Nexicon Inc. (fka NXCO)

[ericthemidget]

downsideup – I have reread your posts more attentively, and I must admit I am impressed with your intellectual expression and ‘in-depth’ level of understanding. (‘In depth’, in the sense that it is obviously studied, not because you read the comments of one article…so please regard my definition of ‘in depth’ as your level of knowledge and not much less)

On the issue of the existential technical feasibility of what Nexicon is purporting they can accomplish, I don’t think we would disagree. In fact I would argue the RIAA (via MediaSentry), BayTSP, and Logistep, all Nexicon competitors are currently doing and offering to the same protective clients, on a spectrum of scope scale none of which I have seen Nexicon demonstrate. In fact, there is nothing on my radar I have seen from my role inside the rightsholder/anti-piracy community or anything I have been able to find in ‘publicly available’ online realms to demonstrate Nexicon’s technical ability, beyond their claims. Show me a C&D from Nexicon like the one Ca$h posted here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=32262540

I do not doubt Nexicon has run some tests, but on what scope and scale? Frankly, since GetAmnesty was launched last year, I expected to see at least one of their DMCA compliant C&D notices, the functional means of delivering the ‘bill’ for copyright infringement, posted on a forum or perhaps posted at chillingeffects.org, or at the very least forwarded to me privately via the network of professional peers I maintain. Perhaps then I might have elevated Nexicon to a lower tier of vendor in the Internet Anti-piracy space, but so far its all ‘flamboyantly expressed’ optimism coming from the company itself and most of the characters on this board.

Therefore, at least I believe, and think you would agree, that Nexicon’s technical performance, form this point forward, must be objectively demonstrated in the marketplace to be vastly superior, than it has been historically. Furthermore, I humbly ask you to generally speculate on what achievement milestones would indicate a pass/fail grade from your perspective.

Lastly on the technical front, I believe we would also agree is impossible to be technically perfect in enforcing intellectual property rights in the Internet. The document posted by Ca$h: http://dmca.cs.washington.edu/uwcse_dmca_tr.pdf (nice find by the way…I forgot that a peer of mine brought it to my attention a while back), I fundamentally agree with its conclusions, however I don’t think it is an excuse to do nothing about Internet piracy, or villianize rightsholders for pursuing such ‘self-help’ efforts to protect their IP assets. Nevertheless, the uncertainty issues inherent to DHCP leasing in the IPv4 environment of the Internet cannot be denied. To believe wholeheartedly, that Nexicon will never encounter such issues, nor have to engage prodigious resources, is as foolish as believing in the Easter Bunny.

So to get to your question about compliance…. What I believe you are implying is that there is a ‘mass-market’, if you will, for counterfeit content on the Internet. Furthermore, the vast majority of that mass-market are not technically savvy enough to successfully anonymize or otherwise cloak their piracy activity to thwart the watchful eyes of Nexcion, or any of their competitive ‘digital bounty hunters’ for that matter. Let’s call this the ‘Joe Downloader Theory’…on which I would stongly agree.

So, your question might then be: If 100 GetAmnesty C&D Notices were sent out, how many would reach ‘Joe Downloaders’, and how many Joe’s would comply, i.e. settle, i.e. pay?? That is a great question? Off the bat with no other context, I would hazard to guess 50% would go through and 15% of those would comply, so math comes to 7.5% compliance or 7-8 out of 100 ‘Joe Settlers’ would end up paying. But here’s the funny thing, I figured Nexicon was going to get a much higher compliance rate than that initially, because they signed up those adult film ‘studios’ as part of the GetAmnesty launch about a year ago. Let’s just call that the shame factor.

However, here is my big BUT: Is such a business model sustainable on a grand enough scale to be viable and lead to investor exuberance over the long term? That is not to say that there is no logical path to evolution of the business, rather to question if there enough track, in reality, to reach the digital destiny you believe Nexicon is heading toward. Of that I am highly skeptical, to the point I would outright say NO! Here is a few points as to why:

