http://gizmodo.com/5958877/secrets-schemes-and-lots-of-guns-inside-john-mcafees-heart-of-darkness?tag=john-mcafee                      strange?                                       

john mcafee

Nov 8, 2012 12:30 PM 162,101 176

Secrets, Schemes, and Lots of Guns: Inside John McAfee’s Heart of Darkness

Jeff Wise

As dawn broke over the interior of Belize on April 30, an elite team of 42 police and soldiers, including members of the country's SWAT team and Special Forces, converged on a compound on the banks of a jungle river. Within, all was quiet. The police called out through a bullhorn that they were there looking for illegal firearms and narcotics, then stormed in, breaking open doors with sledgehammers, handcuffing four security guards, and shooting a guard dog dead. The compound's owner, a 67-year-old white American man, emerged bleary-eyed from his bedroom with a 17-year-old Belizean girl. The police cuffed him and took him away, along with his guards.
Inside, the cops found $20,000 in cash, a lab stocked with chemistry equipment, and a small armory's worth of firearms: seven pump-action shotguns, one single-action shotgun, two 9-mm. pistols, 270 shotgun cartridges, 30 9-mm. pistol rounds, and twenty .38 rounds. Vexingly for the police, all of this was actually legal. The guns were licensed and the lab appeared not to be manufacturing drugs but an herbal antibacterial compound.
After fourteen hours, the police let the man and his employees go, but remained convinced they had missed something. Why else would a wealthy American playboy hole himself up out here, far from the tourist zone on the coast, by a navigable river that happened to connect, twenty miles downstream, with a remote corner of the Mexican border? Why else would he hire, as head of security, a rogue cop who'd once plotted to steal guns from the police and sell them to drug traffickers?
It's not too unusual for eccentric gringos to wind up in Central America and slowly turn stranger—"Rich white men who come to Belize and act strangely are kind of a type," one local journalist told me. But this one's story is more peculiar than most. John McAfee is a founding father of the anti-virus software industry, an inveterate self-promoter who built an improbable web security empire on the principles of trust and reliability, then poured his start-up fortune into a series of sprawling commune-like retreats, presenting himself in the public eye as a paragon of engaged, passionate living: "Success, for me," he has said, "is being able to wake up in the morning and feel like a 12 year old." But down in Belize, McAfee the enlightened Peter Pan seems to have refashioned himself into a kind of final-reel Scarface.
***
ONE DAY THIS past spring, shortly before the police raid, I paid a visit to McAfee. I'd known John personally for five years, having first met him when I traveled to his ranch in rural New Mexico, an adventure-sports reporter who found him to be a genuinely charismatic entrepreneur and thrill-seeker. By now, though, I'd become convinced he was a compulsive liar if not an outright psychopath, albeit one whose life as a thrill-seeking serial entrepreneur was as entertaining for me to follow as it was amusing for him to perform.
By the time I'd arrived in country, I'd heard that his circumstances had soured since we'd last been in touch—that his business relationships had fallen apart and he'd become estranged even from the other caution-to-the-wind expats in Belize. "He is one strange cookie," a British hostel owner told me.
At the time, he was in residence not at his compound in the interior, near the town of Orange Walk, but at his beachfront property on the tourist-friendly island of Ambergris Caye. I pulled up in a golf cart to the rear entrance to his home and found him sitting by a pool overlooking the ocean—trim, tanned, and relaxed in flip-flops, cargo shorts, and frosted hair. As usual, he wore a goatee and a sleeveless T-shirt that showed off the tattoos that ran up his arms and over his back, with sunglasses on Croakies around his neck. He invited me to sit with him in a screened-in porch. Two young Belizean women lounged in the adjacent living room.
It was a pretty palatial setup, but his only companions these days, he told me, were the locals who work for him. Out on the patio, a dark-skinned man appeared and began cleaning the pool. Another man wearing a crisp uniform positioned himself nearby. He carried a holstered pistol awkwardly in front of him. I intuited that the gun was being brandished for my benefit, and I told McAfee that it made me nervous.
"Well, he's a security guard!" McAfee hopped up and called to the women inside. "Hey girls, you've been by my house in Orange Walk, right? How many security guards do I have there?" Five, the girls said. "Did they carry guns?" Yes, the girls said. "Serious guns?" Yeah!
"When I was here before," I said, "no one was carrying a gun."
"Well, that was a long time ago."
"And do you think things have changed since then?"
"The economy is going south," he said. "As the economy goes south, petty theft begins. And then grand theft. And then muggings. And the next thing you know, you murder someone for twenty dollars."
He explained that the country's crime rate was a result of its terrible economic condition. "People in this country starve! And not just a few. Almost everybody has gone through periods of starvation. You won't find a single person who has not at one point lost their hair. This is a sign of advanced malnutrition." Belize is a relatively prosperous part of Central America, not some civil-war-wracked wasteland in the Horn of Africa, but I kept my peace.
He opened the current issue of the Belize Times, holding the paper down with one arm to keep it from blowing away, and showed me a photo of two men. "I am the only white man in Orange Walk, and I was stupid enough to build right next to the highway, where people could see that I have stuff," he said. "So there have been, in the last year alone, eleven attempts to kidnap or kill me."

Before I could ask how, McAfee had gone on to tell me a story about a Belizean gangster named Eddie "Mac-10" McKoy. According to McAfee, Mac-10 wanted to kill him. "I'm an older dude, and somewhat smarter than him," McAfee said. "I tracked him down and forced him to the bargaining table. And we had this big meeting here in San Pedro, and Eddie and I came to an agreement." I took this to mean that he was paying McKoy protection money, but while I was trying to sort it out one of the Belizean women interrupted us, appearing with a tall glass of orange liquid. He sniffed it suspiciously, like he had no idea what it might be. He offered it to me, then after I declined drank it himself.
Some time later, he continued, he learned of another plot on his life. (Why he thought everyone was so hell-bent on killing him, rather than just taking his money, was unclear.) A group of attackers, including two police officers, was planning to force his car off the road one night, he said, take him back to his compound with a gun to his head, and force the guards to open the gate. They would then kill McAfee and the guards and make off with the $100,000 cash he was rumored to keep at his property. Fortunately, McAfee said, McKoy intervened.
McAfee was proudest of the way he'd responded to his would-be killers: He hired them. "Everyone who has tried to rob me, kill me, works for me now," he declared. This was not just good hacker logic, he explained, but a kind of public service. "None of these people are responsible, because they can't work. At some point, you've got to stop living for yourself. We as Americans have ripped off the world. We get to throw food away. It's insane."
He jumped up and called to the women inside: "Have you ever thrown food away?" Getting no answer, he continued: "The idea is so alien you don't even comprehend it, right?"
He remained standing. We'd been talking for an hour, and I sensed the interview was over. I thanked McAfee for his hospitality, and asked if I could reciprocate by buying him dinner. He looked at me incredulously. "Haven't you been listening to me? I can't leave my home after dark."
***
IN THE LATE EIGHTIES, as computers were starting to become common in American homes, fears began to circulate of malicious rogue programs that could spread from machine to machine. Where many saw an emerging hazard, McAfee recognized opportunity. A software engineer working for Lockheed, he obtained a copy of an early virus, the so-called "Pakistani Brain," and hired coders to write a program that neutralized it. It was a prescient move, but what he did next was truly inspired: He let everyone download the McAfee security software for free. Soon he had millions of users and was charging corporate clients a licensing fee. By his third year, he was pulling in millions in profit.
The anti-virus program wasn't McAfee's first entrepreneurial venture. As a young man, he'd traveled through Mexico, sleeping in a van, buying stones and silver, and making jewelry to sell to tourists. Later, during the AIDS panic in San Francisco, he sold identity cards certifying bearers as HIV-free. His freewheeling approach carried over to his Silicon Valley operation. Employees practiced sword-fighting and conducted Wiccan rituals at lunchtime. One long-running office game awarded employees points for having sex in different spots around the office. McAfee himself was an alcoholic and heavy drug user. (After a 1993 heart attack, at the age of 47, he became an aggressive teetotaler.)
In early 1992, he went on national TV and declared that as many as five million computers could soon be hijacked by a particularly dangerous virus called Michelangelo. McAfee sales skyrocketed, but the date of the supposed onslaught came and went without incident. "It was the biggest nonevent since Geraldo broke into Al Capone's tomb," complained ZDNet. Forced from his management role, McAfee cashed out his stake in the company, earning $100 million.
Cast adrift, McAfee gave himself over to the life of a wealthy adventure seeker. He raced ATVs (crashing a dozen or so) and made open-ocean crossings by Jet Ski (often they sunk en route). He poured millions into a 280-acre yoga retreat in the mountains above Woodland, Colorado, where every Sunday morning he would hold complimentary classes. "Everything was free," recalls a former student. "You would think that this guy was amazingly generous and kind, but he was getting something out of it. He was interested in being the center of attention. He was surrounded by people around him who didn't have any money and were depending on him, and he could control them." Among the entourage was a teenage employee named Jennifer Irwin, whom McAfee began dating.
Growing bored with ashram life, McAfee invented a new pastime called "aerotrekking," which involved flying tiny aircraft very low over remote stretches of desert. Experienced pilots called the practice inherently dangerous, but McAfee found it exhilarating. He brought a cadre of followers, including Irwin, with him down to Rodeo, New Mexico, where he bought a ranch with an airstrip and spent millions adding lavish amenities—a cinema, a general store, a fleet of vintage cars. He started calling his entourage the Sky Gypsies. McAfee took pains not to portray himself their leader, but it was clear that he was the one who paid the bills and called the shots. When he talked, no one interrupted.
This is where I first met McAfee, as a reporter dispatched to write about his ambitions to turn aerotrekking into a new national pastime. He put me up in a bedroom in his ranch house, and we awoke before dawn to walk to an aircraft hangar filled with small planes. "People are afraid of their own lives," he said in a cough-syrup baritone. "Shouldn't your goal be to have a meaningful life? Unknown, mysterious, thrilling?"
Some of his efforts to support his new sport seemed less than kosher. To give aerotrekking an illusion of momentum, he set up a network of fake websites purportedly from aerotrekking clubs scattered around the country. And at the end of my visit, McAfee told me, proudly, of his scheme to distract nearby residents, who had become irritated by the aerotrekking and begun to organize against the company. One of the Sky Gypsies had snuck into the local post office after hours and posted a flyer announcing a national paintball convention coming to town. The flyer promised that hundreds of trigger-happy shooters in camouflage would soon descend en masse and storm through the wilderness. To bolster the hoax, McAfee had set up a fake website promoting the event. The homebrew psy-ops campaign went off without a hitch. By the next day, the town was a beehive of angry protesters, and the aerotrekking issue was forgotten.

