Louisiana Internet Software & Technology Association Blog : Louisiana Internet Software & Technology Association : LISTA Blog : LA Technology Law News & Updates

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The State of Louisiana's economic development department has been trying to persuade Electronic Arts to relocate to or open a new game design studio in Louisiana. EA has already located a game testing center at Louisiana State University, and the state would like to expand EA's presence. Louisiana's digital media tax incentives program was originally focused on attracting game development companies to Louisiana like EA.

Unfortunately, the slow down of the national economy has worked against Louisiana's efforts as EA has seen its own business difficulties during the past year. 

Nevertheless if the State of Louisiana wants to remain attuned to EA's vision of the future of video game development, the State should note that EA has just announced its intention to purchase Playfish, a social game company. See the San Francisco Chronicle article on November 10, 2009 entitled, EA buying Playfish in $300 million deal.

If you are not familiar with social games that have grown out of platforms like Facebook, I found a pretty good definition of social games and also a good list of social game developers on The Social Times Blog in an entry entitled, "What are social games?". 

The various economic development arms of Louisiana and its cities should consider efforts to attract social game developers to Louisiana. If they are successful, they might find that EA is not far behind.

Erich P Rapp.

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I love my Kindle and Amazon.com, but several weeks ago Amazon had a knucklehead moment which I am happy to report they have now corrected.

Several weeks ago, Amazon deleted a version of the George Orwell book, 1984, from all Kindles that had purchased it. The version was not an authorized and properly licensed edition of the copyright protected book. Many Kindle owners felt this deletion was an invasion of their property rights. 

The obvious solution to the problem would have been for Amazon to make an arrangement with the copyright holder and or legitimate publisher to compensate the right holders for the unauthorized sales on a one time basis. Presumably most authors and publishers would like to have a good relationship with Amazon, and I am guessing would make some arrangement with Amazon to authorize these sales in exchange for appropriate compensation.

Unfortunately, Amazon instead decided to make its mistake its customer's problem instead of Amazon's problem. Now, however, Amazon has figured it out and have given the book back to the customers. Yesterday, Amazon e-mailed customers whose books were deleted and offered the customers a free copy of the book they lost or the option of a $30 gift certificate or check. It looks like Amazon has used this incident as a learning opportunity, and I commend them for it.

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I realize that I may be overly focused in this blog on e-publishing, but I think this technology is ground breaking in a number of ways. An e-book reader encompass a number of important trends in technology hardware and software.

The equipment, an e-reader, is highly specialized in contrast to a notebook computer which may perform many different functions. As various aspects of hardware such as memory chips, storage, display technology, etc... decline in cost and shrink in size, the economics of highly specialized hardware improves. Any e-book reader is an expression of that fact. The continuing evolution of highly specialized hardware and software is very important. It reduces the complexity of using the technology and broadens the potential user base.

An e-book reader generally also uses mobile phone technology instead of Wi-Fi or broadband internet access to the web. Mobile phone technology access to the web is an extraordinarily important aspect of web connection. As a result, the user of e-book reader technology can access and purchase e-books from nearly any location. This approach to product delivery is extraordinarily important to any one trying to a make an electronic consumer sale of published materials.

The main players in this arena are Amazon and Sony. Amazon's Kindle 2, the market leading e-book reader, is competing with Sony's new e-book reader which has just been announced as an open format e-book reader using the e-Pub format. The new Sony reader is called the "Daily Edition." The USA Today had a great article in its Tuesday August 26, 2009 internet edition as part of the technology section. This article described what Sony is trying to do with its new e-reader. The article is entitled, Sony's Reader Daily Edition takes on Amazon's Kindle. In a very exciting aspect of Sony's announcement, the new Daily Edition will be able to download content in the e-Pub format from many libraries around the country for free. The Sony e-book reader is using AT&T's 3G network while Amazon is using Sprint's mobile phone network.  

The e-book reader regardless of who creates it is a college student backpack size reducer and a business person brief case size reducer. Such e-book readers are having an evolutionary impact on the future of print media. Now that the technology is mobile and is contained in a compact and easy to us device, the growth of e-publishing is going to be explosive and game changing.

Erich P. Rapp.

