Every digital media event comes in waves. For instance, the deal that resulted in TigerDirect being first to sell a $449 Linux-based digital media do-it-all box comes in three parts: the Box, the Players and the Market.

1. The Box

Video Without Boundaries (VWB) has signed TigerDirect, the retailer, to sell its Lafayette MediaReady 4000 Internet/DVD set-top box - a sort of "Vegamatic" of consumer electronics. It does a little bit of everything.

The unit is a combination DVD/CD player and PC that lets people watch DVD videos, rip CDs to an internal hard drive, access stored audio, video and digital pictures from any networked-connected PC or access streaming audio/video over the Internet, surf the Web, e-mail, sing karaoke and play games. TigerDirect will sell the thing on its Web site for $449.

The unit has the size and look of a DVD player and combines a DVD/CD player and Web browser with a full-sized wireless keyboard, a media player for playing back Web-based streaming media, MPEG-1/MPEG-2/MPEG-4/MP3 support, Dolby Digital 5.1 Surround Sound, picture-in-picture capabilities, a karaoke microphone jack and features that will let people access all the popular forms of home entertainment from their couch.

Computer content can be accessed from the Internet or from the home network. The product supports dynamic DSL, cable modems and 10/100 Base-T Ethernet.

"The rising value of the computer as an entertainment medium has created a need for equipment that enables consumers to access computer-based entertainment content from their family room. The Lafayette MediaReady 4000 delivers more power in one box than any other product we have evaluated in the sub-$500 price range," said TigerDirect VP of marketing Russell Strunk.

Video Without Boundaries makes media-convergent home entertainment devices that use a Linux-based architecture according to VWB president Jeffrey Harrell. The 4000 is its first patent

2. The Players

The deal that resulted in TigerDirect selling the MediaReady 4000 involves four companies.

- CAC Media developed a Linux, though not open source, operating system called the MediaReady Convergence Software Suite customized for digital media applications. The MediaReady 4000 is the first hardware to use it. CAC Media will license it to other companies. It competes directly with Microsoft's Windows Digital Media 9 Series and runs on any x86 microprocessor.

- Video Without Boundaries (VWB) developed and makes the MediaReady 4000. It will sell the complete unit to OEMs who peddle it under their own labels. It'll also sell the board or even the chipsets that run the CAC operating system to resellers that want to build their own.

Video Without Boundaries owns a piece of CAC Media though investment and CAC and VWB have a joint venture to license the CAC software to CE and PC makers.

- To build a recognized brand name, VWB licensed the Lafayette name from the Lafayette Electronics stores. Lafayette no longer has stores or makes electronics gear. It has started on a path similar to Polaroid's and licenses its brand name to other companies for a fee.

- TigerDirect sells computer and electronics gear and software directly from its www.tigerdirect.com web site and catalogs. It was the first to sign up to sell VWB's Media Ready 4000 box.

A PC or CE maker - or even another retailer - that wanted to get to market rapidly with a "converged" product has several options:

- License the CAC Media software and use Intel, AMD or VIA microprocessors to develop and make its own hardware.

- License the CAC Media software and buy VWB circuit boards to use in its own hardware.

- License the CAC media software and buy complete boxes from VWB with its own name on them.

CAC Media exec Ken Nelson claims there's been lots of activity licensing the software. Licensees however can't be named; they want to make their own product announcements. Nelson says licensees are companies of different sizes and that interest is roughly divided between PC and CE companies.

Nelson says both industries see digital media home entertainment devices as the next evolutionary step.

Naturally he thinks the Media Ready 4000 has a leg up on rivals:

- It's here now. Shipping starts this month.

- It does practically everything a digital media buff could want. It doesn't support DVR functions but could by adding a TV tuner.

- At $449 it's cheaper than the cheapest Microsoft-based unit, the $999 Gateway Media Center PC.

Nelson says that the company expects to develop embedded versions of the MediaReady Convergence software, a move that should make the hardware cheaper and more reliable. The software can be configured to work in multiple sorts of CE devices, he said. A MediaReady 400 version could run a DVD-less set-top box, for example.

3. The Market

Ah, the age-old question: Is the market ready for such products? Are people ready for Rhapsody and Movielink in their living room?

HP, first to announce a digital media PC, recently said it was satisfied with sales of its Windows-based Media Center PCs but it, and none of its Media Center compatriots, would provide any numbers. Microsoft isn't talking numbers either. The absence of numbers usually means pretty lackluster results. Companies that are succeeding blare out their sales numbers relentlessly as Apple does with iTunes track sales and RealNetworks does with the number of music tracks it streams.

Pieces of the digital media infrastructure are still missing. Not enough homes are networked. Not enough TVs are equipped to access movies off the Internet. Not enough stereos can play streamed and downloaded tracks. Broadband has nearly reached critical mass but comes up short on speed. The missing pieces are in transit, industry proponents say. When they get here in the next year, 18 months or two years, products like MediaReady 4000 will find a market.     Back to Headlines

Deutsche Telekom-owned ISP T-Online and Samsung said this week that they have jointly developed a set-top box that will deliver the T-Online Vision services to residences. T-Online Vision includes video-on-demand, a portal offering news, sports and entertainment and WebMail.

Fujitsu Siemens offers a similar box, also developed in conjunction with T-Online, that sells for about $1,200 (999 euros). Versions that include DVD players and recorders sell for more. The Samsung box, like the Fujitsu Siemens one, makes entertainment-on-demand and online services - previously available only from a PC - available on a TV set. Samsung said it would begin shipments in Q3.

The T-Online Vision on TV service, launched in late '03, uses special set-top boxes called Activy Media Centers. It lets users access e-mail, news and information on sports, movies, music and games through a TV that's connected via broadband to the Web.

Vision includes an electronic program guide and personal video recorders with time-shifting functions as are found in digital video recorders - pause, play, reverse, fast forward and save. Activy's DVD drive can play formats like DVD, audio CD, MP3 and Windows Media on the TV set or through a stereo or surround system. E-mail, SMS, chats and instant messaging are available. It also supports interactive TV, which has become quite popular in Europe.

Movies from T-Online are downloaded in near DVD-quality and stored in a piracy-protected format on the Activy unit until users pay to watch them. Deals currently exist with MGM International Television Distribution, a unit of Metro-Goldwyn-Mayer, DreamWorks, Universal and the German film production and distribution firm Constantin Film for films previously released in US and German theaters.

Similar to the US online movie services Movielink and CinemaNow, the films cost $3-$5 (3-4 euros) a piece and, once downloaded, can be viewed any number of times in a 24-hour period. T-Online has about 500 films available. Payment is by MicroMoney, the T-Pay charge card. T-Online customers can put it on their Deutsche Telekom phone bill.

