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On Wednesday the US Court of Appeals turned down Verizon's bid to stay a court order directing it to turn over the information needed to identify and contact two Verizon subscribers that the RIAA and its member record labels suspected of illegally making copyrighted files available for others to download. A defeated Verizon said it would turn the data over to the RIAA and its member labels within 24 hours. It also said that it would turn over data on two additional customers that had been subsequently subpoenaed. Verizon had asked the appeals court to delay its divulging the data until after a September 16 hearing of the whole case. RIAA president Cary Sherman applauded the decision, "When Congress enacted the Digital Millennium Copyright Act (DMCA), it deliberately balanced the interests of Internet service providers (ISPs) and copyright holders. ISPs were given immunity from liability for piracy on their networks, while copyright holders were given a quick and efficient mechanism to learn the identity of computer users who were stealing their works. "The Court of Appeals decision confirms our long-held position that music pirates must be held accountable for their actions, and not be allowed to hide behind the company that provides their Internet service. The courts have repeatedly affirmed that the DMCA subpoena authority is constitutional, and does not threaten anyone's free speech or privacy rights. Given that an epidemic of illegal downloading is threatening the livelihoods of artists, songwriters and tens of thousands of other recording industry workers who bring music to the public, we look forward to Verizon's speedy compliance with this ruling." Verizon had contested the subpoenas requested by the RIAA for the subscriber data, saying the process was too easy and consequently did not protect its subscribers' privacy. "Verizon remains concerned that the RIAA and other copyright owners and people who are not copyright owners may abuse this process," said Verizon associate general counsel Sara Deutsch. "In light of the court's decision, it is time for Congress to become involved and offer a legislative solution." At the September 16 hearing Verizon will again challenge the constitutionality and interpretation of the DMCA that has resulted in the court's decision. Among its objections, Verizon contends that the process makes it too easy for copyright holders to abuse their power by giving them access to confidential personal data without a hearing before a judge. Any district court clerk can, without a judge, issue an order to ISPs to give copyright holders confidential data about any of their customers suspected of copyright violations. Critics of the ruling have also said that a judge should be involved in any decision to turn personal data over to a corporation because of the privacy issues involved. Others point out that web site owners could use the process to obtain personal information after an unsuspecting person visited their site. As proof of what can happen, Verizon cited a letter of apology that the RIAA was forced to send to Penn State University after falsely accusing its astronomy department of making tracks by the musician Usher available for illegal download. It turns out that the files in question related to a retired professor named Peter Usher. If Verizon wins in September and the copyright owners don't win any subsequent appeals, Verizon and probably other ISPs won't have to turn over subscriber data in future cases. The appeal would go in Verizon's favor if it's decided that the DMCA provisions are either unconstitutional or that the district court misinterpreted them. A ruling in favor of the RIAA would most certainly result in the copyright holders requesting thousands, perhaps tens of thousands, of subpoenas to uncover the names and contact details of alleged file swappers. Verizon says it has already informed all four people whose data has been subpoenaed that their customer data would be turned over to the copyright holders. The RIAA and the labels haven't said yet what steps they intend to take to enforce their copyrights with the four or with the thousands that are certain to follow. The possibilities are: - A warning letter, a cease-and-desist one, as a first step, including a demand that all copyrighted files be removed from the user's PC. The letter is certain to drain the blood from the faces of many parents who may think that the kids are only doing a little "innocent" file swapping when they read, for example: "Last Saturday night at 9:27 pm, the PC in your home had 87 copyrighted songs (see the detailed list below) being made available for download in violation of our copyrights. Between the hours of 8:12 pm and 11:36 pm, 62 tracks were downloaded. At $150,000 per violation, you owe us $9.3 million. Please pay immediately or we'll see you in court." - A civil lawsuit seeking
damages at the rate of $150,000 per copyright violation. Whatever action the copyright owners take is sure to drive the P2P diehards, who flock by the millions to the likes of Kazaa, Grokster, iMesh and Morpheus, to seek new ways to swap files without being discovered. Setting up smaller networks whose members are more selective about who can log on seems currently to be the most talked about possibility. Once users who make large quantities of tracks available for download begin leaving the big P2P networks, the critical mass of music and movie files that attracted occasional downloaders will begin to shrivel. It'll be a snowball rolling in reverse - the fewer files available for downloading, the fewer sharers will log on. The big P2P networks will rapidly lose their US members. The copyright owners will try the same legal tactics in Europe and Japan next. If successful there, the big bucks that advertisers spend hawking their products and services on the big P2P web sites will also begin to shrivel. In place of the big P2P networks, which reveal much about each person's PC when connected, will come smaller networks that do a better job of hiding user details. "The technology will move faster than the court systems," Jorge Gonzalez, founder of Zeropaid.com, a web site with information about file-sharing software, told the New York Times reporter Amy Harmon. "The new programs being developed are going to mask users. By the time Verizon has to start turning over a lot of names, the identities of users will be unknown." An AOL employee developed and recently released a piece of software called Waste that would set up small, private more secure networks. AOL quickly withdrew the software from its web site and demanded that it be deleted by anyone who had downloaded it. An AOL program that's been around for years called ICQ also permits small groups to form with selective membership and swap files while "IM'ing with each other." The instant messaging programs of AOL, MSN and Yahoo also permit file swapping among smaller more controlled groups. By almost any definition of the private networks reputed to be emerging from the web's depths, AOL's ICQ and IM would qualify - small numbers of users per network, new members accepted only by existing members, secret passwords and user names required plus offering both instant messaging and file transfer. Rumors started circulating on the net this week that Joltid would soon launch a private network. Joltid's Niklas Zennstrom developed the FastTrack P2P network that has surpassed Napster in popularity. It's the P2P network used by Kazaa, Grokster and
iMesh. The company's new web page predicts, "Joltid is
ready to once again revolutionize the Internet through our two
new products, PeerCache and PeerEnabler. Joltid consists of
the original management and development team behind Kazaa and
the FastTrack peer-to-peer network." The only possible escape hatch
for the ISPs and the large P2P networks would be to change the
law. Senator Sam Brownback (R-Kansas), is drumming up support
for an amendment to the DMCA that would require a copyright
holder to file a lawsuit that gives the accused an opportunity
to defend himself. It would eliminate the ease with which a
subpoena can currently be obtained from a court clerk. Cinema-to-go:
Archos Creates New CE Category of Handheld Personal Video
Recorder
Archos' Video AV300 Create a New Consumer Category for Mobile Video Devices - "TiVo-on-the-go" The unit's ability to record video from any source, whether TV, VCR or live with an optional digital camera is what makes it unique. It can also download and store large volumes of MPEG-4 video files. Once video is saved, it can be played back either on the built-in color display or on any TV or PC in near-DVD-quality. The Video AV300 claims to have the only high-resolution 3.8-inch color LCD screen. "At home people have TVs,
stereos, DVD players and PCs for personal entertainment. Now
consumers want to watch the latest release of a movie, a
favorite TV show, or a music video while killing time, or
additionally listen to MP3 music in the car or share videos
and photos with friends, all while on the go," said Henri
Crohas, the president and founder of Archos. "People also
want to record music from their stereos or video from a TV,
but they do not want to have to go through a PC. Archos has
created the perfect solution with the Video AV300 series - a
single personal device that does it all." The Video AV300 can record songs direct from any audio source, such as a home stereo, into MP3 audio tracks with stereo sound. A stereo microphone can be used to record live. MusicMatch software is bundled to convert entire CD collections into MP3 format. The unit is modular. Available
accessories include a 3.3-megapixel digital camcorder and a
camera with zoom lens, FM radio with remote control and a
selection of memory input card readers for importing photos
directly into it. A USB 2.0 interface or optional
FireWire connection can be used to quickly transfer data,
video, music or photo files to and from any desktop or
notebook equipped with a compatible connector. Optional accessories are: AVCam 300 $199.95, FM Tuner $29.95; and Memory Card Readers: Compact Flash $29.95, Memory Stick & MultimediaCard-in-one $29.95, and SmartMedia $29.95. Power is from rechargeable
batteries and an AC adapter. Back
to Headlines
Starting before AOL began attempting to build a package of value-added content and services to attract some of the booming broadband market, RealNetworks assembled, and continues to assemble, an impressive library of infotainment such as news, sports and music, which it's hawking without a broadband brick hanging around its neck. In fact, it could partner with any broadband supplier. America Online, after two years and a lot of promises by both the AOL and the TW organizations, still hasn't been able to shake enough content out of Time Warner to make its broadband proposition an appealing draw. Sports and news plus you know what are the three main draws for any new media. AOL could certainly have used TW's news and sports content to land a lot of broadband subscribers. But, Time Warner has permitted its three CNN news channels to fall behind in viewership to newcomer Fox on cable TV. Its www.cnn.com web news site trails the Microsoft-GE MSNBC online news venture. Its Atlanta sports teams have slid below the radar, particularly the Braves baseball team, which a few years ago was referred to as America's Team and had the national draw of the Dallas Cowboys football team. And, who knows what might have happened to AOL's high-speed subscriptions if the enormously successful annual swimsuit edition of Sports Illustrated were available on the net only to AOL broadband subscribers. One thing that America Online could use is an attractive music service. RealNetworks is in the process of acquiring what's considered the best online music service in Listen.com's Rhapsody service. Many analysts say that Rhapsody is superior to Apple's more heralded iTunes service because Rhapsody is compatible with Windows and any MP3 player whereas iTunes currently works only with Macs and the Mac version of the iPod portable music player. iTunes isn't even compatible with Apple's own Windows version of the iPod yet. One long shot would be for AOL Time Warner to acquire RealNetworks, not for its technology, but for the content deals RealNetworks has in place. That would probably cost AOL TW something on the order of $2 billion, not the kind of money AOL TW would come up with quickly. Plus the company is in the mode of selling businesses to pare down debt, not add to it. Still it's the kind of move that might give AOL what it says it needs to compete in broadband. Another organizational move that would be less costly and might bring a large sum of additional money into AOL TW's coffers down the road would be to put the America Online operation under the Time Warner Cable (TWC) division. In a flash, Time Warner Cable would become the world's largest dial-up company as well as the largest broadband company, that is, unless Comcast continues its torrid broadband growth. Organizationally the move would make sense: - The subscription nature of
TWC and AOL is similar, certainly more similar than AOL and
Time magazine. There's a major "but" that could prevent AOL TW making such a move and that's the various lingering government investigations that AOL has brought on itself. Whether those can be sorted out before the market is ready for a TWC IPO is a major question. In any events, the early returns on AOL's transition from a dial-up company to a broadband leader ain't good. Something, perhaps an acquisition or reorganization, may be needed to accelerate the change. Back to Headlines
Online Music Services Comparison
Apple's
RealNetworks' - Rhapsody is generally
considered the easiest-to-use, most consumer friendly
Windows-based subscription service.
AOL Facing Steeper Decline in Dial-up Business AOL Time Warner CFO Wayne Pace said this week that the company was on target for its 2003 financial goals but might reassess its outlook based on two possible positives and a certain negative: Possible Positive 1: The movie "The Matrix Reloaded" is doing better at the box office than AOL TW had budgeted for. Better than expected initial box office results usually presage good revenue from cable TV showings plus good DVD sales and rentals. Possible Positive 2: Advertising sales for the upcoming fall TV season, referred to as the "upfront season," appear strong. Certain Negative: America
Online's dial-up business is declining faster-than-expected.
