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Verizon Plans Full-blown Fiber Optic Broadband & TV Service Regional phone giant Verizon has confirmed that it plans to obtain cable franchises in Texas, California and seven other states as reported earlier in the week in BusinessWeek. Verizon has previously said that it's building fiber optic systems capable of carrying TV programs including digital TV, videoconferencing and movies-on-demand. The network will supposedly connect to about a million homes this fall and 12 million by 2008. Paul Lacouture, who's in charge of the project, told the magazine that "The battle is going to get a lot more intense." Verizon intends to spend $20 billion-$30 billion extending the service to nearly 35 million phone customers. If and when it does, the package of goodies it could offer would be significant: - Internet connections of up to 30 Mbps - 10 times faster than what cable companies currently offer and 30 times faster than what phone companies typically offer. No doubt the speed would come at 5 Mbps, 15 Mbps and 30 Mbps, increments or tiers, each priced successively higher with 5 Mbps probably going for the $40-$45 a month that cable companies charge for 3 Mbps. - With sufficient demand, Verizon could offer as much as 100 Mbps. - Full TV, sports and movie programs in competition with the cable and satellite TV. - Video-, sports- and movies-on-demand. - Phone service with "in-the-same-room" voice clarity. Competition in the home entertainment market, already fierce, would heat up if the phone companies begin filling their fiber optic pipes with movies, sports and TV programs. ************************************************** Telephone companies Cable TV companies Cable TV companies with current Wi-Fi "b".........................................11 Mbps Powerline-based..............................14 Mbps Telephone companies over Wi-Fi "g".........................................54 Mbps Ethernet wired Coax-based....................................270 Mbps The phone companies, which for the first time ever are experiencing
competition for local phone service, aren't faring very well against the cable
and cell phone services. Estimates claim the phone companies are looking at
losing 15%-30% of their local subscribers to the cable and voice-over-broadband
(VoIP). Without any video entertainment content to offer, the phone companies
find themselves handicapped against the cable companies. BusinessWeek quoted UBS
analyst John Hodulik as saying that he believes losses could be limited to 15%
if the telecom companies had video content - TV shows and movies. ******************************************************************** ******************************************************************** The telcos have responded to the mobile phone threat by buying up the services- they now control 85% of US cell phone users. The phone companies would be hard pressed, both financially and regulatory, to buy the cable services. "Bundling" - one monthly bill that includes multiple services at a special combined rate - appears to have enormous appeal with consumers who are trying to simplify their life and get the best possible deal. It seems consumers are more likely to stick with a carrier when they buy bundled services. Apparently it's harder for consumers to change all the services at once. The thought of changing one's local phone service, long distance, TV and broadband access in one fell swoop brings out the inertia in the best of us. So the phone companies have begun evaluating various schemes to get content such as joint marketing deals with the satellite TV companies - SBC with Dish Network and BellSouth and Verizon with DirecTV. Now, Verizon wants to go all the way and offer its own cable TV through its soon-to-be-installed fiber optic network. Neither BellSouth nor SBC, the next biggest phone companies, have mentioned any full-blown deployment of fiber optic to be followed by TV programming. BellSouth admits to testing fiber optic and SBC is planning a pilot in some new housing developments. "I'm not sure it's going to make sense to take fiber all the way to the home in existing neighborhoods," SBC VP of corporate planning Jeffrey Weber told BusinessWeek. Close to the same situation exists in the UK. The two big cable TV providers NTL and Telewest are selling bundles: local and long distance, TV programming and broadband access. Phone giant BT and the independent third-party ISPs who sell BT's broadband can't offer a full bundle. Back to Headlines New Linksys Devices Stream Music Around the House Cisco's Linksys unit is shipping a Wireless-B Media Link for Music and Wireless-B Music System, two gizmos that let consumers listen to digital music from a PC on a stereo or elsewhere around the house. With the Media Link for Music, they can listen to music stored on the PC or other devices on a home stereo. The device bridges the analog and digital worlds, using Wireless-b (802.11b) networking to send digital audio content such as MP3s, WMA files and playlists across the network to a stereo. It sits near the stereo and connects by standard RCA cables or optical SPDIF cable for digital operation. Media Link for Music has an embedded LCD screen so users can select songs, playlists and music services on the built-in display. They can operate the thing with a remote or by scrolling through music lists and songs with the device's buttons. Media Link connects to a home network with its built-in 802.11b wireless functionality or via standard 10/100 Ethernet cable.
The Media Link Music System unit, on the other hand, plays the streamed music itself. Weighing in at less than three-and-a-half pounds, the Music System includes high-quality speakers. Similar to a portable boombox, it can go with the user anywhere in the house, the garage or out by the pool. It also has an LCD screen for easy song selection and identification. Besides streaming stored music files, the Media Link devices access hundreds of Internet radio stations and support music-streaming services. The things come standard with an Internet radio service that offers more than 1,000 basic stations that can be displayed on their LCD screen. To offer a greater selection, Media Link is compatible with RealNetworks' Rhapsody Internet Jukebox service. Linksys and RealNetworks are offering a free three-month trial of the Rhapsody Radio Plus service (normally $4.95 a month) with the purchase of either Media Link gadget. With Radio Plus music fans can create their own customized Internet radio stations with music from their favorite artists, listen to more than 50 professionally programmed stations and skip over songs they don't like. Linksys customers can also upgrade to a Rhapsody All Access subscription for $9.95 a month and get all the Radio Plus features as well as unlimited streaming access to a library of more than 650,000 songs for a cost of 79 cents each. Media Link for Music is $149.99. The Music System is $179.99. Back to Headlines
Dell MP3 Player Supports Linux Lindows, which makes the consumer-oriented Linux-based Linspire desktop operating system, has struck a music deal with Dell. Dell's Digital Jukebox portable MP3 player is now compatible with Linspire and the company's Lsongs music management software. Lsongs, which Lindows unveiled in April, is similar to Windows- and Mac-based software jukeboxes that let users import, organize and listen to music as well as create custom playlists and burn CDs. Support for the Dell DJ is available through the Lsongs music player. To use the two together, users need to install Lsongs and then plug the Dell DJ into the PC's USB port. Lsongs automatically recognizes the Dell DJ without any user configuration required. The Dell DJ will appear in the Lsongs interface ready to sync music from a user's music library with a single menu command. Users can either transfer music through the sync mechanism or drag-and-drop to add and delete songs. Apparently Dell wasn't Lindows' first, or at least only, choice of an MP3 player partner. According to Lindows CEO Michael Robertson, "We talked with Apple Computer about supporting the iPod but they want to keep that a closed system." Exactly what RealNetworks said when it tried to entice Apple out into the "open." The Dell DJ starts at $199 and comes with either 15GB or 20GB of storage. A
rechargeable battery provides up to 16 hours of continuous music
playback. Back
to Headlines
Sony, PalmOne, Apple Opening More Retail Stores Gateway's retail stores may have failed, but that's not stopping other PC and
CE companies. Apple keeps operating its own retail locations. Now Sony, which
has three big retail stores and a boutique-sized one it opened last year in San
Diego, plans to add 10 more over the next year including the one it opened in
Boston on May 6. PalmOne has 11 stores with four more due to open by year-end.