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According to the New York Times article on August 12, 2009 entitled,  Sony Plans to Adopt Common Format for E-Books, Sony plans to adopt the open standard e-book format called "e-pub" used by large publishing houses including Random House and HarperCollins. The move should create considerable competition for the Amazon Kindle over time. Amazon is the market leader right now for e-publishing, but operates a closed standard system. You can only read e-books from Amazon on the Kindle.

With the arrival of new e-book readers and a common format, the number of books available in electronic format should increase considerably. The quality of the books will likely be much better as well. I recently read an e-book in the Kindle format that must have been published without anyone proofreading it. The copy was filled with typographical errors. These are, however, the problems that early adopters of anything face. The e-book product is well worth the bumps in the road as far as I am concerned.

I am a huge fan of the Amazon Kindle. My wife and I both have Kindles, carry them everywhere and use them frequently. Despite the cost, I have started following several newspapers, magazines and blogs on my Kindle because of the ease of carrying, using and turning the Kindle "on and off" as opposed to the cumbersome process of booting up a notebook computer. I, of course, also read books received on the Kindle. Instead of hauling around a knapsack full of books, magazines and newspapers as I once did, I can now just carry the Kindle instead.

The e-book reader is also more private. While I am reading it, I am not advertising what I am reading. Sorry porn lovers, I am not talking about anything genuinely embarrassing like pornography. The Kindle is really not a good platform for photos. LOL. The Kindle is really only useful for text and the very lowest grade photographs from a newspaper. Instead, I can read the New York Times without having my often more conservative colleagues and acquaintances around me scoffing or rolling their eyes.

The Kindle and the Sony e-Book Reader are only two of a wave of such devices coming onto the market. As time passes, I also anticipate that more interactive books will be published. The readers will eventually be able to communicate with the author and the publisher directly from the e-Book reader. I also suspect that some books will also begin supplementing themselves with additional information provided after the book's original publication. This additional content might include information about other things such as movies, subsequent books in a series, or other derivative products. Effectively having a contact list of everyone that buys a publisher's book is a pretty valuable tool for the publisher. While paying an author or editor to "blog" more content to those e-book readers is an added and new cost for the publisher, but such a blog entry or "extra" content could blur the line between entertainment or extra reader valued content and advertising. As advertising, the low cost of such targeted communications would be small compared with the cost of traditional media advertising.

The e-publishing arena is yet another piece of the digital interactive world. Now, what do we have to do to get the publishers building future platforms for distribution of this content in Louisiana. Call us at LISTA if you need help working in Louisiana.

Erich P Rapp.

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 The 36th International Conference and Exhibition on Computer Graphics and Interactive Techniques is ongoing in New Orleans from August 3 to 7, 2009.  The Siggraph Conference is being held at the New Orleans Convention Center and details about the program can be found on the web at the conference web site. For more information on Louisiana's digital interactive media tax credit program, please go visit the exhibits presented by the Louisiana Department of Economic Development, Greater New Orleans, Inc. and the Baton Rouge Digital Industries Consortium. 

Erich P Rapp.

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Just read an interesting item in the July 20, 2009 Fortune Magazine on page 60 entitled, "No Free Lunch" (not available online at the Fortune Magazine web site when this entry was written). It concerned the now famous Stewart Brand quote about the freedom of information.

In 1984 at the first "Hackers Conference," Stewart Brand, famous also for the Whole Earth Catalog, stated, "information wants to be free" which is widely quoted as a call for free distribution of all information. Brand's actual statement was, however, far more ambiguous. He actually said in fuller context, "On the one hand, information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free because the cost of getting it out is getting lower and lower all of the time. So you just have these two fighting against each other."

In response, Steve Wozniak, the not so good dancer on Dancing with the Stars and co-founder of Apple Computer, replied to Brand that "Information should be free, but your time should not."

It seems like Wozniak captured more of the notional reality than Stewart Brand. While laws that protect intellectual property continue to create value in certain types of information and creative content, the reality is that this capture is less complete and shorter in duration than ever because of various technological tools.

As the value of information and creative content has itself declined, the value of interacting with the actual creator of the content seems to have gone up. For example, musicians are getting less and less value from their recorded music and more and more value from their live performances. The same trend also seems to impact on book authors and speaking engagements.

