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Three 'Big Bucks' Broadband Trends Three megabuck trends that will drive digital media over the next few years involve delivering entertainment content to the home, including music, movies, TV programs and games. Content will be both downloaded and streamed. A new genre of "made for broadband" videos will emerge due to the lower cost of video production gear and the declining cost of internet delivery. The Online Reporter has already detailed two "no-cost" personal video posting sites: the BBC's "One-Minute Movies" and a US start-up called My5minutes. Delivering video to the home will take lots of bandwidth both to the home and in the home -more than is being installed currently. 1. Broadband infrastructure. Rapid growth will last another three-five years as telcos and cablecos finish connecting broadband to nearly every home in the developed world. Most importantly broadband speeds will have to be increased substantially to support delivery of multi-channel HDTV-quality video. 2. Broadband entertainment portals. The phone companies in Germany and Italy started the two most complete broadband entertainment portals: Deutsche Telekom's T-Online Vision and Telecom Italia's Rosso Alice. Both offer the gamut of games, movies, music, news and sports. No US company has put together such a comprehensive broadband entertainment portal, although some of the big names have reached various stages of an entertainment portal including: MSN, AOL, Yahoo, RealNetworks and Lycos. Yahoo has aggressively pursued broadband-portal deals with SBC and BT. MSN has signed up Verizon and Qwest. 3. Home networking. The battle for which standards will dominate home networking is far from over. Consumers took to Wi-Fi so quickly that experts, who pooh-poohed Wi-Fi, were taken aback. Wi-Fi's 802.11g has largely replaced early front-runner 802.11b as the consumer's choice because of its faster speed. Neither "b" nor "g" will be able to deliver the HDTV-quality that will ultimately be wanted. Faster versions of Wi-Fi are being developed. Simultaneously an alliance of coax vendors is developing technology capable of delivering HDTV-quality video throughout homes already networked with existing coax cable. Reports creep out that the electric power utilities can become a broadband player. If so, they'd have the advantage of having a network outlet in every room. Broadband Entertainment Portals Web sites to visit for entertainment and information, both paid and free, downloaded and streamed. Music
Games Broadband Entertainment Portals Players Full-blown Partial* Possible Telecom Italia's
AOL Google None of the "partial" broadband entertainment players offer movies for sale. Google's only service is e-mail, which it started in April. Back to Headlines
ETV To Offer Thousands of Classic Movie Downloads As of last July, some 50 million Americans were what market researcher Arbitron calls "monthly streamies," meaning that they had consumed streaming audio or video over the Internet in the past month. The percentage of Americans who had ever watched Internet video rose from 8% to 12% from January through July of last year. No doubt that number has risen considerably since then, with more Web sites offering streaming music videos, Movielink and CinemaNow increasing the number of movies they offer and an increase in broadband adoption, which makes it possible for more folks to experience the joys of streaming media. All of this bodes well for ETV Hollywood, a California start-up that plans to make a library of 10,000 classic Hollywood movies, TV shows and cartoons available of streaming and downloading over the Internet. American Interactive Digital Concepts Corporation (American IDC), a company that develops interactive online communities, was so taken with the idea that it decided to merge with ETV and make the site its own. The idea behind ETV seems to be high quality at a low price. Watching a full-screen DVD-quality movie on its Web site is free, at least for now; downloads will cost as little as 99 cents. According to Gordon Lee, chairman and chief financial officer of American IDC, the company can keep the cost to end users low because its movies are in the public domain - no royalties to pay - or very low royalty payments. The company will keep expenses down by passing on any royalty fees to viewers. If there's a dollar royalty per download, that download will cost $1.99 rather than 99 cents, Lee said. Because the films offered by ETV are in the public domain, there's no copy protection so downloaders are free to burn the things onto DVD or transfer them to a newfangled portable video player as often as they'd like with no repercussions. Most of the cost of running ETV would appear to come from restoring, digitizing and compressing the library of 10,000 films it has licensed. All of this is done in-house, which keeps the cost down. The site will start offering films for download once enough of them have been digitized and compressed that there's a decent selection. Because of the compression technology used, the films only take three or four minutes to download over a broadband connection, Lee said. He expects to get an "assembly line" in place to compress and digitize up to 50-100 films a week so the entire library will be available for download by the end of the year. For now, though, fans of the movie classics from the '30s, '40s and '50s will have to settle for streaming them on a PC over a broadband connection. For the streaming technology, ETV turned to Digital Continuum Inc and its "Digital Network in a Rack" technology. The rack-mountable hardware/software combo enables broadcasters to create, store, access, edit, schedule, broadcast and track blocks of digital content. Eventually ETV expects to have four revenue sources: - Sell downloads of films and other programs - Offer broadband channels to content providers for a monthly fee - Sell encoding services to help content providers digitize their programs for broadband delivery - Sell ad space on its own broadband channels In the near future, likely once enough of the library is digitized, the company plans to establish separate 'round-the-clock broadband channels for classic sports, extreme sports, religion, self-help, cooking and other areas of interest. Back to Headlines
Movies.com Coming to a Nearby Radio Station Reversing the normal flow of information, ABC News Radio will make Movies.com
content available to its listeners. Movies.com, a leading Web site for movie
fans, and ABC News Radio, announced a new series of weekly entertainment
features that will be made available to all ABC Radio affiliates across the US.
ABC News Radio will produce a series of 60-second entertainment updates using
branded content from Movies.com. "Radio is a natural extension of our
brand," said Movies.com VP Dan Sherlock. Back
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AOL Enters Reality Genre with "The Startup" America Online is staking a claim to the reality entertainment market with a new yearlong series that follows the trials and tribulations of four corporate start-ups. Launched as part of the AOL for Small Business services in partnership with Entrepreneur.com, "The Startup" tracks a cavern tour park, a spa, a salsa firm and a girls' clothing store as they struggle through their first years in business. Through articles and profiles courtesy of Entrepreneur, weblogs from the start-ups and video footage shot by AOL and the companies themselves, the reality series will share the day-to-day rewards and roadblocks - from financial frustrations to technical troubles - that come with starting and running a small business. Each start-up will be highlighted for one week a month, although some content is likely to be updated more often. "The Startup" features business profiles of all four companies and their owners; videos highlighting their locales and owners; online journals and regular updates featuring the highs and lows from the last month. Visitors to the site can communicate with the start-ups and other small business folks through bulletin boards, online chat, polls and the other community features that are part of AOL for Small Business. As the Internet, especially with a broadband connection, is becoming a vital
part in helping small businesses thrive, AOL saw it as "logical and
appropriate" to be able to follow a small business over the Internet.