"As in the case of broadband, we are now profiling ourselves as an innovative trendsetter in the multi-channel communication field through the services and products of T-Online Vision accessible via the TV set," said Thomas Holtrop, CEO of T-Online. "We have extensive know-how in the marketing of premium content, maintain fine relations with the media industry, and already serve about 3.2 million T-DSL broadband customers who we view as potential prospects for On-Demand services - now on the TV set too."

Video including movies, TV shows and pornography delivered over the Net is estimated to become a $2.4 billion business in Europe. "We're just at the beginning, in the embryonic stage," Marc Schröder, product manager of online content at T-Online told the International Herald Tribune. "And as with an embryo, growth is rapid."     Back to Headlines

RealNetworks released the "gold" version of the RealPlayer 10 free media player that plays content in any major Internet media format including RealAudio, RealVideo, AAC, Windows Media, QuickTime, MPEG-4 and MP3.

While the beta version has been available in the US since early January, the final version is now available in North America, Europe and Japan. Initial international versions include German and Japanese. French, Spanish, Italian, Brazilian-Portuguese, Korean and simplified and traditional Chinese are coming this summer.

The free RealPlayer 10 offers:

- Support for every major media format and the ability to play music from all the major online music stores.

- Integration with the Rhapsody music download store with more than 500,000 tracks.

- The ability to fast forward and rewind within streams without delay, and to pause live streams.

- High-quality streaming video and audio through RealVideo 10 and RealAudio 10 with AAC.

- Support for more than 50 portable music devices including the Apple iPod, palmOne Treo 600 and Creative Zen NX.

Besides the 50-odd content and technology partners that already support RealPlayer 10, RealNetworks has signed up several new ones including BT Rich Media, Air America Radio, "Car Talk" from NPR, Movielink and Virgin Radio.

Virgin Radio, the UK's only commercial national rock music station, is now broadcasting over the Internet using RealAudio 10 with AAC. It has also implemented RealNetworks' Helix Universal Server 10 as its media delivery platform, which lets Virgin use a single platform to support all the leading streaming formats.

BT Rich Media, a new BT business unit focused on providing content owners with a secure digital media delivery platform, has licensed and implemented the Helix Universal Server and the Helix Service Delivery Suite to manage its multimedia content services including pay-per-view, video-on-demand and music downloads. BT is supposed to treat and promote RealAudio 10 with AAC and RealVideo 10 as its preferred media formats.

Air America Radio, the new national "progressive" radio network, uses RealPlayer 10 exclusively for its Internet broadcasting. During the radio network's first week more than two million online programming streams were delivered via RealPlayer 10.

"Car Talk," a weekly radio show on NPR, is making a new show available every week after its on-air broadcast exclusively through RealPlayer 10.

"The new player is good - but it's not perfect," said "Car Talk" co-host Tom Magliozzi. "They still haven't perfected that Lawrence Welk-blocking technology I've been asking for."    Back to Headlines

The baseball season may have just started, but MLB Advanced Media (MLBAM), the interactive media and Internet arm of Major League Baseball, has already seen quite a bit of action. First there was the deal with MSN to offer most MLB online content, including live game broadcasts. Then there was the deal with AOL to offer a limited amount of online content to AOL subscribers.

Now, the company has agreed to offer certain game content as part of Synacor's content bundles. Synacor's platform lets ISPs offer customized subscription tiers of premium and basic content with single sign-on and integrated monthly billing.

The deal lets Synacor's distribution partners offer their customers the chance to listen to every major league game live through MLB.com Gameday Audio or catch all the action with MLB.com Condensed Games and Post Game Highlights. Fans can also use the Searchable Video tool to track their favorite players or set up Personalized Highlight Reels.

MLBAM joins more than 30 other content and service providers offering their wares through Synacor.   Back to Headlines

TDC will become the first Danish provider to launch a national network of hotspots, TDC Hotspot. Through agreements with Statoil, McDonald's, and Baresso Coffee, TDC opened some 400 hotspots with speeds of up to 2 Mbps. Access is free for the first three months.

"We start out with 400 hotspots, but we are not going to stop at that. We expect to establish an additional 200 wireless access locations before the end of 2004. A laptop computer or a handheld PDA equipped with a wireless network card and a subscription to TDC Hotspot are all it takes to log on. No further software or hardware installations are required," said Lars Torpe Christoffersen, president of TDC Solutions.   Back to Headlines

Calling it a "major strategy shift," USA Today said that AOL plans to offer some of its music, news and sports for free to increase ad revenue and attract more customers. AOL wants to get more use out of the content that it spends a lot of money on. "We now have the option to grow our audience beyond AOL," Jim Bankoff, executive VP of programming, told the paper. "We'll have the flexibility to leverage our fixed investment in publishing."

Two European countries already have full-blown entertainment portals - Italy with Telecom Italia's Rosso Alice (See The Online Reporter 388) and Germany with Deutsche Telekom's T-Online Vision. Both offer hundreds of movies and thousands of music tracks as well as gaming, sports, news and sporting news. There's no equivalent in the US although AOL, MSN, RealNetworks, Yahoo and Google are gradually moving in that direction.

The US phone companies will soon realize that they need such content portals to compete with the cable's bundles of TV, broadband and phone services. Cable companies will want to offer their own entertainment portals. AOL, whose parent company Time Warner, has a major cable TV service - Time Warner Cable - could be getting itself ready, wittingly or unwittingly, for such a future opportunity.

Entertainment Portals

Actual                                            Possible

Telecom Italia's Rosso Alice              AOL
Deutsche Telekom's T-Online Vision   MSN
                                                       Yahoo
                                                       Google
                                                       RealNetworks        Back to Headlines

Microsoft has joined the World DAB Forum, an international group of 80 organizations focused on developing digital audio broadcasting technology. Apparently using Microsoft's Windows Media Audio 9 Professional (WMA 9 Pro), the DAB standard can deliver true surround sound for the first time. Capital Radio plc, NTL Broadcast, RadioScape Ltd and Pure Digital and Imagination Ltd are conducting tests in London using DAB with the Windows Media 9 Series to deliver 5.1-channel surround sound. Microsoft Research in Cambridge, England is reportedly exploring a number of services and technologies using DAB and is testing them across home and mobile networks.   Back to Headlines

Video game maven Atari has launched a new subscription service that lets consumers with broadband Internet access play dozens of its older games online.

The new worldwide service, Atari on Demand, provides unlimited access to back-catalog Atari games, productivity software and kids' software for $14.95 a month. Other subscription packages are also available. Located at www.atariondemand.com, the service is powered by Exent Technologies' EXEtender platform. It uses Exent's streaming widgetry, which manages bandwidth usage and ensures that the computer can handle the game's requirements before delivering the software.