This dovetails nicely with Wozniak's comment that information should be free, but not ones time. While we may see a pull back in the years ahead from "free information" as we know it on the web today, the long term trend is pretty clear. Information and creative content are going to remain in a protected form that can be directly monetized for a shorter and shorter period of time.

The business and social cycle that turns most manufactured goods and most services into a commodity over time and which also tends to move most creative content over time into the public domain of free things is growing shorter and shorter. In contrast, the value of human input and attention measured as the time a person invests in a productive activity continues to exist at some level in the economic system and is likely to endure. In some sense, this reality is almost medieval and speaks to a time when the value of a guildsman or craftsman was at its highest. Of course, we have a completely different kind of guildsman today. All of the vocations that were performed by guildsman in medieval times are now performed by mechanical devices and a new type of guildsman is emerging with a different set of skills such as the design and development of software and web platforms.

As businessmen, we will over the long run have to adapt to this "retro-" reality. 

Erich P. Rapp.

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The Wall Street Journal on Monday July 6, 2009 had a Page C-1 story entitled, Venture-Backed Start-Ups Seek Stimulus. The gist of the story was that venture funds like Novak Biddle Venture Partners, RockPort Capital Partners and Flywheel Ventures were directing the start-ups they are investing in to explore the federal stimulus package as a means of finding additional capital.

This story suggests to me that venture capital funds and angel investors would find Louisiana's new digital interactive media tax credit incentive program very attractive. Marketable tax credits are not much different in economic terms than stimulus program grants. A start-up developing a web platform, mobile application or software package can get marketable tax credits equal to 35% of the funds they spend in Louisiana on labor residing in the state and 25% of all other expenditures.

If, for example, a start-up used labor residing in Louisiana to develop a new web platform and in the process spent $1,000,000 in Louisiana. The State of Louisiana would issue tax credits for $350,000 and the start-up could sell the tax credits for $0.85 to $0.90 on the dollar realizing perhaps a little more than $300,000 in extra funds. Thus, a venture capital fund investment of $1,000,000 spent on labor residing in Louisiana becomes an investment of $1,300,000.  That seems like stimulus that a venture capital fund or an angel investor would like to see.

Erich P Rapp.

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As Louisiana becomes a hub in the next few years for the development of software, mobile applications and web platforms, I am wondering what value can Louisiana digital interactive media developers bring to the industry. One area that desperately needs to be addressed is the news media and journalism.

It is no secret to anyone that is conscious that the industry that delivers news to the public is struggling to find a profitable business model in the digital media age. Where is this industry heading and can developers in Louisiana add value to the evolution.

Perhaps, the Politico.com web site and the story behind it present a glimpse of the business techniques that will govern the future of journalism and news delivery.

The first and foremost Politico.com business concept that stands out to me is volume of content and extreme detail about a relatively narrow (at least for a newspaper) subject. It's hard to imagine any traditional media source providing as much detailed and essentially real time data about politics in Washington DC. While the Federal Register provides a great deal of detail about federal action, its not anything close to "real time" and it is completely devoid of the human component. Politico is the federal register of politics using a Twitter model without the 140 character limit and a huge mix of gossipy human stuff. No one but a reporter at Politico could possibly want to know this much about politics in Washington DC. 

And yet, I am told that Politico is profitable and widely read. That is more than the New York Times can say at least as to the profitable part. All of this suggests that no matter how much detail one provides about politics in Washington DC, there is at least some audience for it. It also suggests that if you can place an enormous amount of entertaining (at least to someone) political information in a digital setting at a low enough cost , the business can pay for itself with advertising. The delivery of news has a "long tail" component. 

The August 2009 issue of Vanity Fair magazine contains an article entitled, Politico's Washington Coup which describes the Politico story in some detail. If you want a sense of the future of journalism, this article is a good read.

This may hold some promise for local newspapers. The key to the future for local newspapers may be more information. Adding more stories in a digital format does not cost as much as adding more pages for more stories in a printed newspaper. The specialty for the local paper is local news. Local news is as to your local newspaper as Washington politics is as to Politico. It seems like the local newspapers need to go more local with everything, e.g., more local business news, more local society and social event news, and more local entertainment news. Change the emphasis from the AP news feed to everything local with the names of as many local people printed in the newspaper as possible.