In retrospect, it's startling that McAfee was still so committed to aerotrekking. The year before, his own nephew had been killed in a crash, along with the passenger that he had been carrying. The passenger's family hired a lawyer and filed a $5 million lawsuit. McAfee started telling reporters that the financial crisis had all but wiped him out, slashing his net worth to $4 million. (Both the New York Times and CNN reported the claim, which he later characterized to me as "not very accurate at all.") He unloaded all his real estate at fire-sale prices and moved to Belize, having been advised by his lawyers that "a judgment in the States is not valid" there. He obtained residency far more quickly than the one-year minimum waiting time mandated by law. "This is a Third World country," he told me later, "so I had to bribe a whole bunch of folks."
Accompanied by a gaggle of hangers-on (including Irwin, by then 28), McAfee settled into a beachside compound on Ambergris Caye. With characteristic gusto he launched a slew of enterprises, including a coffee shop and a high-speed ferry service. Then he met an attractive 31-year-old named Allison Adonizio, a vacationing Harvard biologist. She told him she was working in a new field of microbiology called "anti-quorum sensing"—instead of killing infectious bacteria, she said, certain chemicals can disrupt and neutralize them. She'd already identified one rain-forest plant that was rich in such compounds and believed there must be many more. They could solve the burgeoning global problem of antibiotic resistance, she said. McAfee offered to build her a lab in Belize where she could work with native plants. She flew home, quit her job, and moved down to the jungle.
McAfee's Next Big Thing was under way. He bought land along the New River, deep in the interior of the country, where he Adonizio would grow the herbs. He also acquired another parcel a few miles downriver, near the town of Orange Walk, where he started building a processing facility. He announced that Adonizio had identified six promising new herbs and invited me down to take a look. This, he said, was the reason he'd come to Belize in the first place: to rid humanity of disease and at the same time to lift Belizeans up from poverty. "I'm 65 years old," he said. "It's time to think about what kind of legacy I'm going to leave behind."
In early 2010, I took a trip to Belize, and once again McAfee welcomed me warmly into his home and treated me as a friend. Strolling around the weed-choked parcel he was cultivating, though, I began to question his claims. The herb, he said, was too fragile to be planted the conventional way, and had to be allowed to grow naturally. But if the plant was too delicate for agriculture, how could he be so sure it would thrive in sufficient quantity to feed his production facility? When I pressed him about it, he suggested that the far-fetchedness of the plan was itself evidence of its legitimacy: "I must either be a fool," he said, "or I feel extremely secure that I will be shipping goods."
Midway through my visit the story grew odder still. Adonizio and McAfee told me that, for all the world-changing potential they saw in their anti-quorum sensing project, they'd decided to put it on hold. Instead, they were concentrating on developing and marketing another jungle-herb compound Adonizio had discovered, one that they said boosted female libido.