Sony and PalmOne say they don't measure the store performance by how much
product they sell. Their purpose is to educate consumers in a dedicated
atmosphere rather than as just one of the thousands of gadgets on display in the
typical electronics store. Gateway, on the other hand, tried to make each store
a profit center. Apple, which has 70 stores including one in Tokyo, will open a
20,000-square-foot flagship store on Regent Street in London by the end of the
year - on a site the Queen supposedly owns. Back
to Headlines
Audible Magic Device Scans for Video, Software and Porn Audible Magic, which makes content management services and anti-piracy devices, has come out with a new version of its CopySense Network Appliance for peer-to-peer monitoring. Besides monitoring networks for sharing copyrighted music, CopySense 1.4 also checks for video, software titles and sexual content. The new device uses a sophisticated metadata filter to identify the additional content types. Future versions will use a registered content database, similar to the one that's currently used for songs, to more precisely identify individual files. "The strategy we have developed, working with content owners to register and identify songs, is easily extended to other forms of content," said Audible Magic founder and CEO Vance Ikezoye. "Movies and porn are areas of increasing concern on P2P networks, especially as more and more consumers adopt high-speed connections." CopySense 1.4 offers additional reporting options, including one that
restricts information reported about individual IP addresses, and the ability to
export standard reports into HTML, XML or CSV formats. "These additional
reports are based on feedback from our higher education customers," Ikezoye
said. "Removing the capability to report on individual P2P activity
addresses the concerns about user privacy that have been raised on college
campuses." Back
to Headlines
Google Thumbs its Nose at Microsoft Google is getting ready to introduce a mechanism to search files stored on a PC just like the functionality Microsoft is supposed to be working on for the delayed Longhorn operating system, now due - if Microsoft is lucky - in mid-'06, according to the New York Times, which quoted anonymous sources. Google declined to comment on the project, reportedly code named Puffin and reportedly running internally for the last year. Puffin development has been led by an ex-Microsoft product manager, the paper said. Microsoft's functionality is supposed to be part of Longhorn's new file system. Longhorn is also supposed to integrate natural language Web search that would make the data's location transparent to the user. Google's move is regarded as a defensive one to avoid becoming Netscape-style road kill. Among other things, MSN is supposed to replace declining dial-up revenues
with search ads. Back
to Headlines
AT&T Getting Back into Wireless Biz Even before its deal to sell AT&T Wireless to Cingular, a move that will create the largest wireless operator in the US, is finalized, AT&T is already announcing its intention to get back into the wireless arena through a partnership with Sprint. The non-exclusive five-year agreement lets AT&T offer an AT&T-branded wireless service to its 30 million business and consumer customers. It's testing the service in select US markets and hopes to launch the thing later this year. AT&T will act as a "mobile virtual network operator" offering its own content and applications, operator assistance and information service on top of Sprint's wireless data network. AT&T will also handle its own customer care and billing. According to AT&T chairman and CEO David Dorman, the telco giant plans to aggressively add the wireless service offering to its consumer product bundles including the OneRate local and long-distance plans and the CallVantage VoIP service that is delivered over broadband connections. As integration of wireless handsets with Wi-Fi networks improves over the next 18 months, AT&T also plans to offer handsets that let customers to make VoIP calls over broadband connections in home and businesses. Financial terms of the deal were not disclosed. Back
to Headlines
In a move that shows just how much weight the iPod portable music player has, Apple has split its hardware business into two divisions - one for the Mac and one for the iPod. Jon Rubinstein, who headed up the company's hardware engineering business, is charged with running the new iPod division. Timothy Cook, head of worldwide sales and operations, is taking the lead in the Mac division. Tim Bucher, who's in charge of Mac system development, will replace Rubinstein in hardware engineering. It's not too surprising that the iPod is getting its own division. It's way ahead of any of its competitors in market share, despite also being more expensive than many other players. Since the first iPod came out in late 2001, more than three million of the gadgets have been sold. "This organizational refinement will focus our talent and resources even
more precisely on our industry leading Macintosh computers and the wildly
successful iPod," the company said in a statement. Back
to Headlines
High DVR Growth Projected for Cablecos Forecasts are that the US cable TV companies will install 12 million DVRs by the end of next year - 12% of the total number of US homes - and 30 million by 2009, 28% of the expected number of TV-equipped homes. Cablevision plans to start offering DVRs made by Scientific Atlanta. TiVo, which provides the DVR software for DirecTV's set-tops, so far seems to be getting shut out of the cable TV market. Most of the cablecos seem to want to get a leg up on DirecTV's TiVo-based DVRs and offer multi-TV DVRs. Scientific Atlanta has developed its own version of a multi-TV system, but both it and rival Motorola are also showing Moxi-based units. Digeo, a company that Paul Allen has invested in, developed the Moxi technology, which seems to be the leading candidate for use in the DVRs that are being developed for the cable TV companies. So great is DVR use becoming that research company Nielsen will start
tracking what people are watching - both live and delayed. Back
to Headlines
Phone Companies Coming with TV Programs The phone companies have realized, finally, that the cable TV companies are their major competitors now that the telcos have bought up the companies that control 85% of the American cell phone market. They also see that the biggest gun missing from their arsenal is content - they simply don't have any. And the kind of joint marketing deals they're doing with the two satellite TV providers just won't carry the day long-term. SBC has a deal with The Dish Network and DirecTV has partnered up with Verizon and BellSouth. The telcos will have to go beyond those marketing deals and start contracting directly with the media content companies much as Verizon is doing by applying for cable TV franchises in a few Texas communities. When they starting getting such franchises in multiple markets, the telcos will then be in competition with the satellite TV companies as well as the cable TV services. For the satellite TV companies, the current marketing deals with the phone companies are not critical. They see the phone companies as nothing more than another retailer - another distribution channel. Predictions are being made that the telco-supplied TV services are starting a growth spurt. In-Stat/MDR, for example, forecasts the number of worldwide subscribers to digital TV services provided by local telcos will grow to 14 million by 2008, when the service availability will pass an estimated 75 million households. In-Stat expects a 100% growth in subscriber figures for 2004 because of the increasing use of DSL broadband. It also credits improvements in video compression technology that lengthen the distance that video can be transmitted over the DSL wires and increase the number of streams that can be sent simultaneously. "Competitive threats and fixed line revenue pressures are encouraging telcos to become active in offering digital TV to their subscribers," said In-Stat/MDR senior analyst Michelle Abraham. "The possibility of gaining an additional $60 per month in revenue, while becoming less likely to lose $30 a month to your competition, is an important factor in the business case. Separately Verizon has confirmed a Business Week story (detailed separately
in this week's Online Reporter) that it would begin offering video services to
business and home users in the second half of 2005. It also confirmed that it
would try to get cable franchise licenses and agreements with cable TV
networks. Back
to Headlines
Mass Swapping of TV Shows on P2P Networks Following on the mass swapping of music and movies on the P2P services comes the same phenomena for TV programs - even those that are free on network TV such as "Friends" and "The Simpsons" according to cyber supersleuth Mark Ishikawa of BayTSP. The top five most downloaded TV programs according to Ishikawa, whose clients includes content developers such as the movie and TV production studios, are: ******************************************************************** The Simpsons* Ishikawa said that his clients send "cease and desist" letters under the guidelines of the DMCA and those generally cause the person sharing the TV program to stop. Even though the network shows are available free to anyone who wants to watch, a downloaded copy can be viewed at a person's convenience rather than when the network schedules it. TV program swappers capture the show with either DVRs or one of the many PC brands that include a TV tuner. Every PC sold with Microsoft's Windows Digital Media - a number that will purportedly hit one million by year-end - can record shows and movies from whatever source it's connected to - cable TV, antenna or satellite TV. A recording made on a DVR can be copied to a DVD recorder and then copied to the PC. Once on the PC, the TV recording can be made available on a P2P network. The greatest fear that the TV show owners have is that the availability of
their works freely on the Web will deprive them of the increasingly lucrative
revenue from the sale of their stuff on DVDs. Back
to Headlines
******************************************************************** The digital media age is about the Internet delivering music, movies, games, other entertainment and information on-demand. Consumers will gain control over what they get, when they get it and where they get it. 1) Wireless networking. Entertainment will be the driving force for installing wireless networks in millions of homes particularly as network speeds increase to 100 Mbps, permitting movies, TV shows and home videos that are downloaded or stored on a PC to be played on TV sets in other rooms. 2) Built-in digital video recorder functions à la TiVo will be included in entertainment appliances such as TVs and set-top boxes. By connecting them to the home network, consumers will be able to access movies, TV shows and other TV-broadcasted content in any room at any time. 3) A digital media interconnection standard, probably a combination of Windows and UPnP, that will automatically synch up connected multi-vendor digital entertainment products and display a common user interface menu for operating any connected device - a standard that could lead to (gasp!) a universal remote control. 4) Handheld personal video players such as those from Archos and HandHeld Entertainment. Millions will use them to watch downloaded and pre-recorded video. 5) Digital Media-enabled cell phones that let you talk, play games, take pictures, personalize ringtones, surf the Web, listen to music, watch news and sports and preview movie trailers. 6) Streaming media for accessing Web-based radio, news and sports highlights, plus dedicated music genre channels. Streaming will one day deliver full-length movies, music videos, TV programs and information videos to millions of Internet-connected homes around the globe. 7) Smaller, less expensive storage products with larger capacities such as DVDs, tiny hard disks and memory products that will drive down costs and increase both capacity and fidelity - in other words: "More, better, cheaper." ******************************************************************** LIES, DAMN LIES AND STATISTICS
Kids Know Downloading Is Wrong, but Do It Anyway Despite knowing that the files they download through P2P networks are copyrighted, kids still download music, games, software and other digital media, according to a new poll from Harris Interactive conducted for the Business Software Alliance (BSA). The survey found that most of the eight- to 18-year-olds polled are aware
that digital media files are copyrighted. More than half - 53% - still download
music and 32% download games. A smaller number download larger files such as
commercial software - 22% - and movies - 17%.