Atari on Demand also supports multi-player gaming.    Back to Headlines

So far this year Swisscom has added over 100,000 broadband subscribers, both wholesale through its Fixnet business and retail through its Bluewin operation. Swisscom now has about 600,000 ADSL broadband subscribers.

Since mid-February Swisscom has doubled the speed of its ADSL bandwidth for residences without increasing price. The upgrade came a month ahead of schedule at the end of March.

The bandwidths of the two options Swisscom offers have doubled since February of last year: instead of 300 Kbps/50 Kbps (download/upload) or 600 Kbps/100 Kbps, ADSL customers can now surf at 600 Kbps/100 Kbps or 1,200 Kbps/200 Kbps at the same price. A new option provides 2,400 Kbps/200 Kbps. Existing lines were upgraded and migrated to the new bandwidth for free.

Over 500,000 sites have been migrated to the higher throughput. Only 0.5% of the cases weren't able to migrate because of the distances involved.

Over 98% of Swiss households can now access Swisscom's ADSL broadband. Some four million fixed lines in Switzerland are ADSL-enabled. Swisscom says its ADSL competes favorably with the speed of rival broadband Internet offerings from the cable TV services. The company says that Switzerland has one of the highest growth rates in broadband.    Back to Headlines

The Alliance for Public Technology (APT) has released a study about the various broadband policies being implemented in the US entitled "A Nation of Laboratories, Broadband Experiments in the States." APT says that while some states have productive broadband implementation programs, other states have none at all.

APT calls for a national policy mandated by the federal government to ensure that every consumer can get equitable broadband access. Matthew Bennett, APT's public policy director, claims a state-by-state approach undermines the goal of universal service envisioned by the 1996 Telecommunications Act. The Federal Communications Commission (FCC) interprets the legislation as allowing anyone to enter the communications business and any communications business to compete in any market.

APT's report concludes that the US should be leading the world in broadband access instead of trailing other nations. It says that the federal government must take action and go beyond state "experiments" and develop a national plan.

Last week President Bush and Democratic presidential hopeful John Kerry both called for better broadband access. Bush, like APT, used the term "universal" in his exhortation - "universal" having become a key word in the clamor for restructuring America's healthcare system.

APT sponsors include BellSouth, Covad Communications, Intel, SBC Communications, the US Telecom Association and Verizon.    Back to Headlines

A study recently conducted by the Nebraska Information Network found that four out of five rural Nebraskans live in areas where high-speed Internet connections are available. Additionally, 80% of the people outside of the state's most populated cities could access broadband last year compared to 75% in 2002.     Back to Headlines

SBC's CFO Randall Stephenson said at a recent Merrill Lynch conference that the company's deal to offer its customers EchoStar Communications' Dish Network satellite TV service has helped SBC reduce the number of lost local phone customers. The phone companies, for the first time since the Great Depression, are facing the possibility that they will not have an active wire into every American home. They are using "bundle selling" to stem the loss, offering attractively priced bundles of DSL along with local and long distance services.

SBC signed the EchoStar deal last July and began offering the product last month in a bundle. The two offer a co-branded product with integrated order entry, customer service and billing - essentially marketing and back-office operations. Stephenson said that bundling had "really moved the needle" in terms of keeping residential customers. He said that bundling would make SBC revenues grow this year.

Stephenson also said that Q4 saw SBC score its biggest long distance revenue growth rate ever and that DSL had continued growing. SBC has been selling its co-branded Yahoo broadband more aggressively, reducing prices to where they approach the high-end of the dial-up AOL offers.

The phone companies have been losing phone lines for several reasons:

- Consumers don't need a second phone line when they upgrade from dial-up to broadband and two out of every three broadband subscribers have gone with the cable companies' broadband.

- Some consumers cancel their local phone line and use a cell phone instead. The phone companies stemmed the revenue loss by buying most of the cell phone service providers. After the SBC-BellSouth-owned Cingular acquires AT&T Wireless, the local phone companies will have 84% of the cell phone market. Their financial resources let them gain control of one of the threats to their local phone domination. Only the cable companies will be left to offer consumers local phone access independent of the telcos.

- The cable companies are slowly growing their own local phone business. They are bundling phone service with their TV channels and cable modem broadband.

- Internet-based telephony, or VoIP, really threatens the phone companies' hegemony. Phone companies such as AT&T and the cable companies are anxious to offer it because it's unregulated - so far - and cheap. The cable companies, unlike the telcos, don't have a large installed base to protect and are free to cut prices as low as necessary to attract business.

If the cable companies can put as attractive a VoIP product together as their broadband service and market it as effectively, the phone companies' lack of entertainment content, their biggest weakness, will become more obvious. Making deals with distribution companies like EchoStar may not save the telcos. They may ultimately have to make content sourcing deals directly with the entertainment houses - proving that in the end "content will be king."

Reports suggest the phone companies aim to enhance their technology to be able to offer three channels of HDTV-quality video programming. Two would be standard fare; the third an extra cost option. They think that on average only three people will want to watch different channels in a typical home, at the same time. The content producers would be deliriously happy with such a situation. The cable and satellite TV companies, on the other hand, will no doubt be scrambling to lock up exclusive deals with content suppliers such as ESPN and the NFL, and disenfranchise the telcos in the "must have" entertainment category.

The Digital Media Triple Play

Companies          Content         Distribution           CE Gear

News Corp              yes                 yes                     no
Microsoft                 no                sort of                   yes, mainly software

Sony                      yes             not in US                yes
Time Warner           yes                 yes                     no

Phone companies             no               yes
Cable TV companies        yes               yes                         Back to Headlines

Sima Products Corporation, which makes consumer-oriented photo, digital imaging and home theater accessories, has introduced the GoDVD to make it easier for consumers to back up their home video and DVD collections.

GoDVD is a digital video enhancer that sits between a playback source (VCR, camcorder or DVD player) and a DVD recorder to restore and transfer old videos to the DVD format. It can also be used for editing home videos directly onto a DVD. In addition, the GoDVD unit lets folks who own pre-recorded DVD movies create a fair-use backup copy of their original DVD. It'll be interesting to see if the movie studios try to block that particular feature in a hardware device as they did with 321 Studios' DVD backup software.

The $130 gadget stabilizes video signals for crisper copies and reduces video sync noise. It's compatible with S-VHS, VHS-C, VHS, 8mm and DVD and contains four output signal enhancement modes - normal, enhanced, darker and black/white. The thing can also support both US (NTSC) and international (PAL) video formats.