Digital interactive media developers in Louisiana need to partner with traditional media organizations to build a better news delivery device using Louisiana's digital media tax credits incentive program.

Erich P Rapp.

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I am very concerned about the market for transferable Louisiana Tax Credits after reading about the problems that members of the New Orleans Saints have had. See Ex-Saint Kevin Houser says tax credit fiasco not his fault. 

Louisiana needs a "Tax Credit Exchange." I will propose to the membership of LISTA that they advocate the creation of a non profit corporation (need to check with my tax attorney friends on this concept) to operate a Tax  Credit Exchange that would make a market for certified tax credits and various grades of contracts to deliver tax credits at a future date.

The paper work and related contracts would be uniform and the status of the contracts would be verified with the appropriate arm of Louisiana government.  If the contract involves little more than a "hope and a prayer" that the person entering into the contract will apply for credits and undertake a creditable business venture in the future, those credits will be deeply discounted and the purchaser will understand that he is purchasing a very speculative contract.

Alternatively if the purchaser decides to buy an existing tax credit that is certified by the state, the value of that credit will be much less significantly discounted. The customers in the market will be better educated about what they are buying, and the process of selling the credits into the market will be orderly and uniform.

I will be reaching out to people with expertise useful in the creation of such a market in the weeks ahead. If you have such expertise and want to help create an orderly market for tax credits in Louisiana, I am looking for your help.

If you think I am making a mistake with this recommendation, I would also like your input. I think we need a more orderly market that discourages the type of problems the New Orleans Saints players have had (but for the grace of god go I), but I want to know what y'all think. I want to start a discussion of the problem. Please write comments on this blog entry and send me email correspondence with your thoughts on this subject.

I am very open to discussion about this subject. Please comment.

Erich P Rapp.

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Senate Bill 277 concerning digital interactive media has been formally sent to the Governor for his signature on Thursday June 25, 2009. We hope that the Governor will act soon on this important piece of legislation.

Unfortunately, a proposed amendment to the new digital media program allowing a digital media tax credit recipient to have the state convert the tax credit to cash at $0.90 on the dollar did not complete the legislative process on Thursday before the formal deadline for adjournment. This concept was presented to LISTA by the Baton Rouge Area Chamber of Commerce. We felt this option was an excellent addition to the program proposed in SB 277. LISTA regrets that this amendment was not adopted by the legislature as a whole. We will review this concept again in two years at the time of the next Louisiana fiscal legislative session.

In the coming weeks, the original members of LISTA will meet to discuss the future direction of the organization. One of my first proposals to the membership will be opening membership up to a broader group of interested people and companies. The original members were asked to make substantial financial contributions in order to get the organization started. I will now propose to the membership that the average cost of membership be reduced significantly and that the organization make efforts to enlist many new members.

As with any government sponsored business incentives program, the new digital media program will not survive unless it is beneficial to the state as a whole. Determining whether the program is successful requires an expert in economics and financial analysis to review and analyze all of the available relevant data. I would like to see LISTA join with other economic development agencies and organizations in Louisiana to sponsor a university professor's effort to track all available data on the digital media industry in Louisiana from July 1, 2009 and forward to determine whether the digital media act is fulfilling its potential for the state.

I would also like to see LISTA and such a university professor track the geographical distribution of the beneficiaries of the digital media act in the state. Our goal at LISTA is to encourage and support growth of digital interactive media businesses throughout the state. We thus want to know the extent to which this goal is being fulfilled.

The new digital media program will also lead to the adoption of related rules for the administration of the program by the Louisiana Department of Economic Development. LISTA and its members will actively participate in and comment on the development of such rules. 

Additionally, LISTA and my law firm, Kean Miller, will undertake a series of presentations inside and outside of the state on the use of the digital media tax credit program. Further still, LISTA and Kean Miller will begin offering educational seminars on topics of interest to the digital media community. 

Again, I offer my thanks to all of the people who assisted with the adoption of SB 277. It has been an educational and ultimately gratifying experience for me.