1) The odiously negative baggage that the RIAA’s practices have brought to ‘pre-settlement’ self-help efforts. Remember the RIAA refines their evidence collection and then pursues John Doe Subpoenas aimed toward ISPs in order to obtain the actual personal information of the DHCP lessee at the time of infringement. They then make a pre-settlement ‘offer’ (hammer), which if not agreed to by their target Joe, results in a lawsuit (anvil) where they bring out the big guns. Even so, the litigation has not been a cakewalk for the RIAA, and at least from my perspective the whole strategy has been a PR nightmare, with effects that have bled over from the Recording Industry into other rightsholder organizations that want nothing to do with it or at made them at least gun-shy about pursuing more moderate methods of enforcement. If Nexicon were ever able to deliver on their promises and start churning out massive GetAmnesty notices, ultimately the apparatus they represent will have to sue more than a few Joe Downloaders to make an example of them; and there are plenty of well funded ‘wholly irrational’ eff types out there that will come to poor Joe’s defense, which is when things will start to get messy. And despite all of the effort and mess the RIAA has made in its pre-settlement effort, music piracy continues to be rampant on the Internet; and I have seen nothing from Nexicon to indicate that their solution would achieve any better results.

2) Malfeasance and Fraud…or at least the perception of it. Again, if Nexicon were ever able to deliver on their promises and start churning out massive GetAmnesty notices, then I believe two things would happen to immediate dilute the effort: 1) Fraudsters and Phishers would start spamming similar C&D notices, or perhaps go through the effort of actually spoofing the GetAmnesty site to separate several foolish Joes from their money or at least steal their identity or both; and 2) A viral ‘urban legend’ like message would get out warning Joes of such fraudsters and phishers and not to pay no matter how legit a notice or website appears.

3) Rights of use for pirated content. I don’t know if those ‘studios’ that are already signed on to GetAmnesty actually confer rights of use for the pirated content they discover Joes downloading, however more mainstream rightsholders would be loathe to. Not only does granting use rights to pirated content undermine the legal concept of copyright, but rightsholders do not want to be liable for warranting and/or supporting substandard product. The only mass quantity pirated copyrighted material that is reproduced to original quality is text, e.g. news articles. But that content is delivered mainly via the Web, and there is no viable way for a third party to monitor that consumption; and iCopyright and Attributor look to have a competitive edge there.

4) Competition. As mentioned before Nexicon’s (better funded) competitors are already offering a similar solution, they just have not been so public about it. If Nexicon actually makes what even appears to be a viable attempt at GetAmnesty, competitors will naturally respond in kind and come forward more aggressively with competitive offerings in the marketplace; and there is nothing I have seen from Nexicon that gives them a technical edge, actually quite the opposite.

5) Other Viable Solutions. For some time, I have been a fan of targeted packet filtering technologies. This is in the realm of blocking confirmed infringing content in the bowels of last mile network. This will have to include automated content recognition technologies, such as those from Audible Magic, Phillips, Tompson, and Vobile (funded by Disney & AT&T), which Nexicon’s competitors have already integrated in to their systems, and Nexicon itself has no real answer (don’t try to feed me that AHVV crap either…that still requires human intervention). Anyway the real players will have no need for Nexicon, or its competitors for that matter.

The bottom line is Nexicon and it claims of superlative Anti-piracy technical and business prowess, in the grand scheme of things, does not exist in a vacuum, as so many on this board want to believe or pretend. ‘Hackers’ are dime a dime a dozen in this business, and most have the same pathology big talk…no proof. No matter how many wild west, law enforcement clichés about a ‘new sheriff in town’ or ‘outlaw turned lawman’ anyone wants to spout, Nexicon has yet to prove any of their claims and there many of us in the rightsholder community that believe they never will.

I’d be delighted to continue a rational, intellectual, and civil discussion/debate regarding the finer points of Internet anti-piracy issues on this board if you are game. However, let’s eat the elephant over time and try to digest one topic at time over time…and that way we can see which of our perspectives come to fruition vis a vis this company.

Cordially,

ETM

As far as short selling, I was under the impression that the SEC was cracking down on naked short selling of those 700 some firms, thus the mandate 3 days to deliver shares (settle between brokerages). Also, I thought the only way to short pennys and pinks was to naked short sell them via offshore trading accounts. That seems to be what Cornell (NXCNs former (toxic) funding ‘partner’) would do via a proxy and then cover with ‘converted’ shares. I can’t recall the specifics, but I remember that this board was very helpful in explaining things when there was all of the Cornell chatter going on here earlier this year: http://investorshub.advfn.com/boards/board.aspx?board_id=9964