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A lot of companies say their products are created specifically for the teen market, but they're often designed by adults who think they know what teenagers want. Digital Lifestyles Group went directly to the source and found out. Teens want a PC that not only lets them do homework, but listen to music, watch DVDs, chat and e-mail with friends and looks cool enough to display, maybe even hang on the wall. Oh, yeah, throw in an MP3 player and cell phone that plug into the PC to make downloading content easier. And make the whole thing wireless so they can sit on their beds and surf the Web. The original idea for a teen-oriented system came from chairman and CEO Kent Savage, who thought it up when his son wanted a machine with all the cool features and functions of a Mac, but was actually a Windows-based PC. The company took these desires one step further and decided to see what the younger generation - not just Savage's son - wanted in a computer. According to Digital Lifestyles' VP of marketing Annie Bacon, earlier this year the company got a group of teenagers together in its hometown of Austin and had the kids walk the adults through a typical digital day. The Digital Lifestyles folks took those ideas and had a design firm mock up a machine. They then went back to the kids for feedback and came up with the final design. The result is the hip-e platform, a so-called "all-in-one digital lifestyle platform for teens that transcends the role of a computer to become the focal point of entertainment, communication and fun in a teen's room." At the heart of the platform is the hip-e node, an all-in-one PC with a 17-inch flat-panel monitor, TV tuner, 120GB hard drive, 512MB RAM, Windows XP home edition, CD/DVD drive, detachable speakers, wireless keyboard and a docking station. There's also a cell phone and USB drive/MP3 player that can be used separately and plug into the docking station (called the "nodeboard") for uploads/downloads and charging.
The hip-e node can be set up on the desktop or as a wall-mounted system. It has built-in Wi-Fi support so it can be used just about anywhere in a home with a wireless network. It can be customized with interchangeable faceplates and palm rests such as the available pink fur and leopard skin pattern. The company also plans to let users create their own faceplate themes.
One of the cool functions is the "sweepstakes light." Centered at the top of the hip-e node is a crystal blue LED. The company sends out promos over the Net to its users telling them to check their machine at a specified time. If the light is glowing, that user wins a prize, such as a free game. The platform also includes the hip-e playme, a portable digital media player/USB drive with 512MB of storage. It docks and syncs up to the nodeboard for charging and managing content. Disconnect the wireless hip-e beatbox speaker system from the node and plug the playme into the beatbox to create a mobile MP3 boom box. There's also the hip-e reachme cell phone and service that also docks and syncs up to the nodebook for charging. With service provided by Sprint PCS, the reachme is available with a variety of teen-oriented pre- and post-pay service plans. Other features of the phone include text messaging, ringtones and games. For more mobile teens, Digital Lifestyles will also offer the hip-e nodebook, a small notebook version of the PC with similar functionality. To make the system even more teen-friendly, the company partnered with a bunch of application providers to create a customizable interface with access to all the programs teens access most often. Dubbed the hip-e Hangout, the interactive desktop includes links to the Snapstream TV tuner software, Musicmatch, AOL Instant Messenger and any other application the user wants to add. It has multiple layers, so a top-layer item could be "Music Software" and the layer underneath that could offer a choice of Musicmatch, Napster and iTunes, for example.
The whole platform was announced back in August, but the reachme MP3 player is the only component available. According to Bacon, the rest of the components should be out by Thanksgiving. It will be available from Digital Lifestyles Group's hip-e Web site, at hip-e stations in Simon Malls around the country and from Amazon.com.