According to Sarah Bernard, general manager of AOL for Small Business,
"Integral to any small business' success and day-to-day operation is the
incorporation of technology and the use of the Internet. Moreover, small
business owners are indicating that a broadband connection plays a critical role
in helping their companies thrive." Back
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Outsourcing the American PC Business No technology had more of an American birthright than the PC business - Microsoft, Intel, Apple, IBM, Novell, Compaq, HP and the like. Those names may still appear on the outside of the boxes but the insides are made in faraway places. Pip Coburn's crew at the brokerage UBS has compiled a list of who makes the boxes: Who Makes Your PC Desktops: Dell: Asustek, Hon Hai, Mitac Dell: Quanta, Compal Napster Name To Get More Exposure Roxio seems determined to make sure Napster remains the most recognized name in online music. The Napster name and headphone-wearing-kittyhead logo can be seen in ads on TV, in magazines and on the Internet.
The name is also attached
to several related products including CD-Rs and a portable music player. Now
Roxio has hired brand-builder Brand Central as its exclusive US licensing agency
and the kittyhead might be pasted on everything from clothes to room décor to
toys and possibly more electronics products soon. "With our recent success
in brand extensions such as our Napster MP3 player by Samsung, blank media from
Imation, pre-paid music cards with InComm and media storage from Case Logic, we
are now well positioned to take the brand to the next level," said Larry
Linietsky, senior VP of worldwide business development for Napster.
Back
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Intel, acting as the proud papa of all things wireless, has compiled its
second annual "Most Unwired Cities" list ranking the top 100 US sites
with the greatest wireless Internet accessibility. Hotspot locations are where
people can use wireless-enabled notebook PCs to access the Web with a Wi-Fi
connection. They can be found in airports, public parks, college campuses and
hotels, truck stops, RV parks and malls among other places. Intel paid for the survey done by Bert Sperling, a researcher who specializes in collecting and analyzing data for the nationally known "Best Places" surveys. Study findings are based on the number of public and commercial wireless
access points (hotspots), local wireless networks, wireless e-mail devices and
Internet penetration. The data was also calculated at the per-capita level to
determine how many people share hotspots within a given city or region. The data
was collected from a variety of industry sources and weighted across a 100-point
scale. Back
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Glaser Can't Resist the Lure of a Good Apple RealNetworks is reportedly looking to partner with a major competitor - either Apple or Microsoft. According to the New York Times, Real CEO Rob Glaser e-mailed Apple chief Steve Jobs suggesting the two form a "tactical alliance." Glaser apparently suggested that Apple license its DRM system to RealNetworks so customers of Real's Rhapsody music service, which competes with Apple's highly successful iTunes Music Store, could download and play their Rhapsody tracks on the iPod portable music player. If this happened, Real would reportedly make the iPod "its primary device for the RealNetworks store and for the RealPlayer software." The e-mail supposedly said that if a Real-Apple alliance isn't possible, Glaser would consider making an offer to Microsoft, his arch-enemy. Apple isn't talking about the proposal and Jobs apparently hasn't responded to Glaser. Maybe he, like many others probably would, considers the possibility of a Real-Microsoft hookup as likely as a Bush-Kerry ticket. Real did, after all, file a billion-dollar antitrust suit against Microsoft a few months ago and is behind the biggest problem Redmond is facing with the European Commission. Remember the ruling that forces Microsoft to sell a version of Windows stripped of the Windows Media Player in Europe? For a while now pundits have been saying that to succeed in digital music
Apple will have to open iTunes to other portable players besides iPod and open
iPod to other digital music formats - such as Microsoft's WMA - used by other
services. Rhapsody, like iTunes, already uses the AAC format, so cooperation
among the services would be pretty easy. For now, Apple still seems reluctant to
open its code although it has started dabbling in co-marketing and co-branding -
America Online users can access iTunes from their AOL home page and
Hewlett-Packard is coming out with new PCs that have the iTunes Jukebox
pre-loaded. And an HP-branded iPod is expected on the market in the near future
as well. Back
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Digital Media Products Help Triple Apple's Profits Apple reported that strong iPod sales were a major contributor to its second-quarter profit increase, up to $46 million from last year's $14 million. Revenues were $1.9 billion, a 29% increase year-over-year. Apple CEO Steve Jobs told the New York Times that the 807,000 iPods the company sold exceed the 749,000 Macs it moved. It marks the first time that a PC company has sold more digital media units than PCs. There are differences in the two products' contribution to Apple's P&L. iPod sales increased 909% year-over-year while Mac were up only 5%, less than the industry average. The company recently cut the price of entry-level Macs by $100. Yet, PCs still accounted for about $1.2 billion of Apple's total revenues with iPods contributing $264 million, about 14% of the quarter's $1.9 billion. Apple CFO Fred Anderson told the Associated Press that iPods accounted for "probably half of the company's revenue growth." However, the Financial Times estimated iPod's share at only about 40% of the revenue growth. Apple's Q2 Revenue Total $1.9b Apple has sold 2.9 million iPods so far, giving it a market share between 32% and 40% depending on whether you ask the NPD Group/NPD Techworld or Steve Jobs. Jobs says Apple isn't being pressured by competitors like RCA, Rio, iRiver and Digitalway. The FT thinks that iPod's gross margin is declining. Dell and HP, Apple's two main PC rivals, want to emulate Apple's success but
have taken different courses in their handheld music players. Dell opted to go
with its own design and compete head-on with Apple. Dell also sells the
Musicmatch online music service in competition with Apple and its iTunes. HP
partnered with Apple to sell both the iPod and Apple's iTunes music service.