Erich P Rapp.   

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The Louisiana Senate has concurred on the amendments to Senate Bill 277 from the House of Representatives. The formal legislative process is complete.  SB 277 now goes to the Louisiana Governor for his signature. Please send messages and make phone calls to the Louisiana Governor's office urging the Governor to sign SB 277.

Assuming that Governor Jindal signs SB 277, the new digital media program is a game changing event in the history of the Louisiana economy. I suggest to you that the impact of this event on the Louisiana economy over the next ten years will rival the impact of sugar and cotton agriculture in the early 1800's and the discovery of oil in Louisiana in the early 1900's.

Louisiana is about to enter the digital media revolution in a dramatic way.

Erich P Rapp.

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The Louisiana House of Representatives passed Senate Bill 277 re digital interactive media tax credits today. The bill must now return to the Senate for a concurrence vote on the House amendments. If the Senate concurs on the House amendments, the bill will be sent to the Governor for his signature.  Thankfully, Senate Bill 277 received a favorable vote in the morning.

The successful passage of SB 277 will allow a wide array of software and web platform development projects to earn 25-35% marketable/transferable tax credits on the cost of production of such software and web platforms. This program will likely result in a material increase in the value of software and web platform development in Louisiana. SB 277 is authored by Senator Ann Duplessis and supported by the Louisiana Internet Software and Technology Association (LISTA), Greater New Orleans, Inc. (GNO, Inc.) and Baton Rouge Area Chamber of Commerce (BRAC).

In the mid-afternoon after SB 277 had successfully passed the House, a small group of House members unhappy with the governor's proposed budget cuts began an effort to slow consideration of other bills on the agenda. This effort successfully prevented about 20 bills scheduled for debate from being considered and many more bills on the agenda subject to call from being considered. 

At 6 PM today, the legislature reached a Constitutionally mandated deadline for considering bills that have not yet been voted on favorably by both houses. Thus, the bills remaining on the docket at 6 PM will die unless both houses simultaneously vote to allow consideration of any given bill. Some effort to get a two-third vote on some of the remaining bills will be taken tomorrow morning. It remains unknown how successful this effort will be.

One victim of this work slowdown and the hard 6 PM deadline was an amendment to the digital interactive media bill allowing the program users to choose between tax credits and a discounted tax rebate in cash. The successful passage of this bill contemplated for SB 199 would have been to put a minimum value on the tax credits in the market. LISTA, GNO, Inc. and BRAC all supported this amendment which was contemplated to be amended into SB 199. SB 277 in the form passed by the House and the Senate only provides for the issuance of marketable/transferable tax credits. It is also unknown if this bill will ultimately be considered in this session by suspension of the rules by two-thirds vote. The effectiveness of the effort to suspend the rules and allow further bills to be considered will likely be known by  the middle of the day on Tuesday.

A further report will follow tomorrow.

Erich P Rapp.

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The Louisiana House of Representatives has scheduled Senate Bill 277 for a vote in the House of Representatives on Monday June 22, 2009. Senate Bill 277 is, of course, the renewal and extension of the digital interactive media business/tax incentive program. Between now and then, please call your Representatives and voice  your support for SB 277.

Senate Bill 277 is authored by Senator Ann Duplessis of New Orleans and now being managed in the House of Representatives by Representative Cameron Henry. The bill is supported by the Louisiana Internet Software & Technology Association (LISTA), Greater New Orleans, Inc. (GNO, Inc which is the business development arm of metropolitan New Orleans), BRAC (Baton Rouge Area Chamber of Commerce), and the Jindal administration. The bill will provide marketable/transferable tax credits and cash rebates to businesses spending funds in Louisiana to create a broad array of software and web platform design and development projects.

By encouraging the operation of these types of  businesses, Louisiana will likely draw many new high paying jobs into the state on a long term basis. LISTA is very optimistic that this legislation will have a transformative impact on the Louisiana economy if adopted.

Between now and Monday June 22, 2009, please call your Representatives and voice your support for SB 277 and then Louisiana can join the digital media revolution.

Erich P. Rapp.