"If there was one negative, it's that narrowband
subscribers are continuing to erode a little bit faster, but
we are dealing with that on the cost structure side,"
Pace said. Concerning the AOL division, Pace said, "We have said 2003 is the year to stabilize this business and return to EBITDA growth in 2004. These goals will be achievable." Pace also said that the company still intended to pay its whooping great debt down to $20 billion by year-end. Pace confirmed that the broadband business at Time Warner Cable continued to grow despite recent price competition from telcos such as Verizon. The last report for the number of AOL dial-up subscribers was the first quarter when it said that its subscriber base had declined by 289,000 from Q4. The Washington Post figures that AOL has lost more than a million dial-up subscribers since the decline began at the end of 2002. It quoted First Albany analyst Youssef Squali as saying that the company had lost 700,000 dial-up customers in the last two quarters. Squali also said that about half the lost subscribers are switching to broadband and 20% appear to be downsizing to less expensive dial-up ISPs such as the $9.95-a-month services from United Online's NetZero and Juno barebones services. Steve Case's recent rumblings about "buying back" the AOL operation for cents on the dollar don't ring right when one considers that AOL's decline started on his watch, while he was still chairman of AOL Time Warner. The events leading to the government investigations also occurred while he was running AOL and subsequently AOL Time Warner. It's apparent that most new Internet users who start with broadband are not starting with AOL broadband but rather with broadband from the cable TV companies such as Comcast and even AOL TW's own Time Warner Cable or from regional phone companies such as Verizon and SBC. AOL is caught between a rock
and a hard place. The broadband market is booming but AOL has
been unable to muster a "knock-their-socks-off"
strategy or product offering. The dial-up market is flat with
the only significant factor being the movement from
high-priced services such as AOL's $23.95-a-month to the more
limited $9.95-a-month services. The numbers are telling. AOL
is losing dial-up subscribers at the rate of perhaps 1.5
million a year. United Online with its $9.95-a-month services
is growing at an annual rate of 50% a year. Infrequent users, who do a little e-mail, some occasional browsing and buy something off the net a couple of times a year, will opt for the $9.95-a-month service. Frequent users, who browse for hours, check e-mail multiple times a day and use the web to purchase stuff as much as they do the malls, will want broadband. They may not want to pay AOL $55 a month when they can get the same physical Internet connection from the phone company for $35 a month, or even less when bundled with other phone services. AOL's reluctance to market broadband aggressively to its dial-up subscribers is partly from the fear that causing them to think about broadband may prompt them to check out the competition, resulting in their selecting a broadband provider other than AOL. It's the "let sleeping dogs lie" philosophy. Its reluctance to introduce a limited $9.95-a-month service is the worry that such a move would cannibalize its highly profitable $24.95 monthly cash cow. AOL has said that it intends to launch a $35 million marketing campaign behind its broadband service. One of the things it'll be hawking is a $9.95-a-month "bring your own broadband" scheme for the America Online basket of goods and services such as free music concerts. It'll be a good test of whether people will pay extra for the value-added package. RealNetworks has been successful with its $9.95-a-month RealOne SuperPass and collected over one million paying subscribers so far. A cursory look at what the two outfits offer for the $9.95 would certainly give RealNetworks the edge, however. Amazingly, Time Warner Cable with its Road Runner service has more broadband subscribers than America Online, for which Time Warner exchanged many of the family jewels. We reported in February that Time Warner Cable had 2.6 million broadband subscribers for its Road Runner service, many more than the 650,000 broadband subscribers that America Online was able to sign up. In fact, Road Runner added a million new subscribers in 2002, more than America Online did in five years. Besides selling its own Road Runner service, Time Warner also offers Microsoft's MSN, EarthLink and other America Online competitors. The two operations, America Online and Road Runner, could have been combined when AOL bought Time Warner - it would certainly have been a formidable force in the Internet connection market, number one in dial-up and number one in broadband. Going forward, however, America Online and Road Runner may have to continue to operate separately because AOL Time Warner plans to sell off some of the shares in Time Warner Cable, probably in an IPO, to pay down some of its enormous debt. Ironically some of that debt was incurred because AOL was forced to buy Bertelsmann's share of AOL Europe when AOL acquired Time Warner. America Online and MSN are now
caught in a crossfire for broadband customers in a war between
the regional phone companies and the cable TV companies.
Whenever America Online (as well as MSN, AT&T and other
third-party broadband services) gets a new broadband
subscriber, it must pay either the phone or cable TV company
most of what it gets from the subscriber to use their wiring
to connect the subscriber to the net. "He who owns the
gold makes the rules" is being transformed to "He
who owns the wires makes the rules" for the broadband
market. AOL, as well as MSN and Yahoo, hope to build up a
catalog of value-added products and services that will attract
consumers to pay a premium for their broadband service. America Online’s dial-up subscribers sooner or later will
see the same numbers that appear in the chart below. With all
the press and advertising about high-speed Internet
connections, it’s likely to be sooner rather than later. They will no doubt come to the conclusion that most would.
“Internet-lite” users will opt for a $9.95-a-month service
and save $180 a year. “Internet-heavy” users will
eliminate listening to the strain of their modems connecting
to the net and enjoy the always-on feature and the speed of
fast browsing and downloading by paying Verizon $30 more per
year. For AOL’s broadband service, consumers will need to justify
paying $330 more a year for the privilege of getting the
package of value-added content that AOL is assembling.
Monthly
Annual United Online’s America Online’s Verizon’s DSL bundled Verizon’s DSL America Online’s America Online’s dial-up business is being threatened
from above and below. From below by NetZero’s $9.95-a-month dial-up
service, a savings of $15 a month – $180 a year – for the
consumer. - From above by Verizon’s DSL service for only about $2.50
a month more than AOL’s dial-up. Back
to Headlines
RealNetworks has ported it RealOne Player to Palm's Tungsten C handheld PDA. The RealOne Player is already available for the Palm Tungsten T and is included on the Palm Zire 71. Features include: - Full display of current
tracks playing, including song name, album and artist. Motorola Reorgs To Focus on Digital Media Home Motorola's Broadband Communications Sector has set up an operation to focus on the consumer digital media market, what Moto calls the "connected home." Its change in focus is meant to develop and market home electronics products like digital set-tops and cable modems, where Motorola is market leader. Multi-function devices such as its DCP501 all-in-one cable-ready home theater system will also be included. John Burke, Motorola corporate VP and general manager of the new consumer solutions business, said, "Our 'connected home' strategy means we're building devices and applications that enhance the value of broadband, with the ultimate goal of driving demand
for cable products and services. We will use Motorola's strong
retail brand and consumer product marketing experience in
these efforts and identify and serve additional market
segments that we believe can benefit from digital
connectivity." Back
to Headlines
The Orchard Taps Loudeye for Digital Services The Orchard, one of the world's largest distributors of non-major-label music, has opted to have Loudeye provide the digital media fulfillment and distribution services that support the digital delivery of The Orchard's music catalog to its customers, retailers and partners. The agreement creates a digital distribution channel that enables retailers, digital music services and other music businesses to offer their customers music from The Orchard's stable of artists and labels without the headache of managing the relationship. The deal calls for Loudeye to
encode, process and distribute the more than 120,000 songs in
30+ genres in The Orchard's music catalog. For The Orchard, it
means shorter time-to-market and lower costs for digital
fulfillment and distribution. For its customer and partner
base, it means the ability to license a subset of the catalog
from Loudeye. The licensed content can be transferred in
various ways - FTP, digital linear tape or magnetic tape
storage - or hosted by Loudeye. Back
to Headlines
Maverick AOL Entity Nullsoft Get its Chain Yanked America Online has pulled a link to file-sharing software called Waste from its Nullsoft subsidiary web site only a day after it was posted. The software combined P2P file sharing with instant messaging, chat and file searches so groups could set up private, secure file-sharing networks. AOL also had forced Nullsoft, which it acquired in 1999 for stock then worth $80 million, to shut down an MP3 search engine, fearing the legal consequences. Founded by programmer Justin Frankel who ran the operation up until he resigned this week, the pre-AOL Nullsoft developed Winamp, believed to be the first widespread MP3 player. Frankel, who started Nullsoft after dropping out of the University of Utah, posted his resignation notice on the web two days after AOL yanked Waste from the site. Frankel wrote on his weblog, "For me, coding is a form of self-expression. It's probably the form I'm most effective at. Everything I code is arguably owned by the company. The company controls what I do with my code [in the past, it seemed I had freedom, but it turns out all of that was not really the case-rather, I was somehow avoiding the control illicitly (for 4 years)]. The company controls the most effective means of self-expression I have. This is unacceptable to me as an individual, therefore I must leav (sic). I don't know when it will be, but I'm not going to last much longer. I have nothing but respect for the company-I've just come to realize that it is time to do something different." The triumvirate of Nullsoft, Napster and the Fraunhofer Institute, with its MP3 compression/decompression software, started a chain of events that has changed forever the multibillion-dollar music industry and has the movie studios trembling in fear that their business model is threatened. Nullsoft developed Waste so that small groups of 50 or so net users could form private and secure networks for instant messaging and, you guessed it, swapping music and movie files. Its instant messaging would compete with AOL's own IM and the file downloading, well, that causes immense problems for Time Warner's music and movie operations. The legal strategy pursued by the copyright owners has recently started to change. Copyright owners have lost two consecutive court decisions, one in LA, the other in Korea, which held that at least three P2P networks, Grokster, StreamCast and Soribada, weren't liable for copyright infringement. The two decisions block, at least temporarily, the legal strategy of closing down the P2P networks in one fell swoop as was done with Napster and Madster/Aimster. However, a case that sought to
order Verizon to disclose subscriber information about an
alleged copyright violator for making over 600 songs available
for downloading went in the copyright owners' favor. If
upheld, the labels and studios will be able to get sufficient
data about P2P users to initiate lawsuits against the
individuals who use the P2Ps for file sharing. Recent lawsuits
against college students confirm the changing strategy. Instead of fighting a handful of massed P2P armies, the copyright owners could be faced with hundreds of thousands of "rebel" P2P networks constantly changing their user codes and passwords. It'll become more like guerilla warfare. Waste is not the first anti-establishment software that Nullsoft has "leaked" onto the net. In March 2000, the nucleus of the Gnutella P2P networking software was on the Nullsoft web site for a few hours before AOL removed it. The Gnutella kernel was subsequently enhanced by scores of "open source" programmers that ply the web's waves to the point that Gnutella is second only to Joltid's FastTrack as the leading P2P network. Gnutella's architecture is such that it bears no hint of the central control that doomed Napster to destruction and appears to have tainted FastTrack network user-Sharman Networks' legal defense before LA federal judge Stephen Wilson. Judge Wilson's dismissal of the charges against StreamCast and Grokster but not Sharman suggested that FastTrack seemed to make infrequent calls home to what are referred to as "super nodes" for further instructions. When StreamCast was kicked off the FastTrack network for allegedly not paying for training manuals, it ported its software to run on the then-nascent Gnutella network. Because of its lack of any central intelligence, it has been difficult to track the actual number of Gnutella file swappers but it's thought to be substantial. AOL obviously doesn't want Waste to menace the music and movie industries as the Gnutella network has done. The New York Times reported
that it took AOL only 24 hours to find out about the Waste
software and remove it from the Winamp site. AOL immediately
posted a warning to anyone who obtained a copy that it had not
been authorized by the company: "You acquired no lawful
rights to the software, and must destroy any and all copies of
the software, including by deleting it from your
computer," the warning read. "Any license that you
may believe you acquired with the software is void, revoked
and terminated." America Online no doubt has
conflicting thoughts about his leaving. President Lyndon
Johnson once said about one of his more rebellious aides,
"I'd rather have him on the inside of the tent p*ssing
out than on the outside of the tent p*ssing in."