Struggling Gateway sells units with its own brand name plus those of RCA and
Creative Labs. It also sells Musicmatch. Apple
1
32.2% Source: NPD Group/NPD Techworld
Steve Jobs says that iPod's success builds on Apple's ambition to be at the center of the digital media era. iPods are considered to have the best user interface of any handheld music player. Apple has used its dominance in the online music business to sell iPods. Its iTunes Music store, which is closely integrated with the iPod, has sold over 50 million tracks. The tight integration is supposed to make it easy for iPod users to download and manage tracks from iTunes. iTunes by itself had minimal impact on Apple's revenues or profits. At the outside the service has brought in less than $50 million in revenues since it was introduced last April - a drop in the bucket even for Apple. If Apple is paying a 65 cents-75-cent royalty per track to the labels as reported, then its gross margin on iTunes would probably not cover the cost of developing and operating the thing. iTunes Milestones Date Milestones April 28, 2003
Macintosh
version launched Source: Apple In December, Steve Jobs projected that iTunes would sell at the rate of 75
million tracks per year. Back
to Headlines
TV Search Engine MyDTV Raises $7m Internet users have search engines to help them find what they want quickly. The same will be true for TV users who are increasingly faced with finding something they like out of the 200-odd channels coming into the home. MyDTV, a TV search company (yes, a TV search company), that enables viewers to find content they like out of the welter, has closed a $7 million financing round. As the result of the investment, Larry Marcus of WaldenVC will join MyDTV's board of directors. MyDTV will use the capital to support ongoing development of its TV metadata technology and enhance its PromoLogic, ContentIQ and TV Agent products. MyDTV will also expand business development, marketing and customer support. The company's objective is to give TV programmers and operators a service to enhance their offering by personalizing programming and letting customers interact with the medium. MyDTV's technology is integrated with programmer and operator information systems and set-top box middleware to offer navigation tools and viewer interfaces. The widgetry connects directly to programmers' production systems, automatically generates metadata and broadcasts it continuously to the viewer's set-top digital receiver. When upcoming programming matches a viewer-defined profile, a recommendation
banner pops up on whatever channel the viewer is watching. The viewer can click
on the banner to access the channel or ignore it.
Larry Marcus has a long pedigree in digital media. As a WaldenVC general partner, he focuses on consumer technology and new media infrastructure, services and content. He serves on the boards of MyDTV and Savage Beast Technologies. His personal investments include Netflix, Virage and MetaTV. He was director of new media equity research at Deutsche Bank Alex Brown where he covered Gemstar, General Instrument, Scientific-Atlanta, RealNetworks, Excite@Home, Terayon, OpenTV, Softnet, Worldgate, Intuit, Electronic Arts, CBS MarketWatch, Women.com and CNET, many of which he backed in equity or debt offerings. Marcus is a good man to know if you want to raise money for a digital media start-up. Back to Headlines SBC, CinemaNow Offer VOD to DSL Subscribers Under a new "exclusive" agreement with SBC Internet Services, movie download service CinemaNow will offer a customized version of its video-on-demand Web site to SBC Yahoo DSL subscribers. The deal says the two will promote their respective services to each other's customers. CinemaNow features pay-per-view, download-to-own and subscription-based access to full-length films, shorts, music concerts and TV programs. "As the video-on-demand market continues to grow, it has become increasingly clear to us that the defining value of our service is the ability to put the control in the hands of the users," said Bruce Eisen, executive VP of CinemaNow. Working with SBC "allows us to more efficiently reach the broadband audience and give consumers the kinds of choices they expect in the on-demand age," he added. To celebrate the launch, SBC Yahoo DSL subscribers can get their first CinemaNow pay-per-view movie for 98 cents. Typically, the movies cost $2.99-$4.50. SBC has a similar partnership in place with CinemaNow rival Movielink. The
two launched a co-branded SBC Yahoo-Movielink Web site last November.
Back
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P2P Movie Sharing Increases in March Cybersleuth BayTSP reports that movie piracy rebounded in March with the copies of five films available for download increasing by 50% or more. File sharing dropped dramatically in February, possibly because of the new suits filed by the RIAA, but, as has happened in the past, sharing increased in the subsequent month. The five films joined the Top 10 list: "Lost in Translation," "The Passion of the Christ," "21 Grams," "50 First Dates" and "Starsky and Hutch." "Shaolin Soccer," which finally went into in limited distribution in the US in March, is a Top 10 for the eighth month. Use of Kazaa and its FastTrack protocol declined again in March, offset by increased use of eDonkey. More people are sharing their files - reversing a two-month trend when they
kinda turned file sharing off. Users share fewer files during the daylight
hours, indicating that while more people are logged onto P2P networks during the
day, they are using their work and school broadband connections to download, but
not share their files. The number of users decreases in the evening, but the
average number of files shared per user increases. 1. Lord of the Rings: Return of the King - Warner Bros - 45,123 Cingular Puts the 'ME' in 'MEdia' with New Data Offerings Cingular rebranded its data services as Cingular MEdia and launched several new content bundles and offerings under the new name. The new MEdia moniker, an umbrella for the company's messaging, alerts, browsing and downloadable content, is supposed to reinforce Cingular's focus on providing products and services that let customers personalize their phones. The mobile operator now offers data services packages - Cingular MEdia Basic and MEdia Works - that bundle text, instant and multimedia messaging plus wireless Internet access at a significant discount compared to the standalone services. For $7.99 a month MEdia Basic gets subscribers 250 text/instant messages, 50 multimedia messages and 1MB Wireless Internet Express. MEdia Works costs $19.99 a month for 1,500 text/instant messages, 200 multimedia messages and unlimited Wireless Internet Express. Cingular has partnered with The Weather Channel, CNN, The New York Times, Handango, Match.com and Tele Atlas Traffic to give MEdia users wireless Net access to some of the top content providers. Then there are daily comics offered through a partnership with FunMail. For a one-time fee of $2.99, customers can pick and receive up to 50 of their favorite comic strips that they can read, save and rate from "Great" to "Blah." FunMail's Mobile Comic Network servers format each comic for Cingular handsets, optimizing the pictures to the phone's screen size. Initial comic-capable phones include the Motorola V400 and T720 and Nokia Series 60 and Series 40. Additional comics and comic-compatible phones will launch throughout this year. Cingular also launched Cingular Image Composer, a tool that lets users download their favorite picture as a screensaver for their phone in a three-step process: Upload the picture to the Cingular Web site; edit it to fit the size of the screen and, if desired, use the drawing tools to add a personal touch; hit send and the picture arrives on the phone in minutes. The Cingular Image Composer costs $1.99 per download and works with all
color-screen Cingular handsets. Back
to Headlines
Ringtones: A Billion-Dollar Business in '08 According to the Yankee Group, the US market for mobile "audio accessories," otherwise known as ringtones, reached $80 million at the end of last year and may turn into a billion-dollar-a-year business by 2008. The current worldwide market for ringtones, ring tunes and calling tones is over $2.5 billion. True wireless music, however, is still in its infancy and isn't expected to become mainstream for a few years. Due to the popularity of music ringtones and the expected popularity of
"true" mobile music, Yankee expects the music industry to "have a
profound impact on the shape of the wireless industry," according to Adam
Zawel, Yankee's wireless/mobile applications and commerce director.