"There are more than one billion home videos sitting in people's homes, with a shelf life of less than 20 years," said Doug Marrison, president of Sima's SPC subsidiary. "Sima created the GoDVD enhancer to help preserve those treasures onto the longer lasting DVD medium so they can be viewed for years to come. And through enhanced technology, GoDVD actually improves and restores images that may have suffered due to frequent use, age or poor storage conditions."    Back to Headlines

Synergy Media Group (SMG) has advanced the in-store media kiosk with TouchStand, a wireless, Web-enabled structure designed to match a music retailer's brand.

TouchStand integrates a variety of features previously available in standalone offerings. "We actively sought input and ideas from some of the country's leading music retailers and then designed a unique product that meets their growing needs," said Michael Fitts, CEO of Synergy and co-creator of TouchStand.

For consumers, the kiosk provides digital audio clips, bestseller lists, song-related content and content searches. Retailers get automatic content updating, consumer data mining and e-mail and mailing list management.

The TouchStand runs on Apple's Mac OS X operating system and eMac computer with a full-color 17-inch touch screen. It has a wireless Internet connection secured by SonicWall's encryption technology. Loudeye provides 3.2 million song clips and Muze provides a database with more than 260,000 titles plus detailed information about artists, genres and record labels.

The digital audio content makes it possible for retail shoppers to visit a TouchStand to preview music tracks in a brick-and-mortar environment, either by searching the TouchStand database or scanning the UPC code from a physical CD across a barcode reader on the TouchStand kiosk.     Back to Headlines

Creative Technology has added to its portable audio player family with the MuVo Slim, a flash-based player with 256MB of storage.

Roughly the size of a credit card, the slim 0.3-inch thick device can hold up to eight hours of WMA files or four hours of MP3 tunes. It has a built-in FM radio with 32 presets and features FM recording capabilities.

For users interested in capturing and storing other forms of data, the MuVo Slim has a built-in microphone and can hold up to 16 hours of voice recording. It's capable of holding more than 175 floppy disks worth of slide presentations, digital images or voice and music files.

The removable, rechargeable battery allows for 17 hours of continuous play.

With a retail price of $200, the MuVo Slim is being marketed as much at the business user as the consumer, and comes with a black case. Creative will customize the thing for a "corporate gift" with capacities of up to 1GB.

The player is initially available in silver and black for that sophisticated look, but will come out in a rainbow of colors for the fashion-conscious by summer.     Back to Headlines

Wal-Mart's entrance into the US digital music market has apparently touched off a price war Down Under.

Australia's BigPond Music, a digital music service owned by Telstra, dropped its per-download price to 99 cents Australian for the month of April. "Wal-Mart in the United States recently attracted worldwide attention by offering downloads for 88 cents ($1.18 Australian), undercutting Apple's 99 cents ($1.34 Australian) iTunes. Now BigPond Music is offering music fans in Australia a chance to join the music download revolution at the price of 99 cents for April," said BigPond managing director Justin Milne.

The regular price for downloading tracks was $1.49 Australian (US$1.13) for BigPond members and $1.89 Australian (US$1.44) for everybody else.

Not to be outdone, Destra, which pushes music downloads through various distribution partners, is undercutting Telstra's offer by 10 cents to 89 cents Australian (68 cents) throughout April. "We have been selling legal music for the last three years and we will not be undercut by Telstra or any other new player to the marketplace," Destra CEO Domenic Carosa declared.

Destra Music offers online digital music through Sanity.com.au, HMV.com.au, JBHiFi .com.au, ChaosMusic.com.au, eChoonz.net, Whammo.com.au and Dick Smith. It boasts more than 200,000 tracks and plans to have more than half a million by mid-year.    Back to Headlines

OD2, Europe's most prominent distributor of legal music downloads, is crowing that, through its many distribution partners, it sold more than a million downloads in Q1 - 10 times as many as a year-ago and twice as many as in 4Q03.

The first quarter also marked the first time that the company's quarterly revenues topped a million pounds. "This was an absolutely cracking three months for us," OD2 CEO Charles Grimsdale said. "Across all our sites, and in all countries where we operate, sales and transactions were ahead of expectations."

Peter Jamieson, chairman of the BPI, the trade association for UK record companies, congratulated the company by saying "To sell one million downloads in three months is a great achievement." Jamieson also turned the milestone into a plug for industry-backed music services: "There is clearly no excuse for music fans to continue taking the illegal route when so many high-quality legal alternatives are available offering great content and repertoire at competitive prices."    Back to Headlines

New music download site ItsFun.com, which gives content owners up to 95% of the proceeds from their downloads, has forged an agreement with the Eroica label to list music from some 200 artists and albums. Much of Eroica's catalog is classical and features orchestras, soloists, duos and chamber ensembles. Eroica first emerged in 1993 with an original two-volume release of Bela Bartok's solo piano works performed by Hungarian-American pianist June de Toth. It is also home to recorded music from the Manchester Music Festival Symphony Orchestra and the String Orchestra of New York City.    Back to Headlines

Legal peer-to-peer music service Wippit has reopened with version 2 of its Web site, which adds à la carte downloads and no longer requires use of the Wippit P2P client.

Wippit 2.0 launched with music from 200 independent labels as well as two majors - EMI and BMG - for a catalog of 150,000 tracks, up from 60,000.

While the price of an annual subscription is now up, Wippit's à la carte downloads should be cheap enough to attract even the most frugal. Single-song downloads start at 29 pence each (40 cents) and reach the industry average 99 pence ($1.59). The subscription rate jumped from 30 pounds a year ($50) to 50 pounds ($90) "to reflect the additional quality content that is being made available." The subscription fee gets users unlimited permanent downloads - that can be burned to a CD or transferred to a portable player - from Wippit's library. The company also makes money by selling ad space on its P2P client.

The service's new version also adds an SMS billing option so downloads can be paid for by mobile phone, which means kids don't need credit cards. For now, the billing option is only available in the UK, but Wippit plans to introduce it in the US, Germany, Spain and Sweden later this year.

The new Wippit includes downloadable software, mainly in music, video, entertainment, games and creative genres. It isn't included in the all-you-can-download subscription, and will be sold separately on the Wippit Web site.    Back to Headlines

CD music album sales in the US were up 9.2% in Q1. Increases were in both current releases and older albums, also called catalogs. Q1 unit sales hit 158 million copies, up from 144.7 in the first quarter of 2002. The music industry has been in a sales slump since 2000. About 25 million digital tracks were sold by online services in the first three months of this year, versus 19.2 million in the second half of last year, according to Nielsen SoundScan.   Back to Headlines

EMI, the Big-Five label, will terminate 1,500 people and cut 20% of the artists it has under contract, mainly on the continent. The job cuts represent about 20% of EMI's total staff. About 900 redundancies are coming from outsourcing its music manufacturing for a savings of about $90 million a year. Holland-based MediaMotion will make EMI's European products and US-based Cinram will handle North America. EMI intends to maintain its own supply group, warehouse and distribution facilities at both locations.