The base system, which includes the hip-e node, beatbox and Hangout, is $1,699. The All-in-one node bundle is $1,899 for the node, playme, reachme, beatbox and hip-e Hangout. The playme node bundle, which includes the node, playme, beatbox and Hangout, and the reachme node bundle, with the node, reachme, beatbox and Hangout, are each $1,799. The nodebook is also $1,799. Digital Lifestyles also sells
some components separately. The playme goes for $149, the
reachme is $129 and the beatbox is $79. Back
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Podcasting: The Next Big Thing Podcasting is a method for copying Internet-stored audio content to a handheld music player such as an iPod. It uses existing and readily available technology such as MP3 audio files, so anyone who wants to create audio content - and become a so-called podcaster - can do so and make it available for others to listen to. Think of podcasting as sort of like blogging-meets-Internet-radio on an iPod. Topics can range anywhere from politics and hobbies to how-to's, interviews, personal observations, sports and music to you name it. It gets its name, of course, from the iPod, by far the most popular digital media player. Copying a podcast to an iPod or other media player is a matter of connecting the iPod to an Internet-connected PC. There is already software that automatically finds a new podcast and copies it to the iPod. Since a podcast is not live, it can be listened to at any time. Sites such as Podcasters.org, Podcast.net, iPodderX, Loudpocket.com, Engadget and iPodder.org are popping up all over the Web. The sites aggregate audio to make it easier for listeners to find and download content that meets their interests. Content goes from the content developer to the aggregator to the user's digital media player. The first podcast was "Trade Secrets," a daily news and tech talk podcast from former MTV VJ Adam Curry, who also developed iPodder, the first podcasting aggregator, which automatically copies new content from various sources to the iPod when it's made available. In some respects it's like having a TiVo for Internet audio except that it uses portable digital media players for storage. Most of the current podcasts sound more like amateur radio than polished productions - but consumer interests lately seem to be running toward "reality" programming such as the survival and "you're fired" shows, which also come without much polish. Podcasting has a number of appeals. It's simple for the creator and easy for the listener, although the software tools used for both need some polishing. It has attracted the attention of the "underground" community that made Linux, P2P networks and blogging so successful. It has a "piracy" feel - like getting something for free. It also appeals to the need that many Internet users have to communicate with like-minded people around the globe - so-called special interest groups - something that the original Napster was evolving to when the labels killed it. The automation of getting it on the handheld player gives users the kind of "no problem" method they want. DVRs such as TiVo have become popular - even addictive - for their ability to play movies and TV shows when the consumer wants to watch - so-called time-shifting - not when they're aired. As such, they appeal to the "anytime" aspect of the "anytime, anywhere" creed that digital media lovers tout. Podcasts have the same appeal - listen to what you want, when you want. The portability of handheld media players enables podcasts to also fill the "anywhere" aspect of the creed that TiVo can't do - yet. Consumers, because of DVRs and the Internet, are becoming accustomed to getting content such as entertainment, news and information when they want it, not when media companies schedule it. Why wait for something over-the-air when the Internet can deliver it immediately? The FCC has, over time, made it nearly impossible for individuals to run their own radio stations. Podcasting removes the barriers the bureaucracy put up by making it possible for any Internet-connect person to create and easily distribute audio content to the growing millions of digital media player owners. It's sort of like "DIY radio" except it's distributed over the Net. There is no reason, of course, that existing media giants couldn't use podcasting commercially. Independent portals such as AOL and MSN could do their members a service by setting up a podcast aggregation and download service. The multi-station radio corporations such as Clear Channel or the satellite radio services such as Sirius could use it to download programming including commercials. The satellite radio services could use it to gain a competitive advantage or perhaps add a buck or two a month for subscribers who want it. iTunes or the other online music services could also gain a competitive edge by making podcasts easily available for their users. The evolution from podcasting
can also be seen. The coming avalanche of handheld video
players will make possible "vidcasting" on a large
scale. Vidcasting will be enabled by the continuing price
decline and increased quality of digital video cameras. Many
people are already familiar with making videos and copying