"Specifically, record companies will drive the wireless industry to support
a DRM framework, one that protects content within the closed environs of the
wireless networks and as it flows over local area connections to devices not
connected to the carrier's network." Back
to Headlines
China Mobile Users Can Hear Stories Linktone, which provides wireless media, entertainment and communications services in China, is offering two new voice entertainment services for China Mobile subscribers. The services - Story Teller and Mobile Voice Greetings - are distributed over China Mobile's interactive voice response (IVR) system. Story Teller lets subscribers access and listen to Linktone's library of some 2,000 stories, in categories ranging from romance, horror and mysteries to popular Internet short novels. The company is also working with Chinese celebrities to develop content that would appeal to China's mobile youth. With Mobile Voice Greetings users can send and receive pre-recorded, personalized greetings along with songs or pieces of music from a collection of 5,000 international and Chinese songs. Linktone charges for both services on a per-minute basis and shares revenues
with China Mobile. Back
to Headlines
Sprint Unveils 10th Camera Phone Sprint has come out with its 10th integrated camera phone, the Sprint PCS Vision Picture Phone PM-8200 by Sanyo. The new "camera phone with more" is an update of the Sprint-Sanyo SPC-8100 with a VGA-quality camera, improved picture resolution, a built-in flash and zoom capabilities. Other enhancements include Sprint PCS Ready Link, the company's nationwide walkie-talkie service and a built-in speakerphone that works whether the clamshell-style handset is open or closed.
Sprint PM-8200 Camera Phone by Sanyo The phone boasts
internal and external screens that support 65,000 colors, external picture
caller ID and a phonebook that stores up to 300 entries. Users can access all
the other PCS Vision apps and content including messaging, Web browsing and
downloadable games, ringtones, wallpaper and screensavers.
Back
to Headlines
AT&T Wireless Launches Music ID Service AT&T Wireless has launched a music recognition service that identifies a song when a user holds a mobile phone up near the music source. It's the first such service in the US; several European mobile operators already offer a similar kind of thing. It comes from San Francisco-based Musicphone in cooperation with Shazam Entertainment. UK-based Shazam, whose service is widely used in Europe, operates a proprietary recognition database of more than a million recorded songs. When people hear a song they'd like identified, they dial "#ID" from their AT&T Wireless phone. When prompted, they hold the phone near the music source, such as a car stereo, for about 15 seconds. In minutes, they get a text message naming the song and artist. AT&T Wireless customers can try the service at no charge beyond airtime
for the first identification. Subsequent requests cost 99 cents each plus
standard airtime charges. Back
to Headlines
Intel Intros Digital Media Chip for Advanced PDAs and Cell Phones The popularity of portable digital media devices in the last 12-18 months - stuff like camera-equipped cell phones and handheld music players like the Apple iPod - has surprised a lot of people. Almost all the current products are limited to handling audio or at most still photos. The next widget wave will have video capabilities - to play music videos, movie previews, videoconferences, video chats and snippets of news and sports. Adding video requires more processing power but without increasing the size of the gizmos or decreasing battery life. A wireless connection to the mobile phone network or the Internet will also be a must. Moving to exploit this emerging market, Intel has launched a new family of processors based on its Xscale technology. The PXA27x line, code named Bulverde, is the first to integrate Intel's Wireless MMX mojo. The processors have five features to put them in demand with both cell phones and PDAs: - Wireless - Support for GSM/GPRS, Wi-Fi 802.11b and Bluetooth wireless networking on multiple operating systems: Microsoft's, PalmSource's, Symbian's and MontaVista's Linux and Java. - Low power - MMX technology improves video performance while improving battery life. - Small - Intel's flash memory and processor stacking technology makes it possible to have more memory and higher performance in less than half the space of a typical memory package. - Video - Supports MPEG-2, MPEG-4 and Microsoft's Windows Media Video 9. The MMX technologies provide additional performance for 3-D games and advanced video. Intel's Quick Capture Technology supports camera phone images of four or more megapixels. A 2700G multimedia accelerator chip supports full-screen video at full-frame rates, DVD-quality video playback on VGA displays and dual display of two different video images - ideal for videoconferencing or presentations. - Security - Intel's Wireless Trusted Platform adds security features such as
trusted boot, secure storage of private information and cryptographic keys and
support for common security protocols. The chips contain a so-called
"security engine" separated from the area where processing takes place
but has access to secure memory. "Advances in wireless broadband demand a new kind of wireless device," according to Sean Maloney, Intel executive VP and general manager of its loss-making Communications Group. "As various forms of wireless broadband access become increasingly available - 3G, Wi-Fi or WiMAX - mobile devices must have plenty of performance balanced with low-power capabilities to be able to handle all that the Internet has to offer." Intel is also providing tools for developers to use to build applications for the products based the PXA270 chip, the first of the PXA27x series. Sony Music Entertainment is using the tools to develop apps that are optimized for the new chips. Intel developed a "Mobile Scalable Link" that speeds data delivery to and from wireless networks. It moves data at speeds up to 416 Mbps. The PXA270 with a 312 Mhz processor goes for $32 and the Intel 2700G Multimedia Accelerator is $17 in 10,000-unit quantities. In conjunction with Intrinsyc, Intel has done a cell phone concept design to cut the time and cost needed for OEMs to get a new Intel-based widget to market. Intel has its heart set on being as dominant in the low-cost, handheld digital media video market as it is in PCs. So far it hasn't had much luck. It had to write off a $600 million impairment charge in December when it reorganized its mobile operations. The new chips are the first to support full-featured multiple operating systems on smart phones. Intel's security emphasis will appeal to content providers. The chips video, low-power and small form factors will appeal to consumers. NOTE: Intel is working on a hardware security scheme called LaGrande for its
Pentium 4 chips. It said that it put what it's learned so far into the PXA27x
chips. Microsoft is also working on a better security project called the
Next-Generation Secure Computing Base. Both companies, and others, are looking
for non-intrusive ways to protect content without aggravating the user.