EMI said that in its fiscal year ended last month sales of recorded music would be flat year-over-year and that it expects to report solid performance in music publishing. The company said that the terminations would "enable it to continue to succeed in the physical (CD) world while fully capitalizing on the opportunities presented by its rapidly growing digital (online music) business."

EMI Group chairman Eric Nicoli said that since EMI Music chairman and CEO Alain Levy and EMI Music vice-chairman David Munns arrived at the company they had taken steps to improve its financial performance. So far the two have implemented $196 million (100 million pounds) of worth of fixed-cost savings and have managed, at least in Nicoli's eyes, "a dramatic turnaround in the performance" of EMI's US operations. "By strengthening our management capability and investing in artist development worldwide, they have established a momentum in the business which we are determined to maintain," he said.

Levy said, "The time is right to further reposition EMI Music. Exiting manufacturing in our two primary regions of Europe and the US will allow us to lower our costs while flexibly meeting our supply needs in the future. These additional steps will more closely align us with the evolution we are seeing in our markets. We believe that by concentrating our efforts on a tightened roster of artists we will increase our revenue-generating potential while reducing our costs, even as we continue to invest in artists worldwide and in developing our digital capabilities."    Back to Headlines

Recorded music sales globally fell 7.6% in value last year compared to 2002, according to the industry association, the International Federation of the Phonographic Industry (IFPI). Industry sales are down 20% over the three years since 2000. The 2003 global music market was worth $32 billion (28.5 billion euros) with total sales, including music videos, of 2.7 billion units. Music video sales increased 46.6%. CD albums dropped 9.1% in value. Sales of CD singles fell 18.7%. Only a Q4 sales surge in the US, the world's biggest market, kept the numbers from being worse.

Two weeks ago the Financial Times reported that the five big labels, Universal Music, Warner, EMI, BMG and Sony Music, would attempt to cut $1.3 billion-$1.4 billion out of their costs over the next two years. The labels, of course, knew long ago that their 2003 sales were down.

The IFPI blamed the drop, the fourth consecutive year of decline, on three factors:

- Online piracy, primarily the widespread sharing of music tracks on the P2P networks.
- Physical piracy by "factories" filled with lots of CD and DVD duplication gear turning out bogus copies of music discs.
- Other entertainment products. The IFPI didn't name its competition but the list would include cell phones, movie DVDs, video gaming, instant messaging and the Web itself.

Low points in the IFPI study:
- Western Europe sales began declining like the rest of the world.

- Germany was down 19% last year, 30% since 1999.

- France was down 14.4%, bringing sales back to what they were in 2000. Interim growth was due to local talent.

- Sweden was down 14.7%.

- Denmark was down 12.5%.

- Belgium, Greece, Ireland, Portugal and Switzerland had double digit decreases.

- Latin America was down for the third year in a row, off 14.4% in value.

High points from the IFPI report:
- Music video sales were worth $2 billion, up 46.6%, including $1.8 billion in DVD music videos, up 67%.

- Sales grew in Malaysia and the Philippines.

- China had a 21.7% increase despite "endemic physical piracy." It was China's third year of growth.

IFPI chairman Jay Berman, referring to the industry's plan to stem the sales decline, said, "The recording industry is responding on several fronts. Record companies are making available a large volume of music catalog for consumers to access online. At the same time they are stepping up the fight decisively against online piracy, starting legal actions against illegal file sharing that will be extended in the coming months."

The IFPI cited five studies done in recent years that show that P2P file sharing has caused a decline in purchases:

- Enders Analysis - Europe March 2003
The Enders study called "Piracy - Will it kill the music industry?" concluded that "Digital piracy cost about 35%-40% of the reduction in the size of the global music market last year."

- Forrester Research - Europe January 2003
Forrester's study "WholeView Technographics" presents arguments of the negative impact on sales in Europe. It says: "Music industry executives claim that downloading tracks via services like Kazaa and Morpheus cannibalizes CD sales - and they're right."

The study concluded that more than 40% of frequent downloaders buy less music now than they did before they began downloading. The 2% who of people who say that they bought more after having downloaded is not enough to compensate for the loss, resulting in an overall negative impact on sales.

- Jupiter Research - US August 2003
Jupiter surveyed 1,326 US-based online music fans and a third of the active file sharers said that they had decreased spending on music since they started file sharing. Only 16% said their spending increased. This finding suggests a net negative impact in this group consistent with the IFPI National Group conclusions.

- Ipsos-Reid (US) - Q4 2002
As at end 2002, Ipsos' quarterly US study Tempo found that while 25% of Americans older than 12 own a PC-based CD burner, 59% of the file sharers own a CD burner per se. Of these, 42%, or 17 million people, reported having burned a pre-recorded music CD rather than actually purchasing that CD. Even if this occurred only once per person, it would account for almost a quarter of the album sales lost.

- Edison Media Research - May 2003
Edison's survey found, sensibly enough, that the heaviest downloaders have the biggest negative impact on sales. Among those who have downloaded more than 100 files, roughly 16% of respondents, CD purchases dropped 61% year-over-year. In 2002 heavy downloaders bought an average of 28.9 CDs a year, a number that slipped to 11.3 in 2003.

What Was Not Reported
Of course, the IFPI didn't report that the recording industry has not produced the kind of things that generate growing record sales for the last four years:

- Like a musician or musical group so powerful that they create enormous record sales worldwide such as Elvis, the Beatles, Madonna, Michael Jackson or Britney Spears. Stars sell CDs. Australasia was the only region to show sales growth and that was due, according to the IFPI, to "local stars…generating significant sales."

- Like a new music genre such as rap or rock that causes music fans to buy lots of new albums.

- Like a new format to replace CDs that are limited in sound quality and a bit long in the tooth technology-wise. The IFPI says that among the few positive signs last year was "a global rise in music DVD sales" - a new format that delivers better sound quality and video good enough to compete with TV and the movies. DVD music videos now account for 5.7% of global retail revenue, up from 3.1% in 2002. Using effective DRM copy protection on CDs has been difficult for the labels, both technologically and public relations-wise.