Back home, I wrote a story that questioned McAfee's good works, and raised doubts about his motives for being in Belize. After it was published online, McAfee launched a vigorous defense in the comments section, claiming that he'd never shelved the anti-quorum sensing project but had lied to me during my visit because he'd sensed that I'd intended to write a hostile article all along. "I am a practical joker, and I joke no differently with the press than I do with my next-door neighbor," he wrote. "I'm not saying it's a particularly adult way of behaving, or business like, or not offensive to some. But it's me."
At first Adonizio supported McAfee's claims in the comments section. "I felt a bit uncomfortable (at first) about playing our joke on Jeff," she wrote. "However, after reading the piece, I understand why John had wanted us to keep things under wraps. Jeff was there on day one with the intent to write something sensational. John kept saying: ‘an aggressor with no humor deserves no leniency.'"
Then, four months later, she contacted me by email. "Remember me?" she wrote. "I'll just be blunt. I was naive about who and what Mr. McAfee really is."
She explained that before my arrival she had not, as they'd previously claimed, found any new antibiotic compounds. She had only the one that she'd been working on at Harvard, and it was already under patent, and so could not be developed for sale. "We really didn't have anything when you came down," Adonizio said. McAfee decided the libido drug, which originally had been mooted as a joke, could serve as a plausible alternative in the meantime. She played along with his hoax, she said, only at McAfee's insistence.
Amid the article's fallout, their relationship had become tense. He showed her websites devoted to various kinds of outré kink, and became increasingly open, when his girlfriend Irwin was out of town, about bringing prostitutes off the street and into his bedroom. (One day Adonizio came upon "literally a garbage bag full of Viagra.") After she'd broken up with a boyfriend on the mainland, "he kept trying to set me up with these weird friends that were into polyamory and crazy kinky stuff," she said. "He tried to convince me that love doesn't exist, so I might as well just give in and sleep with all these crazy circus folk." He liked to hint that he had connections to dangerous criminals, implying that he could have her ex-boyfriend killed: "I have someone who can take care of that," he told her.
When at last she decided she'd had enough and asked McAfee to buy out her share of the company, he exploded, she says, screaming and lunging at her. She fled and locked herself in the lab. McAfee pounded on the door and shouted obscenities. Afraid for her safety, Adonizio called a friend to escort her off the property. The next day, she boarded a flight back home to Pennsylvania.
Even at thousands of miles away, she said, she felt frightened that he might do her harm. "As soon as I started questioning his motives, he turned on me and became a horrible, horrible person, controlling, manipulative and dangerous," she told me. "I'm thankful that I got out with my life."
In the wake of Adonizio's departure, McAfee grew more isolated. An investor who'd wanted to back the anti-quorum-sensing venture backed away. A joint-venture agreement with Dr. Louis Zabaneh, one of the country's most powerful men, fell apart. The hangers-on drifted away. After 14 years, Irwin left him. McAfee spent most of his time in Orange Walk, where he'd expanded the rickety herb-processing facility into a small walled fortress. "what i experienced out @ his property made me wanna get the fuck outta dodge," an associate e-mailed Adonizio, "creepy, and a bit scary. and i don't scare easily … i have a feeling he's in some deep shit down there."
***
I DIDN'T MAKE IT BACK to Orange Walk during my visit in April, but I was tense throughout our meeting in Ambergis Caye, even though McAfee insisted he bore me no hard feelings and had in fact liked the last article: "I thought it was well written," he said.
When I asked him about why Adonizio was unhappy about her time with him in Belize, he seemed exasperated. "Allison is an unhappy person who is unhappy to the core," he told me. "Whatever's on the table, she will turn it this way, that way, and make something out of it, to be the cause of her unhappiness."
And what about his lack of friends in the expat community? "I don't need friends," he said. "What does friendship actually mean? It's a commitment to an idea that just doesn't interest me."
A moment later he paused and said, "I'm going to tell you the truth, for once." Then he seemed to get distracted, and made a phone call. The next day, he sent an e-mail inviting me to come back for another visit: He'd forgotten that he'd wanted to tell me that very important, he wrote, which he was only willing to impart in person. I had an eerie, inexplicable feeling that the thing he wanted to tell me was that he'd ordered my murder. I waited to call him until I was back in the States, and when he heard that I was already home, his tone was brusque: "I'm really not interested in chatting over the phone about things that are dear to my heart," he said.
Two weeks later, the police raided his compound. In the process they validated what I had taken to be some of McAfee's most far-fetched assertions. Superintendent Marco Vidal confirmed to me that, indeed, several members of his security force were known criminals, and that McKoy was a gang leader of some note. "McKoy is a member of one of the factions of the Bloods Gang," Vidal wrote me in an e-mail. "We know of a meeting between McKoy and McAfee at his café in San Pedro Town, Ambergris Caye in which McAfee was flanked by the two leaders of the most notorious and violent gang operating in Belize City. At that meeting McAfee also took along a Police Officer. We believe that his intention was to make it categorically clear to McKoy that he controlled both the legitimate and the illegitimate armed forces."
In the wake of his arrest, McAfee was nervous enough about the police investigation that he sent two employees to solicit an officer for inside information. Both were arrested for attempted bribery. McAfee then sent another Belizean on the same mission. He, too, was arrested.
McAfee's world seemed to be imploding. In late May, Gizmodo posted the text of a message that McAfee had put up on a private discussion board. In it, he described being on the lam from the police. "I am in a one room house in an uninteresting location," he wrote. "I have not been outdoors for 5 days." He added that he was posting from an iPad but didn't have a charger, and the battery only had a 21 percent charge remaining. He described his run-in with the police, then signed off with this: "I'm down to 17% charge. I will leave you."
But just a few days later, residents spotted McAfee driving a golf cart around Ambergris Caye with a new 17-year-old girlfriend, apparently in good cheer. I dropped him a line, and his reply was upbeat. "Things are getting back to normal," he wrote. "I'm just waiting for a few properties to sell then I'm off to the South Pacific. No doubt to new adventures…"
In the weeks that followed, he didn't decamp for the South Seas. Instead, he took to walking around San Pedro wearing a pistol in a holster, in violation of Belizean gun laws. Then, in late July, McAfee appeared in an article in Westword, an alternative weekly based in Denver, describing his latest business venture—According to McAfee, it is called "observational yoga," and involves sitting in comfortable chairs and watching other people perform asanas. Thanks to its numerous health benefits, McAfee said, "it's very popular" in Belize and he planned to franchise the concept around the country.
"It would be very difficult to sell this concept in America," he admitted. "But here I can make any kind of outrageous claim that I choose."
UPDATE: John McAfee is now the primary suspect in a murder investigation involving his neighbor in Belize.
Jeff Wise is a science journalist, writer of the "I'll Try Anything" column for Popular Mechanics, and the author of Extreme Fear: The Science of Your Mind in Danger. For more, visit JeffWise.net.

http://arstechnica.com/tech-policy/2012/11/the-russian-underground-economy-has-democratized-cybercrime/                  

The Russian underground economy has democratized cybercrime

You can buy a botnet for $700, or rent one for just $2 per hour.

by Ian Steadman, wired.co.uk - Nov 4 2012, 3:00pm EST

Javier

If you want to buy a botnet, it'll cost you somewhere in the region of $700. If you just want to hire someone else's for an hour, though, it can cost as little as $2—that's long enough to take down, say, a call center, if that's what you were in the mood for. Maybe you'd like to spy on an ex—for $350 you can purchase a trojan that lets you see all their incoming and outgoing texts. Or maybe you're just in the market for some good, old-fashioned spamming—it'll only cost you $10 for a million e-mails. That's the hourly minimum wage in the UK.
This is the current state of Russia's underground market in cybercrime—a vibrant community of ne'er-do-wells offering every conceivable kind of method for compromising computer security. It's been profiled in security firm Trend Micro's report, Russian Underground 101, and its findings are as fascinating as they are alarming. It's an insight into the workings of an entirely hidden economy, but also one that's pretty scary. Some of these things are really, really cheap.
Rik Ferguson, Trend Micro's director of security research and communications, explains to Wired.co.uk that Russia's cybercrime market is "very much a well-established market." He says: "It's very mature. It's been in place for quite some time. There are people offering niche services, and every niche is catered for." Russia is one of the major centers of cybercrime, alongside other nations like China and Brazil ("the spiritual home of banking malware").
Russian Underground 101 details the range of products on offer in this established market—Ferguson says that they can be for targeting anyone "from consumers to small businesses." He points to ZeuS, a hugely popular trojan that's been around for at least six years. It creates botnets that remotely store personal information gleaned from users' machines, and has been discovered within the networks of large organizations like Bank of America, NASA, and Amazon. In 2011, the source code for ZeuS was released into the wild—now, Ferguson says, "it's become a criminal open source project." Versions of ZeuS sell for between $200 and $500.
Cybercriminal techniques go in and out of fashion like everything else—in that sense, ZeuS is a bit unusual in its longevity. That's in large part because viruses and trojans can be adapted to take advantage of things in the news to make their fake error messages or spam e-mails seem more legitimate. For example, fake sites, and fake ads for antivirus software, aren't as popular as they once were because people are just more computer literate these days. Exploits which take advantage of gaps in browser security to install code hidden in the background of a webpage have also become less common as those holes are patched up—but programs which embed within Web browsers still pose a threat, as the recent hullabaloo over a weakness in Java demonstrates.
Ferguson points to so-called "ransomware" as an example of a more recent trend, where the computer is locked down and the hard drive encrypted. All the user sees on the screen is that tells them that their local law enforcement authority (so, in the UK, often the Metropolitan Police) has detected something like child pornography or pirated software on their PC, and if they want to unlock it they'll have to send money to a certain bank account. No payment, no getting your hard drive back.
Amazingly, if you pay that "fine," then you will actually get your information back, says Ferguson. "But you've labeled yourself as an easy mark, and there's no telling if they haven't left behind a backdoor which will let them come back and try again," he says. Child pornography and pirated software have been in the news a lot over the past few years, for obvious reasons, and that kind of thing directly influences the thinking of hackers and programmers.
Taking the time to adapt these tools to recent trends can be very lucrative. DNSChanger, a popular trojan from 2007 to 2011, would infect a machine and change its DNS settings. When the user went to a webpage with ads on it, that traffic would give affiliate revenue to the scammers. One prominent DNSChanger ring (Rove Digital) was busted in Estonia in 2011—the FBI had been tracking them for six years, and during that time it was estimated that they'd earned around $14 million from this little trick. It also meant that the FBI was left with some critical Web infrastructure on its hands—those infected machines (which included machines at major organizations) could only access the Web through those Rove Digital servers. Months were spent trying to get people to check their computers for infection and ensuring that when those Estonian servers were shut off, it didn't take down, say, a bank.
The most recent trends in cybercrime, though, are very much focused on mobile—particularly Android, Ferguson explains: "We've seen so far 175,000 malicious threats for Android, and we expect that to be a quarter of a million by next year. Those threats come from malicious apps—if you want to stay safe, stick to official channels like Google Play, don't just download from any site. Similarly, there aren't any malicious iOS apps in the wild, on the App Store, but that only applies to iPhones aren't jailbroken—downloading from other places puts your phone at risk."
These threats aren't going away, either. In fact, according to Ferguson, "prices are going down" across the Russian underground: "Let's not pretend that these people aren't taking advantage of technology just like normal businesses—improvements in technology are getting faster, and there are things like cloud services which they also use. The bad guys are using technologies to drive down costs in the same way businesses are."
Ferguson cites the recent case of someone claiming to have bought the personal information of 1.1 million Facebook users for only $5 (£3.19) as further evidence of the growing problem of online information leaking into the hands of these cybercrime communities. Hackers and other cybercriminals make it their job to analyze security measures and find ways around them, because that information is where the value lies.
While hackers and other cyber criminals can save by buying in bulk, the cost to the individual (or the business) that falls victim to one of these techniques is potentially much higher. So, be vigilant, OK?
Here's some of what you can buy on the Russian underground:

• Basic crypter (for inserting rogue code into a benign file): $10-30
• SOCKS bot (to get around firewalls): $100
• Hiring a DDoS attack: $30-70 for a day, $1,200 for a month
• Email spam: $10 per one million e-mails
• Expensive email spam (using a customer database): $50-500 per one million e-mails
• SMS spam: $3-150 per 100-100,000 messages
• Bots for a botnet: $200 for 2,000 bots
• DDoS botnet: $700
• ZeuS source code: $200-$500
• Windows rootkit (for installing malicious drivers): $292
• Hacking a Facebook or Twitter account: $130
• Hacking a Gmail account: $162
• Hacking a corporate mailbox: $500)
• Scans of legitimate passports: $5 each
• Winlocker ransomware: $10-20
• Unintelligent exploit bundle: $25
• Intelligent exploit bundle: $10-3,000
• Traffic: $7-15 per 1,000 visitors for the most valuable traffic (from the US and EU)

This article originally appeared on Wired UK.

Owl

http://www.whale.to/b/owl_s.html            

Owl
Symbols

[The Owl seems to be the dark siders symbol for Lilith.  Athena is frequently depicted with an owl perched on her head.]
This is from The Encyclopedia of Witches and Witchcraft by Rosemary Ellen Guiley:
"The owl is associated with death, sorcery and the dark underside of life. To the ancient Egyptians, the owl represented night, death and cold. The Bible (Leviticus) says the owl is an unclean bird. The ancient Greeks, however, viewed it as the sacred symbol of wisdom, for the owl was the constant companion of Athena, goddess of wisdom.
"The ancient Romans considered the bird a bad omen, presaging death; Caesar's murder was announced by the screeching of owls. Besides death, the hooting of an owl foretells illness, bad weather and the loss of virginity of a village girl. In European and American folklore, charms could counteract the owl: throwing salt in a fire, turning one's pockets inside out or tying knots in a handkerchief.
"The Aztecs equated owls with evil spirits, including one regarded as the enemy of the human race, whose named was 'Rational Owl.' In Africa, owls are feared because they are instruments of sorcerers. To North American Indians, the owl is a bird of ill omen, either the harbinger of death or a messenger from the dead. The Sauk believe that if an owl is seen at night, it will cause facial paralysis. Chippewa medicine men stuff the skin of an owl with magic ingredients and direct it to fly to a victim's house and cause starvation. Folk healers in Peru use owls to combat negative sorcery. In Peruvian myth, the 'owl woman' is associated with shamanistic rituals and magical curing.
"In the Middle Ages, demons in the forms of owls attended witches, accompanying them on their broomstick flights and running errands of evil for them. Magicians and healers used owl feathers as a charm to lull people to sleep.
"In some cultures, the owl has long been respected. In India, eating owl eyeballs is said to give a person night vision. The Kiowa Indians of North America believe medicine men turn into owls at death."
" The owl is a bird credited with more malevolence than any other, even though its reputation for wisdom goes back to our earliest myths. In Greece, the owl (sacred to both Athena and Demeter) was revered as a prescient creature -- yet also feared, for its call or sudden appearance could foretell a death. Lilith, Adam's wife before Eve (banished for her lack of submissiveness) was associated with owls and depicted with wings or taloned feet. In the Middle East, evil spirits took the shape of owls to steal children away -- while in Siberia, tamed owls were kept in the house as protectors of children. In Africa, sorcerers in the shape of owls caused mischief in the night. To the Ainu of Japan, the owl was an unlucky creature -- except for the Eagle Owl, revered as a mediator between humans and the gods. In North America, the symbolism of the owl varied among indigenous tribes. The Pueblo peoples considered them baleful; the Navajo believed them to be the restless, dangerous ghosts of the dead. The Pawnee and Menominee, on the other hand, related to them as protective spirits, and Tohono O'Odham medicine singers used their feathers in healing ceremonies. When we turn to Celtic traditions we find that the owl, though sacred, is an ill omen, prophesying death, illness or the loss of a woman's honor. In the Fourth Branch of The Mabinogion, the magician Gwydion takes revenge upon Blodeuwedd (the girl he made out of flowers, who married and then betrayed his son) by turning her into an owl and setting her loose into the world."
exerpt from the article "one is for sorrow, two is for joy" by Terri Windling
it is taken from an excellent reading room: http://www.endicott-studio.com/rdrm/
This is from A Dictionary of Symbols by J.E. Cirlot:
"In the Egyptian system of hieroglyphs, the owl symbolizes death, night, cold and passivity. It also pertains to the realm of the dead sun, that is, of the sun which has set below the horizon and which is crossing the lake or sea of darkness."

My Little Pony

SIS - the Slovak Information Service.


Athena  Athena wears the ancient form of the Gorgon head on her aegis, as the huge serpent who guards the golden fleece regurgitates Jason; cup by Douris, Classical Greece, early fifth century BC – Vatican Museum

Lilith

M Egyptian hieroglyph

Archaeology Institute of America

2002 Greek Euro coin

Incubus

Black Eyed Peas

Drake

CGIAR (Consultative Group on International Agricultural Research - affiliated with the World Bank)

Frost Bank in Austin, Texas.

Currency symbolism

At this point, I should digress and go back and say that as we were walking into the Grove we actually came within about ten yards of the 40 foot stone owl that sits to the north side of the small lake. We were only about seven yards away from the black altar that sits at the base of the owl. So, already at this point we had proven that rumor true: yes there is a giant stone owl – yes there is an altar.....So, I was there witnessing something right out of the medieval painter Hieronymus Bosch’s Visions of Hell: burning metal crosses, priests in red and black robes with the high priest in a silver robe with a red cape, a burning body screaming in pain, a giant stone great-horned owl, world leaders, bankers, media and the head of academia engaged in these activities. It was total insanity. --Alex Jones http://illuminati-news.com/occult-activities-at-bohemian-grove.htm
What's Inside Your Wallet?

landscaping surrounding the US Capitol.

Post-Election Puzzler/ Will Farrell & His Owl ???

http://lawprofessors.typepad.com/contractsprof_blog/           

Post-Election Puzzler

 Will Farrell posted the following video just days before the election:

Is this an offer?  If so, how many millions of voters have taken him up on it?  It seems seriously intended, and when I first viewed it, I felt like he was addressing me directly.  It could be a joke, I suppose.  It's hard to tell.  Will Farrell is an actor and his performance here (if that's what it is) is full of nuance.
[JT]

 Hey doesn't He live in Laurel Canyon                  dot's , dot's , dot's   ;)

http://www.techdirt.com/articles/20121111/18355921009/if-you-eat-something-say-something-dhs-sounds-alarm-terrorist-implications-food-trucks.shtml     

If You Eat Something, Say Something: DHS Sounds The Alarm On The 'Terrorist Implications' Of Food Trucks

from the basically-any-form-of-transportation-is-a-threat----start-walking,-citizen dept

It's interesting (or maybe just kind of sad) that various government agencies see possible terrorists everywhere but rarely, if ever, catch one. Despite the large number of personnel being thrown at the problem (along with lots of money), actual terrorists seem to be in limited supply.