Back
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Better PC Sound Quality - About Time! Intel, with some help from Microsoft, the PC and CE makers, codec vendors and software developers, has finally gotten around to replacing a decade-old audio spec with the 1.0 rev of the new Intel High Definition Audio. More than 80 companies, Intel says, worked on developing the thing and Intel hopes it will "propel the PC to truly top-notch audio performance." Intel, Microsoft and the PC pack foresee PC-based widgets replacing TVs and stereos in the living room. With millions of consumers buying "surround sound" for their TVs and stereos, the bar for quality sound has been raised significantly in the last few years. People like hearing the Batmobile roar like it was in the room or the sound of ballpark vendors hawking hot dogs and beer in the background. The difference in what consumers expect in sound quality today compared to what they accepted a few years ago is about as different as the sound the old wind-up Victrolas produced and a DVD. Intel says that enabling higher-quality PC audio in the new spec is attributable to an upgraded architecture and an increased bandwidth that allows 192 kHz, 32-bit, multi-channel audio. Intel aligned its HD Audio architecture with Microsoft's Universal Audio Architecture (UAA) by having engineers from both companies work together. UAA aims to create and maintain Windows audio class drivers for high definition audio, USB audio and 1994 audio technologies. Intel technology initiatives manager Thomas Loza said the PC would play a vital role in the rapid growth of home theatres. Jason Reindorp, group product manager of Microsoft's Windows Digital Media Division, said the new spec would offer "vastly better audio fidelity" for Windows users and make possible "new and exciting usage scenarios." Intel promised to keep the down the cost of adding high audio definition to
PCs. PCs with the HD Audio will use Intel's upcoming Grantsdale chipsets that
are expected to be on the market later this year. Back
to Headlines
World Headed to 500m Broadband Users; Dial-up Age Ends Next Year The dial-up age will end next year when broadband subscribers will outnumber dial-up users according to eMarketer in its "Broadband Worldwide" study. The report says that the number of broadband-connected residences and businesses exceeded 100 million, making the number of actual users something like 250 million. eMarketer differentiates between "subscribers" defined as an Internet connection and "users" defined as the people accessing the Net. By that reckoning, eMarketer says that there will be over 300 million people using broadband to access the Web by year-end. It says that the growing popularity of home networks will mean that multiple people will frequently be accessing the Web simultaneously. eMarketer estimates that by 2007, there will be nearly 500 million broadband users worldwide accessing the Internet from home, work, school and elsewhere. It took approximately three-and-a-half years to reach the first 10 million broadband subscribers and about the same time to go from 10 million to 100 million, eMarketer says. From 100,000 subscribers in '96 to 100 million in early '04, broadband has moved beyond the early adopters and has entered the mainstream according to eMarketer. "We are quickly approaching the end of the first age of the Internet, the dial-up age," eMarketer senior analyst Ben Macklin said. "Spanning approximately 10 years from 1995, the era will come to a close in 2005, when there will be more broadband connections worldwide than dial-up. The broadband age, beginning in 2005, may perhaps span only five years, as a new age will emerge - for some countries as early as 2010 - the age of bandwidth-on-demand." eMarketer says that the broadband age, beginning in 2005 and lasting maybe five years, will be characterized by the growth of bandwidth-intensive applications such as video- and music-on-demand, multi-player online games, voice and video communications and online shopping and learning. It will be replaced by bandwidth-on-demand (BOD) when "bandwidth will flow like water from a tap." Broadband Subscribers Worldwide 1996.................... 100 thousand Includes all residential and business subscribers but not wireless LAN, Bluetooth or 3G mobile broadband subscribers. Source: eMarketer Inc 2004 - By the end of this year Asia-Pacific will have 56.6 million broadband households, topping North America's 37.7 million, Western Europe's 28.7 million and Latin America's 2.3 million. - Asia-Pacific will surpass 100 million broadband households in 2007. - At the end of last year South Korea led the world in broadband subscribers per 100 inhabitants at 22.7, topping Hong Kong (16), Canada (14.3), Taiwan (13.5) and Denmark (13). - Japan will surge to the top of the deck with 28.1 subscribers per 100 inhabitants in 2007, followed by Denmark (25.4), South Korea (25.2), Hong Kong (23.2) and Canada (22.4). - China will lead Asia in total subscribers by 2007 with 54.5 million of them, up from 12 million in 2003. In 2007 the US is supposed to have 58.3 million users and Japan 35.9 million. eMarketer's study costs $1,295. Back
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Arbitron Finds Lots of Broadband Subscribers A recent Arbitron study found that 24% of all Americans have broadband
Internet access at home. The survey also found that 54% of Internet radio
listeners would be "very or somewhat interested" in listening to
Internet radio on a form of CD walkman or cell phone and that one in five
Americans owns more than 20 DVDs. The findings are based on a January 2004
survey consisting of 2,290 telephone interviews with a randomly selected
national sample of Arbitron's Fall 2003 radio diary keepers. Back
to Headlines
Covad, Qwest Sign First-of-a-Kind Broadband Deal Covad and Qwest have signed a three-year commercial line-sharing agreement so Covad can continue to offer high-speed DSL service to thousands of home users in Arizona, Colorado, Minnesota, New Mexico, Oregon, Utah and Washington, the Qwest region where Covad offers service. This marks the first time a competitive communications carrier such as Covad and an RBOC have negotiated commercial terms for line sharing since the FCC's Triennial Review decision last August. That review relieved local phone companies of having to lease ADSL line share loops to third-party ISPs like Covad. FCC chairman Michael Powell said that he was "gratified" by the
Covad-Qwest deal because it gave consumers in Qwest's territory a choice of
broadband service. "When the commission voted to eliminate line sharing, I
expressed my concern that the commission was eliminating an important source of
supply in the broadband market," he said. "This agreement demonstrates
that even without government compulsion, commercial arrangements negotiated in
the market are possible. We hope this agreement will stimulate additional line
sharing and unbundling arrangements…I urge all carriers to take the necessary
steps, during the commission's call for a 45-day negotiation period, to ensure
that consumers in all other regions of the country can enjoy the same
benefits." Back
to Headlines
My, How Time Flies. It's Four Years Since the Napster Suit April 13 marked the fourth anniversary of the day a lawsuit was filed against the wildly popular Napster peer-to-peer service. The suit was brought by the heavy metal rock band Metallica and turned out to be the first in a series of legal actions that shut down Napster after it was driven into bankruptcy. It also caused a lot of backlash against Metallica, a band that, in the past, encouraged fans to bring tape recorders to their concerts and make illegal bootlegs. Metallica sued to get its music taken off Napster's servers and managed to get thousands of users it claimed were swapping its songs banned from the Napster service. Irate fans fought back, setting up anti-Metallica sites and message boards. They even hacked into Metallica's Web site and scribbled: "Leave Napster Alone." Of course, Metallica is still around and dipped its toes into the digital
waters last year, offering some of its recordings for download from a new Web
site. Napster disappeared from the radar screen to be resurrected as a
legitimate service last October after Roxio bought it.