Back
to Headlines
Palm Acquires Handspring, Confirms PalmOS Spinoff The boards of directors of Palm
and Handspring, which makes PalmOS-based smartphones,
announced on June 4 that they have unanimously approved a
definitive agreement for Palm to acquire Handspring. The Palm
board also gave final approval for the spin-off of PalmSource,
which will be responsible for developing and marketing the
PalmOS operating system. Immediately following the completion
of the PalmSource spin-off, Handspring will be merged with
Palm. The merged company will be renamed later this year.
Back
to Headlines
West Bank Start-Up Promises P2P without the Risk At a time when Verizon is being forced to turn over the names of file swappers to the RIAA and the music industry is planning to send threatening instant messages to users of P2P networks, a start-up out of the war-torn West Bank is offering up some new software that it says will make such actions impossible. "The next revolution in P2P file sharing is here. Resistance is futile." proclaims the web site of EarthStation 5, a Palestinian outfit with operations in the West Bank and Gaza City where developing and distributing P2P software is not illegal. The company, whose management
team is made up of Jordanians, Palestinians, Israelis,
Russians, Indians and Americans, has released its free ES5
file-sharing software boasting of the application's
"unparalleled levels of security, privacy protection and
reliability. The company says that ES5 removes much of the
risk associated with traditional file-sharing services such as
Kazaa and Grokster and lets users download all types of files
including music, movies, games, software and others. "ES5 is the 'Holy Grail of
File Sharing' because it provides anonymity for people sharing
and downloading files," said EarthStation 5 president Ras
Kabair. The planet paradigm even works to keep kids away from adult content by means of access-denying filters. The network is segregated into "adult" and "non-adult" planets. Non-adult planets are unable to see or download any images or movies from adult ES5 planets. Additional features include a built-in web server with integrated Dynamic DNS support so users can run their own web sites from home without paying hosting fees and even add keywords from the site into the ES5 search. Users can preview a file before actually downloading it, a feature lacking on other P2P networks. There's also a noticeable lack of annoying pop-up ads or spyware. Besides the file-swapping and
web server, the ES5 network has a dating service, a free
text/audio/video chat system that lets up to seven users chat
in the same room, free IP-based phone calls, six free
adults-only streaming video channels and "special
events" that will be revealed at some point in the
future. Back
to Headlines
Gracenote, which provides digital music and media information services, has opened a Japanese subsidiary in Tokyo. The company says the commitment will help it serve its existing customers better and facilitate its expansion throughout the Asia-Pacific region by providing sales, support, customer service and technical assistance. Gracenote's software and services for consumer electronics manufacturers and software developers includes the CDDB Music Recognition Service for music identification; MusicID for digital file identification; Gracenote Clean to identify, normalize and map any file to the company's music universe; Gracenote Playlist for one-touch playlist generation; Gracenote Link for streamlining the integration and delivery of music-related content from disparate services and Gracenote Encode, an SDK that enables the creation of personal libraries of MP3 files. "Digital music information services are mission-critical for the Japanese consumer electronics industry," said Gracenote CEO Craig Palmer. "With such strong emphasis on innovation, the Japanese market is the fastest-evolving industry we support; it's essential for us to serve our customers locally to help them meet the growing demand for cutting-edge music information services." The company's current Japanese customers include Alpine, Clarion, D&M Holdings, Digion, Fujitsu-Ten, JVC, Kenwood, Matsushita, Panasonic, Onkyo, Pioneer, Sanyo, Sharp, Sony, TDK and Yamaha. Akifumi Kodama, former
president of Xpeed Networks KK, will head up the Tokyo office
as president. Sho Izaki, who previously worked at Rainbow
Partners, Gracenote's former reseller and Japanese
distributor, has joined as VP of business development and
sales. Yasumitsu Watanabe, the founder and former president of
AIM Company Ltd, which provided tech assistance and customer
support to Gracenote customers through Rainbow, is CTO. Back
to Headlines
MPEG-4 Hits Japanese Speed Bump
the financial interests of the 18 patent holders whose technology makes up MPEG-4 including the likes of Sun and Apple. Ironically, Apple was the first to protest the MPEG-4 royalty rates but was finally able to convince the MPEG Licensing Authority to put a $1 million cap on licenses and exclude content owners with fewer than 50,000 subscribers. MPEG-4 is considered the prime competitor to Microsoft's Windows Media because of its image quality and small file size. The two main MPEG-4 marketing companies are Apple, which uses MPEG-4 as the basis for QuickTime, and DivXNetworks. The two, together with Microsoft and RealNetworks, are targeting makers of next-generation digital media devices such as 3G and 4G cell phones, digital TVs, portable video players such as the new Archos Cinema to go, effectively a handheld TiVo. Intel has developed chips and engineering designs, which it's working on with a number of CE manufacturers to produce products similar to the new Archos unit. The Japanese content groups warned MPEG LA in a letter that they would boycott MPEG-4 if the current licensing policies went unchanged. Losing the Japanese market would be a major blow to MPEG-4 but not necessarily a win for Microsoft or RealNetworks because the Japanese companies are said to be considering H.264 and MPEG-1, two other digital media formats, as alternatives. H.264, although approved by the International Telecommunication Union, won't be completed until year-end. RealNetworks is off to a good start with cell phone makers, having landed a contract with Nokia, the world's largest cell phone manufacturer, to use the open source RealNetworks player in many of its upcoming phones. However, DoCoMo, the Japanese cell phone service provider generally acknowledged as the cutting-edge technology leader, has selected MPEG-4 to stream video up to 40 seconds long to its subscribers. The videos contain sports and news clips plus music, movies and game promos. Users with camera-equipped phones can also record video and e-mail it with DoCoMo's I-motion service. KDDI, Japan's second-place cell phone service provider, offers the same as DoCoMo but also streams movies from the likes of Disney and 20th Century Fox. MPEG LA says it's working with the Japanese groups to resolve the issues promptly as it frequently does with any potential licensee although it generally keeps such negotiations confidential. Larry Horn, VP of licensing at MPEG LA, explained the situation and said: "Explaining our license to individual customers and responding to the issues they raise based on their business models is part and parcel of licensing. There is nothing new or unusual about that. We do it every day. It is an integral part of the licensing process. More often than not, any problems are solved simply by a better understanding of the license, and in other cases, they represent problems of implementation that are easily solved simply by a better understanding of the user's business model. The concerns raised by the Japanese Mobile Content Forum on behalf of individual Japanese mobile content providers are no different, and we will work with mobile content providers to address their legitimate concerns. As with all licenses under its
administration, MPEG LA wishes for its MPEG-4 Visual Patent
Portfolio License to be responsive to the marketplace and to
its customers while offering access to the essential patents
on fair, reasonable, nondiscriminatory terms. "To be clear, the License provides that end users (who do not offer video for remuneration) as well as end user to end user communications using M4Visual are covered as part of the encoder and decoder manufacturing license paid for by mobile product manufacturers. As to Video Providers, the license maintains no royalties unless M4Visual material is provided for remuneration. If there is remuneration, then the license provides Video Providers with a choice of royalties for use of the decoders and encoders subject to an annual 50,000 subscriber threshold below which and an annual cap of $1,000,000 above which they are not payable. Thus, the license operates on the principle of charging royalties to the Video Provider where they receive value for use of the technology and can afford to pay." Back to Headlines
SoundView Increases AOL TW Share Price Target SoundView Technology Group analyst Jordan Rohan has upped his price target on AOL Time Warner shares from $17 to $20 and raised his estimates for its America Online, film and cable networks divisions according to Reuters. Rohan said that growth in AOL's online advertising would at least partially offset the greater loss of dial-up subscribers. AOL reported it lost 500,000 dial-up subscribers in Q1, almost treble the 175,000 Q4 decline. Rohan forecast that the decline will continue with AOL losing 700,000 dial-up subscribers this quarter. He said the company's recent broadband program, though in its early stages, appears to have surpassed AOL's internal projections. AOL's Dial Up Subscriber's
decline Rohan raised his forecast for AOL's online advertising revenue by $39 million to a total of $295 million in June. America Online spends a lot of
money developing and running the free Instant Messaging
service without it generating any revenue for the company.