But these agencies haven't let their lack of success temper their vision of a nation under constant imminent attack. Public Intelligence recently posted a Powerpoint presentation from the NYC fire department (FDNY) discussing the unique safety issues mobile food trucks present. Along with some actual concerns (many food trucks use propane and/or gasoline-powered generators to cook; some *gasp* aren't properly licensed food vendors), the presenter decided to toss in some DHS speculation on yet another way terrorists might be killing us in the near future.

That's right. Instead of serving up a quick hot meal, these food trucks will be serving up death, and lots of it! Under the heading "Terrorist Implications," the FDNY lists the exact reasons we should be concerned, most of which begin with the word "high."
While any terrorist organization worth its twisted ideology would do well to nail down as much of this list as possible, so would any vendor who wished to stay in business. The question is: how do you differentiate between the two? One answer might be to sort through the data collected by all the food truck terrorism incidents up to this point. (American's fusion centers would like to remind you that zero incidents only means we're due, rather than indicating a terrorist-free trend.)

But there's more! The next slide continues to lay out the "Terrorism Implications," this time reminding first responders that food trucks have large quantities of deadly liquids (propane, gasoline) and are "easily concealed" (which I assume refers to the potential explosives, rather than the truck itself... but you can never be TOO sure). Also, food bombers will usually be in the proximity of "crowds" (gasp!) and "sidewalks" (wha...?). Dammit, now the terrorists have gone too far! It's one thing to blow up our crowds. It's quite another to ruthlessly attack our infrastructure, the very thing that keeps our precious crowds from milling about on the lawn and/or street!

But (dear lord) there's even more! According to the DHS, food carts make "excellent surveillance platforms" because of all the "high" stuff they can park next to for long periods of time. (Has anyone considered knocking on the door and having a quick look around, especially during business hours?) And I'm pretty sure they're not allowed to just park wherever they want for indefinite periods of time, at least not in New York City. There are 8 million laws in the Naked City, none of which are accommodating to the small businessman/woman "stealing" customers away from established restaurants paying exorbitant amounts per square foot every month.

But beyond that, why go through the expense of constructing a food truck when you can just rent a U-Haul, fill it full of explosives and ram it into the nearest high-rise/government building? Unless the DHS figures these terrorists are in it for the long haul, suckering people in with weeks or months of delicious ethnic food before parking across the nearest heavily-trafficked sidewalk and blowing everything up in an explosion of propane and proprietary blends of herbs and spices. Also, does it not occur to them that if you want to keep your terrorist activities hidden, it's probably not the smartest thing to set yourself up as a vehicle that people line up to look inside?

The DHS' unfocused "terrorvision" continues to see a threat in every situation and the department seems to be busying itself crafting a response to every conceivable "threat." The problem with this "method" is that it turns any slight variation of "everyday activity" into something suspicious. The number of "terrorist implications" grows exponentially while the number of solutions remains the same. This Powerpoint is another example of good, old-fashioned fear mongering, utilizing public servants to spread the message.

At no point does this presentation offer anything resembling preemptive action or deterrents. All it does is paint a picture of food trucks as potential threats before concluding with, of all things, common sense safety tips aimed at dealing with food truck fires. The final slide paints the picture in the clearest terms, letting the viewer know exactly whose agenda is being pushed:

Prepared by Lt. Timothy Carroll
FDNY Center for Terrorism and Disaster Preparedness

The priorities are all screwed up. Terrorism is the first concern. Everything else is secondary. Considering this is an FDNY presentation, you'd think that "Disaster Preparedness" would be the priority. After all, they are the first response. But instead that honor goes to the vague menace of terrorism, a constant battle with no winners and, for the most part, no combatants. Every day without a terrorist act is a "win" that perpetuates the "need" for more counter-terrorist "efforts."

All that being said, the easiest way to tell that this "Center for Terrorism and Disaster Preparedness" is all bluster and FUD is to take a look at its logo. Yep: MF EAGLE.

Japan Criminalizes Unauthorized Downloads, Making DVD Backups -- And Maybe Watching YouTube

from the hang-'em-high dept

There's a fairly constant pattern in the world of copyright enforcement. The media companies claim that piracy is "destroying" their industries, although they never offer any independent evidence to back this up. They "demand" that governments "do something" -- by which they mean introduce harsher penalties for unauthorized downloads. Because of the hypnotic effect that musicians and artists seem to have on politicians, governments happily oblige, even though there is no evidence that such laws will help artists. After the laws come in to force, online sharing may dip for a while, but soon returns to previous levels, so the media companies start whining again, and demand yet tougher penalties.
Of course, if any of those participants in this never-ending cycle stood back and looked at what was happening, they would see that the very fact the copyright companies keep coming back for more and harsher copyright laws offers clear proof the current approach just isn't working. Instead, they seem to believe that even though it has failed to work every time in the past, if the penalties could just be made sufficiently cruel and painful, suddenly everything would be OK.
Unfortunately, it looks like it's Japan's turn to undertake this exercise in futility:

Japan’s legislature has approved a bill revising the nation’s Copyright Law to add criminal penalties for downloading copyrighted material or backing up content from a DVD. The penalties will come into effect in October.

The Upper House of the Japanese Diet approved the bill by a vote of 221-12, less than a week after the measure cleared the lower house with almost no opposition. Violators risk up to two years in prison or fines up to two million yen (about $25,000).

An earlier article by the same author, Daniel Feit, on Wired, spelt out some of the insanely restrictive rules that will soon apply:

it would be illegal in Japan to make any copies of any movies or games, illegal to upload the data, illegal to download the data, illegal to sell copies of the data and well as illegal to sell a device that enables playback of the copied data. All of these actions would carry stiff penalties.

The new law's effects might be even more ridiculous:

Japanese attorney Toshimitsu Dan told IT Media that even watching a YouTube video could be grounds for arrest "if the viewer is aware that downloading [such material] is illegal."

Since people will inevitably carry on doing all these things, Japan's legislation will simply crimininalize an entire generation. That means that some of them will probably end up in prison for completely trivial infractions; it will also lead millions more people to question their respect for laws that are so at odds with what they regard as normal and fair. Perhaps dimly aware that tough sanctions won't work – or maybe just greedy – some music groups want Japanese ISPs to install a system that they claim can spot unauthorized uploads even before they reach the Internet. As TorrentFreak explains:

Once a match is found, rightholders want ISPs to automatically block the allegedly infringing content. But according to one report, there may even be requests to send out warning letters to uploaders. If implemented this would amount to the most invasive "3 strikes" style regime anywhere in the world.

To add insult to injury, ISPs are expected to pay for allowing the music industry to spy on their users 24 hours a day. Since that cost will inevitably be passed on, that means that customers will be forced to pay for the pleasure of undermining their own privacy, having their ability to upload legitimate material curtailed, and receiving unwarranted threatening letters. Sounds like the Japanese recording industry has been watching Terry Gilliam's "Brazil" too much. This latest call for total surveillance on top of probably the harshest laws passed yet against unauthorized downloads raises an important question: when the current measures fail -- as they surely will -- what will the copyright industries demand next in a further forlorn attempt to deter file sharing? Life imprisonment? Amputation of the mousing fingers?

http://www.techdirt.com/articles/20121109/13423720996/draconian-downloading-law-japan-goes-into-effect-music-sales-drop.shtml             

Draconian Downloading Law In Japan Goes Into Effect... Music Sales Drop

from the what-a-non-surprise dept

For years, we've pointed out that some in the music industry get so obsessed with "stopping piracy" that they miss the fact that their main job should be to increase revenue. They make the huge mistake of assuming that the two things are the same -- and that "stopping piracy" automatically leads to "increased revenue." Yet, almost every time that issue is explored empirically (over time), it doesn't seem to hold up. The latest example was sent in by Techdirt reader edinjapan, and it concerns the new draconian anti-piracy laws that recently went into effect there. If you believed the basic theory behind this law, this would mean that greater enforcement by police would mean less piracy... and a massive influx in revenue.