Back
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Loudeye Makes Sourcing Indie Music Easier Loudeye has pushed further into digital music by introducing a new IndieSource program that's supposed to accelerate the ability of independent record labels around the world to sell their music through the world's big digital music services. They license their catalog to Loudeye and Loudeye takes it from there. For the music services, it's a one-stop shop for licensing hundreds of thousands of non-major-label tracks. Music services already using IndieSource include Musicmatch, BuyMusic and Cellus USA among others. Indie labels and music reps that have signed on include Avatar Records, Stern's Music, Paradise Artists, Maggie's Music, Corn Music Services, Rebel Records, Agog Creative Group and RoadHouse Records. The newest label to join is Saregama, India's largest music company, which owns content in every major Indian language across all musical genres. Loudeye also has a relationship with content aggregator The Orchard, one of the premier IndieSource partners. Besides distributing content from thousands of independent labels, IndieSource provides encoding, fulfillment, licensing, tracking, usage reports and royalty calculations. Loudeye works closely with the RIAA to ensure that the proper codes are applied to the music to guarantee rapid delivery to the music services. Loudeye's IndieSource partners can take advantage of the company's
relationships with major online retailers, wireless carriers and wireless
content companies to expand their distribution across other digital media
channels. Back
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The Orchard Makes South American Deal Indie digital music distributor The Orchard has forged an exclusive partnership with EPSA Music, which makes discs and markets and distributes music in South America. Under the deal, EPSA will deliver music from Argentina, Chile, Peru,
Colombia, Venezuela, Bolivia, Ecuador, Paraguay, Uruguay, Guyana, Surinam and
French Guiana to sell through Orchard's global distribution network. The Orchard
provides music to more than 50 digital music services and mobile network
operators in the US, Europe, Australia and Japan. Additionally, through the
partnership, EPSA will provide sales and promotion opportunities in South
America for artists from around the world.
Back
to Headlines
'Musicology' for Sale on Musicload Prince's new "Musicology" album, which has been exclusively
available for download from the eclectic rocker's fan club Web site since the
end of March, is now for sale at www.musicload.de, the music service launched by
Germany's T-Mobile last August. The physical CD won't be available until April
20. The complete album download from Musicload is 16.95 euros ($20). The title
track can be downloaded for individual purchase for 1.59 euros ($1.90). Users
who download the album can burn it onto a CD or copy it to a mobile player up to
three times. Back
to Headlines
Labels Raising Download Prices? Despite the belief held by some that online music stores charge too much for downloading a song or album, the record labels are considering price hikes that would make downloading more expensive. While iTunes, Napster and the others have pretty much stuck to their promised 79 cents-99 cents-a-tune, there's talk of raising the price for some tracks to $2.49 according to The Wall Street Journal. The price hike would likely hit top hits, exclusives and songs released to the online services before making their CD debuts in traditional retail outlets. There's also talk of lowering the cost of downloading some older tracks if the price of the newer ones goes higher. Pressure from the labels has already caused several download sites to raise the price of complete albums. In some cases, a downloaded album costs more than buying the CD from Amazon.com or Best Buy. Although all the sites promised that "most albums" would cost under $10 to download, iTunes, Napster and Musicmatch charge $12-$14 for many new hit albums. In some cases, the price is even higher. Amazon, meanwhile, charges an average $13.49 for a CD, $10 or less if it's on sale. The Journal quoted one music industry exec as saying "For us right now the issue is not 'do we make another $300,000 by raising the price five cents?' It's making sure the market grows." There are other ways of growing the market for legal music downloads rather than raising the price, which could backfire and drive users back to Kazaa, Grokster and other P2P sites. - The labels could offer more of their catalogs on the music services. - Create standard user rights across the board, so all songs downloaded from a service could be burned to a CD or transferred to a portable player the same number of times. - If the goal is to preserve album sales, offer people incentives for downloading a complete album rather than individual tracks. - Lower the price of back-catalog tracks. - Make all download services easier to use. The market for legal downloads is still fairly young and doesn't account for
a noticeable percentage of overall music sales yet. According to the IFPI,
although the music industry dropped another 7% in 2003, total worldwide sales
still hit $32 billion. Of that, downloads accounted for less than a mere $100
million. However, download sales can only grow, regardless of what the labels
do, as new services crop up everywhere and big names like Virgin, Sony and
Microsoft are waiting in the wings with their planned digital music services.