Kids Know that Digital Files Are Copyrighted Books
91% Source: Harris Interactive "What's most alarming is that eight out of 10 kids and teens understand the definition of copyright and nearly all of them, especially teens, are aware that software, music and movies are protected by copyright," said BSA's VP of public affairs Diane Smiroldo. "The fact that kids know stealing software is wrong, and yet they behave like it's okay, clearly illustrates a challenging ethical dilemma." Turns out they're more worried about technical problems than about stealing. When they illegally download files, the kids worry more about accidentally downloading a virus (60%) than whether they might get into legal trouble (50%) or accidentally downloading spyware (43%). Only 29% said they worry that it's wrong. Although they might not pay attention to the message, kids and teens learn
about laws that protect creative works online from a variety of sources. Most
learned about it from TV (59%), but a significant number also learned about the
legal issues from a parent (44%) or the Internet (44%). Other sources include
ads (36%), friends (30%) and teachers (18%). Back
to Headlines Media-Savvy Consumers Present a 'Moving Target' Media-savvy consumers - those with broadband Internet connections, DVD players and burners and MP3 players - tend to experiment with new gadgets and media formats, and may well have a significant impact on how media vendors do business according to In-Stat/MDR. A new survey by the market research firm found that, although they still go to the cinema and buy DVDs, many of these media-savvy folks use movie download services, own a digital video recorder (DVR) or have their PCs connected to home networks. They generally feel out new media sources and opportunities and are continually re-evaluating the quality of music and movies. In-Stat/MDR principal analyst Gerry Kaufhold says this makes them "a moving target for those who wish to sell, rent, lease or otherwise profit from owning professional entertainment content." Other findings about the media-savvy crowd include: - They're subscribing to fewer premium TV services, such as HBO and Showtime. Their relatively strong pay-per-view and video-on-demand use may indicate that they don't see the value proposition of having a short list of 50 movies available in monthly rotation. - The media savvy, especially those with higher annual household incomes, are tuning out network television. Nearly 30% of In-Stat's respondents said they are watching less network TV than they did last year. - Some 42% of the respondents said they'd pay to get commercial-free network TV. Half of this group said they'd pay $5 a month or more for it. - A large number of the respondents said they had already burned a DVD. DVRs such as TiVo are changing consumer expectations about when and how they can get TV and movies. The sudden surge in DVR use is due to the push by the two satellite TV services, Dish Network and DirecTV. DirecTV, for example, offers a two-tuner TiVo-based DVR for $100, free to first-time users. DVR numbers will explode once the cable services begin pushing them on their subscribers. The two main cable set-top suppliers, Scientific Atlanta and Motorola, are readying large volumes of their own and of Digeo Moxi-based DVRs for shipment in the second half. DVRs whet consumer appetite for the "anytime" aspect of entertainment called time shifting. There's no checking the TV guide, no looking up a theater schedule, no re-arranging a busy schedule around a set start time. Want to see a replay of Rudi Giuliani's testimony at the 9-11 hearings? No problem! Just record it on the DVR and watch when it's convenient. Unlike videocassette recorders, DVRs permit programs for recording and playback to be done from a TV program guide. Time shifting gets people accustomed to flexible viewing times. The premium cable/satellite TV channels don't offer that - and can't. Video-on-demand/pay-per-view delivered by cable and satellite TV is also limited in the number of programs offered at any one time. When enough people have broadband with enough speed, any entertainment will be available, any time. That's assuming that their houses get networked - probably with coax. It also assumes the industry gets copy-protection schemes worked out - there's too much business at stake for them not to. Speaking of copy protection and digital rights management schemes, the
entertainment and content industries are well aware that there's no monopoly on
their wares. If they don't make their stuff available to the market, someone
else will develop content for the distribution channel. When the movie studios
stubbed the new-fangled TV networks, others stepped up and developed content for
it. Back
to Headlines France's Free Becomes Largest Independent DSL Provider The French ISP Free's 630,000 subscribers make it the largest independent DSL provider in the US or Europe. It has added more broadband users than Covad, the largest American independent broadband provider. At the end of 2002 Free set the price standard for entry-level 512 Kbps DSL, bringing it down from 45 euros ($54) to 30 euros ($36) a month. Competitors have responded with tiered pricing, time-based billing and bundles of phone and DSL service. Free has countered with free telephony, TV services and increasing bandwidth. It now delivers 1 Mbps for 29.99 euros ($36). Free uses France Telecom's infrastructure. France Telecom's own DSL service Wanadoo has positioned itself as a reliable, high-quality provider that kept its rates high. DSL Reports says that France Telecom has put out RFPs for a million DSL gateways with voice, video, 802.11 and Bluetooth with a hard drive and DVR as options. Industry analysts predict that Free will reach a million subscribers by the middle of next year. It's currently adding about 150,000 subscribers a quarter. See http://www.free.fr. Back
to Headlines In homes with an Internet connection, broadband penetration has grown from
33.8% to 46% in the US according to research company Ipsos-Reid. In Canada, it
increased from 64% to 67%. Like Korea, which at 70% has deep penetration, growth
of the Canadian broadband market is declining as it approaches saturation.
Back
to Headlines Broadband, 22 TV Channels Going for $65-a-Month in Spain Spain's Telefonica has expanded its Imagenio TV-over-ADSL to Madrid and
Barcelona after a trial period in 300 homes in Alicante. A million homes will
now be able to get the service, which costs 54 euros ($65) a month and includes
a broadband connection, 22 TV channels and a set-top box. Back
to Headlines European Broadband Content To Hit $2.15b The value of content sold over broadband will reach 1.8 billion euros ($2.15 billion) in Europe in 2007 according to Screen Digest. Only 24 million euros ($28.8 million) were reportedly spent on broadband content in 2003. Key predictions in Screen Digest's report are: - The number of broadband-connected homes in Europe will grow from 18 million at the end of 2003 to over 62 million by 2007. - Content bundles, called "bouquets" in Europe, will be the dominant content subscription vehicle. A lot of ISPs already offer their customers optional low-cost subscriptions to packs of entertainment services that include video feeds, music, games and children's material. Such bundles will account for about half of consumer expenditures on broadband entertainment content by 2007. - Music was the initial driver of broadband content. Many ISPs and a handful of content providers now offer legitimate music download services through OD2's wholesale online music service. MyCokeMusic launched in the UK earlier this year. Roxio's Napster launched in the UK this week and Apple's iTunes will follow later this year. Europeans will spend 46 million euros ($55 million) on music download services this year. - ISPs will become content aggregators like Telecom Italia has done with Rosso Alice and Deutsche Telekom with its T-Online Vision. ISPs have two motivations: give consumers a strong reason to subscribe to broadband and get more revenue from them. ISPs will also provide secure access and payment for outside content providers. Francois Godard, the report's author, said, "The current boom in
broadband connections is poised to deliver a dramatic increase in online
entertainment expenditure. The key areas of content will be music,
games-on-demand, movies, sports and children's content and it seems that
broadband users prefer to buy these as content bouquets rather than à la
carte." Back
to Headlines McCaw Sees Big Future for Wireless Broadband Access Craig McCaw, who made billions in the cellular business, has set his sights on wireless Internet access. In March he acquired Clearwire Holdings, a company that provides wireless broadband service in Jacksonville, Florida, and holds the exclusive rights to the radio spectrum in another 100 US cities. In April he acquired NextNet Wireless, which makes gear for delivering high-speed wireless access. On May 3, he put $36 million into Microcell Telecommunications, which is supposed to offer wireless broadband throughout Canada. Wireless broadband technology is a potential threat to the broadband fiefdoms
that the cable and phone companies own. McCaw isn't infallible. His biggest
failure was Teledesic, which was going to use a global network of 840
low-altitude satellites to provide Internet-like transmission of digital data
around the world. Back
to Headlines BT Hits 90% Broadband Coverage BT said this week that 90% of the homes using its phone service in the UK could now get a broadband connection if they want it. BT Wholesale CEO Paul Reynolds said, "This is a stunning achievement. Nine out of 10 people are now connected up to a broadband exchange and we've announced plans to get us to near universal coverage by next summer." He said that the ADSL coverage puts the UK ahead of other G7 countries. He said the best other countries are doing would not get them to 90% penetration until the end of this year when the UK would be "past 95% and well on the way to topping 99% by summer 2005." ********************************************************** Exchanges % of UK phones Now live for broadband
2,652
90%
BT Retail sells direct to businesses and residential customers and includes BT Openworld, one of the UK's largest ISPs. BT Wholesale sells to third-party ISPs who use BT's infrastructure to connect their broadband customers to the Internet. The British government regulates the price and terms that BT offers third
parties. AOL UK is one of a number of BT resellers. Back
to Headlines AOL Testing Broadband Digital Media Player AOL is reportedly testing a new digital media player called "Fanfare" that plays audio and video, protects against spyware, can be used to manage digital media files - music, videos and pictures - and has a calendar feature, according to BetaNews.com. Fanfare is also said to include an "AOL Talk" function that permits users to carry on live conversations, just like instant messaging. The report says that 15,000 AOL broadband users are testing the new service. A "public preview" is expected by year-end. We can't help but notice that the Fanfare name sounds remarkably like The Fan, which is the name Comcast uses for its broadband digital media player. After being hit with a suit by Music Choice over AOL's use of MC as a name for its online music service, AOL is no doubt selecting its brand names more carefully. Recently AOL has started showing signs that it won't roll over and die as its dial-up customer base dwindles. It's rapidly adding new broadband content and services to attract consumers who use other companies' broadband access but still want their AOL content. Broadband access could turn out to be a commodity - like the water and
electrical utilities - with the real money in content and services. If so, AOL's
current strategy of focusing on content and services could turn out to be a
winning hand. And developing highly functioned digital media players like
"Fanfare" or what ever it ends up being called could increase the
company's status in the financial markets, something that would make Time Warner
executives and shareholders very happy. Back
to Headlines Commenting on BT results for its fiscal year ending March 31, CEO Ben
Verwaayen said, "We are enabling broadband Britain." He said that BT
would soon reach 2.5 million broadband connections, a 162% annual increase.