them to a PC. What is missing from making widespread "vidcasting"
possible are two things: vidcasting aggregation sites and an
abundance of portable video players - handheld TiVos, so to
speak. Both of those will come, in time. Note: Not even Google has kept
up with the sudden emergence of podcasting. Google thinks the
searcher means "broadcast." Back
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RealNetworks Sees Record Quarter Driven By Music, Games RealNetworks just completed its most successful quarter to date, at least in terms of revenue. The digital media giant raked in $68.3 million in Q3, up 32% over the year-ago quarter. GAAP net loss, including $3 million in expenses related to its antitrust fight with Microsoft, was $7 million (four cents). Excluding the antitrust litigation costs, the net loss was $4 million (two cents). In 3Q03 the company lost $3.7 million (two cents). Consumer products and services - largely music and games - drove the company to its record quarter. Revenue from its consumer business reached $55.4 million, up 52% from the $36.4 million it saw a year ago. Games revenue grew a whopping 189% to $9.1 million, up from $3.2 million last year. Video, consumer software and other revenue fell 4% to $27.5 million. As the company transitions itself into a consumer services company, revenue from its business products and services fell 16% in the quarter to $12.9 million, down from $15.4 million in the prior year's quarter. Real now claims more than 1.55 million paying subscribers to all of its services, up from 1.4 million in June. The number of people paying for its Rhapsody or premium radio services grew to 625,000 from 550,000 at the end of Q2 and 250,000 a year ago. Looking forward, the company expects Q4 revenue in the $68 million-$69 million range. It warned that revenue growth will be lower than in recent quarters due to a couple of factors: - Real's Harmony promotion, which offered à la carte song downloads for 49 cents instead of the 79 cents per song the company usually charges, brought in some $700,000 in Q3, a feat that's unlikely to be repeated in the current quarter. - In keeping with its drive towards profitability, Real said that it won't be renewing several video content relationships that have been underperforming. The move is expected to positively effect profit in Q4, but negatively effect revenue. The company also said that new subscriber additions in Q4 would likely be offset by a loss of subscribers who will leave when the video content they want is no longer available. As a result, Real expects a relatively flat overall subscriber count for the quarter. Excluding those antitrust
litigation costs, Real said it should return to profitability
in Q4, with EPS of zero cents to a penny-per-share. The
company sees its path to profitability helped along by growing
revenue, improving gross margins, operating cost savings and
rising interest income. It expects to grow revenues 15%-20%
next year and stay profitable, excluding antitrust
expenses. Back
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HP's version of the iPod already accounts for 6% of iPod sales even though HP only started shipping them in August. Microsoft CEO Steve Ballmer recently said that Apple's biggest weakness in the digital media market is that it doesn't have a worldwide reach that could give it the volumes needed to sustain a global business model. HP, as this newsletter said long before Ballmer's comments, brings a global reach to Apple that it otherwise did not have. Apple admittedly does not have nearly the market presence in the rest of the world as it does in the US. In fact, its recent quarterly financials showed a restructuring charge of $4 million related to vacating European office space. Ballmer's words are worth repeating because they show what Microsoft management thinks of the company that has become the first big winner in the digital media market: "There's no way anything gets to critical mass with Apple, because Apple just doesn't have the volumes. They don't have the volumes anywhere in the world; they don't have the volumes particularly in some countries. The critical mass is going to have to come from the PC, or the next-generation video device." Translated, that seems to mean several things: 1. Microsoft does not think that HP can give Apple the necessary volumes for a "critical mass" of digital media devices. Perhaps that's because Microsoft intends to keep HP busy selling Windows Media Center PCs and future Windows-based digital media devices. PCs will remain more important to HP than iPods ever will become. In fact, Apple itself still gets much more revenue from its PCs than from its music business even with the Mac's miniscule market share. Music products for the most recent quarter, including iPods and the iTunes Music Store, nearly quintupled but still account for only 27% of Apple's revenue. 