Back
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Online Music Sales Grow but Still Insignificant The music industry has been in a sales slump since 2000, which it blames on
unfettered P2P piracy. Until about a year ago critics could say that the labels
weren't selling tracks for downloading. Apple iTunes changed that, at least in
the US. But music fans still haven't exactly beat down the door for legit online
music. Only about 25 million digital tracks were sold in the first three months
of this year, versus 19.2 million in the second half of last year, according to
Nielsen SoundScan - the $25 million or so of tracks sold in the quarter -
figured on the basis on a dollar a track - is hardly enough to keep the labels'
corporate jets fueled, housed and maintained. Q4 2003 19.2 million
$19.2 million By the way, it costs about $40,000 a month to fuel, house and maintain a
small to mid-sized corporate jet - crew included but not counting the cost of
the jet. That's about half a million a year. Back
to Headlines
Most-Played CDs on the Internet For the Week Ending April 11 This Week Last Week Artist/Title 1
1
Usher/Confessions (Arista) Aggregated from over 30 million listeners using media players powered by the
Gracenote CDDB Music Recognition Service. Back
to Headlines
Tracking the Online Music Services
Rhapsody/ iTunes Napster
Musicmatch EMusic
BuyMusic.com MusicNet@AOL MusicNow
Wal-Mart Last report
04/15/04 03/15/04
02/23/04 01/28/04
03/10/04
03/30/04
03/31/04 03/23/04 * About 100,000 of RealNetworks' numbers are thought to be RadioPass
subscribers. Cablecos Escape the Noose - for the Moment Friday, April 9, the Ninth US Circuit Court of Appeals stayed a ruling that will let cable companies be regulated the way phone companies are regulated at the federal, state and local level. The stay was granted pending an appeal to the Supreme Court by the Federal Communications Commission and the cable companies. In March 2002, the FCC decided that broadband access delivered over cable TV lines was an information service, not a telecommunications service. Last October, an appeals court decided that the FCC was wrong. Its decision demands that the cable companies let third-party ISPs piggyback on their infrastructure. Last week the court refused to reconsider its decision but stayed it. If upheld, the cable companies will have to give independent ISPs access to their networks just like the phone companies do. The phone companies are required to cut ISPs in for a fee set by each state. They contend that the rates are too low to cover the installation and maintenance of a broadband network. Another court upheld a separate FCC decision that relieves the companies from sharing their next-generation fiber-optic infrastructure. The FCC has asked for comments on the question. The FCC required Time Warner
Cable to make its network available so AOL could acquire Time Warner. Comcast
was subsequently required to make its network available as a condition to its
acquisition of AT&T's cable TV operation. In both cases the fees the cable
companies charge is considered too high for the ISPs to make money. AOL, in
fact, recently said that it would no longer sell a broadband Internet service.
It's concentrating on its AOL for Broadband value-added content and services,
which go for $15 a month. Back
to Headlines
Canada To Push for Beefed-Up Copyright Protection Canadian Heritage Minister Helene Scherrer has promised copyright reform to prevent widespread file sharing. She said she would "make sure that downloading stays illegal" and "will make it a priority so it is done as quickly as possible." She promised that Heritage Canada and Industry Canada officials would draft legislation to amend a newly discovered loophole in the Copyright Act that a federal judge views as permitting free music downloading, according to Toronto's Globe and Mail. Scherrer will push for Canada to ratify two international treaties that protect the ownership of copyrighted materials. In a judgment last month, the Federal Court of Canada ruled that swapping
songs on the Internet for personal use doesn't break the law. Justice Konrad von
Finckenstein said, "I cannot see a real difference between a library that
places a photocopy machine in a roomful of copyrighted material and a computer
user that places a personal copy on a shared directory." As a result, he
refused to grant the Canadian Recording Industry Association a court order that
would have forced ISPs to identify 29 so-called uploaders alleged to have large
numbers of copyrighted tracks available. Back
to Headlines
Labels' Legal Losing Skid Continues A federal judge in Florida has become the second judge to tell the RIAA that it can't lump all its "John Doe" copyright infringement suits into one swoop. He said the labels must file 25 separate suits against users of the ISP Bright House. A Philadelphia judge said the same thing last month about identifying 203 Comcast customers - 203 suits have to be filed. "Courts are beginning to recognize that the record companies' crusade against file sharers is stepping on the privacy and due process rights of those accused," according to Cindy Cohn, the legal director of the Electronic Frontier Foundation (EFF), the cyber-liberties group. The labels have continued their step-by-step legal campaign against people
accused of making large quantities of copyrighted music tracks available for
others to copy on the various P2P networks. Most studies done since the campaign
against these individual "uploaders" have shown that fewer people are
sharing tracks in the US. US music sales are also showing a rebound; CD album
sales were up in Q1. Back
to Headlines
The Canadian Recording Industry Association (CRIA) appealed the ruling that
ISPs need not turn over customer identification to them. The CRIA alleged that
the ISP customers whose identities they want were illegally making copyrighted
music tracks available for other P2P users to download.
Back
to Headlines
Microsoft Settles with InterTrust; InterTrust Figures To Make Hay Off of ISVs & Integrators Microsoft's legal charwomen, who are on roll these days, have cleaned up a potentially nasty patent mess and settled with InterTrust Technologies, the otherwise failed DRM house that got bought the year before last by Sony and Philips for $453 million - less the $125 million InterTrust had in the bank from its bubble-age IPO. In the wee hours of Monday morning when everybody in the US was asleep Microsoft announced that it's paying $440 million for InterTrust to withdraw its lawsuits, which claimed practically everything Microsoft owns trod on 11 InterTrust patents that cover not only DRM but also security (think Palladium). InterTrust ultimately made 144 claims and offered the court 193 infringement scenarios that indicted not only Windows Media Player's DRM components, but XP, ME, the .NET Framework, Office XP, Visio 2000, Access 2002, Excel 2002, FrontPage 2002, MS Reader, Project 2002, Publisher 2002, Xbox, Windows Installer, ActiveX, SMS and Windows Server 2003 among others. For its one-time payment Microsoft gets a license to InterTrust's portfolio, which Microsoft admits contains some patents that pre-date its own. The license will pass through to Windows developers in some - but not all - cases. It looks like most Windows developers, and system integrators, will have to go to InterTrust to cut separate licenses although InterTrust doesn't want to say that. What InterTrust CEO Talal Shamoon and CTO David Maher were willing to say is that who would need a license is "very fuzzy," and that the ISV or SI should contact either InterTrust or Microsoft to find out. They couldn't get any more explicit, they said, because that would be revealing the terms of the settlement without the protection of an NDA. Microsoft said developers can get the relevant portions of the agreement with InterTrust under NDA from IPLG@microsoft.com. David Kaefer, the director of business development for Microsoft's IP unit, suggests that most ISVs leveraging Microsoft technology will have to buy an InterTrust license. In its press release, InterTrust described the circumstances that