Rohan thinks that one result of settling the legal dispute
with Microsoft will be to free AOL to work on ways to generate
money from the IM service. "If AOL were successful in
this endeavor, it would be reasonable to argue that the
America Online division is worth at least as much as
Yahoo," Rohan said. PVRs and DVD Burners Are the
'Killer' Combination Summary: Personal video recorders and DVD burners are often considered possible replacements for VCRs. Neither will replace a VCR by itself, but they have significant potential when combined as one device. Personal video recorders (PVRs) such as TiVo, ReplayTV, UltimateTV and others have had far less commercial success than might be expected, especially considering the glowing reviews and testimonials of PVR owners (for example, U.S. Federal Communications Commission Chairman Michael Powell even referred to TiVo as "God's machine"). Making a commercial business of PVRs has been difficult. For example, TiVo (the market leader) has struggled; the original ReplayTV and the company that bought it, SONICblue, have once again been acquired; and Microsoft dropped UltimateTV mere months after its launch. Many business models have been attempted and others are being considered, such as hardware sales, subscription services and various advertising-oriented schemes. Many have written PVRs off as "toys for techies," destined to be a permanent niche market. However, we believe that two emerging trends will finally drive mass adoption of PVRs: - Monthly service offerings
from cable companies Much has been said about the first trend - the ability to reach mass markets composed of users willing to buy the capability as part of a monthly service fee or rental of a set-top box that contains the capabilities. In recent months, cable companies such as Comcast have aggressively rolled out such capabilities. Much less has been said about the second trend - the combination of the PVR and the DVD burner into one device. Although products have come to market that are some type of PVR/DVD burner combination, the implementations have not shown the true potential of the pairing. In the consumer electronics area, Panasonic has DVD burners on the market, but with subpar electronic program guide (EPG) functionality. In the PC area, Microsoft and its PC hardware partners market the Media Center PC, which shows promise; however, it currently suffers from form factor issues, mediocre-at-best hardware offerings and glitches regarding DVD burning capabilities due to initial attempts to appease the U.S. entertainment industry regarding the recording of copyrighted materials. Integration of Media Center PC functionality and its user interface via Sonic Solution's MyDVD and follow-on products shows just how easy DVD burning can be. PC-based PVR programs such as SnapStream currently don't directly support DVD burning. PVRs and DVD burners often are considered as replacements for the venerable videocassette recorder (VCR). The combination of the two into one device and the subsequent economic models offer significant potential. An objection often made is the claim that people don't want to record, such as studies claiming relatively low percentages of VCR owners using those machines for taping. Such arguments fail to take into account the difficulty of programming VCRs as compared to the ease of doing so with PVRs, which have good EPGs. In fact, the EPG may be the most important piece of the puzzle. Another factor is that while the amount of recording a user might do is small, its importance is great. Some VCR owners use their VCRs almost exclusively for recording. Archiving still will be an issue because no matter how large and inexpensive hard drives become, people will want to easily share and save recorded material. Even those who say they don't want to archive material may want the capability to loan recorded material with friends and family, or may simply want to watch the material on a TV that is not connected to the PVR. Few households have the advanced capabilities required to view sources anywhere in the house. The economic issue basically comes down to volume and the subsequent lowering of prices. This requires standards. In the case of writable DVDs, the standards issue has been complex, but overstated. Most of the issues regard "write-many" variants, such as DVD-RAM (which, as with writable CDs, will not be as important as "write-once" versions). Most consumer DVD machines shipped during the past year read both the DVD-R and DVD+R versions of the "write-once" standard. Therefore, the emergence of one clear standard is less important than many might have thought - there is little risk that the "wrong" choice is made at any point in a consumer's decision path. The worst possible case would be to buy the wrong type of media for recording for the drive; even this is less of a problem because drives that write both formats are now available. This is not a VHS vs. Beta type of issue. Even with the standards issue - part real and part overblown - not completely resolved, media costs have decreased considerably. DVD+R media can be purchased for less than $1 each, which is competitive with VHS tapes and much more economical in real terms than VHS tapes were when that technology started to gain critical mass. Drive costs (hard drive and DVD burner) also have decreased in price enough to make the economic models work. Affordable set-top boxes offered by cable companies and satellite companies are available. Consumer and PC devices, while slightly more expensive, target the high end of the market, which also will grow with combination devices. Larger hard drives and external hard drives will lessen the need for DVD burning, but they will not help with sharing or viewing location issues. Also, even the largest hard drives run out of space eventually, and with high-definition content-recording PVRs about to reach the market, hard drives will fill up fast. This eventually will drive demand for archiving capability onto higher-capacity, high-definition DVDs. The digital rights management
issue is not solved by the emergence of the PVR/DVD burner
combination. However, this combination will be a catalyst for
the hastened development of solutions to the digital rights
problem. Acronym Key LIES, DAMN LIES AND STATISTICS Music, Movies Driving Home Networking, Digital Media Servers Consumers with a home network are beginning to think about using their PCs as digital media centers according to research done by Parks Associates and the Consumer Electronics Association called the "Status of Digital Networks and Applications." Networked home PC users are interested in using the PC to store, organize and stream audio and video to other devices in the house. About 20% of those with a network want to connect entertainment-concentric devices such as TVs, digital cameras and stereos. "This research establishes
the growing desire among specific consumer segments for
connectivity beyond the PC LAN," said Tricia Parks,
president of Parks Associates and author of the report.
"Current home network users - consumers who already have
data networks for PC connectivity - will constitute a
significant portion of the early market for multimedia
networks. But in order to meet this demand, and in fact
realize this market, home-networking solutions must be
scaleable and interoperable with existing solutions. This
report provides companies planning entertainment network
options and solutions with a great amount of
information." Back
to Headlines
A report from market researcher
NPD Intelect shows PC units increased 8% in April compared to
last April. This is the first positive month-over-month result
since January 2001, 27 months ago. Back
to Headlines
66% of US Consumers Own PCs; 16% of Non-owners To Buy One The number of American households with PCs grew from 59% to 66% between 2002 and 2003 according to a survey from eBrain Market Research. The study projects that this year 16% of non-owning consumers intend to purchase a desktop computer. Also, 18% plan to purchase a scanner and 14% intend to get a DVD drive. "We are seeing a lot of
consumer interest in purchasing computer and peripheral
products over the next year and beyond," said Sean Wargo,
senior industry analyst for the Consumer Electronics
Association (CEA). "The majority of the consumers we
spoke with plan on buying flat panel computer monitors,
scanners, notebook/laptop computers, color computer printers
and/or DVD drives sometime in the future." Back
to Headlines
For the Record: FCC Travels Well 2,500 the number of trips that
FCC commissioners and staff members made during the last eight
years. Who won? Surprise! The media
companies. They've got the big bucks, you know. P2P Networks Rankings on June 3, 2003 at 12:00 EST Network
Users Source: the webzine Slyck * Joltid owns the FastTrack
network, which is used by Kazaa, Grokster, K++ and iMesh. The number of Gnutella users is difficult, perhaps impossible, to calculate since there is no central control or ownership. * Note: The numbers shown are not the total number of people who have downloaded and installed the software; that is reportedly many times larger. They are the number of people who were downloading or uploading files at 12 noon EST on June 3. The actual number of people who use the service one or more times a month is many times larger, perhaps in the tens of millions. On May 23, Sharman Networks
claimed its Kazaa Media Desktop software had become the most
downloaded software ever, having overtaken the previous
recordholder, AOL's ICQ, by reaching 229 million worldwide
downloads. Back
to Headlines
European electronics giant Philips will soon launch a 167-gram (six-ounce) iPod style portable music player that'll store thousands of songs. Called the HDD 100 with 15GB of storage, it'll be compatible with Windows - but not Mac - PCs. Philips calls it the "the world's smallest recording audio jukebox." Initial plans were for a $585 price but competition from the Creative Nomad Jukebox and the Archos Jukebox may well force Philips to revise the price downwards. The unit has begun appearing in retail stores in Asia and is scheduled for a July launch in Europe. The unit plays MP3- and WMA (Windows Media Audio)-encoded music tracks. Given its background in dictation equipment, Philips decided to incorporate a built-in microphone for voice recording that stores audio in the MP3 format. Current versions of Apple's iPod don't record. The Philips widget also has a five-band equalizer with four programmable settings that can be linked to information in a track's ID3 tags. Whenever a particular artist or genre is played, the selected equalizer settings would kick in. The unit downloads tracks from
the PC with a USB 2.0 connection, which is 40 times faster
than the older USB 1.1 connections. It's also got a remote
control and a software-based navigational interface. Back
to Headlines
Yes, Wi-Fi Surveillance Cameras D-Link is shipping a new model of its 802.11b wireless Internet camera, called the DCS-2100+, that will stream audio as well as video anywhere over a local network or video anywhere over the Internet. It includes integrated motion detection. The unit is a surveillance device that delivers streamed images from home or, say, day care centers to any PC anywhere that has Internet Explorer. D-Link president Steven Joe said, "With motion detection sensors, a built-in microphone, video surveillance recording and remote monitoring features, the D-Link DCS-2100+ is the perfect solution for those who need to see and hear what's happening in the home or business." The D-Link DCS-2100+ can
produce up to 30 frames a second at two separate resolutions
using MPEG-4 compression, installs without wires, features an
integrated web server, a built-in microphone, remote
monitoring of up to 16 cameras with its IP Sentry software, a
motion detection/e-mail alert system, compatibility with all
D-Link AirPlus, 802.11b or the draft-compliant 802.11g
wireless networks. Its suggested retail price is $399. Back
to Headlines
Cisco's Linksys Intros All-in-one DSL Modem, Router, Wi-Fi Access Point Linksys, Cisco's newest division, has introduced an all-in-one device for digital media homes wanting DSL and Wi-Fi in a single box called the Wireless-G ADSL Gateway Pro (Model WAGP100G). Included are an ADSL modem, a wireless-G access point for networking speeds up to 54 Mbps, full router capabilities including DHCP, a four-port 10/100 switch with a dedicated DMZ port ideal for Internet gaming or video conferencing, a stateful packet inspection (SPI) firewall, 8MB of flash and 32MB of SD-RAM to deploy future DSL IP services. The unit uses Intel's IXP421 network processor and Intel's XScale core. Intended to be sold by DSL providers such as the telcos and independent DSL providers such as Covad, AT&T and America Online, the unit comes in optional self-installation models. A one-vendor device with all the hardware components to connect the thing to the Internet and share other resources limits troubleshooting issues and gives the DSL provider the ability to extend its managed IP network into the home so specially offered IP services can be delivered over the DSL Internet connection. A one-vendor solution also gives the service provider one point of contact to build more comprehensive marketing programs for educating users on the value of an Internet connection and the applications that can be performed simply and affordably at home or in the office. Linksys director of broadband services Matt McRae said, "This is the ideal solution for DSL Provider deployment. Our proven leadership in the router, wireless and modem market enables us to bring all three technologies together in one device that can benefit the user by ease of use and cost while providing the DSL provider with the right hardware that can be easily upgraded as additional features and application services become available." The additional memory Linksys incorporated in the DSL Gateway gives the provider the ability to manage and distribute advanced IP services to its customers. Some of these services or applications include music distribution, video-on-demand, home automation, home security, storage offerings, remote diagnostics and others determined by the DSL provider. The Intel IXP421 network
processor provides the Linksys DSL gateway with the processing
power to increase the speed at which data is encrypted and
secured through the router, letting users take full advantage
of their high-speed broadband connection and wireless-g 54
Mbps speed. The processor lets the router, modem and access
point do what they do best: data routing, Internet
connectivity and wireless networking functions.
Back
to Headlines
Despite the fact that the previous model only shipped in the US in March, Video Without Boundaries (VWB) has already started producing its MediaReady Internet/DVD player. The MediaReady 4000, as well as its predecessor, the 3000, is a consumer home entertainment device that combines DVD playback, feature-rich TV/Internet capabilities, e-mail, karaoke and CD/MP3 playback in a box the size of a typical DVD player. The new machine, however, adds "powerful PC componentry" including an onboard hard drive for digital storage entertainment. New connectivity options, which include Ethernet 10B/100BT wired and wireless connections, USB 2.0 and 1394 connectors, enable the device to download, play and manage digital movies and other digital entertainment from the Internet or networked home PC. The unit comes with a full-sized wireless keyboard, 5.1 Surround Sound, picture-in-picture capability, karaoke, a microphone jack, wireless remote control and a microphone. VWB expects to have the
MediaReady 4000 on retail shelves in late summer for $349.
Back
to Headlines
Latin American Wi-Fi Market Growing Shipments of Wi-Fi base stations to Latin America are expected to double in the next 15 months according to Gil Simoes, business development manager for the Caribbean and Latin America subsidiary of Nortel Networks, citing figures from research house In-Stat/MDR that estimate Latin America and the Caribbean currently accounts for approximately 4%-5% of global shipments. Simoes told Bnamerica that demand for "unrestricted access," coupled with a "real need for broadband connectivity" in the region will drive the growth of Wi-Fi wireless networking." He said that the uptake in Latin America would benefit from the region's relative lack of thorough wireline and fixed-DSL penetration. Nortel has recently unveiled
and begun pushing a Wi-Fi and broadband initiative and
portfolio of products. Nortel is touting the security in its
products and Simoes claims the solution gives Wi-Fi a security
level equivalent to that of a typical wired network.
