The University of Chicago Law School Faculty Blog

Book Review: Convergence Culture by Henry Jenkins

This is a review of Henry Jenkins’s new book Convergence Culture. The review is a bit longish, so I will do it in three separate posts today; Friday; and Monday.

 

Jenkins is a media studies professor at MIT, and his job is the fantasy job of a 12 year old: watch Survivor and American Idol and count it as work. His new book Convergence Culture is a sequel to his 1992 work Textual Poachers: Television Fans and Participatory Culture. Both books examine participatory media, that is, a popular culture that directly involves fans in the defining of the culture. This convergence isn’t about technology—one screen (or one box) to rule them all—but rather about the way that the bright lines separating content creators from content users are becoming increasingly fuzzy. A convergence of creators and users-as-creators.

 

The book is a fun read—examining not only Survivor and American Idol but also “transmedia” storytelling in The Matrix and Harry Potter and Star Wars fan fiction—and is an almost anthropological examination of new trends in fan participation. Fan participation also raises important legal issues (especially for copyright) and Jenkins spends some time on those, though they are not, understandably, the focus of the book.

 

EULAgizing Amazon Unbox

On Friday, I posted on Amazon’s new video download service, Amazon Unbox Video. Today, I want to head into the terms of use. My version of the printout runs 26 pages though only the first ten are actually about Unbox; the remaining pages relate to Microsoft’s .Net framework. Three characteristics stand out in the terms of use: phoning home to the Amazon mothership; remote destruction; and soft contractual rights. Consider these one by one.

Governance at Gunpoint

A story in today’s Wall Street Journal (sub. req.) about the continuing troubles at Bristol-Myers raises troubling questions about the government’s use of strong-arm tactics to extract corporate governance and other concessions from firms under threat of litigation-induced firm death.

In the aftermath of the demise of Arthur Andersen, firms are especially leery about the possibility of being indicted.  As the Andersen case makes clear, the risk from indictment is enormous, and even exoneration by the Supreme Court isn’t enough to bring back the dead.  It was in the wake of Andersen that the US Attorney’s Office for the District of New Jersey negotiated a so-called “deferred prosecution agreement” (DPA) with Bristol-Myers to settle allegations that the firm engaged in deceptive inventory practices to meet quarterly earnings estimates.  DPAs, which are adapted to the corporate crime context from the pre-trial diversion programs used to monitor juvenile and drug offenders, have been used in 43 corporate crime and fraud cases since 1993.  These agreements raise issues about privilege waiver and corporate versus individual accountability, but the Bristol-Myers case highlights the danger of governance reform aspects of these agreements. 

Targeted Minimum Wages: Big Box Veto and Local Minima

Mayor Daley has vetoed Chicago's Big Box Ordinance, though this chapter of local history remains open until is known whether the City Council will override the veto - and whether a new, somewhat different ordinance will be proposed. Proponents might draft a yet more refined minimum, or "living," wage bill.  The federal minimum is $5.15; the Illinois minimum is $6.50 (another example of asymmetrical preemption by federal law); the proposed Chicago minimum would have been $9.25 (plus some benefits and then increases over several years) but only for firms that are $1 billion in size and then in business properties occupying 90,000 square feet or more. My subject here is what to make of such targeted minimum wages.

For-Profit Charities

The recent Red Cross scandal is a reminder that charitable nonprofit organizations sometimes act poorly.  Meanwhile, many for-profit commercial organizations try to do good—by helping poor coffee growers, or providing hurricane relief, or supporting schools.  Yet the good-doing nonprofits enjoy tax benefits denied to the good-doing for-profits.  Why should this be the case?  It turns out that there is no reason for discriminating against commercial operations that provide charitable benefits.  Indeed, the incentive structures of a profit-making business could be used to enhance the efficiency of charities.  Hence the case for the “for-profit charity.”  Click here for the argument (an abstract of the paper is below).

Abstract:     
Nonprofit firms may not distribute profits to owners but instead must retain them or reinvest them. Nonprofits that are “charitable organizations” under Section 501(c)(3) of the tax code may receive donations from individuals who are allowed to deduct their donations from their income for tax purposes. We argue that the law should not link tax benefits to corporate form in this way. There may be good arguments for recognizing the nonprofit form and good arguments for providing tax subsidies to charities or donors to charities, but there is no good argument for making those tax subsidies available only to charities that adopt the nonprofit form. Consequently, the “for-profit charity” may well be a desirable institution. Currently, no such entity exists, but the reason is surely discriminatory tax treatment; the charitable activities of many commercial firms suggest that in the absence of discriminatory tax treatment for-profit charities would flourish. Current tax benefits for charitable nonprofits should be extended to for-profit charities, and to the charitable activities of for-profit commercial firms.

A new mechanism for exercising shareholder voice

The latest craze in corporate activism is majority voting for board elections.  The intuition is simple if misguided: boards are elected by shareholders to run the firm; elections everywhere (except maybe North Korea, Cuba, and, er, Chicago) are decided by majority vote; therefore board members should be elected only if they win a majority of shareholder votes.  (Currently, shareholder votes in ordinary elections are not dispositive, as board members can be elected with a plurality of votes—only in expensive and rare proxy fights when a rival slate of directors is run do votes actually matter.)  This campaign is being waged on many fronts, including by law professor Lucian Bebchuk, who has personally lobbied firms in which he owns a few shares to adopt bylaw amendments requiring majority rule.  A recent court decision highlights the problems with this approach, and a new paper offers some alternatives.

Designing Access: Amazon’s Unbox Video

Amazon has launched a new video download service: Amazon Unbox Video. The launch of a new content service these days is an exercise in designing access and control over content. Today I will sketch out the big picture features of this access; next week I will do the lawyerly thing and head into the terms of use.

We should start with the basics. Amazon has apparently struck deals with a large number of content providers, including major TV networks, such as CBS, Fox, Nickelodeon and others (but not ABC or NBC) and deals with a number of major movie studios including Paramount, Sony, Universal and Warner Bros.