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Digital Interactive Media including Twitter and YouTube are fueling and energizing a popular uprising in Iran. While traditional media operations face official steps attempting to thwart their reporting in Iran, the enormous number of informal social media "journalists" are shooting video of protests from their cell phones that is then posted on YouTube and Twitter and posting reports about protests in real time on Twitter. These activities seem to be energizing the uprising in Iran. Wow!!! Digital Interactive Media in the form of social media networks has come of age. 

Critics keep suggesting that Twitter may never make any money, but imagine how one would feel if their web platform was supporting a popular uprising against an illegitimate government that is part of a repressive regime. Money may not be everything. Congratulations to the owners of Twitter. Their web platform may facilitate the reform of the Iranian government that many years of United States government pressure has failed to do.

Some of the related stories can be found at Iran's Twitter Revolution on the Nation web site and also on the New York Times web site in the article entitled, In Iran, Iron Cleric, Now Blinking. These events in Iran are a huge step forward for the role and relevance of digital interactive media in the form of social media networks. It is a revolution - - - In this case, literally.

Erich P Rapp.

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The Twitter organization has launched a "Verified Account" service in Beta this week. So now, you know that @TheEllenShow is really Ellen DeGeneres and @The_Real_Shaq is really Shaquille O'Neal when you read their tweets. Well sort of. If the Twitter profile says that the account is verified, you will know that the celebrity in question has confirmed that the profile is approved by him or her. The verified badge does not, of course, indicate who is actually writing the tweets, i.e., whether it is the celebrity themselves or a ghost tweeter.

One major celebrity Twitter account is stopping new entry production. Trent Reznor has left Twitter (at least for now). He comments at some length on his social media experience on his blog in an entry entitled, Online communities, etc. His commentary is interesting glimpse at the celebrity or "public figure" experience in the social media era and thus worth a few minutes to read.

So much for the special problems of the famous in a social media driven world.

Erich P Rapp.

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Dell Computer reports it has earned $3 million in sales from people visiting their web site referred from their Twitter profile with 624,000 followers. Dell has paid Twitter $0.00 for its profile and promotion. This report is found in a New York Times story dated Friday June 12, 2009 entitled, Dell says it has earned $3 million from twitter. Amazing. Is there any doubt why old media outlets like newspapers, magazines, radio and television are suffering steep declines in their advertising revenue.

While Twitter cannot continue to give away commercial advertising for free, Twitter's costs for delivering that promotion are much lower than any traditional old media outlet. The old media outlets most evolve into a new model that focuses more on web based delivery and combines professional journalism and user/amateur provided journalism in order to reduce their cost base. The details of such a model are yet to be determined, but the path to uncovering that business model might become more clear in the months ahead.

Erich P Rapp.

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The Louisiana Governor's office declared its support today for Senate Bill 277 concerning digital interactive media business incentives in Louisiana. After several weeks of negotiations and discussions with the leadership at the Louisiana Department of Economic Development about the exact language to be contained in Senate Bill 277, Senator Duplessis, LISTA, the Department of Economic Development and the Governor's office have reached an agreement on the terms of Senate Bill 277.

The Ways and Means Committee of the Louisiana House of Representatives will hold a hearing on Senate Bill 277 on Monday June 15, 2009 at 9 AM. If you are involved in this business and interested in supporting Senate Bill 277, please come to the committee hearing to show the committee members the business community support for the bill. If we as a digital interactive media industry in Louisiana fail to show our interest, we may find the committee members find it hard to care about our bill. Let's show our support.

The most exciting part of the bill is the definition of "digital interactive media." Under the new program, the digital interactive media incentives would be available for the development of many different types of software and web platform development as well as the development of video games and interactive animation. Under the existing law, the incentives have largely been limited to video game development. We are very excited about the potential for new businesses in the broader community of digital interactive media moving into Louisiana. In the years ahead, we anticipate new developer/programmer and new design jobs coming to Louisiana in material numbers.

The next most exciting thing about Senate Bill 277 is the proposed incentive parity with the film and television production incentives program. Under the existing digital interactive media program, the benefit was 20% transferable tax credits on in-state expenditures and the percentage declined over time. The new program would allow 25% transferable tax credits on all in-state expenditures and a 10% bonus for expenditures on labor residing in Louisiana for 35% transferable tax credits on expenditures on labor residing in Louisiana without any declining  benefit over time. As a practical matter, this combination of benefits effectively reduces the cost of developing many types of software and web platforms in Louisiana by over 30%.