won't need a separate license as products built using "Microsoft platform technology for normal and expected uses." Ones that would could be those that combine third-party technology with Microsoft's. Although that sounds like anybody that adds value to Microsoft technology - and which Microsoft technology we're talking about here is as murky as who needs a license - the InterTrust officials resisted that interpretation without Providing an alternative. They said that they would have a test for who needs a license in the next few months - apparently they're working with such as MPEG LA on the test - and also have some further insight into pricing. Currently they're saying pricing is being done on a case-by-case basis. Of course the only license InterTrust ever sold besides this deal with Microsoft was to Sony, which paid InterTrust $28.5 million to license its patents before it bought into the joint, and Philips, which InterTrust says got a license at some point or another that's not clear. Sony has never explained what it wanted the patent rights for or if it's used them. As part of the deal with Microsoft, InterTrust gets the right under Microsoft patents to design and publish InterTrust reference DRM and security specifications. The company never managed to create a saleable product. Maybe it'll try again. The deal is supposed to accelerate the adoption of development of DRM technologies. InterTrust has designs on licensing mobile and consumer electronics makers. InterTrust says its patents contain 2,000 claims. It's got 30 US patents and 12 international patents and upwards of a hundred patent applications pending throughout the world. It expects to add others. Last July, Microsoft lost the Markman hearing and its bid to get a summary judgment against InterTrust, which originally sued Microsoft in April of 2001 and then kept adding claims and finally a second suit. Microsoft had negotiated with InterTrust before the suit and came close to putting $100 million in the firm. InterTrust says it reached a settlement with Microsoft on Saturday, April 3, the day after Microsoft came to terms with Sun Microsystems, agreeing to pay Sun $1.95 billion to get it to drop its Java-provoked private antitrust suit. Microsoft previously settled the old AOL Time Warner antitrust suit over Netscape for $750 million, the Be antitrust suit for $23.25 million plus legal fees and cut a deal for some unrevealed amount of money with AT&T, which was demanding $90 million for patent infringement by NetMeeting and TrueSpeech. Besides resolving the serious tying problems that remain in Europe, appealing the $521 million award made to Eolas, there remains the great billion-dollar RealNetworks private antitrust suit and Burst.com's problems with Microsoft's Windows Media Player 9, which purportedly treads on its streaming IP. Microsoft is also in court with one of those class actions suits over Windows and Office pricing that it couldn't settle. God knows what that'll cost. Meanwhile, Microsoft and Time Warner, which were supposed to become DRM buddies by the terms of their $750 million antitrust settlement, last week bought substantially all of the 75% position Xerox had in ContentGuard, a DRM joint venture Xerox set up with Microsoft in 2000. Xerox, which kicked in 17 DRM patents from Xerox PARC while Microsoft contributed money and bought a license to the venture's XrML technology, retains a small piece of the operation. They didn't say who owns what, but Microsoft now owns more than the 25% it started with. "Working in equal collaboration," Microsoft and Time Warner are supposed to develop the ContentGuard IP portfolio and kick-start the DRM market. Like InterTrust, ContentGuard licenses patents, which, again like InterTrust, cover broad fundamental elements of DRM and distributed authorization. Microsoft mumbled something about making the ContentGuard and InterTrust IP interoperate. XrML, the extensible Rights Markup Language, is the basis of the ISO-approved MPEG REL, the language used to assign digital rights and conditions to any digital objects. The InterTrust settlement coupled with the ContentGuard move suggests that Microsoft is positioning itself to make a big push into DRM. The Wall Street Journal, which has evidently got a little list, says
Microsoft has been named in at least 35 patent suits since 1998.
Back
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Nokia Unveils Slimmed Down Game Deck If at first you don't succeed as well as you expected, try again. That seems to be the thinking of cell phone leader Nokia, which has trotted out a slimmed-down version of the N-Gage game deck it launched to much fanfare - and limited consumer interest - last year. The original N-Gage, which combined a portable game device with a cell phone, MP3 player and FM radio, failed to even come close to the sales Nokia hoped for and attracted a number of customer complaints about its bulky size and limited battery life. Enter N-Gage QD, a cheaper gadget that limits itself to game playing and smartphone functionality - no MP3 player, no FM radio, no USB port. It's about 20% smaller than the original and retails for $199 (199 euros) on its own or $99 (99 euros) when it's purchased with a cell phone contract. Nokia upgraded the QD's gaming functionality by adding a hot-swappable multimedia slot for instant gaming, improved gaming controls, a brighter screen with more colors and longer battery life - up to 10 hours of continuous play. It plays all existing N-Gage games. There's also a new embedded application for launching the N-Gage Arena, a Web site where gamers meet up with others from around the world for multiplayer gaming over mobile networks or participate in close-range multiplayer gaming via a Bluetooth connection; download exclusive content and access statistics. Users of the original N-Gage will be able to download the N-Gage Arena launcher in May from www.n-gage.com. Phone features, besides making and receiving calls, include personal information management, an XHTML browser, e-mail and the ability to download additional Series 60 applications. The N-Gage QD is set for release in Europe, Africa and Asia-Pacific next
month. It should be out in the Americas in June. Back
to Headlines
Thomson Intros First Advanced Compression IP Video Set-top Thomson has set its sights on being the market leader for the next-generation Internet-based (IP) set-top boxes that the phone companies will use to deliver rich content to homes over DSL broadband connections. It foresees the day that consumers will get home entertainment packages that include hundreds of entertainment channels - TV-like, music and other audio, movies, browsing, e-mail and gaming. Thomson says that the phone companies will be able to build new revenue-generating models that will increase their income. The phone companies would welcome the ability to deliver entertainment content over existing copper wires and avoid the enormous expenditures of new infrastructure. Thomson believes its work in compression technologies gives it an edge over its competitors according to Bruno Fabre, VP of Thomson's Telecom Division, who claims Thomson is uniquely positioned "to help telecom companies deliver exciting new video and data services to their customers, which can build new business models and increase telco revenues. This expertise, combined with the experience we have gained from the trials of our other IP video products, solidifies our role in this burgeoning and exciting category." Thomson's newest goodie for the emerging "telco entertainment" market is an RCA-branded IP1000 set-top box that uses Thomson's recently announced advanced compression video delivery platform. It enables residences to receive high-quality audio and video content over existing DSL infrastructure. The IP1000 supports current and next-generation video coders-decoders (codecs) including MPEG-2, MPEG-4 Part 2, Microsoft's Windows Media 9 Series and MPEG-4 Part 10 (JVT). Thomson worked with Intel to develop the technology platform, which in the IP1000 uses a Celeron 733MHz processor. The unit has connections for a remote control and keyboard plus tw |