Verwaayen added that the company intends to make broadband accessible to 99% of
British homes within a year. Back
to Headlines The Wire Pyramid
AOL's European Broadband Initiative AOL has said that it may have a better chance of broadband success in Europe
than the states because the European governments more closely regulate what the
phone companies can charge third-party ISPs to use their broadband
infrastructure. AOL UK, which already has over 325,000 users, this week unveiled its latest initiative saying that it wanted to bring "choice, clarity and value" to UK Internet users. It claims to offer "straightforward pricing with no upfront fees, no capacity limits and no surcharges for 'heavy' usage - plus a free customer help line." AOL will offer an "under 20 pound" ($35) entry-level broadband service with an always-on connection at up to 256 Kbps down and up. AOL reduced its "up to" 512 Kbps to 24.99 pounds ($44) from 27.99 pounds ($49) a month. Its "up to" 1 Mbps offering will be 29.99 pounds ($53), down from 34.99 pounds ($62). AOL UK CEO Karen Thomson said, "Our in-depth research shows that very few consumers have any idea or interest in what a one- or two-gigabyte capacity imposed by some providers actually means in terms of usage. In fact, many AOL Broadband members already use a total of more than 1GB of data each month and this is likely to increase as additional broadband features and content are introduced." She touted the "uncapped services" as a way for users to access more content over the Internet such as online radio, streaming music videos and films plus downloading software, photos, music and videos without worrying about usage surcharges. The new entry-level service will be offered first to AOL's dial-up users, then to other UK consumers in June. David Carr, VP of Broadband for AOL UK, said that the company would continue to offer exclusive content and services as additional incentives to attract subscribers. He said that certain "dedicated" content would be available only to subscribers to AOL's higher speeds. He said that the company was working on new broadband products such as video-on-demand, 2 Mbps broadband, Internet telephony (VoIP) and wireless broadband connectivity. In the UK, AOL uses both the phone company's - BT's - broadband
infrastructure as well as that of the NTL cable TV service. Back
to Headlines Broadband Scorecard North America
Potential Adelphia
0.951 324,236 - year
12/31/03 --------------------------------------------------------- Note: Synergy Research Group says that worldwide DSL and cable modem broadband equipment sales grew 74% in Q3 year-over-year and 11% sequentially. It forecasts 100 million DSL broadband users by the end of 2004. Source: The Online Reporter and company reports. Back
to Headlines BROADBAND SCORECARD INTERNATIONAL
Potential Belgacom (Belgium)
0.785 51.8% - year
12/31/03 * Wanadoo operates under the Wanadoo name in France, Spain and the
Netherlands but under the Freeserve brand in the UK. Note: Synergy Research Group says that worldwide DSL and cable modem broadband equipment sales grew 74% in Q3 year-over-year and 11% sequentially. It forecasts 100 million DSL broadband users by the end of 2004. Source: The Online Reporter and company reports. Back to Headlines
EarthLink Launching Wireless Broadband in California EarthLink will launch wireless broadband in Northern California based on
WiMAX-ready gear. It's partnering with Digitalpath Networks, which will provide
the Internet access. EarthLink will use its software and brand name. Rates are:
"up to" 384 Kbps for $21.95 a month and "up to" 1 Mbps for
$29.95 a month. Back
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Broadband Penetration Rates
Country
per 100 population Source: Point Topic Back
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Sharman Lawyers: We See No Evil Lawyers defending Sharman Networks' Kazaa P2P network in an Australian court, denied that their client had violated any copyright laws because its users make copyrighted tracks available for others to copy. They further asserted, in a case that the recording industry brought against Sharman, that the labels had not provided the court with any proof that Kazaa users had violated any copyright laws and thus an infringement case against Sharman had no merit in law. "There aren't any allegations of actual infringement," Sharman lawyer Robert Ellicott told the court. "The law is clear that to attack somebody for authorizing an infringement, some infringement has to be proved. Now, they have neither given particulars nor alleged facts which would establish an infringement and it has to be an infringement, of course, in Australia." He then asked the recording companies to provide the names and addresses of Kazaa users who had copied or made files available for others to copy in violation of copyright laws. In response, Richard Cobden, an attorney for the labels, said, "Our evidence contains dozens of incidents of downloading. Why should we be asked now for the names and addresses of these people who operate by pseudonyms? We could not possibly do it, your honor, but we are going to suggest that the evidence is perfectly clear that the recordings are made available." Presiding over the case, Justice Murray Wilcox placed a gag order on both sides because an issue of Australian Personal Computer magazine carried actual pictures from the raids the recording industry had made on Sharman's offices. "Somebody has, we would submit, used the proceedings for the purpose of embarrassing, demeaning, however you like to describe it, our clients," said Ellicott. Separately, Australian webzine apcmag.com published a report detailing the labels' suit against Sharman and its partner Brilliant Digital Entertainment, which owns Altnet, a for-fee P2P network that hawks music, computer games and pornography on Sharman's Kazaa network. Among the highlights: - Six death threats have allegedly been made against the labels' chief piracy investigator Michael Speck and against Stephen Peach, head of the Australian Recording Industry Association (ARIA), which brought the suit. - The suit alleges that Kazaa facilitates the distribution of 260 million pirated tracks a month. - The supposed purpose of the multiple raids that were conducted simultaneously was to take a digital "snapshot" of the entire Kazaa network at one moment in order to prove that Sharman could and did control the Kazaa P2P network. Sharman has repeatedly denied the charge, saying that it's a neutral technology provider much as Sony claimed in its now legendary Betamax suit in the US. - Sharman CEO Nikki Hemming apparently disappeared from the office when the raid started by sneaking out of a side door and heading home in a silver Porsche Boxster with "SHARE" on the license plate. On arriving at her luxury home, Hemming found the raid already underway there. She had to wait in the yard while the search was conducted and the hard drives of servers in her home were analyzed. - Raids were also conducted at the homes of Sharman CTO Phil Morle and Brilliant Digital and Altnet CEO Kevin Burmeister. The reported purpose was to determine the extent of their participation in operating the Kazaa P2P network. Note: Sharman could not afford to run the Kazaa P2P network without the
millions of files that are traded illegally on the network. Those free tracks
attract some 70 million users at any one time. The 5,000 or so files that Altnet
makes available legally are not enough to attract more than a few hundred
thousand people, if that. Without the 70 million eyeballs that Sharman uses to
attract advertisers, there would be precious little money coming in - certainly
not enough even to run the network, much less to buy Porsches. It is the illegal
trafficking in copyrighted music tracks that keeps the doors of Sharman open.
