their money where their mouth is in terms of making a movie happen.  In that sense it’s a brilliant market research and fundraising tool with almost no downside.  The only criticism that emerged after the Veronica Mars project, largely driven by bloggers as far as I can tell, is that the projects take money from fans only for the reason of taking more money from them down the road (when they go see the movie).  But anyone who has ever been a fan knows that’s how it works–we pay money to attend conventions/shows where we buy more items.  We go see a movie then buy it on DVD or digital download.  We’re fine paying for multiple items connected to stories we love.

And with Kickstarter, that’s exactly what you get.  Kickstarter is known as a perk-based or reward-based funding platform.  Meaning that when you contribute to a project you are signing up to receive something based on your contribution.  At the lowest level it may be a thank you.  At higher levels it could be physical goods, pre-ordered products, participatory credits, special meetings with the creators/inventors, all kinds of things.  But ultimately that is what you’re paying for–nothing else.  If the project fails, you don’t get money back.  If the project succeeds and results in billions of profit, you don’t get anything else.  You are not an investor, you simply bought something associated with the project.  If you don’t get what you paid for you can sue the project owner, but that’s not like a giant lawsuit over a failed company by disgruntled investors.

That distinction matters.  In the US it is currently against the law to crowdfund for equity investments (where you put money in to own a piece of the final result or company).  That kind of investment is controlled by the SEC and ran into a very public wall when the website buyabeercompany.com tried to gather enough pledged funds to purchase Pabst Blue Ribbon brewery for $300 million.  After gathering pledges above $200 million the SEC stepped in and informed the site owners that this kind of activity was highly regulated–the SEC shut down the site and settled with the creators.

As Braff explained in an interview about the project:

Listen, I would love, more than anything, to have it be you get an equity stake. You have 10 bucks, you make your 10 bucks back with the percentage of profit, like a stock. But that’s not legal yet.

And he’s right, for now.  But that’s set to change soon.  In 2012, Congress passed the Jumpstart Our Business Startups Act or JOBS Act.  The bill focused on having the SEC relax regulations about gathering investors to contribute money in exchange for ownership–equity investment as opposed to reward-based investment.  The prior rules essentially forced businesses that wanted to raise money from large groups of people to issue stock and jump through all the hoops associated with such an offering–it made this kind of investment only financially viable for extremely large sums of money.  For smaller amounts of money, $50,000 or $10 million, it didn’t make sense to issue stock and private lenders including banks may not be interested, leaving those companies with no viable option.  But with the changes in technology and the ability to raise money via social media, there needed to be a change to regulations to allow that activity to take place.

Even in the middle of a re-election year and our highly partisan political environment the law passed the House by a vote of 407 to 17.  The law requires the SEC to issue new guidelines on investments–it has issued draft guidelines for institutional investors (large banks, wealthy single investors, etc.) but is overdue for issuing guidelines for consumer investment (the $5 or so you and I might contribute to a project).

Once those guidelines come, we’ll see if the journey Kickstarter has begun in transforming Hollywood economics takes the next step.  The potential is there–in the UK where equity crowdfunding is legal, at least one UK platform reported at a recent crowdfunding conference that reward-based projects typically raised from $3,500 to $35,000 but equity-based projects raised an average of $88,000.  Investors are more willing to give money in exchange for ownership.  That may make larger budget movies possible if we take successful projects from the $5 million range to the $15 million range or higher.

This additional money doesn’t just impact Hollywood but virtually every creative industry.  Virtually every media can now be distributed digitally and crowdfunding not only raises money but establishes an initial audience of consumers and evangelists.  Years ago to raise money from thousands of people you had to travel from city to city, struggling to get the word out.  Now you can use social media and have thousands of people backing your project.

Ultimately, this is a movement that can bring a new wealth of creative content as projects that may not have been funded with the old models suddenly find enough support to reach the market.  Which really only matter if it helps bring us a Chuck movie.

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Filed under Celebrities, Commercial Activity, Crowdfunding, Laws, Social Investment, Social Media Risks, Social Platforms