Back
to Headlines
Faster, Cheaper, More Secure Wi-Fi Chips from Atheros Wi-Fi wireless networking will spread faster as the gear becomes faster, less expensive and more secure. Atheros Communications, the reputed market share leader for wireless networking chips, announced volume production of four new Wi-Fi systems on a chip that are: - Faster - 802.11a, 802.11g in addition to 802.11b. - Cheaper - reduced parts count
and lower power requirements. By combining fast network
processors with high-performance wireless and wireline
technologies, Atheros provides the basis for equipment makers
to produce inexpensive secure access points, gateways and
routers that communicate concurrently with IEEE 802.11a,
802.11b and 802.11g clients. Sybase Extends Wi-Fi Software Initiatives for the 'Unwired Enterprise' Sybase announced a $25 million program that will help its customers and software development partners develop Wi-Fi applications for the enterprise. It said it would collaborate with leading research universities and industry partners to "overcome current barriers to the development of 'always available' applications for the unwired enterprise, helping companies extend the desktop computing experience to mobile and remote workers." Sybase will establish a network
of Wi-Fi competency centers, starting with one at the Research
and Technology Park at the University of Waterloo.
Additionally, the company will collaborate with its customers
and network of over one thousand partners to accelerate mobile
application development and deliver database-powered
enterprise solutions to mobile devices. Sybase will also
initiate a global marketing campaign in conjunction with its
partners to raise awareness of how Wi-Fi technology enables
the unwired enterprise - delivering the right information to
the right people at the right time. Back
to Headlines
Milwaukee's Parks Offer Free Wi-Fi But BYOB Milwaukee citizens will be able to use free Wi-Fi Internet access in two of their downtown parks this summer according to a report in the Washington Times. SBC, the regional phone service, and Cisco, the network gear maker, are donating the equipment. People with a Wi-Fi-equipped portable PC (doesn't everyone have one?) will be able to browse, get and send e-mail and listen to streaming music for as long as they want in Pere Marquette Park and Cathedral Square Park. The system won't filter content or provide security from hackers. The signal will be relayed from
several transmitters atop the streetlights. City chief
information officer Randy Gschwind told the Milwaukee Journal
Sentinel that people will be able to log on to the Internet
while listening to jazz at park concerts in Cathedral Square.
"They are going to sit with wine bottles out and their
laptops right next to them," he imagined. (Uh, Mr
Gschwind, it's Milwaukee so shouldn't that be a bottle of
Milwaukee-brewed beer?) Back
to Headlines
RIAA Sues StreamCast over Unlaunched Music Service Perhaps still stinging from its surprise loss in an LA federal court in the first case it brought against StreamCast, the RIAA has filed a new suit against StreamCast, the Morpheus P2P software developer, over an Internet radio music service that the company tried to develop but never launched. Last month US district Judge Stephen Wilson shocked copyright owners and most legal experts by ruling that StreamCast and Grokster hadn't violated copyright infringement laws with their P2P file-sharing software because they didn't control what their users did with the software. Originally named Infinite Music before renaming itself MusicCity (an appellation usually accorded Nashville) and finally settling, at least for the moment, on the name StreamCast, the company's original idea was to assemble a large database of thousands of songs as the basis of a legitimate Internet radio compliant with the 1998 Digital Millennium Copyright Act. To compile the music collection, in 1999 and 2000 it purchased and copied hundreds of CDs onto hard disks and other storage devices. It then tried to make deals with the record labels to play the tracks over the net but was unable to get licenses from the recording companies. When its efforts at getting licenses failed, the company abandoned the project. The RIAA's lawsuit claims that StreamCast violated the copyright laws when it copied the CDs to computer storage. Charles Baker, the company's lawyer, told the Los Angeles Times that it was not clear that a radio service needed to be licensed. When StreamCast was judged to be not guilty in the LA lawsuit it promptly and perhaps coincidentally moved its headquarters from the Nashville suburb of Franklin, Tennessee to Los Angeles. Having left Music City, it'll soon be sending its executives and lawyers back to Nashville in what will no doubt be a drawn out but more boring suit. The RIAA sued MP3.com over its similar My.MP3.com service in 1999: MP3.com eventually settled with the labels to the tune of over $100 million. Considering that the RIAA has also sued StreamCast's investors and the industry's history of legal actions against other P2P file downloading services, the crystal ball prediction is that StreamCast can expect to be sued until it's out of business, just like Napster and Madster/Aimster. "They're doing everything they can to stop this company and have reverted back to the only tactic they know, which is to spend their opponent into submission," newly reappointed StreamCast CEO Michael Weiss told Reuters. Where the crystal ball gets fuzzy is when asked why iMesh, the Israel-based P2P music service, has not been sued. It uses the same FastTrack P2P network that StreamCast did and that Sharman Networks and Grokster still use. It's not the fact that iMesh is a foreign company. Sharman is headquartered in either Australia or Vanuatu, take your pick. The now defunct Kazaa, original developer of the FastTrack network, was sued in its native Holland. So what magic foo-foo dust* has been sprinkled on iMesh, the number two P2P file-swapping network according to several accounts, that makes it invisible to the RIAA legal radar? * See the backpage if you're
not familiar with foo foo dust Back
to Headlines
Italy Cracks Down on File Sharers, Increases Taxes on Blank Media Using a new and little-known law, Italy's Guardia di Finanza (finance police), which investigates smugglers and tax dodgers, have been combing the e-mail accounts of thousand of Italians suspected of having downloaded and uploaded music and movie files off the net. The law is contained in Italy's version of what was enacted as part of the EU's copyright directive. It permits fines of up to 1,032 euros ($1,200) for worse case and repeat offenders. As the Wall Street Journal points out, "It also lays the groundwork for what armies of entertainment lobbyists and lawyers have been unable to achieve in the US - a vast police clampdown on file sharing." Already 75 people are under investigation according to Italy's La Repubblica, with 3,000 more people identified for further investigation. The technique the Guardia uses is to intercept all the e-mail of suspected infringers. Once proof is found that the suspect is dealing in copyrighted material, the evidence is given to a public prosecutor who decides how to proceed and can bring charges for receiving stolen goods or copyright infringement. Consumer rights groups have
criticized the law for substantially increasing the tax on
blank media: Media
Prior New "It's a shameful measure
that forces consumers to pay a price for the fact that junk
heaps like the Italian Association of Copyright Holders and
the government can't come up with an effective way to fight
piracy," said four Italian consumer groups in a joint
statement on April 29. A better way to fight piracy, they
figure, is to lower prices for pre-recorded CDs and crack down
on the pirates themselves. Back
to Headlines
EMI Confirms Suit against Bertelsmann for Napster Financing EMI has followed Vivendi Universal in bringing suit in New York district court against Bertelsmann, claiming that Bertelsmann's $100 million financing of Napster enabled the P2P network to continue its illegal online file-swapping service in violation of EMI copyrights. Music publishers including Leiber & Stoller initiated the action, which EMI and Vivendi Universal have joined. "By investing both millions of dollars and management resources in Napster - which was an illegal enterprise built on the unlawful distribution of copyrighted works - Bertelsmann enabled and encouraged the wholesale theft of copyrighted music," EMI said in a canned statement. The suit says that Bertelsmann
made a "willful and material contribution...to the
widespread infringement of copyrighted musical works by users
of the notorious Napster system." Back
to Headlines
Senator Sam Brownback, a Kansas Republican, is drumming up support for a law that would restrain copyright owners' abilities to enforce their copyrights. It would regulate digital rights management systems, grant consumers the right to resell copy-protected products and require digital media manufacturers to prominently disclose to consumers the presence of any anti-copying technology in their products. The bill would amend the DMCA to require that a copyright holder obtain a judge's approval before obtaining the name of an alleged copyright violator. A federal court recently ruled that a copyright holder could force an Internet service provider to disclose a suspected pirate's identity and contact data without a judge's involvement. The law was used as the basis of a suit by the RIAA against Verizon, seeking to force Verizon to divulge the names and personal data of four of Verizon customers. The Brownback bill's other main points are: - It would prevent the Federal
Communications Commission from forcing makers of PCs or
digital media products to implement specific copy-protection
technology in their products. Fellow Senator Ron Wyden, an
Oregon Democrat, has already submitted a bill that would
require software, music and movies that include
copy-protection technology to warn prominently that they
contain such technology. Back
to Headlines
Sendo Brings Patent Infringement Suit Against Orange UK cell phone maker Sendo has initiated legal proceedings in the High Court of Justice in London against cell phone service provider Orange. Sendo claims that the Orange SPV smartphone infringes a Sendo patent related to the design of a circuit board used in the phone. Sendo applied for the patent in September 2001, but didn't get it until last month. Sendo then reportedly attempted to enter into negotiations with Orange but without result. Sendo decided that it had to enforce its patent or risk losing it. Because Orange is a UK importer and because the phone is marketed under the Orange brand, Sendo decided to sue Orange rather than High Tech Computer (HTC), the phone's Taiwan maker. The Orange SPV smartphone uses Microsoft software. Sendo CEO Hugh Brogran said in a statement, "Sendo has created intellectual property rights within the smartphone and mobile phone area. We have been advised by our patent agents that the Orange SPV phone infringes these rights. We have tried to solve the matter in an amicable way. However, we are now in a position that we have to take legal steps. We are seeking damages and an injunction to restrain sales of the product. As we have previously stated, if Sendo believes that its global intellectual property rights are infringed, wherever in the world this might be, we will take steps to defend those rights." Deutsche Telecom's T-Mobile
unit recently postponed the introduction of the same HTC phone
under the T-Mobile brand. Whether the postponement was due to
problems with the phone, as reported, or whether it was due to
the threat of a possible Sendo suit over patents is unclear at
this time. The Online Reporter pointed out at that time that one of the main holes in Sendo's case appeared to be how HTC could have produced a working phone based on what Sendo claims was defective Microsoft software when Sendo couldn't. A respected source told this paper that by the time Sendo canceled the Z100 and decided to sue Microsoft, the Microsoft software, after a great deal of effort on the part of Sendo engineers, was finally working, more or less. When Orange introduced the SPV (Sound Pictures Video), initial reports claimed the unit was buggy and that consumers returned a number of them. According to Guy Kewney's
webzine Mobile Campaign (http://www.kewney.com), "This is
a hole that is wholly of Microsoft's invention. Microsoft
staff are saying that the Sendo phone didn't work; true, it
had flaws. But two independent magazines What Mobile? and
Mobile News both did head-to-head tests of the Sendo Z100 and
the SPV. Both found the SPV to be noticeably the poorer design
of the two. It's also worth adding," it said, "that
the SPV is a breakthrough design, using some of the power of
Microsoft's desktop applications, such as Outlook, in a phone.