2. Microsoft does not think Apple can become a factor in home digital media products such as entertainment PCs or home media servers. Sales of Apple desktop PC were actually down in the recent quarter; it laid the blame on a component shortage. Laptop revenues were up about 70% but, even so, Apple is a minor player in the laptop market. The possibility of a worldwide marketing outfit, such as HP is doing with iPods, selling Macs or Mac-based entertainment PCs and home servers is unlikely given Apple's restrictive distribution policies 3. Microsoft thinks that there is a bigger opportunity for industry dominance in handheld video players - where Apple does not have a product entry - than in digital music players. Microsoft rarely concedes but - so far at least - none of its hardware partners, including the likes of Dell and Sony, has been able to come up with an iPod killer. So conceding the handheld music player to Apple, at least for the short-term, Microsoft may be more focused on the handheld video units, such as the ones that Archos and iRiver keep introducing. The one PC-cum-CE company that
Apple has the most to fear from is Dell, with its ability to
drive manufacturing and distribution efficiencies. While the
Apples are thinking about innovative new products, Dell's
entire corporate culture is focused on getting products made
in the Far East that are comparable, frequently superior, to
competitors' products and nearly always less expensive. That
combination, coupled with Dell's pace-setting customer
service, could give Apple fits. Dell has recently publicly
downplayed its digital media intentions, but it keeps rolling
out new products. It'll certainly have all the help and
backing needed from Intel - Dell has never sold any other
brand of microprocessors - and Microsoft. Back
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Cisco, Microsoft Collaborate to Fight Internet's Ills Spam, viruses, spyware and hackers can prevent the Internet from becoming the main distribution means for delivering entertainment, information and education to homes. This newsletter has long called for industry leaders such as Microsoft, Intel, Cisco, the phone companies and cable TV services to band together to clean up the Net before people lose confidence in its use. We welcome the announcement by Microsoft, the world's largest software company, and Cisco, the world's largest maker of Internet and networking gear, that they will work together to "share technical details, integrate their technologies and push for industry-wide standards," in the words of the Wall Street Journal. The companies set no deadlines or timetables for their efforts but at least it's a start. Jayshree Ullal, senior VP of Cisco's security and technology group, said, "It is clear that the threat from viruses, worms, hackers and other attacks presents a major challenge for organizations. This integration effort aims to help customers better utilize their existing investments in Microsoft and Cisco's products and technologies. The collaboration has the bottom-line goal of improving the security of our customers' networked systems and information assets while reducing the costs of security management." Two remaining questions are,
"What took you so long?" and "Where are Intel
and the other financial beneficiaries of the Internet's
largesse?" That especially includes the phone and cable
TV companies that are reaping billions from Internet
usage. Back
to Headlines
Israel to Collect Copyright Fees on Blank Media Israel's Ministry of Justice is
proposing a bill that would collect fees on sales of media
such as CDs and on gear used to copy media, such as CD
burners. The fees will be given to three royalties
organizations, representing the producers, performing artists
and recording producers, who will distribute the fees to their
members. The Copyright Law (Duplication of Material) will
specify that consumers have a right to copy CDs for private
use as long as they use the stipulated types of media, meaning
the ones that the fees are collected on. Canada, Germany and
other countries have similar laws. Back
to Headlines
Pay Phone Boxes Become Jukeboxes BT will offer a downloading music service at its pay phone boxes, turning them into music kiosks, according to the Times of London. BT intends to contract with an online music service such as iTunes so that consumers could pay for and download tracks from what will become big red jukeboxes. Revenue would be split between the online service and BT. In the cell phone era,
payphones have become dinosaurs. Some 60% of BT's 100,000
phone boxes lose money and the number of calls made from pay
phones has fallen by half. Pay phones have also been
considered as Wi-Fi hotspots. The Times also says that the BBC
is about to launch a new Google TV "video-on-demand"
service to enable British broadband customers to click into a
huge archive of film and television
programs. Back
to Headlines
330,000 Historical Documents Now Online Internet users can access local
data directories including census data and geographical
archives from England and Wales dating back to 1750 in digital
form, according to BBCnews. The University of Leicester
digitized 330,000 documents from 643 directories with funding
from a 335,000-pound Lottery grant. It will be easier for
users to search manuscripts for specific details and thus
avoid the costly procedure of converting documents into
electronic text. The documents are available at www.historicaldirectories.org.