It will take time to educate the digital interactive media industry about the benefits of this new program, but the program will eventually be a significant draw for new software and web platform development business in Louisiana.

Once this legislation becomes law, we must begin thinking about qualified workforce development by education and by transfer of qualified labor into Louisiana and we must work to change the perceptions about the workforce potential in Louisiana. Louisiana, however, can overcome these problems and build a digital interactive future.

I offer a prediction. With the proposed digital interactive media program enacted, Louisiana will be transformed from a digital interactive media backwater to a top five state player within ten years. Louisiana will be a leader in software and web platform development.

Erich P Rapp.

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The Louisiana Senate passed Senate Bill 277 on Thursday June 4, 2009. The bill will now be considered by the Ways and Means Committee of the Louisiana House of Representatives. The hearing has not yet been scheduled. An update will be provided on this blog when the meeting is scheduled.

We need everyone to send emails and make phone calls to their Representatives in the House expressing their support for Senate Bill 277 authored by Senator Duplessis and also expressing their opposition to Senate Bill 199 authored by Neil Riser.

SB 277 concerns tax credit incentives for businesses operating in the digital interactive media arena. The bill would provide tax credits for many types of software and web platform development. The objective of the bill is to increase the amount of such business being done in Louisiana and to increase the number of  software and web development and design jobs in the state.

The bill is a renewal of a program that has been in place for the past four years, but has been little used because it was previously limited to video games. The renewal of the program would include a modernization of the definition of digital interactive media and would place the level of tax credits granted on parity with the existing film tax credit program.

Senator Riser's Senate Bill 199 would not change the definition of digital interactive media to include software and web platform development and design generally. It would instead limit the coverage to video game development. LISTA is opposed to Senate Bill 199 by Senator Riser.

We need you to express your support for SB 277 and your opposition to SB 199 to all of your Representatives in the Louisiana House of Representatives. Every call and every email is important. A message to a Representative from a constituent voter will have a big influence on the legislator. The message can be limited to a sentence or two expressing your wishes. You can get the email address and phone number of  your representative at  http://www.legis.state.la.us/

For more information, the Saturday June 6, 2009 edition of the New Orleans Times Picayune includes an article describing SB 277 and its progress through the legislative process. The article was written by Times Picayune Capital Bureau Chief, Robert Travis Scott, and is entitled, Growth is sought in digital media. 

Erich P Rapp.

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The Louisiana Senate Revenue and Fiscal Affairs Committee voted a favorable referral of Senate Bill 277 out of committee to the full Senate on Tuesday May 26th. The current form of the bill is not yet available on the Louisiana legislature web site, but should be posted very soon. 

Representatives of LISTA have worked with representatives of the Louisiana Department of Economic Development on language for the legislation that would provide material support for the growth of operations of Louisiana web platform and software development businesses in Louisiana. Despite concerns of some for the potential cost to Louisiana state government of the legislation, the bill has so far been favorably received by the legislators.

The current legislation would provide transferable tax credits in the amount of 25% of web platform and software development costs and 35% of certain related labor costs to firms developing such projects in Louisiana. These tax credits could then be sold in the secondary market for as much as $0.90 on the dollar.  The passage of this legislation would seem likely to make Louisiana a national hub for web platform and software development in the years ahead.

The full Louisiana Senate may vote on this legislation on Thursday May 28th or Monday June 1st. If you are interested in web platform and software development businesses in Louisiana, please email and call your Senators and Representatives asking them to support Senate Bill 277.

If you do not know who your Senator and Representative are, you can find out by typing your home and business addresses into the appropriate place at  http://www.legis.state.la.us. It only takes a few minutes to find out and send your representative and senator an email. Please take the time to do this. It is really a big deal for the growth of this important industry in Louisiana.

For media coverage on Senate Bill 277 and the Louisiana Internet Software and Technology Association, please see the New Orleans Times Picayune article on Wednesday May 27th entitled, Movie, software tax benefits OK'd.