Except, the reality is that consumers are spending less on music than they were before the bill became law. The article actually posits that the government has made some people so fearful of being arrested that they won't do any downloading from legitimate sources any more -- just in case it's tainted. So even if they can cut out piracy (doubtful) there's little evidence to suggest much increase in commerce as a result.

http://www.japantoday.com/category/national/view/a-month-after-download-law-consumers-spending-less-on-music-survey?utm_campaign=jt_newsletter&utm_medium=email&utm_source=jt_newsletter_2012-11-07_AM    

A month after download law, consumers spending less on music: survey

By Philip Kendall

National Nov. 07, 2012 - 06:43AM JST ( 59 )

TOKYO —

On Oct 1, knowingly downloading copyrighted music and video in Japan became punishable by up to two years in prison and a 2 million yen penalty.
The law was passed in June after the Japanese music industry, the second largest in the world after the U.S., reported continued financial losses, with analysts suggesting that just one in 10 downloads were legal.
Since the law came into effect, there have certainly been some changes, and many Internet users have become reluctant to click that download button for fear of receiving a hefty fine, meaning that the law has been a success in a way.
According to a recent statistical survey, however, since the law was passed, sales of music in Japan have continued to fall and consumers are actually showing less interest in music than ever before.
Livedoor News reported that the results of a consumer survey show that more than 68% of respondents spend “0 yen” on music in an average month; the highest the figure has been in almost 10 years.
The multiple choice survey asks consumers, “How much do you spend on music in an average month?” with answers ranging from “0-500 yen” to “over 10,000 yen.” “0 yen” has risen significantly since 2004, while numbers of every other response have decreased each time since 2007.
Is this the effect of the new download restrictions? Has Japan’s new draconian law actually had a negative effect on music sales? Or has the Japanese government simply noticed that music sales continue to fall and mistakenly pinpointed illegal downloads as the cause?
The Internet masses had plenty to say about the results of the survey and the Japanese music industry in general:
—“Bring the average price of a CD down and I might buy one…”
—“I rarely actively listen to music now anyway - it’s just on in the background. For the price stores charge I wouldn’t buy an actual CD.”
—“In terms of cost performance, CD albums are pretty poor.”
—“This is how the Japanese music industry will die…”
—“Since they got so strict about downloads I actually don’t feel like buying new music.”
—“Listening via YouTube’s enough for me.”
—“I used to discover a lot of new bands by downloading their albums without worrying about whether I’d like them or not. Now I can’t do that, so I hardly buy CDs.”
—“I usually buy about 100 songs a year, but more often than not I get them from foreign stores. Music here is too expensive.”
—“What idiot would pay those prices for a new CD!? I buy my music used now…”
—“I don’t want CDs, per-se; I want music. If more tracks were available to download I’d buy more.”
—“Why pay? I can sing for free…”
It’s interesting to see that, although one or two people suggest that the tough new law has put them off buying new music, the vast majority of responses suggest that – just maybe – the reason music sales have fallen so much recently is due to a general lack of interest and that new albums are simply not particularly good value for money.
It would seem that the public’s perception of the music industry has changed, and that fewer and fewer people are willing to invest their hard-earned cash in music that they simply use to fill the silence rather than sit and listen to for pleasure.
Perhaps the enormous rise in illegal downloads is a sign that people are interested enough in music to take it for free, but not so in love with what’s on offer that they’d willingly pay the asking price. There seems to be a general vibe on Japanese online message boards that, with the option to download removed, few people are interested in today’s music enough to pay, and so would rather not bother entirely.
But, as one Japanese Internet user states: “Well, they’ve implemented this law now, so they’d look pretty silly removing it. Well done, guys!”
Source: 痛いニュース

http://www.guardian.co.uk/world/2001/aug/29/media.filmnews              

Top Gun versus Sergeant Bilko? No contest, says the Pentagon

Scripts can often be the first casualty in Hollywood's theatre of war

MediaGuardian.co.uk

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• Duncan Campbell in Los Angeles
• The Guardian, Wednesday 29 August 2001 06.49 EDT

Hollywood film-makers have frequently changed plot lines, altered history and amended scripts at the request of the Pentagon, according to recently released military documents. Producers and directors have often agreed to changes in order to gain access to expensive military hardware or to be able to film on military property. On many occasions films have been changed so that the US armed forces are shown in a more heroic fashion. Film companies agree to the changes because doing so saves them millions in production costs. If film-makers do not agree to alterations, assistance is withheld.
Among films that have been given approval and help by the Pentagon are Armageddon, Air Force One, The Jackal, Pearl Harbour and Top Gun. Those that have failed the test include Forrest Gump, Mars Attacks!, The Thin Red Line, Apocalypse Now, Sgt Bilko, Platoon and Independence Day.
One internal army memo about Forrest Gump, which starred Tom Hanks, suggested that "the generalised impression that the army of the 1960s was staffed by the guileless or by soldiers of limited intelligance" was unacceptable. "This impression is neither accurate nor beneficial to the army."
Of the scene when Tom Hanks shows a scar on his buttock to President Johnson, a navy memo states: "The 'mooning' of a president by a uniformed solider is not acceptable cinematic licence."
The documents indicate that the Pentagon sees the film business as an important part of public relations. "Military depictions have become more of a 'commercial' for us," said one memo quoted in an investigation by David Robb in the current issue of the media magazine Brill's Content.
In GI Jane, the 1997 film starring Demi Moore, one scene in a foxhole originally showed a male serviceman having difficulty relieving himself in her presence. "While addressing issues related to the presence of women in front-line ground combat, the urination scene in the foxhole carries no benefit to the US navy," wrote US navy commander Gary Shrout to the director, Ridley Scott. Scott wrote back that "this scene has been eliminated" and agreed to other changes but the end result was still unacceptable.
In Hearts in Atlantis, due out later this year and starring Anthony Hopkins, there is no military plot but the film-makers wanted to use land belonging to the army. The Pentagon agreed and suggested that the film could include a shot of an army recruiting booth in a carnival scene.
When Top Gun, starring Tom Cruise, opened in the US, navy recruiting booths were set up in cinemas. Cooperation had been given after the character played by Kelly McGillis was changed from an enlisted woman to someone outside the service, as relationships between officers and enlisted personnel are forbidden in the navy.
The film companies are often shown in the documents to be more than anxious to help. "We firmly believe that with the support of the US military, Armageddon will be the biggest film of 1998, while illustrating the expertise, leadership and heroism of the US military," wrote Disney executive Philip Nemy to the Pentagon.
The Jackal, starring Bruce Willis and Richard Gere, received help after the marines were given a better role. Major Nancy LaLuntas had objected that the helicopter pilots had no "integral part in the action - they are effectively taxi drivers."
A letter from film's director, Michael Caton-Jones, stated: "I am certain that we can address the points that you raised ... and effect the appropriate changes in the screenplay that you requested."
In GoldenEye, the 1995 James Bond film, the original script had a US Navy admiral betraying state secrets, but this was changed to make the traitor a member of the French navy - after which cooperation was forthcoming.
The makers of Independence Day agreed to turn the secretary of defence, under whom military installations fell to alien invaders, into the White House chief of staff, but still did not win approval.
The writer and producer, Dean Devlin, had told the Pentagon: "If this doesn't make every boy in the country want to fly a fighter jet, I'll eat this script." But a Department of Defence memo concluded: "The military appears impotent and/or inept; all advances in stopping aliens are the result of actions by civilians."
Mars Attacks! and the comedy Sgt Bilko also failed the test.
The financial incentives for film companies are great because military hardware is enormously expensive and difficult to hire, with the Israeli air force being one of the few services that rents out its equipment.
Philip Strub, special assistant for the entertainment media at the Pentagon, said yesterday that the military was often asked to help when a film was still in development. He said that after changes had been suggested it was a matter of trust that the film-makers would honour the changes and he was not aware of any injunction ever being taken to stop a film being shown: "It would be anathema to us (to interfere with) the artists' rights and first amendment rights ... We regard it as a success when we work with a film-maker on a project and a lack of success when we don't."
Some films the Pentagon had been unable to assist, he said. Saving Private Ryan was shot in Europe where the US had no second world war equipment. Some projects, like the anti-war Born on the Fourth of July, never asked for help, he said. He added he anticipated that growth of computer-generated imagery meant that requests for help would decrease.
Cheryl Rhoden of the Writers Guild of America West, said yesterday that she was aware of the issue. "Any time that any outside entity attempts to effect changes is of concern to writers," she added.