Back
to Headlines ************************************************************************************ Group Discount Offer to Provide The Online Reporter to All the Key Managers in Your Company New Tech and New Media Are Booming. Make Sure That You and Your Key Managers Are In Synch
"Technology is not kind. It does not wait. It does not say please. It slams into existing systems. And often destroys them. While creating a new system." - Joseph Schumpeter in Juan Enriquez's book "As the Future Catches You" Executives at companies like yours say that the digital media market has arrived so suddenly that many--if not most--of their key managers have so many diverging views that it makes teamwork difficult. But the industry isn't waiting while your company gets organized. - Carly Fiorina calls it "digital entertainment" and says it will be HP's product focus this year. - The boom will result in the sale of billions of dollars of music, movies, books, publications, software, broadband gear, software, servers and storage. It'll change the existing media and computer landscape in ways that'll astonish even the futurists. - Since Napster started the phenomena, the market has gone legit with Apple raking in millions from iTunes and billions from its iPods. - Broadband Internet usage has spiked to nearly 27 million US homes - one in four. - It's already resulted in the sales of millions of Internet-connected devices like portable music players and digital video recorders like TiVo. - Pocket-sized video players are hitting the market so that TV show, movies and home videos can be viewed anywhere, anytime. - Cell phones have emerged as another avenue for delivering digital entertainment. Next-generation cellular networks are delivering photos, music, games, even videos. The Online Reporter Connects The Dots The Online Reporter is the only publication that connects all the dots of events in the industry's key sectors: - Broadband - lower costs, higher speeds and in every home - Digital Rights Management - the battle between copy protection and fair use - Digital Consumer Technology - all the new gizmos - Home Networking - Wi-Fi, powerline and coax - Multimedia cell phones - The Online Music and Movie Services - plus all the other TV-like video that'll be delivered over the Net People are already spending millions tin this market and the revenue dollars will soon be counted in the billions. The key phrase is "any content, any time, any where." Digital entertainment will be delivered to the home over the enormous broadband network that the phone companies and cable TV companies are building. The market for hardware, software and services will be enormous. The Industry Giants Already Know About It Intel and Microsoft, the duo that revolutionized the office computer industry, and networking giant Cisco have already focused their product development efforts on digital media and the products based on it are beginning to spew out. Sony and the Japanese consumer electronics giants are trying to save themselves with it. Apple has already turned a profit on its developments. China threatens to take the whole hardware market by storm with its low-cost labor and rapidly improving technology. - Microsoft is revamping its products to go after this growth market and even launched a new operating system specifically for the PCs that it intends to be the standard for home entertainment centers.. - Intel has released engineering designs for a next generation of portable video players - 12-ounce pocket-sized gizmos selling for less than $400 that'll hold 70 hours of your favorite TV programs, movies, home videos, photos and music for you to enjoy anywhere, anytime. - Cisco is scrambling to be the leader in home networking, another digital media market sector that is exploding. Group Rates - Don't Let Your Company Get Left Behind How do you get all the key people in your company up to date on events in the digital media industry? Easy - by delivering a copy of The Online Reporter to their mail box every Friday. This weekly strategy bulletin covers the industry like no other research you can buy. It delivers a mix of product announcements, industry trends, statistics, research and analysis into a weekly industry briefing - delivered on Fridays, not on those hectic Monday mornings. This is not a market that is going away. Your company may already be missing the biggest opportunity of this decade to move a lot of content and gear. One publication covers Digital Media like no other - The Online Reporter. Call 225-769-7130 or email rhett@riderresearch.com for group rates. Well, it happened. Finally. A US digital music service has opened for business in the UK. Napster is now officially the first major US-based digital music service to open its virtual doors in the UK, and it's ready to give all those sites powered by OD2 a run for their money. On Demand Distribution (OD2), founded by British rocker Peter Gabriel and Charles Grimsdale, is the digital music distribution service behind some two dozen online music services in Europe, with seven heavy hitters in the UK alone. The OD2 sites, which include MyCokeMusic.com, MSN Music Club and Tiscali Music Club, saw a combined three million downloads last year and one million downloads in Q1 of this year. That's still small fries compared with the music services in the US, where Apple's iTunes sold 70 million downloads in its first year and Napster sold five million in its first four months. Despite the deep entrenchment of OD2, Napster brings something extra to the party - well, 240,000 somethings, to be more precise. OD2 offers some 260,000 music tracks to its users. Napster is entering the UK with half a million songs from all the major labels and a group of independents and promises to grow the catalog to more than 700,000 in the next 30 days. As its sister site does in the US, Napster.co.uk offers both a monthly subscription service and an à la carte download store. Users who sign up for Napster Premium at 9.95 pounds ($17.65) a month can listen to the whole Napster catalog on-demand, download any track they want onto the hard drives of up to three PCs and listen offline to save bandwidth while they surf. Ten interactive ad-free Napster radio stations let listeners see which song is coming next, skip forward or jump back, and save their favorites to their Napster library. Subscribers can purchase individual songs that can be burned to a CD and transferred to a portable MP3 player for as little as 88 pence ($1.56) per song. Napster Light is for folks that just want to download the music, which they can do for 1.09 pounds ($1.93) per song or 9.95 pounds per album. Free features include 30-second samples of all songs, the ability to organize an entire music collection in the Napster client, free access to Napster's online magazine Fuzz and a chance to sample tunes from the Official Charts Company UK charts. Napster parent Roxio still plans to launch the service in other parts of Europe, but license negotiations with the majors - the bane of the music download biz - make it impossible to say when a version of Napster will reach the mainland. OD2 seems to realize just what major competition Napster might be. It's fighting to keep its users the old fashioned way - a half-price sale. The distributor is reportedly lowering the price for its top five partners, which will offer bulk packages - 40 downloads for 20 pounds ($35.48), dropping the per-track price to 50 pence (89 cents). The UK music sites in question are those run by Wanadoo, Tiscali, Coca-Cola, Virgin Megastores and MSN. OD2's not saying how long the cheap prices will last. The battle with Napster will help get OD2 and its partners in shape for the major invasion that's expected to occur throughout the rest of the year. Napster may have been the first, but it is by no means the last. Apple is still promising that iTunes will hit the UK before the end of the year, although chances are that we'll see it sooner rather than later so Napster won't have too long to establish a foothold. Sony, which launched its Connect music service in the US to mixed reviews earlier this month, is supposedly opening the site's European counterpart in June. And Virgin Digital, part of Richard Branson's personal British empire, is set to launch a new music service in both the US and UK this summer. Although Virgin Megastores already has an OD2-powered download site, the new venture will use the label-owned distributor MusicNet as its backbone. In related news, Napster partner Samsung has a new portable music player that
will integrate with the new Napster UK service, much as its YP-910GS does with
Napster in the US. The co-branded YH-920GS will let users transfer songs
directly from the Napster client to the player via USB 2.0. With 20GB of
built-in memory, the player holds over 5,000 songs and also has an FM tuner,
tuner recording to MP3 and line-in MP3 encoding. The YH-920GS will be out this
summer. Back
to Headlines Wippit, a London-based digital music service that fuses legitimate P2P downloads with downloads from a central server, has added Sony Music UK to its roster of content providers. The selection of music from the Sony catalog joins tunes from EMI, BMG and more than 200 other labels on the Wippit service. Sony's music, which will be available for download this summer, includes tracks from such artists as Beyonce, the Coral, Prince, Anastacia, Manic Street Preachers and Super Furry Animals. The Sony tracks will be part of Wippit's new à la carte download service, which uses digital rights management that lets users burn a limited number of CD copies of the tracks as well as export them to portable devices. Major label music on Wippit is served centrally from the company's own servers and is not available on a P2P basis. Sony and Wippit are working on special initiatives, including exclusive track
offerings, to be offered down the line. Back
to Headlines Founder To Put iTunes Jukebox on Chinese PCs Apple has made another deal to get its iTunes Jukebox digital music software pre-installed on home computers. Following its January arrangement with Hewlett-Packard to put the software on HP's consumer PCs, Apple has teamed with Founder Technology, one of the largest PC suppliers in China. Starting next month, Founder will pre-install the iTunes software on all of its PCs. With iTunes, Founder PC users can import music from CDs, create custom playlists, burn custom discs and take their entire music collection with them on their iPods. iTunes for Windows delivers MP3 and AAC encoding from audio CDs, Smart
Playlists and the ability to burn custom playlists to CDs and MP3 CDs, burn
content to DVDs to backup an entire music collection and share music between
computers via Rendezvous over any network. Back
to Headlines MusicNow, Vans Warped Tour, Create Branded Online Service Digital music provider MusicNow, which recently unveiled its strategy to power specialized "Digital Music Club" download sites, and the Vans Warped Tour, America's longest-running touring festival, are launching the first online music store and subscription service created for a concert festival. Launching on June 24, the day before the tour's first show, the Vans Warped Tour Digital Music Club powered by MusicNow will let tour organizers offer commercial releases from the 150 touring artists. Exclusive live tracks from the tour itself will roll out as it travels to some 50 locations through August. Throughout the summer, albums from artists who've participated in the tour over the past 10 years will be added to the site. The Vans Warped Tour Digital Music Club will offer a branded download store and a corresponding subscription service. Visitors to the online store can purchase individual tracks for 99 cents and entire albums for $9.99. Folks who join the $9.99-a-month subscription service can partake of unlimited streaming and conditional downloads of individual tracks, entire albums and playlists created by Vans Warped Tour artists for the fans. Users of the Warped Tour Digital Music Club will also be able to search,