Over the last four years the industry has also made - and continues to make - some questionable business decisions:

- Like its failure to embrace the Internet, especially its failure to use the Web to market new talent and sell older tracks. Apple iTunes has sold 50 million tracks since it launched and Canada's Puretracks and Europe's OD2 both sold a million tracks in Q1. Hardly the kind of numbers to pull the labels out of their funk. It will take online sales of 50 million tracks a month before the industry can point to its Internet operations as a success. It is unlikely that any of the online music services, iTunes included, can claim to have had a single profitable quarter - although Apple is able to use iTunes to help it sell lots of highly profitable iPod music players.

US online sales were only 19.2 million in the last half of 2003, a mere pittance. Online download sales were so low in Europe, Canada, Australia, Latin America and the Pacific that the IFPI did not even bother to provide the numbers.

As one pundit said, "Had the industry embraced digital downloads in the beginning, and if it would lower the prices it charges the online music services that it finally sanctioned (years too late, I might add), the situation would be very different, and the industry might actually be seeing higher sales now instead of declines."

- Like its sloth in offering a legal response to the P2P networks. It was only in the last few weeks that the labels began legal proceedings against the P2P operations outside of the states. Early evidence in the US pointed to a drop in file sharing once the labels began their individual lawsuits last summer. In fact, music CD sales were up 9.2% in Q1. The labels have given no sensible reason for delaying filing suits in Europe. In the UK the labels last week finally started instant messaging prolific file sharers to warn them that the jig is up.

The question that keeps coming back to the table is whether the recording industry can ever get its business momentum back to growth. Recent court rulings have gone against the labels. A US federal judge ruled that two of the big three P2P networks aren't responsible for their users' copyright infringement. A Canadian judge ruled that Canadian ISPs don't have to identify subscribers suspected of serious copyright infringement.

With their legal strategy in disarray, at least momentarily, the labels will have to return to the fundamentals that built their business:

- Find and market new talent.
- Nurture potential new music genres.
- Develop new formats whose superiority is so obvious that music fanciers will want to replace their entire collections. It wouldn't hurt if the new formats had DRM protection as effective as the stuff the movie studios use on their DVDs.

- Use the Web to market new talent and add value to existing content.
- Get their legal act together. If copyright infringement is illegal under today's laws, go to court and punish the file sharers.    Back to Headlines

Shared Media Licensing (SML) is doing its part to spread legal file sharing with its new music store "starter kits." Based on the Seattle firm's Weed file-sharing technology, the do-it-yourself kits help would-be download sites stock their virtual shelves with a free $5 in Weed music.

The Weed system encourages file sharing, but ensures that the rights holders get paid. Weed tracks can be downloaded and played on a PC three times for free. After that, the listener is asked to pay for the file, usually a dollar. Once the track is purchased, it can be played on up to three PCs, burned to a CD or transferred to a WMA-compatible portable player. Users must first download Weed software before playing the tracks. The software isn't a player, but a tool that tracks the online distribution of the files and allocates the payments for the purchased songs.

SML doesn't offer downloads on its own site, but encourages others to offer Weed-enabled tracks. The DIY stores are a way to boost distribution.

The company offers dozens of starter kits in a range of musical genres. Each kit includes a ZIP file containing a bunch of songs. To start on your way to a digital music store, download a starter kit, extract the files and listen to the songs. If you don't like the selection, try another kit.

Once a user finds a starter kit that meets with his approval, he needs to download and install the free Weed software to buy the songs. Once the songs are purchased, they can be posted on a Web site or shared over a P2P network.

Folks that open a Weed-enabled store get 20% of each sale from their site, plus a percentage of the pass-along sales, kind of like in a pyramid scheme. Rights holders get 50% of the proceeds; SML gets 15%.

According to SML president John Beezer, "Weed starter kits are aimed at anybody with a Web site that gets regular traffic, who would like to offer some great new music to their visitors."

Beezer believes that Weed's strategy benefits artists and fans alike. "A lot of people don't have time to search the Internet for new music," he said. "But if they trust a particular site owner's taste, they'll come back often to hear what's new and buy the titles they like. And with Weed files, fans know the artist is being fairly compensated."   Back to Headlines

Musicbrigade, which claims to have the largest stock of online music videos in Europe, has forged a license agreement with Sound Pollution to offer metal and hard rock videos from Sound Pollution's Scandinavian independent record labels. The deal calls for Musicbrigade to stream videos over the Web and offer them for download to mobile phones.

Stockholm-based Musicbrigade has similar deals with EMI/Virgin, Universal and Zomba as well as most of the UK indie labels. Its Web site has nearly 5,000 videos for streaming. The company also has more than 250 videos that can be downloaded to mobile handsets over 3G networks through a partnership with mobile operator Hi3G.    Back to Headlines

DMeurope.com reports that the Polish band Perfect is releasing its new album exclusively online through the Polish Web portal Interia.pl. Apparently no hard copies will be sold. The album is selling for three euros ($3.62), roughly half the typical cost of a CD in Poland. Users who download the album can burn it to CD and download album cover art from the site.    Back to Headlines

Most-Played CDs on the Internet For the Week Ending April 4

This Week         Last Week      Artist/Title

      1                         1              Usher/Confessions (Arista)
      2                         2              Evanescence/Fallen (Wind-Up)
      3                         3              Black Eyed Peas/Elephunk (A&M)
      4                         5              Britney Spears/In the Zone (Jive/Zomba)
      5                         6              Linkin Park/Meteora (Warner)
      6                         4              Norah Jones/Feels Like Home (Blue Note)
      7                        N/A           Janet Jackson/Damita Jo (Virgin)
      8                         7              Kanye West/College Dropout (Roc-A-Fella)
      9                         9              OutKast/The Love Below (Aquemini/Arista)
     10                      10               Eminem/The Eminem Show (Interscope)


Aggregated from over 30 million listeners using media players powered by the Gracenote CDDB Music Recognition Service.    Back to Headlines

* About 100,000 of RealNetworks' numbers are thought to be RadioPass subscribers.
** Only 425,000 of Rhapsody's tracks are available for downloading and burning to a CD.

n/a is not applicable
n/d is not disclosed   Back to Headlines
   

Mobile content and application provider Dwango North America has struck a deal with Wenner Media, owner of flagship music mag Rolling Stone, to bring Rolling Stone-branded content to mobile phone users in the US and Canada.

RealNetworks, which forged a digital services partnership with Wenner earlier this year, is helping Dwango develop the services.

The Rolling Stone-branded content will include premium polyphonic ringtones and music-themed mobile games. The ringtone service will offer downloadable ringtones ranging from the latest chart-topping hits such as OutKast's "Hey Ya" to rock classics such as Led Zeppelin's "Kashmir."

Dwango expects to launch the first service in Q2.    Back to Headlines

As the mobile phone industry pursues its second billion subscribers, next-generation handsets with integrated cameras, push-to-talk, streaming media functionality and other cool features will take over the market and force operators to pay closer attention to their products, says Datacomm Research.