Films which obtained cooperation:

• Air Force One
• The Caine Mutiny
• A Few Good Men
• From Here to Eternity
• Armageddon
• The Longest Day
• The Hunt for Red October
• Pearl Harbour
• Patton
• Patriot Games
• Top Gun
• Windtalkers (to be released)
• The Jackal
• Hamburger Hill
• Hearts in Atlantis (to be released)
• The Longest Day
• GoldenEye
• The American President
• Behind Enemy LInes (to be released)
• Apollo 13
• Tomorrow Never Dies
• Tora! Tora! Tora!
• A Time to Kill

Films denied cooperation:

• Apocalypse Now
• Catch-22
• Broken Arrow
• Die Hard 2
• Dr Strangelove
• Forrest Gump
• Full Metal Jacket
• GI Jane
• Independence Day
• The Last Detail
• Lone Star
• Mars Attacks!
• Memphis Belle
• An Officer and a Gentleman
• Platoon
• Sgt Bilko
• The Thin Red Line

http://www.techdirt.com/blog/casestudies/articles/20111214/00162117076/louis-cks-experiment-brings-110k-sales-550k-gross-over-200k-net-four-days.shtml           

Louis CK's 'Experiment' Brings In 110k Sales, $550k Gross, Over $200k Net... In Four Days

from the nice-work-if-you-can-get-it dept

So that was fast. Yesterday we wrote about comedian Louis CK's experiment in direct to fan sales, offering up his latest comedy special for a simple, convenient $5 download with no DRM (and also being human and polite in talking about it). All we've been hearing since the sale went up on Saturday was about how everyone's buying it, and it appears plenty of people were curious how it was going. Louis has put up a statement explaining all of the results in pretty great detail. However, before we get to the numbers, he makes a really good point at the beginning. He points out that originally he had no plan to share the results, and that it's natural to try to hoard such information. But somewhere along the way, he realized something really important: people aren't just interested in buying his work, they're buying because they're interested in the experiment as well:

It's been 4 days. A lot of people are asking me how it's going. I've been hesitant to share the actual figures, because there's power in exclusive ownership of information. What I didn't expect when I started this was that people would not only take part in this experiment, they would be invested in it and it would be important to them. It's been amazing to see people in large numbers advocating this idea. So I think it's only fair that you get to know the results. Also, it's just really cool and fun and I'm dying to tell everybody. I told my Mom, I told three friends, and that wasn't nearly enough. So here it is.

This reminds me of Andy Richard's thoughts on transparency, and how that helps connect fans even closer. It's all something of a virtuous circle, it seems. Do cool experiments, be awesome, be polite... and be transparent. And people will want to support you.

On to the numbers. I love the fact that Louis didn't just reveal the topline revenue, but walked through the expenses as well:

First of all, this was a premium video production, shot with six cameras over two performances at the Beacon Theater, which is a high-priced elite Manhattan venue. I directed this video myself and the production of the video cost around $170,000. (This was largely paid for by the tickets bought by the audiences at both shows). The material in the video was developed over months on the road and has never been seen on my show (LOUIE) or on any other special. The risks were thus: every new generation of material I create is my income, it's like a farmer's annual crop. The time and effort on my part was far more than if I'd done it with a big company. If I'd done it with a big company, I would have a guarantee of a sizable fee, as opposed to this way, where I'm actually investing my own money.

The development of the website, which needed to be a very robust, reliable and carefully constructed website, was around $32,000. We worked for a number of weeks poring over the site to make sure every detail would give buyers a simple, optimal and humane experience for buying the video. I edited the video around the clock for the weeks between the show and the launch.

For what it's worth, Louis is pretty famous in comedy circles for his ability to come out with an entirely new "hour" of (amazing, brilliant, hysterical) content each year -- and once he's put that into a special or a video or an album, he never performs that stuff again. Lots of other comics will reuse old material or it takes them a lot longer to develop an hour of material, but as he explains here, he views it almost as if he's a farmer and this is his crop. So it definitely was a risk to do things this way, but certainly a calculated and not a particularly crazy risk.

Okay, let's jump down to the bottom line:

The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we've sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.

I'd actually argue that he did much better than he explains as his net here -- because he already admitted that the cost of production was paid for by tickets sold to those shows. So by not counting profits until he's covered the cost of production, he seems to be doubling the revenue needed to cover production. This makes the results even better than what he suggests.

And while he says that the $200k (which, again, I think miscalculates the actual bottom line) is "less" than he would have been paid if he'd simply sold the show, there are a few other mitigating factors, beyond what he lists above. He focuses on how it would be worse for the fans. But I'll take it a step further and suggest that going that path would have been worse for Louis as well. First, this isn't done yet. While there's definitely a huge spike in sales at the beginning, and it will only go down from there, I wouldn't be surprised to see a decently long tail of support here. Second, and more importantly, this whole experiment -- including the transparency here -- likely has both widened his fan base considerably (even though it was already quite large) and, more importantly, deepened their loyalty to him.

In other words, it may not make as much now, but chances are this pays off even greater sums down the road. Many of the people who found out about this and bought the download are likely now to be more interested in watching his TV show, seeing him live or purchasing future specials that he releases like this (or in new, even more creative, ways). In other words, by doing this kind of experiment, by being polite, awesome and human... and then being transparent about this, it's likely that his earning power from these efforts only grows. That's pretty cool.

Two final thoughts on this, as responses to a couple of the common arguments we hear from folks who can't get their minds past the traditional business model. First up, we always hear claims that "people won't buy stuff if they can get it illegally for free." It would seem that iTunes, Netflix and many other examples have long proven that false, but here's another example.

Second, just last week, we discussed the claim by some that people who pirate do so because they claim that "all artists are rich." I still have never heard that argument used by people who download unauthorized content, though I guess it's entirely possible that some have made such a ridiculous argument. But I actually think Louis CK's success here (not unlike Trent Reznor's success with various business model experiments) shows how off-base that is. By any imaginable standard, Louis is doing okay for himself. But, nearly every comment I've read from folks who paid their $5 (like myself) to happily download and support Louis, is that they're all freaking thrilled beyond belief that he's brought in this much cash from this experiment.

I'm sure there may be some resentful jerks out there, but as Louis himself noted, the people who chose to buy are invested in this experiment and want it to succeed. No one begrudges Louis the money he's making from all of this because we all feel he's earned it. And it's not that he earned it by locking it up, screaming about "pirates" and using a legal sledge hammer to attack fans -- but he's earned it by being polite, by being awesome and by being human. It's a lesson a lot of other content creators still need to learn.

http://www.thembj.org/2012/07/amanda-palmers-prowess/              

by Megan Dervin-Ackerman : Business, Featured Articles, July 2012

Amanda Palmer’s Prowess

Amanda Palmer, a punk cabaret singer and one of the most productive users of social media today, has set a new record for the highest amount of money that a single musician has raised from Kickstarter. On May 31st, she exceeded her target of one hundred thousand dollars ten times. Nearly twenty five thousand fans pledged towards her new record, the accompanying tour, and an art book. It took as little as thirty days to raise  $1.2 million.
Following the completion of Palmer’s Kickstarter’s campaign, questions arose about how the funds would be put to work. Palmer posted a rendition of sorts online, both to her fans and the public at large –she called it “salty but detailed”.¹ The money, Palmer says, will be used mostly to offset costs of recording and printing (CDs, vinyl records, and a book), to create customized turntables, to fund a six-city tour and an art show, and to pay visual artists on stage. She suggests her net take will be less than one tenth of the funds received, for she has to deduct five percent of the pledges for a Kickstarter’s commission and another five percent for Amazon’s credit card processing.  Palmer also points out that the amount collected is treated as taxable income (fans can write-off their donations).