browse and shop from MusicNow's entire catalog of 500,000 tracks. Additionally,
concertgoers can buy MusicNow Download cards at all Vans Warped Tour venues and
participating Vans retail stores. Back
to Headlines Napster, MusicNow Score Promo Deals for Free Downloads Roxio's Napster music service has landed two more promotional/reward partnerships. The Citi Cards division of Citigroup and battery bigwig Energizer have both turned to Napster for consumer rewards programs that give away free music downloads or subscriptions. Starting this summer as part of campaigns targeting college students, Citi will offer either 25 free Napster download credits or a free three-month subscription to Napster Premium to select card members. The offer will initially be available via a direct mail campaign and online channels. The exclusive deal with Energizer puts a promotional code good for one free Napster download in four-, eight- and 12-packs of AA Energizer e2 batteries and four- and eight-packs of AAA Energizer e2 batteries. The 12-packs of AAA e2 batteries will contain codes good for two free downloads. The Energizer promos will be featured on more than four million battery packages. MusicNow has an online promo deal with Gillette to herald the arrival of Gillette's M3Power micro-powered shaving system for men. The idea is that fans who register on the M3Power Web site will be able to download three free "power" songs from MusicNow. To participate, consumers visit www.gillettem3power.com/music and enter a valid e-mail address. They'll get an e-mail with a MusicNow code that lets them download any three songs from MusicNow's library of 500,000 tracks. The codes will be valid until June 18 or until the allotted number of free
tracks have been downloaded. Back
to Headlines Folks Who Buy CDs Buy Music Downloads The music industry sanctioned a slew of legit online music services thinking that they would dislodge people off the file-swapping networks and while these legal services may appeal to current and former peersters, they're apparently attracting an increasing number of CD buyers as well. According to NPD Group more folks who purchase larger numbers of physical CDs than average consumers are buying the downloaded tunes in addition to the CDs, not instead of them. Just under 5% of the CD buyers surveyed said they'd bought music from a legal service last quarter. While seemingly not a huge number, it's nearly three times the 1.7% who did it a year ago. Among the group that purchased both CDs and legal song downloads, the likelihood that they also downloaded a song illegally fell dramatically - from 64% in 1Q03 to 42% in 1Q04. "Paid services like iTunes and Rhapsody appear to be attracting core music buyers, which can create a firm foundation for legal digital music purchases," said NPD president Russ Crupnick. "To date, NPD data show that there has been a small reduction in sales of CDs. However, that decline might be offset by the overall value of the digital customer and the downturn in illegal file sharing." CD buyers who also signed up for an online music subscription service bought 11 CDs on average in the past year, more than any other group. Folks who bought à la carte music from a download site followed closely, buying an average of 10 physical CDs. People who get music from a P2P network bought only maybe eight CDs last year and people who don't download or stream music from the Web lagged them all, buying only an average of six CDs last year. "Our research shows that it's the people who are really into music that
are beginning to adopt paid digital services as an additional way of acquiring
and enjoying music, and so far these service are living side-by-side with
traditional CDs," Crupnick said. "As the industry matures and digital
music becomes even more mainstream, it remains to be seen just how much paid
digital music will affect the market for CDs." Back
to Headlines Warner Music Canada Opts for DMDS Musicrypt, whose Digital Media Distribution System (DMDS) enables the secure digital delivery of music files at any stage of production, has signed Warner Music Canada as the latest major label to use the system. Warner did an extensive pilot that included the digital distribution of new major artist releases like music from the Red Hot Chili Peppers, Seal, Eric Clapton and Alanis Morrisette. It will now use the DMDS as its digital delivery service to release music to radio stations as well as use it internally. EMI Canada and Universal Music Canada are already DMDS customers. Musicrypt also has deals with several independent labels and radio stations in Canada and Europe. The Web-based DMDS incorporates biometrics, high-value encryption and
watermarking to guarantee the secure delivery of the digital files.
Back
to Headlines Loudeye Dishes Up a Billion Samples Loudeye is crowing that over the past 12 months it served up a billion music samples for its licensed distribution partners. That's roughly 250,000 more samples per day than in the prior year. It had a significantly better year in the digital delivery of full-length tracks as well, serving up 14 million songs, a 223% increase. The company now has a digital music repository that plays host more than 4.5 million full song tracks, an increase of more than a million songs from a year earlier. Loudeye's media operations center, which is where it takes in new content and
transfers it into a digital format, boosted its production capacity from a rate
of 490,000 digital music files a week to 4.2 million a week, or 25,000 an hour.
Back
to Headlines Most-Played CDs on the Internet For the Week Ending May 16 This
Last 1
1 Usher/Confessions (Arista) Aggregated from over 30 million listeners using media players powered by the Gracenote CDDB Music Recognition Service. Bollyvista, an infotainment Web site for South Asians living in North America, Europe and other parts of the world away from home, is making its content available to its visitors even when they're on the go. Through a partnership with Canadian mobile applications provider m-Qube, the company has launched www.mobile.bollyvista.com, a cross-carrier wireless content store for downloadable media. Available only to folks in Canada, the mobile site offers wireless subscribers Bollywood-themed ringtones and screen images. The download costs are added directly to the user's wireless phone bill. Canadian wireless carriers Bell Mobility, Microcell Solutions, Rogers Wireless and Telus Mobility support the new site. The mobile storefront will be made available to US consumers later this
summer. Back
to Headlines DestraMusic Goes Mobile with GoConnect Australian digital music provider Destra is taking its music mobile through a partnership with online media communications firm GoConnect. The relationship will make it possible for consumers to access music and video clips on their Windows Media Smartphones and Pocket PCs using GoConnect's m-Vision interactive video delivery technology. They'll also be able to view the music video clips on their desktop PCs. Folks with Windows Mobile-powered devices can download the GoConnect software to their phone or PDA to watch the video clips. There's a fee-based video service as well as a free song-sampling service that delivers a selection of 30-second music samples - both audio and video - that users can play on-demand. "As the mobile phone increasingly becomes a multi-functional communication and mobile entertainment device, GoConnect's m-Vision provides DestraMusic with the 'early mover' advantage in new service delivery for the mobile phone industry," said Destra CEO Domenic Carosa. Users can also access the free Music EV music sampling service on a PC by downloading the free software from www.gotrek.com.au. The partnership calls for GoConnect to set up its own branded online retail
store, Music EV Online, powered by DestraMusic. Besides the downloadable music,
the Music EV subscription service will provide full-length music videos for
multiple plays for a set period of time on Windows Mobile-powered Smartphones
and Pocket PCs. "Consumers who do not want to purchase individual songs
outright can choose to purchase the subscription service," said GoConnect
CEO Richard Li. "They will have the latest music videos delivered directly
to their Microsoft Windows Mobile devices simply by pressing the update key on
their phone." Back
to Headlines Danger Courts New Hiptop Partners Danger Inc, which makes the hiptop all-in-one wireless gadget, has inked deals with Yahoo for instant messaging and wireless telecom operator ONE for Austrian distribution. Under the Yahoo agreement, there's a customized version of the Yahoo Messenger IM client for the hiptop, a mobile phone with an HTML Web browser, an embedded e-mail account, instant messaging, personal organizer, camera accessory and games that features a 65,000-color display and QWERTY keyboard for data entry. Starhub, a wireless carrier in Singapore, is the first to offer the Yahoo service on the hiptop. Carriers that offer the hiptop can choose to bundle Yahoo Messenger with the standard application package or offer it as an IM option through Danger's Device Catalog application download service. The deal with ONE marks Danger's second European operator partnership, and brings the number of operators offering the hiptop to eight. ONE will start selling the hiptop on May 25 in Austria. The device retails
for 249 euros ($290) with a 12-month contract. The initial data flat-rate
service price starts at 19.90 euros/month and can be combined with existing ONE
voice plans. Back
to Headlines Magix Updates Music Maker Software Magix, the music software developer, has released Magix Music Maker 2005 Deluxe, a new version of its music creation widgetry. The software, which is targeted at both professional musicians and consumers, now has 96 stereo tracks, video clips, MIDI file support, text and images, special effects templates and thousands of new loops and samples. Once the music is created, users can burn master CDs that supposedly sound like they were created in a traditional music studio. New features for musicians and DJs include a Magix Robota drum feature, a virtual analog drum computer with an integrated step sequencer that enables "independent sound creation with pulsating beats and analog crunch." Other additions include a vocal tuner that automatically corrects recorded vocals and can create a whole choir from a single recorded voice; virtual instrument automation; remix agents for building original remixes and a new Magix Music Editor 2.0 with real-time editing, effects and noise filters. For consumers, the software has a project overview mode to make it "extremely" easy to use. It also features a broad range of instruments, VST and DirectX plug-in support and special effects. The new rev has a karaoke function and lets users create musical Web pages, e-mails and e-cards. Magix Music Maker 2005 Deluxe for Windows will sell for $59.99.