Erich P Rapp.

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The Senate Revenue and Fiscal Affairs Committee of the Louisiana legislature has scheduled the hearing on Senate Bill 277 regarding tax and business incentives for digital interactive media for 10 AM on Monday May 18, 2009 at the Louisiana State Capitol in Baton Rouge.

All those who own, work for, or are interested in digital interactive media businesses and the future of those businesses should plan to attend and speak in support of Louisiana Senate Bill 277. This bill would provide for transferable tax credits for businesses undertaking Louisiana based production of products and platforms in the digital interactive media arena.

The businesses undertaking those productions would receive a transferable tax credit equal to 25% of the production cost expended in Louisiana plus a 10% bonus or a total of 35% of the production cost for labor incurred in Louisiana. These tax credits can then be sold in the secondary market for cash (currently $0.80 to $0.90+ on the $1.00 of credit in realized cash) which substantially reduces the cost of building digital interactive media productions in Louisiana. 

For those involved in this industry, I cannot overstate how important this hearing is.

Erich P Rapp. 

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The Louisiana Senate Committee on Revenue and Fiscal Affairs will likely hold a hearing on Senate Bill 277 concerning tax and business incentives for digital interactive media businesses on Monday May 18th. The time of the meeting will be announced soon. We will post an entry with the time and place of the hearing as soon as the information is available.

Stay tuned to new entries in our blog to learn the time and place of the committee meeting. We need your help to encourage the Louisiana legislature to support digital interactive media business incentives.

Erich P Rapp.

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When I was a young boy, I enjoyed reading the articles in Popular Mechanics Magazine. The articles usually involved an electronics kit or some similar  "do it yourself" project. Whatever they were suggesting in the magazine was always a few years ahead of a product in the consumer market. That meant no one else had it, and that was a good thing to me. I was a geek and so were my friends.

Today at 46 years old, I am something of a magazine addict. I know that is a very "low tech" thing, but I still like turning printed pages in a magazine. Best of all today, the marketplace for magazines is so weak that a subscription to the typical magazine is less than $10 for a year of issues delivered to the house. It's a bargain by any standard. This interest and economic condition led me to a subscription to my boyhood magazine, Popular Mechanics. 

Popular Mechanics has changed significantly since I was a young, but one thing is the same, the magazine is still trying to present imaginative ways for the reader to get ahead of the consumer product market with some wit and elbow grease. You can still find a current version of those "how to..." articles of my youth in the magazine. You can get tips on soldering a circuit board or cooling a computer processor. If you follow their instructions and use some imagination, you can have something cool (by teenage geek standards) that no one else you know will have.

I have been writing regularly here and elsewhere about the challenges that cable television companies are facing from video streamed over broadband internet and the adaption of your television to receive that streaming video. I have concluded that cable television companies are facing a serious challenge to their existence from video streamed over broadband internet.

An article entitled, Ditch Cable, Save Cash in the May 2009 Popular Mechanics magazine confirmed everything I had been thinking. Popular Mechanics was suggesting that their reader, the electronics hobbyist, could save, on average, over $700 per year by canceling their subscription to the local cable television service and replacing it with a combination of an old fashion television antenna and video streamed through broadband internet access.

Of course, this approach is not yet as user friendly as a remote control on a digital cable box, but nothing presented in Popular Mechanics ever was. If, however, the past is any indicator of the future, the subject of this article will be the basis of many consumer products in the years head. In fact, the idea will be widely available in the large stores selling televisions by Christmas 2009 in the form of HDTV's that will stream video over broadband internet using a "widget engine" as an internet channel controller.  

Cable television companies are riding a gravy train of profit today. Video streamed over the internet has done almost nothing yet to damage them, but their business model is in serious trouble in the years ahead. They know it.

Can Louisiana play an important economic role in this evolution. If the Louisiana legislature and the Governor enact Senate Bill 277. this spring, Louisiana will see a river of new digital interactive media business flow into this state including potentially the replacement of the current business model for cable television, and Louisiana will become a leader in this digital interactive media industry. Senate Bill 277 is a business incentives program for bringing digital interactive businesses to Louisiana.

Erich P Rapp.

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