According to the researcher, the main issue confronting these new phones is ease-of-use - new devices won't sell and new services won't be used unless the average Joe can use the things without consulting a manual not to mention a minimum number of clicks. Datacomm recommends that handset makers, operators and ISV collaborate to ensure ease-of-use.

The researcher also says that while operators understand the critical role devices play in attracting subscribers, testing and supporting a variety of devices is a major expense and headache. Operators appreciate devices that can be repackaged for different market segments and tools that help them manage their device portfolios better.

The researcher's study found that camera phones are outselling pure digital cameras because mobile operators subsidize the cost, offering consumers significant discounts for signing one- or two-year contracts. However, Datacomm warns, camera phone improvements such as higher resolution, general-purpose flash and optical zoom, are needed to maintain the momentum.

Another finding is that push-to-talk (P2T) could quickly become standard on feature phones. Voice is still the mobile phone's killer app, and push to talk takes voice service to the next level. The study found strong evidence of a four-pillar P2T market - friends and family, mobile professional and a white-collar vertical and blue-collar a vertical.   Back to Headlines

Mobile operator KPN is broadening its longstanding relationship with InfoSpace Mobile to improve the purchasing experience of subscribers of its KPN Mobile Dutch subsidiary.

The new deal calls for KPN to use the InfoSpace Modalyst Storefront Management solution to power an online storefront that sells a variety of wireless data products. With Modalyst Storefront Management the KPN online store will segment products better, bundle and promote. KPN will also use the platform to deploy and promote new and seasonal value-added services, monitor usage in real-time and tweak content packages to serve customer needs.

Modalyst Storefront Management lets carriers make and price specialized offers and bundles for specific customer segments. For example, it could be used to create a bundle for soccer fans containing SMS final score alerts coupled with MMS game highlights.

The InfoSpace software will initially be used in the SMS storefront on KPN's youth-branded site. In the future KPN will use the platform on its portal and expand the scope to include MMS services, browsing applications and downloads.    Back to Headlines

Mobile phone users in the states in need of daily inspiration can now get it from one of the highest sources available. Acotel has brought its "Pope's Thought of the Day" subscription service to the US. The messages contain the pontiff's thoughts, prayers and guidance - all for 30 cents a day.

To subscribe, folks need to send the text message "POPE ON" to the number "24444." To unsubscribe, send "POPE OFF" to the same number.

Subscribers get an SMS message delivered to their mobile phones every day, seven days a week. Verizon Wireless and Cingular are the first two carriers to offer the Pope's Thoughts in the US, but others are expected to sign on in the next few weeks. Acotel, a provider of mobile multimedia applications, started offering the service last year in the UK, Italy, Ireland and Malta.   Back to Headlines

Vodafone and Warner Bros Online have teamed up to bring iconic Warner Bros Entertainment brands to Vodafone live customers in 16 countries. Warner Bros will initially provide Vodafone with games, screensavers, alerts and other mobile apps based on its popular brands. The two will collaborate on "made for mobile" content, including videos. Warner Bros brands include "The Matrix," "Harry Potter," Looney Tunes and "Friends."   Back to Headlines

Cartoon fans who want to take the "way-back machine" to visit their favorite characters of yesteryear can now do so by visiting the Movielink Web site.

The broadband movie site has inked a licensing agreement with Classic Media and its affiliate Bullwinkle Studios to make more than 350 30-minute classic cartoons available for downloading.

The deal gives consumers access to episodes of "Rocky & Bullwinkle & Friends," which features the famous moose and squirrel duo as well as Mr Peabody & Sherman (one of our personal favorites), Boris & Natasha, Dudley Do-Right and Fractured Fairy Tales. It also includes other classic animated series such as "Casper the Friendly Ghost," "Felix the Cat," "Dick Tracy" and "Mr Magoo."

To launch the new toons, Movielink is offering a 25% discount on all rented Classic Media titles until April 15. The cartoons are available from the Movielink.com site as well as its college.movielink.com site.

Customers can download the toons and store them on their hard drive for up to 30 days. Once play is initiated, they can watch as often as they like in a 24-hour period.   Back to Headlines

My5minutes.com, a new online community that lets folks upload and download videos for free, has hooked up with emotionGarage, a Milpitas, California-based automotive tuner shop that specializes in aftermarket parts, for its first "Film It and Win It!" contest.

To enter, videographer wannabes have to make a video that meets specific criteria and upload it to the My5minutes.com Web site. Visitors to the site will then vote on the entries, rating them from one to five stars. The videos that get the most stars win.

For the emotionGarage film contest, the videos must include a shot of at least one of the products emotionGarage sells in its Euro line and emotionGarage's logo, URL and phone number must appear near the beginning and end of the film for a minimum of five seconds each. The rest is up to individual creative genius.

Completed videos have to be uploaded to the emotionGarage section on the My5minutes.com site by April 25. Voting will take place until April 30. Contest rules and regulations are at www.my5minutes.com/contest /php.

My5minutes plans to hold a "Film It and Win It" contest each quarter featuring different automotive performance tuner shops as well as one that gives away video gear.    Back to Headlines

EarthLink has taken a leaf from the America Online book on how to differentiate itself from other ISPs. It's offering subscribers premium content.

Rather than rely on price cuts and faster speeds, as other broadband service providers seem to be doing these days, EarthLink has partnered with Synacor to push a bundle of premium sports content at a significantly cheaper rate than it would cost to subscribe to each of the services individually.

According to the companies, EarthLink Premium Sports is the most comprehensive premium sports product on the Internet with sports video and audio content from NASCAR, Major League Baseball, the NHL and college sports as well as fantasy sports games and information.

The new service is powered by Synacor's Portelus platform, which integrates content from a variety of partners and makes it all accessible through a single sign-in and interface. Synacor offers content from more than 30 partners and just added Major League Baseball to its roster this week.

EarthLink is the first national ISP to offer Synacor's bundled content. The Buffalo, New York firm is reportedly in talks with other major broadband ISPs "on the cable side."

The content included in EarthLink Premium Sports would cost more than $40 a month in subscription fees if purchased separately. EarthLink subscribers get it all for $9.95 a month:

NASCAR.com TrackPass and PitCommand (Retail: $9.95/month). Includes live coverage of over 250 qualifying, practice and race events. Subscribers can listen to conversations between drivers and their crew with In-car Audio. PitCommand delivers real-time GPS-based telemetry on all cars. Multimedia On-Demand offers features audio, video and condensed races.