Back
to Headlines Lime Wire Revs File-Sharing App Lime Wire, which makes the LimeWire peer-to-peer software that runs on the Gnutella network, has come out with a new version of the thing full of bells and whistles. LimeWire 4.0 boasts faster and more successful downloads, improved searching for rare content and a guarantee that users won't get any bundled software when they download the new version. Able to run on Windows, Mac and Linux machines, LimeWire 4 adds: - Better search results, showing at least five times as many results as before. - A "What's New?" feature that lets users browse the network for recent content additions. - The ability to drill down into search results, which now immediately display the artist, album and other info that describes the files. - Faster connections on start-up. - The ability to use Web proxies to route downloads and protect user identity. - A new search progress bar in each search tab. - User notification when the Internet connection is down or a firewall is blocking access. - Improved download functions that exclude bad file sources, creating more
reliable downloads. LimeWire 4.0 Basic is a free download. LimeWire Pro, which offers all the
Basic stuff plus better search results, turbo-charged download speeds, no ads or
nagware and six months of free upgrades, is $18.88. Back
to Headlines iRiver Ships New 40GB MP3 Player iRiver has added a new high-end device to its family of hard drive-based portable music players. The 40GB iRiver H140 can store more than 1,200 hours of digital music in MP3, WMA, WAV and OGG formats and is compatible with both PCs and Macs. Besides playing music files, the H140 can act as a portable storage device for any other type of file. iRiver boasts that the H140 can play for 16 hours on a single battery charge, double that of leading competitors (read iPod). The player also has an FM tuner, backlit remote control with four-line display, built-in MP3 encoding, optical audio input/output and built-in voice recording. With its optical/analog line-in jacks and included microphone, the H140 lets users record, encode and store MP3s or uncompressed WAV files from a variety of sources, not just a PC.
The H140 is also compatible with the latest version of the MoodLogic software that lets users create mixes based on genre, mood and tempo rather than just by artist and track names. The H140 retails for $429.99. Back
to Headlines Streaming Is New Source for Copying Music With the labels homing in on illegal file swapping on the P2P networks for the last year, music lovers around the world looking for "safer" sources to build up their music libraries may have started thinking about all that music that's streamed over the Net and how to trap it on a PC. Applian Technologies claims its $29.95 Replay Music is the first software that not only copies music being streamed to the PC but also splits tracks and automatically labels the songs with name and artist (tagging). The software can record while the user listens on the PC, capturing music from multiple sources including Internet streams, mobile devices or audio CDs. Market researcher AccuStream says that consumers listened to nearly eight billion audio streams in 2003. Replay Music's premise is that many of those listeners want to capture those streams on the PC, identify them and then copy them to CDs or portable music players for playback while away from the PC. Replay Music records to MP3 format or burn songs to audio CDs. A download of
the software is available at www.replay-music.com.
Back
to Headlines A Big Week for Sony as It Talks The Talk, But Can It Walk The Walk? Peter White, Senior Analyst at Rethink Research, Which Publishes the Weekly Faultline Newsletter If Sony wants to recover its pre-eminence in consumer electronics, it will need more weeks like the last one. There were other Sony stories but it was probably enough that it showed off its PlayStation Portable (PSP) for launch next year; extended considerably the franchise of the Vaio PC towards higher audio-visual quality with versions that look like iPods, portable media players, DVRs and TVs; offered support for Windows DRM on its CD manufacturing; joined with IBM to develop a content creation system for the forthcoming "Cell" chip and slashed the price of the PlayStation 2. Mostly analysts panned all of the moves saying that it was too late to kill off the Apple iPod, too late to stand up against Microsoft's portable media players, that it was approaching the living room inside out, from the TV instead of the PC. The PSP was said by Japanese analysts to "offer nothing that isn't already out there in separate devices," and encouraged Sony to pitch it head-to-head with the Nintendo Game Boy rather than point out that the device does just about everything. "There is no call yet for multi-function portable devices and it just forces the prices up," the same critic said. Faultline has to differ with much of this, though not all of it. Sony will need more weeks like this to turn a very large ship around to a 10% margin by 2006, something it promised over a year ago. But it would be a sadder Sony if it weren't doing at least all of this. Sony has to stop the rot on music players by introducing one that has a hard disk, and as such it launched its first one ever this week, just like the iPod, and despite poor comparisons on price and good comparisons on battery life and the fact that it supports multiple digital music formats - MP3, WMA, WAV and its own ATRAC3 - it is not going to oust the iPod just by existing. And even if it did, it wouldn't do it any time soon. Sony has a brilliant track record among consumers, an even better global brand than Apple for design in consumer goods, control of its own component manufacture, and better channel relationships than Apple. Against it, Apple hit the sweet spot, hit it early and has a year lead, better mind share and strong partnerships. But there are a million stores around the planet where you can buy all Sony (and Samsung, Toshiba and Panasonic and many other brands) music and TV products, and this will leverage those channels. And these are places where you can't buy an iPod. It's not a fair fight and Apple will need all the lead it can muster because it won't only be up against Sony. As for the comment about "multi-function devices," the financial group that employs that analyst had better fire him quick. The war for device leadership, be it cell phones, smart phones, PDAs, handheld game platforms, laptops, music players, wireless LAN phones, portable video players or miniature DVRs - will be fought and won on the cool factor. One of the most important ingredients of the "cool" factor is what else can the devices do. So PDAs that are also phones, that also hold tons of music that also show complete films and have storage attachments for storing videos, are going to outsell those that just give you a diary. This war is all about Moore's Law. Each year devices will become cheaper, smaller or have more power or do more or all four, until there is a market leader for a personal data server which takes in both business and entertainment, and where video is as easy to store and play out to other devices, as micro databases with safe corporate data. And in that war Sony's does pretty well. Its DVR may not be as good as TiVo's but at least it has one and it can eventually install it within a Vaio. Its portable video player may not be as popular as those offered by Microsoft's partners, but it will be able to support multiple digital rights management regimes, including its own. It's big flat TVs might not be quite as cheap as Panasonic's or Samsung's but it will have the same video processor as its PCs, and run from multiple Sony source materials. The Vaio launches that Sony showed this week included a new interface called "Do Vaio", which will be incorporated into all of its notebooks and desktop PCs as well, which handles a variety of media files such as live and recorded TV programs, music and photos, and content from CDs and DVDs. It has a remote control operation as an alternative to keyboard and mouse. The devices include the Vaio Pocket "iPod killer" with a 20GB hard disk holding 13,000 songs, attaching to a PC via USB with a 20-hour battery life, it also connects to cameras and can show photos on a two-inch-plus screen. The new Type U Vaio, which runs Windows XP, is just 167 millimeters wide, 108 millimeters tall and 26.4 millimeters deep and looks for the world like a tablet PC, although it isn't. It's driven by an Intel Celeron 900MHz processor and looks like a games device because you're expected to control it in your hands from both sides. It has a 5-inch LCD screen and a stylus so it can also be used like a Palm Pilot. A tiny keyboard can be attached and it comes with 64MB of video memory, which can connect to a full-size display or TV. The Type V Vaio looks like a flat TV screen but it has built-in DVR functions and comes with an MPEG encoder so that it can save analog programs in MPEG and it can also write them to DVD. It comes with Sony's new "Motion Reality" video processor and has a hard 160GB hard drive. It also runs on an Intel Celeron chip under Windows XP, and it can be operated with a remote control, or keyboard and mouse. The Vaio type X, which was shown as a future idea for PCs, is effectively a huge DVR that Sony says it could have ready in about a year, which features over one terabyte of storage with up to seven TV tuners. Record and watch as many programs as you need, or forward them to anywhere in the house. It's almost not worth discussing the specification of the PSP that Sony launched/showed at E3, because it has been anticipated for so long. It plays DVD-quality movies and digital music, as well as games that will sit somewhere between the quality of PS1 and PS2 games platforms. Sony declared that it was its most significant hardware release in four years and that it would be released by the end of 2004 in Japan and by March 2005 in the United States and Europe. No prices yet; they're expected in late September. The PSP weighs in at nine ounces, has a 4.3-inch screen in a wide-screen format, uses Wi-Fi and has battery life of two hours in high activity and 10 hours idle and plays movies on its Universal Mini Disk (UMD), which Sony hopes studios will rapidly adopt. Sony gave some clues as to how it would generate extra and continuing revenue with the device, offering Web-based games played through the Wi-Fi connection and creating mini-transactions, where small additional downloads or new features are downloaded and paid for rather than bought in shops. It hopes to sell three million devices in the first quarter next year and that will be the first test of its success. Most pundits are betting against it, saying that will not hold out against the new Nintendo devices. Sony needs just 6% of its existing PlayStation customers to take one in order to succeed. More details also came out this week on the new Dual Screen Nintendo that the PSP is up against, launched as a spoiler to the PSP. It will come out simultaneously with the Japanese launch of the PSP, but it will also launch in the US at the same time, which means it will have at least a three-month head start against the PSP. It will have two screens - both 3D, one a touch screen - and have voice recognition bundled for game control. The company says it will have Sony PSP both short- and long-range wireless multiplayer capabilities, which presumably means Bluetooth and Wi-Fi (unless it means Wi-Fi and phone). The devices will have two processors, both able to play Game Boy Advance titles, and a new gigabit flash memory cartridge. Nintendo has already sent out 100 development kits to games companies. Finally this week, with an eye on the PS3, Sony and IBM began the process of creating content for the forthcoming Cell chip. The Cell chip is supposed to be the basis of the next generation of PlayStation, or at least its highly graphical screen-driving component. It has up to eight cores on a chip, each with eight slaves, making 72 CPUs on a chip. It has been said that this will mostly be used to drive video-intensive applications like photo realistic screen rendering. The companies expect to build the first prototype Cell-based workstations in the fourth quarter of this year. Utilizing massive data bandwidth and vast floating-point capabilities, coupled with a parallel processing architecture, the Cell processor has the power to deliver quantum-leap innovation in entertainment applications. IBM and Sony seem to be saying that they will partner to bring the chip out in workstation form to use in motion picture rendering, competing with Silicon Graphics and Apple supercomputers for special effects on films and also for videogame creation. Sony says it plans to lead the development of the Cell-based operating environment by providing the architecture, algorithms, middleware and data structure for tools needed to create digital content for movies and computer entertainment applications. It seems likely that smaller Cell components will be needed in devices to replay this content. "Cell has enormous power for creating broadband content," said Ken Kutaragi, executive deputy president and COO, Sony Corporation, and president and group CEO, Sony Computer Entertainment Inc. "Today, movies and games are sharing the same world and characters on a common database. Within a few years, both forms of entertainment will be fused and become indistinguishable, offering a seamless experience in the home. Together with IBM, the three companies aim to offer technology that will accelerate the paradigm shift in digital entertainment." Faultline has said as much for the past year, but Kutaragi is the only person in this industry that can get away with saying things like that and being taken seriously, because he created the PlayStation. He goes on to talk about a real-time cyber world, which sounds a little like a visually realistic version of Sony's massively multiplayer EverQuest game, playing live on your TV. Sony also said that its audio copy control system key2audioXS now supports Windows Media Digital Rights Management (DRM) for secure PC-Playback achieved by using Microsoft's Windows Media Data Session Toolkit, much as Macrovision has licensed it in the past. And it cut the price of the PlayStation 2 by up to 25% and will start promoting a new price of $149 for the PS2 in the United States. The above report and analysis first published in Faultline from Rethink
Research in London. E-mail rhett@riderresearch.com for subscription information.