However, it is quite recognizably a Microsoft design; the code
is bloated, often slow and crashes frequently. It's true that
the Sendo phone had some of the same problems; but not as many
of them as the SPV had." Back
to Headlines
The next hearing in the Sendo
suit against Microsoft is scheduled for early July. Microsoft
has moved to have the case dismissed. If not dismissed, it
wants the venue changed from a supposedly fast-moving
tech-savvy Texarkana federal court to one in its home state of
Washington. Back
to Headlines
The 7th Circuit Court of
Appeals on Wednesday heard arguments in the Madster/Aimster
copyright infringement case. It can be heard at Make It Easier & They Will Come Operating on the premise that there's no IT department at home, software developer SupportSoft has introduced a new version of its HomeNet software that's intended to help consumers set up and manage their broadband Internet connections and home networks, both wired and wireless, with multiple PCs. SupportSoft wants to sell the product to broadband service providers such as Comcast, BellSouth and Cox Communications, OEMs and system integrators like IBM, Sony, Siebel Systems and CSC so their customers can pre-qualify, install, configure and receive ongoing support at reduced costs. The company cites research from Parks Associates to show the rapid growth in home networking, specifically the survey that claims that the home networking market will grow from 10 million in 2003 to 30 million homes by 2007. New features include support for the new and faster Wi-Fi 802.11a and 802.11g besides the currently popular 802.11b. The company claims its software makes it easier to configure portable PCs as users go from home to office to Wi-Fi hotspots on the road. SupportSoft's sales pitch to
the broadband service providers is based on the need to keep
their costs low in what is becoming a price-competitive
market. The biggest cost bulge is the initial installation and
setup where SupportSoft hopes its software will enable
consumers to complete the task without having to call a pricey
tech support rep. The cost of sending technicians to a home to
make an installation is even higher, running anywhere from $80
to $150 by most estimates. The broadband service providers
also have to consider the cost of losing a frustrated customer
who can't get the gear up and running quickly. "HomeNet helps take the pain away from setting up a wireless home network - bringing its benefits to the average user without increasing support costs for the service provider," said SupportSoft chairman and CEO Radha Basu. "The newest version of HomeNet recognizes that more and more consumers want the same ease of broadband Internet access they enjoy inside their home to be available when away from their home network. By providing the ability for them to easily connect to the Internet from place to place, HomeNet allows consumers to get the most from their networking solution, while also allowing service providers to add greater value to their product offerings and accelerate revenue generation." Separately, SupportSoft said
TeliaSonera, the largest Nordic and Baltic telecommunications
group, has selected it to be its strategic software vendor for
end-to-end broadband service automation, from installation to
ongoing support and value-added services. TeliaSonera is the
largest Nordic broadband service provider, with more than
450,000 broadband customers. Back
to Headlines
Sandvine Reduces P2P Bandwidth Burden Sandvine's research of its ISP customers shows that peer-to-peer policy management dramatically reduces the bandwidth that file-sharing applications use without impacting the ISPs' subscribers. It's estimated that P2P file-sharing programs such as Kazaa and Morpheus consume as much as 70% of an ISP's bandwidth. By installing Sandvine's hardware, bandwidth utilization is reduced without having to cap user usage, resort to legal actions or deal with quality of service issues. Sandvine co-founder and VP,
marketing and sales Tom Donnelly said, "Sandvine was able
to deliver impressive cost benefits and efficiencies without
degrading the online experience for the ISP's
subscribers." Back
to Headlines
Hackers, Stalkers, Viruses, Spyware & Pornography Threaten Broadband Users Most broadband users do not protect their computers from attacks made possible by the always-on feature according to a study by The National Cyber Security Alliance, a coalition of dozens of online companies and government agencies dedicated to online computer safety. The study shows that most consumers don't realize that they lack protection or that their computers and personal information are at risk. It found that only 11% of the users studied had safe and securely configured systems. Among the key findings were: - 86% say they keep sensitive health, financial or personal information on their home computer. - 79% say they use their home
computer to conduct sensitive financial or medical
transactions on the Internet. 2) Consumers believe they have
taken adequate steps to protect themselves - 78% say they feel their
computer is very or somewhat protected from viruses and Trojan
horse programs. 3) Despite the false sense of security, consumers are not protected - Spyware - 91% of users have intrusion software (frequently referred to as "spyware" or "sneakware") on their home computers, much of it placed there surreptitiously by music or file-sharing programs. Despite heavy use of those programs, 94% of users don't know that spyware is often bundled with file-sharing programs. - Pornography and children's
safety - 97% of parents with broadband connections don't use
parental controls to keep their children safe from
inappropriate content and contact with strangers on the
Internet. "Without even knowing that they are unsafe, millions of high-speed users are putting themselves and their families at risk by having unprotected broadband," said Alliance member Tatiana Gau, AOL's chief trust officer and senior VP for integrity assurance. "A basic broadband connection without protection can be the equivalent of a high-speed sewage pipe into the home, flooding it with viruses, porn, spam and hackers. It is critical that every broadband user practice safe broadband with, at minimum, a properly configured firewall, updated anti-virus protection and parental controls." Orson Swindle, a commissioner at the Federal Trade Commission and a proponent for promoting consumer computer security, recognizes that the survey clearly demonstrates that the job of awareness is an ongoing venture. "Keeping your computer, your personal information and your children safe is something every American should take seriously. Not using common sense precautions like firewalls, virus protection and parental controls is like leaving the door of your house wide open all night." According to the National Cyber Security Alliance, a safe broadband household needs at least the three elements listed on the StaySafeOnline.info web site. - Firewall: a properly
configured and secure firewall that prevents computers on a
network from communicating directly with external computer
systems and acts as a barrier through which all information
passing between the networks and the external systems must
travel; Digital Path To Expand High-speed Wireless Internet Connection Nationally Digital Path Networks has received start-up venture capital to expand from being a Chicago area ISP offering a high-speed wireless connection from the home to the Internet. For $34.95 a month, less than most DSL or cable modem connections, home users can get broadband Internet service at speeds up to four times faster than DSL. Launched in Chicago with more than 500 residential users, Digital Path is will now offer high-speed Internet service in the nearby cities of Gridley and Chester, with plans to bring additional towns online soon. Digital Path CEO Jim Higgins
says the investment will be used to provide working capital as
the company grows from a local start-up to a national provider
of wireless Internet access service. "With an offering
both faster and less expensive than either DSL or cable, this
is a big win for the consumer and small office user of
broadband internet services. Our relationship with DFJ
Frontier gives us the ability to accelerate our growth and
ensure the highest possible quality of service for our
customers." Back
to Headlines
Verizon Extends its Alcatel Deal for DSL Gear Verizon, the largest US regional telco, has extended its contract to buy DSL gear from Paris-based Alcatel, generally regarded as the world's largest maker of DSL hardware. The deal could be significant for Alcatel, since Verizon has recently been pushing its DSL service by reducing prices, improving customer support and extending its reach so more of its phone customers can get Verizon DSL if they want. Paul Lacouture, president, network services for Verizon, said, "By the end of this year, we expect four out of five of our customers will have access to our DSL services." By access, Lacouture no doubt means that DSL is available on the wires that pass their phone customer's home or business, not necessarily that they will have signed up for Verizon DSL. Alcatel's canned statement was
also telling, "This is a significant win for Alcatel,
said senior VP Mike Quigley. "Verizon is installing DSL
in an additional 1,000 switching centers - both remote and
central office units - with most areas connecting via fiber
optic cables. Verizon is obviously serious about deploying
broadband services to the masses, and we are equally serious
about helping ensure those services are the best in the
world." Back
to Headlines
Cisco Systems on June 2 closed
its previously announced acquisition of privately held Linksys
Group, which will become a Cisco division with its
headquarters remaining in Irvine. The move gives Cisco the
leading provider of Wi-Fi networking gear for the consumer and
SOHO market. Linksys products will continue to be sold under
its own name, according to Cisco. Back
to Headlines
Internet Speed Could Be Increased 6,000 Fold Scientists at Caltech are
working on a technology called Fast TCP that could increase
the speed of the current Internet infrastructure by 6,000
times, making it possible to download a full-length movie in a
few seconds according to a report in the New Scientist.
Currently the Internet uses technology developed in the 1970s
called TCP/IP that's much slower. "Caltech is already in
talks with Microsoft and Disney about using it for
video-on-demand," the journal said.
Back
to Headlines
Broadband Coming Bundled with Phone Service "We believe that over half
of DSL will be sold as part of a bundle, which of course would
contain voice, by 2005." - Charles Hoffman, Covad
president and CEO in Dave Burstein's DSL Prime newsletter
Back
to Headlines
Europe Behind in Broadband & Falling Further Behind "At the end of 2002 there were more broadband access lines in South Korea than in the European Union. To make matters worse, those lines were up to 50 times faster than European speeds. Since then there has been the rollout of tens of thousands of VDSL lines, at speeds from 13 Mbps to 50 Mbps; a service unavailable here in Europe. In the first quarter of 2003, Japan added 1.4 million ADSL lines at 8 Mbps or 12 Mbps, more than the equivalent growth in Europe and again at very much higher speeds. It is not only that Europe is not in the lead in the adoption of broadband, but that it seems unlikely to catch up for years to come. "Four leaders of the Euro
telcos were on a panel in Berlin last fall. They spoke with
pride about how much they were achieving. I applauded their
efforts and reported they were ahead of the US in many ways.
But I also asked the question "What will it take to raise
Europe to Asian speed levels? Do the French not want as robust
an internet as the Japanese?" - Ewan Sutherland, the
executive director of the International Telecommunications
Users Group (INTUG) based in Brussels. Back
to Headlines
MusicMatch Launches Composer On Demand MusicMatch has introduced a new service that makes it easy for classical music fans to create custom playlists of their favorite composers, find new composers to listen to and search for music by period, such as Baroque or Romantic. The new Composer On Demand, part of the MusicMatch MX Platinum streaming music service, works the same way for classical music as the company's Artist On Demand does for pop music. Subscribers can take advantage of the easy search feature and MusicMatch personalization and recommendation engine to find and listen to their favorite compositions and learn about others that might appeal to their taste based on previous selections. The service lets users listen to an entire work or skip through to a specific movement. Composer On Demand includes exclusive classical catalogs from all five major music labels from both popular and lesser-known composers. MusicMatch playlists are hand-selected from classical music experts to deliver CD-quality classical performances from top orchestras around the world. Composer On Demand is available
as part of the Platinum tier of MusicMatch MX, which includes
Artist On Demand and additional customized streaming music
features such as Internet radio. It's $4.95 a month when
billed annually. Back
to Headlines
Cornice Intros New High-capacity, Low-cost Tiny Portable Storage Cornice Inc, a start-up, is shipping the very first generation of what it calls the Cornice Storage Element (SE), which it claims has more storage in less space and at a lower price than anything that's been available. Packing 1.5GB into a half-cubic-inch size, the SE is supposedly what's needed to launch a new generation of powerful pocket-sized mobile consumer electronics products at affordable prices. Cornice is aiming at a market that's in between flash memory, which generally tops out at 128MB, and miniature hard disks that typically start at 10GB. Cornice points out that if flash came in 1.5GB, it would retail for between $400 and $500. Instead SE's $65 wholesale price in quantities of 100,000 will cost consumers considerably less, probably something on the order of $125 or so at retail. Cornice thinks it can reduce the product's cost in large volumes to about $50 each at wholesale. One comparison is what the Cornice SE means to SonicBlue's Rio MP3 players. The currently available Rio S10 with 64MB is $119. Add $185 for 512MB Sandisk flash memory and the total comes to $304 with only 576MB of storage. The two new Rios coming out this August will use the Cornice SE. The Rio Nitrus Urban at $299 and the Rio Nitrus Executive at $329 will both have 1.5GB of storage, three times as much as the current models for about the same price. The first Cornice SE features 1.5GB of storage, roughly the equivalent to 30 compact discs of music, two hours of VHS-quality MPEG digital video, 80 video games instead of one on a handheld player, or over 135 raw, four-megapixel maximum-quality digital camera images in TIFF format. The Cornice SE is said to offer CE makers faster record and recall plus a higher capacity than any other small storage devices currently available. In addition, the SE provides for the low battery usage enjoyed by solid-state storage media, and is durable enough to survive being dropped a meter onto concrete or the constant motion incurred if a jogger uses it. The SE is intended to be used
as the fixed storage subsystem in portable electronics devices
such as MP3 players, digital still and video cameras and
handheld gaming devices. Cornice believes that the thing is
priced low enough to make a significant difference at retail.