MLB.com (Retail: $4.95/month). Game Day Audio lets users listen to every team every day. PostGame TV and PostGame Highlights are available after each game. Also includes unrestricted access to MLB.com Condensed Games, Searchable Video and Personalized Highlights Reels and MLB.com Radio.

NHL Highlight Machine (Retail: $4.95/month). Lets subscribers create their own video portfolio of players to track, create a personalized highlight reel and store it, and track fantasy teams by watching them in action.

NHL Game Notes (Retail: $4.95/month) Exclusive online hockey content including stats, game profiles and summaries and press releases. Also provides access to the latest info during the regular season and the Stanley Cup Playoffs.

SportingNews.com Ultimate Fantasy Source Baseball and Football (Retail: $19.99 per season). Provides the most intensive fantasy sports research and resources for both baseball and football. Also lets users create a customized player list, select players to watch and get updates on a regular basis.

SportingNews.com Ultimate Fantasy Football (Retail: $19.99 per season). Lets users build an 11-player team and improve the roster with weekly trades. Check scoring with official updates every morning, customize player list, select players and get regular updates.

Rivals.com (Retail: $7.95/month). Get the definitive scoop on the world of college recruiting, compare school recruiting classes against the competition and search the Rivals.com database to find the stars of tomorrow.

Motor Trend. Get the current issue of Motor Trend pushed to your desktop. The digital version has interactive capabilities including search, archive, send-to-a-friend and content hyperlinks. Readers can research reviews and comparison tests of domestic and foreign cars, read new car previews and check out coverage of the major auto shows.    Back to Headlines

By a 14-4 vote the US House Subcommittee on Intellectual Property approved the Piracy Deterrence and Education Act (PDEA) that, if becomes law, would sentence anyone who makes $1,000 in copyrighted materials available for download to up to three years in prison as well as fines of up to $250,000.

As written, the bill says that no actual copyright infringement actually needs to have taken place. It also requires the FBI to "facilitate the sharing of data" between ISPs, law enforcement agencies and copyright holders. Court action such as a judge's approval would not be needed for the FBI to turn over the identity of an ISP's customers to a record label or movie studio. The bill requires the Justice Department to increase the number of people it has working on anti-piracy activities.

Committee chairman Representative Lamar Smith (R-Texas) said the legislation would "assist federal law enforcement authorities in their efforts to investigate and prosecute intellectual property crimes." He claimed the bill "clarifies and narrows the application of criminal copyright law to the worst P2P offenders."

Opponents are concerned that it reduces the burden of proof, lowers the standard of fair use rights and criminalizes legitimate uses of copyrighted material.    Back to Headlines

Attorney General John Ashcroft, the highest-ranking American law enforcement officer, announced the creation of a task force on copyright violations. It will examine the Justice Department's handling of piracy and file sharing of software, music and movies. Ashcroft said, "I have asked the task force to look at ways the department can strengthen and improve our efforts" to combat theft of intellectual property.    Back to Headlines

The cable companies Tuesday asked for a stay of an appeals court order that would force them to make their broadband infrastructure available to third-party ISPs such as AOL, Covad and EarthLink.

The move came a bit late since the appellate decision went into effect the next day. The court hasn't given them an answer yet, which presumably doesn't bode well.

The cable guys want to appeal to the Supreme Court since the decision would let local and state government regulate them the way local phone companies are regulated.

The cable companies fear that regulation will force them to offer their broadband infrastructure to ISPs at rates low enough for the ISPs to compete with them and with the phone companies.

Several cable operators and the National Cable & Telecommunications Association (NCTA), which represents major cable operators like Time Warner and Comcast, asked the appeals court to stay its decision. "This case centers on the regulatory status of a service that is of key importance to national communications policy: broadband Internet service," said the NCTA.

The case centers on whether cable TV companies should be classified as information companies as they have been or as telecommunications companies. The phone companies have complained that they are forced to play on an unlevel playing field in broadband because they are regulated and the cable companies aren't.

In March of 2002 the FCC sided with the cable companies in a ruling that classified them as information companies. A group of third-party ISPs took the matter to court. The court and the appeals court both said cable companies are telecommunications companies and should be subject to the regulation.

A few cable TV companies lease their broadband infrastructure to ISPs but at rates generally deemed so high it's hard for the ISPs to compete. Meantime, the phone companies have been particularly aggressive in cutting their broadband prices to levels below what the ISPs would have to pay the cable companies.

Most of the cable companies now sell local and long distance phone service and they are eyeing Internet telephony - VoIP - as a way to increase their revenues - at the price of the phone companies' hide.   Back to Headlines

A British High Court judge ruled on Wednesday that the trademark suit to settle the terms of a 1991 contract between Apple Computer and the Beatles' record company Apple Corps Ltd should be heard in London, not in California. Judge Martin Mann did not set a trial date but granted Apple permission to appeal. The dispute centers on whether Apple's iTunes is an "entertainment" or "data transmission" widget. Mann admitted that he owns an iPod digital music player.    Back to Headlines

Digital video software developer CyberLink has introduced InstantMPEG technology, which is supposed to save both time and hard disk space when converting digital video into MPEG files.

InstantMPEG, the encoding widgetry inside the new versions of CyberLink's PowerDirector and PowerProducer Gold software, converts digital camcorder video into MPEG in real-time without having to transfer the video into AVI format first. Since AVI files are considerably larger than MPEG-1 and MPEG-2 files, InstantMPEG saves disk space after conversion. And because video is directly transferred into MPEG, it also saves time.

"As the price of DV camcorders continues to drop and cameras become more popular, consumers will increasingly want fast conversion of DV into MPEG-1 and MPEG-2 files, and the efficiency of real-time encoding is the key," said Alex Weng, director of product planning at CyberLink.

PowerDirector 3 is "From start to finish" video-editing software that helps both experienced users and newcomers create "eye-catching" movies. It offers a dual-mode timeline and storyboard interface as well as CyberLink's fourth-generation MPEG engine to maintain source video quality and SVRT 2 to render the edited video or audio individually and reduce production time. PowerProducer 2 Gold lets users turn movies and photos into DVDs and CDs quickly.    Back to Headlines

Time Warner has joined Microsoft as an investor in ContentGuard, the once-bankrupt DRM outfit whose primary market was documents - magazines, newsletters and such. Time Warner, Microsoft and ContentGuard bought all the shares held by Xerox, the source of ContentGuard's original technology.    Back to Headlines

The British Phonographic Industry (BPI) has released independent research that shows that eight million Brits are downloading music, and another 7.6 million say they plan to start. Nine out of 10 of those currently downloading are doing so illegally. The survey revealed that UK downloaders spent 32% less on albums and 59% less on singles last year. Britain is the country with the largest recording indu