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to Headlines **************************************************************** 10)We connect the dots in between....... 9) Your competitors are already reading it. 8) We bring a variety of sides to every story. 7) We take no advertising, so it is all news - no bull, no pop up ads, no passwords. 6) Our analysts are always available to answer your questions. 5) We cover digital media end-to-end - from enabling technology to anti-piracy services: movies, music, computers, home entertainment gear.. 4) We get the goods first - be in the know, sometimes before it even happens. 3) News flashes for important breaking news that will impact your organization. 2) Exclusive interviews with the leaders of the digital media companies - 1) Information is power... Get the power with The Online Reporter. The best $595 you'll ever spend on market research Call 225-769-7130 or e-mail paperboy@riderresearch.com to subscribe. **************************************************************** HP's H-Pod Rollout 'On Target' Carly Fiorina, HP CEO and chairman, told financial analysts this week that
HP's H-Pod launch "is on schedule." The widget is unique in being
based on Apple's iPod and iTunes technology. Fiorina refused to provide a
specific launch date for the H-Pod. iPod has been Apple's Trojan horse inside
the Windows community - the first and only Apple product that most Windows users
have ever used. Accordingly it makes sense that Apple wants to piggyback on the
world's biggest PC makers. HP, on the other hand, benefits by launching a
portable music player that people want - really want - rather than offering just
another look-alike device. After all, how many unique features can anyone
conjure up for such a thing? Win-win. Back
to Headlines Get Broadband, Get a Free Airline Ticket British Telecom is offering free airline tickets to a dozen US and European
cities to customers that sign up for its DSL broadband. There's the usual fine
print. Back
to Headlines DestraMusic Sales Up 565% Thanks to Cheap Tracks Destra Corporation, the Australian DRM and digital music service provider,
said it saw a 565% sales increase in music downloads in April as a result of a
89-cents-a-track promotion that was offered because rival BigPond Music lowered
its prices to 99 cents a track for the month. DestraMusic.com, which offers
downloadable music through online retail partners, also added music retail chain
Leading Edge to its list of providers. Leading Edge, which reportedly owns
roughly 12% of the Australian music market, will launch its service at
www.leadingedgemusic.com.au. Back
to Headlines Spam Hits All-time High in April Spam, virus and hackers, if left unchecked by those who run the Internet,
will destroy any chance of using the Net to deliver entertainment by broadband
connections to the home. Consumers won't abide having to reboot their TV, their
home servers getting deluged with spam or vandals hacking into their stereos.
That's why it's alarming that 82% of all of last month's e-mail was spam, an
all-time high after a two-month decline, according to MessageLabs Inc, a New
York security firm. "This is as bad as we've seen it," said Paul Wood,
the company's chief information security analyst. Back
to Headlines Satellite TV Grows, Cable TV Stagnates DirecTV and EchoStar, the two US satellite TV services, added 820,000 new
subscribers in Q1 while the top nine cable providers added 13,000. While the
cable companies have been focused on taking the telcos' phone and Internet
connection business, the satellite TV services have been taking away theirs.
Back
to Headlines Market for Home Broadband-Delivered Entertainment Growing The number of Americans over 65 will double from 35.6 million to 71.5 million
by 2030. The age group, the one with the most money to spend on leisure
activities, will prefer to stay home and enjoy their music and movies there.
Broadband will bring the entertainment they want when they want it. With the
price of gasoline currently exceeding two bucks a gallon (leaving one to only
imagine how expensive it will be in 26 years,) the mature set will likely prefer
having their entertainment delivered over the net. Back
to Headlines Phone Companies Must Integrate Video & Broadband or Else "We have to transform the company within five years, completely
integrating video, or we're in desperate shape." - a Bell Canada insider to
DSL Prime. Back
to Headlines HP Foresees Golden Age of Digital Entertainment "You will see a fairly broad-based investment [by HP] in what we
generally call the digital entertainment category," HP CEO and chairman
Carly Fiorina said when posting HP's Q1 results. She was responding to a
financial analyst's question about what HP's product focus would be this year.
HP was the first PC company to launch a PC based on Microsoft's XP Media Center
Edition operating system. It has been a consistent market leader in digital
photography. Fiorina said that HP was very excited by its anticipated
"back-to-school" rollout beginning in July and its emphasis on digital
entertainment products. Back
to Headlines Hitachi To Increase HD Production for iPod Hitachi said this week that it will up the manufacture of the hard drives
that Apple uses in its best-selling iPod. iPods have been short supply due to a
shortfall in components. Back
to Headlines Disney Expands MovieBeam Trials Disney will add three markets to its MovieBeam service. MovieBeam uses spare
capacity on broadcasts to deliver movies to a dedicated set-top where they are
recorded for the consumer to buy. MovieBeam is currently on trial in
Jacksonville, Florida, Salt Lake City and Spokane, Washington. Back
to Headlines More than 2,400 business executives and streaming media professionals
attended the Streaming Media East Conference and Exhibition in New York City May
11-12. The two-day conference had over 125 speakers and presenters from various
companies in the technology, media and entertainment industries. Conferences are
archived for on-demand viewing starting May 24th at www.streamingmedia.com/east.
Streaming Media West will be October 26-28 in Santa Clara, California. Find
details at www.streamingmedia.com/west.
Back
to Headlines Higher gas prices, rising inflation, problems in Iraq, higher interest rates and the beginnings of a nasty presidential race are five things that will make people want to turn off the news for a few hours and entertain themselves on the Net, perhaps buy some songs from iTunes or Napster - or a flick from Movielink. -------------------------------------------------------------THE online REPORTER provides weekly reports and strategic analysis about digital consumer technology and the e-commerce activities of the movie and music companies.. It reports on all the power struggles that have been unleashed.THE online REPORTER focuses on:
If ever that overused phrase "paradigm shift" was apt, it's now, about the Digital Media industry. There's not a company in the industry that's not worried about where it'll still be standing after the deluge - and that goes for leaders like AOL Time Warner as well as that feared monolith Microsoft. Its format is concise and pointed, its style a touch brash and, with any luck, a bit controversial. Its object is to break the stories that give its readers the real inside track. It is pledged to fact and fair comment. THE online REPORTER - Intelligence for decision makers.
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