Potential
Cornice SE Equipped Products The 1.5GB Cornice SE has 31 electrical components and three integrated circuits, compared to the 110 components and six ICs in regular hard disks. "Because a consumer's
storage purchase has so often been viewed separately from the
cost of the host device, the consumer electronics industry has
been conditioned to think of storage in terms of the
cost-per-megabyte of the media," said Cornice president
and CEO Kevin Magenis. "Cornice's innovations now make it
appropriate to think of storage as the cost-per-megabyte of
the entire solution, or the device including storage. On that
basis, we are confident that Cornice offers the most
compelling storage option available to consumer electronics
manufacturers today."
Samsung MPEG4 Camcorder with 1.5GB Cornice SE Storage Samsung is using the Cornice SE in its new $600 ITCAM7, an MPEG4 camcorder with MP3 player and 10x Optical Zoom. Other MP3 players besides the Rio that will use the Cornice SE are RCA's Lyra and a unit from iRiver. Cornice had raised $22 million in venture funding as of August 2002. Investors are CIBC Capital Partners, Nokia Venture Partners and VantagePoint Venture Partners. Texas Instruments was an early investor. Magenis, previously at storage
company Maxtor, told the San Jose Mercury that the company
expects that Cornice will be able to increase its drive
capacity by 60% a year, about the same rate as PC hard drives.
At that rate, the Cornice SE drive will be able to hold as
much high-quality video as a DVD in two-and-a-half years.
Rio The Rio Nitrus Urban uses
Cornice SE storage. Back
to Headlines US Ringtone Market: Small Now, $1b by 2007 The US market for ringtones may be small, but with the right combination of key trends, it will surpass a billion dollars by 2007, according to IDC. Current ringtone offerings - 15-second snippets of songs and sound effects - run the gamut from hit songs to celebrity voices and movie and TV themes to bird chirps. Still in the formative stage, the US ringtone market will be driven by the increased availability of polyphonic-capable devices and polyphonic ringtone content during the next 12-18 months. The researcher expects that by late 2004-early 2005 the US market will be headed towards higher-quality music content delivered through premium wireless audio services, with standard monophonic ringtones being phased out. "Moving from ringtones to
a fuller mobile music services industry will be a critical
evolution in reaching the strategically important youth
market," said IDC senior research analyst for wireless
and mobile communications Dan Thorat. He believes that to make
this progression, carriers will have to work with device
makers, content providers and entertainment industry leaders
to create marketing and branding campaigns that differentiate
their content offerings and "build stronger marketing
relationships between entertainment artists and their mobile
fans." Back
to Headlines Worldwide mobile phone unit sales totaled 112.7 million units in 1Q03, an 18% increase from 1Q02, according to market researcher Gartner. Bryan Prohm, Gartner senior analyst, said, "Annualized sales trends based on these results suggests the market could be on pace for a double-digit rate increase for the full calendar year." Nokia, with 35% of the market last quarter, continued to have more than double the market share of its nearest competitor. "In 2003, an explosion in the availability of color screen and camera phones is expected in mature markets, such as Western Europe, and we predict that many customers will be tempted to replace their existing mobile terminals," said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe. "Photo messaging, which Gartner terms 'disposable photography,' is expected to be the cornerstone service in mobile network operators' marketing campaigns throughout the year. "The mobile terminals market in 2003 will be characterized by 'device diversity' as mobile terminal manufacturers launch a wide range of new handsets with features, such as gaming, music and video. However, the majority of worldwide sales will remain in the low-tier, low-function segment," Wood said. Gartner sees two potential storm clouds on the horizon: The economic impact of SARS and the excess inventory, especially in China, caused by there being over 100 cell phone makers. Ann Liang, industry analyst
with the mobile communications group for Gartner in
Asia/Pacific said, "Clearly, then, any optimism should be
met with an equal measure of prudence."
Back
to Headlines Warner Music To Play on Nokia Cell Phone Nokia, the world's largest cell phone maker, has signed a deal with Warner Music International to provide Warner music on the Nokia 3300 handset, successor to the Nokia 5500, the first phone to contain a music player. "Working with Warner Music International we can create possibilities for fans to enjoy music and personalize their mobile devices in a whole new way, with extra contents such as wallpaper or True tone ring from your favorite artist," Nokia said in a statement. No financial terms were disclosed. The Nokia 3300 was designed
specifically for playing music. It includes a portable digital
music player (MP3/AAC formats), a stereo FM radio, a digital
recorder, advanced ringtones, enhanced messaging and games. It
has a "Pop-Port" connector that uses USB for
transferring files and a 64MB MMC memory card.
Back
to Headlines Estimates
of Worldwide Mobile Terminal Sales to End Users for 1Q03 (Thousands of Units)
1Q03 Market
1Q02 Market ——————————————————————————————————— Nokia
39,479.2
35.0
32,649.0
34.2
20.9 Motorola
16,561.1
14.7
16,804.3
17.6
-1.4 Samsung
11,878.9
10.5
8,890.4
9.3
33.6 Siemens
8,584.6
7.6
8,121.4
8.5
5.7 Sony Ericsson
5,384.8
4.8
6,000.8
6.3
-10.3 Others
30,785.5
27.3
22,867.2
24.0
34.6 Total Market
112,674.1
100.0
95,333.1
100.0
18.2 ——————————————— Note: Table includes iDEN shipments, but not mobile WLL
and ODM original equipment manufacturer (OEM) shipments. Source: Gartner Dataquest (June 2003) Back to Headlines
"The mobile enterprise
market is the biggest short-term revenue driver for us."
- Elie Simon, president of Sun's European, Middle East and
Africa (EMEA) unit, in a Reuters interview. He said that Sun
will soon announce partnerships with various European mobile
phone operators to provide them with new Java-based software
and computer servers geared to making MMS, or next-generation
multimedia messaging services, more secure.
Back
to Headlines Cellular Multimedia Messaging Outlook Dim in Europe Multimedia Message Service
(MMS) and Instant Messaging (im) on cell phones will not hit
double-digit growth of at least 10% in Europe until 2007
according to market researcher In-Stat/MDR. It paints an
equally dim outlook for the high-speed 3G mobile networks now
beginning to be launched. Back
to Headlines Photo Messaging Is Hot, Consumers Would Pay The ability to send a photo
over a cell phone appears to be the first breakout capability
of next-generation multimedia messaging services (MMS),
according to the latest Mobinet study from management
consulting firm AT Kearney and the Judge Institute of
Management, Cambridge University's business school. The
findings, showing the increased penetration of advanced mobile
phone technology, show a strong potential revenue stream for
carriers. Additional findings from the study include: - It's not lack of content that keeps them away. Since June 2002, the number of mobile Internet users who say poor content limits their interest in accessing the mobile Internet dropped by 73%; among non-mobile Internet users, the number dropped 81%. - Widespread purchasing over a mobile phone is still limited. More than a third of mobile Internet users said they'd consider using their mobile device to purchase tickets and entertainment, 19% would purchase travel services and 13% would buy groceries. However, as many as 70% of these purchases are stimulated by impulse or experimentation rather than convenience. - While manufacturers are
coming out with handsets with impressive new features, it's
the basics that attract consumers. More than 60% of users said
the mobile phone innovations they most desire are improvements
to basic features such as sound quality and battery life.
Advanced phones that skimp on these fundamentals and add new
features could present a barrier to acceptance of
next-generation mobile technology.
Back
to Headlines helloNetwork, Portalmix Deliver Mobile Video Portalmix, a Barcelona-based online leisure and entertainment company, has chosen helloNetwork's mobile streaming technology to launch its first mobile video-based applications. Starting this month, Portalmix will deploy a set of video-enabled programs with Telefonica Moviles España (TME), the Spanish subsidiary of Telefonica Moviles Group, enabling TME subscribers to experience video entertainment on their mobile phones. Portalmix will use helloNetwork's helloMobile Encoder Appliance and playback apps to prepare and deliver selected content to Telefonica Moviles. The initial offering, in helloNetwork's VideoScreenSaver format, will deliver download-and-play clips of popular bloopers and candid-camera style outtakes. "Video Descargas" will be available for download at TME's MoviStar e-mocion site and are priced at one euro a clip. The clips will initially run on Nokia Series 60 devices. Support for Nokia Series 30 and 40, Motorola terminals and iMode handsets will follow shortly. TME is the first is the first
operator to offer video services in the Spanish market.
helloNetwork is currently in talks with other content owners
to repurpose similar properties for the greater European
market. Back
to Headlines Youth Want Advanced Cell Phone Features Kids in Canada will propel new growth in that country's wireless services, according to a study from Solutions Research Group (SRG). Nearly half (48%) of Canadian teens aged 15 to 19 now own a cell phone, up from 30% in 2001. A quarter of the "tweens," those in the 12-14 age group, have joined the mobile crowd, up from 6% two years ago. According to Kaan Yigit, SRG partner and study director, it's these kids and young adults that "will provide the momentum needed to drive the integration of the new advanced communication and entertainment features coming into the market." Canadians aged 12-24 who currently have cell phones or indicate interest in owning one show significantly higher interest in the new advanced wireless features than their elder compatriots. "While adults struggle with understanding the need to e-mail or access the web from their wireless…young people will embrace the personal empowerment that mobile connectivity provides them," said SRG VP Michele Erskine.
12-24
12 years
Singapore Cell Phone Provider Drops Wi-Fi Plans MobileOne, Singapore's second-largest cell phone service provider, will close down its Wi-Fi broadband service after the trial results proved disappointing. Back to Headlines
Frequent Flyer Rewards for Legal Kazaa Uploads This month Brilliant Digital's Altnet file downloading service, which uses the FastTrack P2P network made popular by the likes of Sharman Networks' Kazaa and Grokster, will start rewarding users who share licensed content and who use the Kazaa Media Desktop. Working with Sharman and Joltid, developer of the FastTrack P2P network, Brilliant is trying to create a legitimate method to sell music, movies and other copyrighted material over the web. It's had a hard time doing it because the major labels have refused to work with what they consider copyright pirates. Brilliant has been left to work with artists that the major labels, even the large independent labels, don't think are worthy of a contract. It also promotes movies and games with film clips. Peer Points, Altnet's rewards program, is intended to attract more users and make its downloading service more attractive to copyright owners. A Digital Content
Distribution Solution "As the industry moves from centralized to distributed or peer-to-peer computing, the ability to establish relationships with individual computer users becomes ever more important," Bermeister added. The Peer Points Manager works with Altnet's TopSearch technology, which gives artists and content owners a secure distribution platform based on a patented P2P technology to promote and offer their works in a secure and convenient way. Altnet files appear as gold icon files in Kazaa Media Desktop search results. Altnet files will also be accessible from certain versions of the toolbar products distributed by Focus Interactive, and can be easily purchased using Altnet's payment gateway. The Peer Points Manager meters gold icon TopSearch file uploads and compensates participants for use of their resources, enabling them to redeem prizes directly or enter a sweepstakes for cash or prizes. Prizes range from Plasma TVs to MP3 players to Sony Walkmans to concert tickets, flight discounts, clothing and DVDs. Participants can easily opt out of Peer Points Manager, or set caps on the resources they are making available. The Peer Points Manager reportedly protects user privacy and is not supposed to collect or track surfing habits or other personally identifying information. Altnet tested the platform for
close to a year, delivering an average of 20 million licenses
a month, scaling to 20 million licenses a day. It provides a
billing solution, works with multiple file formats and claims
to be the single largest distributor of Microsoft's digital
right management software. Back
to Headlines Royalty Rates Set for College Webcasters The Recording Industry Association of America has reached a royalty agreement with noncommercial webcasters. The new rates, retroactive to 1998 and continuing through the end of 2004, are flat fees low enough to let smaller college stations keep broadcasting while still providing compensation to rights holders. The Small Webcaster Settlement Act, signed into law in December 2002, set May 31 as the deadline for negotiations on a rate structure that would provide an alternative to previously established fees, otherwise a Copyright Arbitration Royalty Panel (CARP) was to convene on June 30. Under the new agreement,
colleges and other "noncommercial educational
entities" have one set of rates, while all other
noncommercial webcasters have agreed to slightly higher fees.