Expert User
Palmer’s strategy relied heavily on the way that she typically interacted with social media and her fan base. From there, she was able to build her “army of fans” for the project by connecting with them “day after day”.² Her engaging directness and creative flair worked to her advantage, and in the process, confounded the notion that new generations are unwilling to pay for music.
Palmer started her career as part of the Boston-based cabaret duo, The Dresden Dolls. They were picked up by Roadrunner Records and enjoyed some success. However, after a bitter fight with the record company, Palmer pleaded to end her contract early and shortly after became a poster child for independent artists.
The fans that Palmer has acquired over the years are not a passive audience; in fact, they consider themselves to be a part of the so-called  “Amanda Team ”, a large family.  If Palmer is consistently seen as much more than a performing artist on stage, it is in part because she signs autographs and chats after every show, blogs continuously, tweets to over 500,000 followers, and responds to e-mail.³ For instance, using Tweeter, Palmer will search for  “a good vegan joint for dinner [and] get 200 responses”–and still find time to thank her followers. Famously, she has changed the spelling of a word in the title of her new album because her fans asked her to, which cost her three thousand pre-produced watermarked CDs.⁴
Palmer likes to be herself, i.e. “an authentic human being with needs and a life, instead of a picture of a pop star on a billboard.”⁵ In social media, attributes like this can take one far. Familiarity there does not seem to breed contempt, unlike the traditional artist-fan relationship. For instance, when her Kickstarter campaign closed, Palmer invited fans to a complimentary celebration in NYC. Her followers inundated twitter with celebratory tweets of the sort “She/We did it!” One writer penned that as Amanda succeeds so do her fans.⁶

Moreover, Palmer’s online strategy fits well with the novel notion of permission marketing, where intimate knowledge of one’s target audience, including activities in common, enables success in sales. For Palmer, this may be nothing more than an extension of her ebullient persona, but Seth Godin, the American entrepreneur, author, and public speaker that popularized the concept, would concur that her intense artist-to-fan connection is key to her success.⁷

Kickstarter
Palmer seems to show that “[going outside] the label system to fund one’s work” can work well. However, it took Kickstarter to make this happen for her.
Since launching in April 2009, Kickstarter has assisted in funding 20,000 projects. The popular crowd-funding site has arguably become “one of the most disruptive and innovative platforms to emerge for the creative community.”⁸ Many types of creators have used and continue to use it, including musicians, filmmakers, visual artists, novelists, writers, developers, innovators, and even small start ups. It is based on a good-better-best marketing strategy: the more you pay as a backer, the better gift or experience you receive in return. Every person that pledges a certain amount of money to the project receives a gift such as a digital download, limited edition product, or an experience, like a private party.

In general, Kickstarter offers “pre-orders” of a product or service. Buyers become investors placing a bet on a project that they believe has a future. These “backers”, however, are not buying business equity; rather, they pledge money against a return in kind.  Ultimately, they pay for a product or experience and support a limited goal that they understand well.
One of the most notable examples of a Kickstarter product is the Pebble watch. Pebble is a wrist controller for a smartphone. It displays information such as speed and distance for bikers and runners, as well as text messages and caller-IDs—and it plays music in mobile devices, communicating with iPhone and Android via Bluetooth 4.0.  The Pebble watch reached the all time record for Kickstarter last week: a whopping $10 million that easily compares to a typical first round of venture capital financing.
Adventures in Crowdfunding
Like the Pebble watch founders, Palmer was able to raise the amount that she did for music because fans understood her vision, got something in exchange, and believed they were part of a larger ‘tribe’ with a similar outlook (Pebble supporters may have the common identifier of being technology nerds). As Slava Rubin, the founder of Indiegogo, another crowdfunding platform, has said: “caring about the person or company; wanting the product; or being part of a community ” are the three big reasons underlying fan pledges.⁹

While Kickstarter can be a helpful tool for some, it is not necessarily for everyone. “First-time users”, Godin writes,  “believe that [crowdfunding] will magically help them find new followers, new customers and new friends…Alas, with the rare and celebrated individual exceptions, none of these platforms magically and regularly turn the unknown author into a sensation.”¹⁰ Kickstarter can have advantages for artists and innovators who already have an audience. If backers are familiar with the creator and already like them, they will be more inclined to support their projects. On the other hand, a band or company that is just starting out does not have that base, and, with the possible exception of the Pebble watch, is unlikely to succeed.

Still, Hal Varian, Google’s chief economist said that, “crowd-funding is well suited to industries that create intellectual property.”¹¹ Small tech startups have historically gathered funding from sources like venture capitalists. But venture capital may not be the fundraising method of choice for other startups, and even for tech startups there now may be an alternative (although this still seems somewhat far away).

Duncan Niederauer, the boss of NYSE Euronext, claims that properly done, crowdfunding “will become the future of how most small businesses are going to be financed.”¹²  Fred Wilson, the prominent New York financier and venture capitalist, said, “if Americans used just 1% of their investable assets to crowdfund business they would release a $300 billion surge of capital.”¹³

Some Lessons
So be it. But an artist, brand, or company cannot make a product without the support of someone who believes in it or a community that is well informed about the maker’s history. In this regard, the work that Palmer has done to obtain and sustain the community that surrounds her is proof that artists and musicians should be interacting and communicating with their fan base. Palmer has marketed her brand and her persona successfully by building credible and lasting relationships with her consumers. She has proven that fans make success possible.
There is, of course, a question about the time that one can earnestly spend with one’s customers or fans without impairing productivity. Amanda Palmer wisely engaged the services of new media, marketing, and management company Girlie Action to run her Kickstarter campaign. To build a semblance of a genuine human-to-human connection between a producer and a consumer more effort is needed than ever before, and not just in the music industry but also in other trades.  A team approach still seems de rigueur.
 By Megan Dervin-Ackerman

¹ Crowdfunding Music: Busking For Millions, The Economist, http://www.economist.com/blogs/babbage/2012/06/crowdfunding-music (June 5 2012)
² Masnick, M., Amanda Palmer Raises $1.2 Million On Kickstarter http://www.techdirt.com/blog/casestudies/articles/20120601/01173819160/amanda-palmer-raises-12-million-kickstarter-crowd-goes-wild.shtml (June 1, 2012)
³ Crowdfunding Music, loc.cit.
⁴ Peoples, G.; Crowd Control: How Amanda Palmer’s $1 Million Kickstarter Campaign Changes the Music Industry, Billboard Magazine June 23^rd: 14-17.
⁵ Sisario, B.; Amanda Palmer Takes Connecting With Her Fans to a New Level http://www.nytimes.com/2012/06/06/arts/music/amanda-palmer-takes-connecting-with-her-fans-to-a-new-level.html?pagewanted=all (June 5, 2012)
⁶ Masnick, M., loc.cit.
⁷ Seth, G., Reflections on Today’s Kickstarter http://sethgodin.typepad.com/seths_blog/2012/06/reflections-on-todays-kickstarter.html
⁸ Malik, O.; Why Kickstarter Works, http://gigaom.com/2011/05/25/why-kickstarter-works/ (May 2011).
⁹ The New Thundering Herd, The Economist, http://www.economist.com/node/21556973 (June 16 2012)
¹⁰ Godin, S.; Kickstarter, Strangers and Friends http://www.thedominoproject.com/2012/06/kickstarter-strangers-and-friends.html (June 18)
¹¹ The New Thundering Herd, loc.cit.
¹² Ibid.
¹³ Ibid.