From TechCrunch:
Long outplayed by two Indian brothers, Hasbro finally delivers a massive counter blow to Scrabulous, one of the most loved games on Facebook. Scrabulous fans in North America will see the following message when they try to play the game:
Scrabulous is disabled for U.S. and Canadian users until further notice. If you would like to stay informed about developments in this matter, please click here.
Hsbro has long contended that Scrabulous infringes on its trademarks for Scrabble. It licenses the North American digital rights for Scrabble to Electronic Arts, which announced its own Facebook version of the game earlier this month. (RealNetworks owns the international digital rights, and is not taking as aggressive a stance against Scrabulous).
I know this is an app and I usually talk about video, etc. But it’s the same thing. Whenever you are trying to build a business on top of a proprietary platform, you are at the mercy of that platform’s business interests.
Hasbro and EA have real lawyers on staff that get paid a lot of money to sue small companies that are eating their lunch and the large company that was enabling them.
Do I think that Hasbro and EA should have just bought out the little guys? Yes.
But they didn’t, they chose to be litigious, which is their right and always a danger when you are doing something that could clearly be perceived as infringing on valuable intellectual property.
It will be interesting to see what the backlash will be on Facebook. There’s been several Save Scrabulous movements already.
Let’s move this into a video context. Let’s say you are a producer that loves Access Hollywood, etc. And you go on to produce a reasonable facsimile of the show and it gets hugely popular on one of the big sharing sites, let’s call it YouBreakImeo.com. You get millions of views every day, but only on YouBreakImeo.com. You start selling some ads, start making some cash. But one day, YouBreakImeo.com blocks your account and starts to prominently feature Accesss Hollywood content.
What do you do?
Hopefully you can move to a new service that will pay you to produce and sell ads for you, and hopefully enough people know your work at that point that they know the value of what you bring to the table.
But it’s going to be a rough transition.
Your recourses are getting the word out on YouBreakImeo.com to your fans (but you don’t know who your fans are anymore since they blocked your account) and telling them where you’ll be posting. And maybe down the line a lawsuit against YouBreakImeo.com, but most likely they wrote an End User License Agreement that says you are not allowed to use your account there for business. So it might be difficult to win.
As I’m writing this, I’m reminded about the YouTube kerfuffle with Perez Hilton that started this blog. YouTube did just what I’m describing (except without the Access Hollywood angle). They just unilaterally canceled his account, which was later restored. I never got a good answer as to why they canceled the account, but it scared the crap out of me.
The Scrabulous situation just shows, it doesn’t matter how popular you become, if you are in conflict with a core business interest on the site that butters your bread, you will be cancelled.
End of story.
7 Comments
July 29, 2008 at 9:52 am
There have actually been grumblings around the internet (I haven’t found a real source) that Hasbro tried to buy out Scrabulous. But the Agarwallas wanted some ridiculous amount of money, on the order of millions for an app they’ve said nets them around 25k a month.
Hasbro also waited until their legal version was ready before suing.
If the buyout attempt rumors are true then it looks to me like the big guys are in the right on this one.
July 29, 2008 at 9:55 am
@ben Well assuming $25k/month, which is $300k annually and make it for 5 years, that’s $1.5 million. Not a crazy valuation.
If they were asking for $15 million, that’s pretty crazy.
July 30, 2008 at 12:10 pm
I’ve been playing the EA version on the iPhone, but not facebook. There are some things I like on the official version, but the lack of being able to play a real human, remotely (you can pass-and-play, which is lame-o speak for “share the phone”) sucks.
The main selling point for a Scrabble-type game is playing other humans, not computers.
July 30, 2008 at 9:13 pm
The hegemony of walled internet environments is brilliantly laid out in Zittrain’s “The Future of the Internet and Why It Must Be Stopped.”
It’s a must-read for anyone thinking about where we are headed.
Free download of book here:
http://futureoftheinternet.org/
He writes:
The app is apparently doing IP geolocation to see whom to turn away; when I visit Facebook from a British IP address I can get to Scrabulous perfectly well. In this sense Facebook hasn’t done anything, except perhaps tell Scrabulous that it had better shut out the North Americans or risk having Facebook kill the app entirely. Instead, Scrabulous itself appears to be taking the action. The “click here” link in the message to North Americans curiously links to an IP address rather than a domain name — http://74.54.87.73/facebook/updateme.php — which contains a form for people to put in their email addresses for updates from the Scrabulous founders.
It’d be great to learn more about the dynamics among Scrabulous, Facebook, and Hasbro. I’ll see what I can glean.
–JZ
July 31, 2008 at 7:16 am
While I agree that Scrabulous looses out by being removed from Facebook, many people fail to see that they have had a well run website that has been around longer than their Facebook app. So, to say that they are going to have a difficult time moving because they rely on one site be a little short-sighted.
Of course, it still doesn’t resolve the “you’re violating someone’s trademark and copyright” problem. I’d be curious to see if Hasbro is also going after their website.
July 31, 2008 at 1:58 pm
I wonder if Hasbro will counter offer now and then if they don’t get a desired price, legally take down the website and then make another counter offer.
November 20, 2008 at 4:27 am
trust me that is not crysis