College and other school stations have until October 15 to opt
in to the new rates, while other webcasters have 30 days from
the time the agreement is published. * The rates for 2002-2004 drop
to $250 a Webcasters with more than one
channel will pay a minimum of $500 a year, $250 if all
stations carry only news/talk/sports. "We are extremely pleased
to have reached this agreement with noncommercial webcasters,
including college webcasters," said Steven Marks, senior
VP, business and legal affairs at RIAA "We recognize that
noncommercial webcasters operate under different conditions
than for-profit webcasters. The agreement includes an
accommodation for noncommercial stations while avoiding a
costly arbitration." Back
to Headlines Napster Foes Metallica Cozy Up to the Net The heavy metal band Metallica, the first and most outspoken of the anti-Napster artists, has launched a new web site that offers fans who legally purchase its new album free access to demos, b-sides, live footage and other content. The "only Metallica-sanctioned online distribution point for the band's music," www.metallicavault.com was developed in conjunction with broadband service provider Speakeasy and Segnana, which works on the band's online and interactive media projects. Fans who buy the band's new
"St Anger" CD will have special access to the site
that includes broadband-enabled content such as rare and
unreleased Metallica tunes, hand-picked by the band for
inclusion. "St Anger" owners will register and enter
a code found on an insert in the CD package to gain access. That's quite a different attitude than the band expressed three years ago when it slapped the fledgling Napster file-swapping site with a lawsuit for enabling its users to illegally share Metallica songs. Although the band may now claim that it was the poor quality of the recordings rather than the money or legal issues behind its censure of the P2P site, it's difficult to believe the about-face. In 2000 Metallica lawyer Howard King and drummer Ulrich called on Congress to step in and stop the file-swapping madness before it got out of control and Ulrich testified at Senate Judiciary Committee hearings to discuss the future of digital music. The band was also the first customer of NetPD, a British anti-piracy firm whose technology scours P2P networks for copyrighted material. Metallica used the data to gather contact information on more than 200,000 Napster users allegedly swapping its songs on the network and delivered the info on the violators to Napster's office after the file-swapping firm said it had no way to determine which users were sharing the band's songs. It will be interesting to see
how the band reacts if multiple users start signing onto the
site using the same ID number. Separately, Vivendi Universal
Games has signed an exclusive multi-year agreement with the
band for worldwide rights to publish and distribute a
multi-platform vehicle combat action game featuring music,
voice-overs and "inspiration" from the band.
Scheduled for release in 2005, the game will be produced in
collaboration with Segnana. Lack of Interest Hinders Music Sales It's not only downloading that's causing the drop in CD sales. Although P2P networks are responsible for a large percentage of the sales decline, recent consumer tracking surveys from the NPD Group found other root causes, particularly among mature buyers. Overall, NPD says, full-length CD sales fell 13% in 4Q02 from a year earlier. Already this year, Q1 sales were down 9% year-over-year. While more than half of the lost sales can be attributed to file sharing, some 60% of music consumers with web access have not downloaded music for free - and sales to this group are off by as much as 7%. NPD research shows steeper sales declines among consumers aged 36 and over than among younger demographic groups. Nearly half of this age group - which represents 45% of all CD sales - say they're purchasing less music because there's less music available that they're interested in buying. Less than 10% of the 36+ demographic reported purchasing less music because of downloading. While the industry is still finding ways to fight illegal downloading, NPD suggests several "industry prescriptions" to help regenerate adult interest in purchasing music: -Focus on the revival of legacy
artists. Movielink Broadens Reach with The FeedRoom Movielink has teamed with Internet broadcaster The FeedRoom to launch a co-branded version of the Movielink movie download service that will let FeedRoom viewers watch previews, download selections and catch films offered by Movielink. Access to the service will be prominently displayed on all the entertainment pages on the FeedRoom site. Users will be directed to the Movielink/FeedRoom home page where they can browse and watch previews at no charge. Fees to download a movie currently range for $4.92-$4.99 per flick, which puts the movie on the user's PC for 30 days. Once the user starts to watch the movie, he can view it as often as he likes during a 24-hour period, after which it is no longer viewable. Titles currently available for download include new releases "8 Mile," "Red Dragon" and "Two Weeks Notice;" Academy Award winners such as "As Good As It Gets" and "Braveheart" and classics like "Taxi Driver" and "Charade." "The launch of the co-branded service with The FeedRoom represents another step forward in our continuing plan to work with a select group of affiliates to offer their customers a variety of top movies," said Movielink's VP of business development Tyler Goldman. "The FeedRoom has distinguished itself as a leading provider of streaming news, current events and entertainment, and now, through the Movielink co-branded service, its users can not only watch previews, they can also rent these movies." Movielink introduced a similar
co-branded offering with Hollywood.com in April. Back
to Headlines The Network That Launched a Thousand Ships Wi-Fi wireless networking is
being installed in 18 UK marinas to help sailors access
weather reports, tidal schedules or simply use the net to
browse or contact land from their boats. Square Mile
International in conjunction with The Cloud, a company that
plans to install and manage Wi-Fi in 2,000 British pubs, have
already set up the service in Portsmouth, Chichester and
Hartlepool with other marinas scheduled for near-term
installation. Access fees are 15 pounds ($24) for 24 hours of
unlimited access or 25 pounds ($40) for a month. Back
to Headlines Kathy Ramsey, the executive VP of public affairs for the National Association of Broadcasters wrote the New York Times in response to a William Safire column that we quoted two weeks ago: "In 'The Great Media Gulp' (column, May 22), William Safire asserts, "today three companies own half the stations in America, delivering a homogenized product." The actual numbers are much less headline-worthy: the top three radio companies today own about 16% of stations. "Regarding programming, in 2002, radio debuted more than 3,000 new songs and 550 new artists on 250 discrete formats. The public appreciates radio's strengths: according to the pollster John Zogby, 85% of Americans say their local radio stations do a good job in providing listeners with news, information and entertainment. "At Congress' direction,
the FCC is currently evaluating a multitude of regulations
governing media ownership. The gravity of this process demands
a fair evaluation of each regulation based upon its individual
merits." Back
to Headlines Amazon.com is negotiating with
Apple to add the iTunes music service according to a New York
Post report. It's reported that Amazon chairman Jeff Bezos has
been thinking about selling music online on its web site for
years. It has licensed its patented one-click technology to
Apple. Amazon might consider that even if were to get all the
current iTunes revenue, it'd have less than $50 million a year
- a drop in the bucket at Amazon. Back
to Headlines AT&T Expanding Wireless Internet Connections AT&T says it will spend
$500 million this year to improve service to businesses by
simplifying billing and expanding its wireless Internet
service in hotels and airports. Back
to Headlines Two percent of respondents said
they have a camera phone and 20% expressed an interest in
getting one, according to a JD Power UK Mobile Telephone
Customer Satisfaction Study. Back
to Headlines Apple Selects MP3.com Europe for Marketing Program Apple has selected MP3.com
Europe for a major marketing campaign on behalf of its new
10GB handheld iPod portable music player. MP3.com Europe's UK,
French and German sites will send out newsletters and targeted
"single-serving" e-mails featuring exclusive tracks
to 300,000 registered MP3.com users. Back
to Headlines Yoakam Fans Can Listen to Album Early Country artist Dwight Yoakam
has posted a video for "The Back of Your Hand" on
his official web site at www.dwightyoakam.com /boyh.html. In
addition, fans who click the pre-order link will be able to
listen to his upcoming album in its entirety before it's
released. The album, "Population: Me" will hit
stores on June 24. Those taking advantage of the pre-order
link, however, will be able to listen to the album in the
"digital library" area of their Amazon .com account
as often as they like until it ships. Back
to Headlines Germany Holding Back Digital Media Boom Europe is the world's second-largest potential market for digital media equipment and content. No one loves their digital media devices more than the Germans. The Europeans, however, led by Germany, are holding back the digital media boom with their lackluster economies. "Europe is the new weak
link in the global growth chain and Germany is its biggest,
weakest link. What would be worse? Higher inflation in
Ireland, Spain and Greece, or deflation in Germany?" -
Stephen Roach, Morgan Stanley's chief economist at a bankers
conference in Berlin as quoted by the New York Times.
Back
to Headlines RealNetworks Confident of Relations with AOL At RealNetworks' annual
shareholders meeting this week, chairman Rob Glaser answered
an attendee's question about whether RealNetworks was the
"big loser" in the AOL Time Warner antitrust
settlement with Microsoft that could clear the way for
Microsoft to sell its Windows Media technology to the world's
largest media company by crediting Microsoft's PR machine with
positioning the deal as a Microsoft win according to the
Seattle Times. He elaborated by saying that most AOL audio and
video comes in RealNetworks formats. He assured the
shareholder that AOL Time Warner and RealNetworks continue to
have a close relationship. "We think we'll do just
fine," he concluded. Back
to Headlines What the Heck Is "Foo-Foo Dust"? From the www.commonsense.com web site comes the following explanation and example of the use of the term "foo-foo dust." "'Stealth regions' are locales on Mars where the radar penetrates the surface but doesn't bounce back - a characteristic these regions share with the military's radar-avoiding stealth technology. In the case of Stealth fighters and bombers, the aircraft surfaces are made of a high-tech radar-absorbing material. In the case of Mars' 'stealth regions,' however, the answer isn't known," said Golombek. They may be covered with a meter or more of "foo-foo dust," a Dr. Seuss-like term that Golombek uses to describe possibly fluffy accumulations of Mars' fine iron-oxide dust particles that can pile up in drifts like red snow." http://www.commonsensecentral.com/CSC_2002/Who_seesthru_foo_foo_dust.htm It surely has a number of uses in the digital media industry
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THE online REPORTER provides weekly reports and strategic analysis about digital consumer technology and the e-commerce activities of the movie and music companies.. It reports on all the power struggles that have been unleashed.THE online REPORTER focuses on:
If ever that overused phrase "paradigm shift" was apt, it's now, about the Digital Media industry. There's not a company in the industry that's not worried about where it'll still be standing after the deluge - and that goes for leaders like AOL Time Warner as well as that feared monolith Microsoft. Its format is concise and pointed, its style a touch brash and, with any luck, a bit controversial. Its object is to break the stories that give its readers the real inside track. It is pledged to fact and fair comment. THE online REPORTER - Intelligence for decision makers.
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