Back
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$1.99 for a month's unlimited Wi-Fi at 3,900 locations across the US. No, it is not a joke. This is the price that SBC is charging any of its 4.3 million DSL subscribers for access to its FreedomLink network. This is a massively counter-cultural move in an otherwise high-price, low-volume industry, but the fact that included in this offer is access to Wayport's McDonalds network makes it particularly significant. SBC can do this because of Wayport's new Wi-Fi World wholesale pricing initiative. Access is charged to the service provider at a fixed rate per location, per month - not per user session. This creates the cost visibility and incentive for a service provider like SBC to promote unlimited data packages. It also demonstrates the potential for the Wi-Fi World system, and other wholesale service providers, such as The Cloud, should watch it. New DSL subscribers will get the same offer, but for free until April 15th, at which point they will have to pay the $1.99 charge. In hotspot terms, this the equivalent of handing out dollar bills on the street corner. By comparison, the T-Mobile HotSpots unlimited plan is $29.99 under a 12-month contract, while Boingo's equivalent plan is $21.95. There will be those scratching their heads wondering how SBC can afford to run this offer. The key is the operational cost structure of the network. SBC's hotspot network is branded FreedomLink, and is a mixture of sites for which it owns the proprietary operator rights, and those owned by a third party where it is simply reselling access. SBC's largest own proprietor deal is with UPS Stores, a nationwide franchise operation, which also operates under the Mail Boxes Etc brand name. These sites make up the majority of the 2600 locations listed on its Web site. SBC has, however, outsourced management of these locations to Wayport. The SBC location list also includes Barnes & Noble sites. The bookseller was the highest profile location partnership for neutral host hotspot operator Cometa, before it was shut down in May. No statements have been made by liquidators of the company as to the fate of the network, but this seems to indicate that perhaps some have been acquired by SBC. Excerpted from Blueprint Wi-Fi.
For the complete article, e-mail charles@riderresearch.com
Back
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Apple Morphing Into a 'Digital Music and Entertainment' Company "Apple is transforming itself from a computer company into a digital music and entertainment company," according to analysts quoted in the New York Times. Along similar lines, the Wall Street Journal said, "Apple's numbers show how the company continues to change from a traditional computer maker to a digital-entertainment company, with a particular focus in digital music." Perhaps other PC companies such
as HP, Dell and Gateway will start accelerating the efforts
they're putting into assembling a competitive digital media
product line. Also facing the march of digital media are the
record labels and movie studios whose business plan are being
impacted. Likewise the traditional CE companies who find Intel
and Microsoft leading the charge of outsiders using their
products to take on the CE industry just as they took on and
practically demolished the mainframe and minicomputer
industries. Anyone remember NCR, Unisys, Burroughs, DEC, Data
General? And let's not forget the impact that start-ups such
as TiVo have made - it's goal is to put a Linux computer into
every home as the TV-based media center. But, at this point
it's Apple that has led the way in innovative digital media
products and services. The coming battle to be the home media
center is, however, a battle in which Apple currently does not
have an entry. Apple shipped only 836,000 Mac PCs during its
recent quarter compared to over two million
iPods. Back
to Headlines
******************************************************************************************* October 26-28, 2004 Santa Clara Convention Center (800) 300-9868 [(609) 654-6266] info@streamingmedia.com www.streamingmedia.com/west ©2004 MAY NOT BE COPIED OR FORWARDED BY E-MAIL, POSTED TO A WEB SITE, FAXED OR COPIED IN WHOLE OR IN PART. Parks Associates On-Demand Digital Entertainment November 10-13 - San Diego Interactive Sessions Priming the Pump: Managing Content through the Value Chain A New Way of Looking at Media Convergence in the Home On-Demand: Video On-Demand: Gaming On-Demand: Music Meeting the Needs for On-Demand Delivery and Consumption The Rise of the Media Hub: An
Ecosystem Focus The opening session will
examine future opportunities, current challenges, and the most
significant developments both now and upcoming in the field of
on-demand digital entertainment. Key topics will include
digital rights management and content protection issues, the
evolution of specific platforms to accommodate consumer
demand, and service design and deployment. What are the industry's most critical issues to be resolved? What are the most exciting developments that will arrive, matching the industry's vision
to the reality of consumer demand? Brett Butler, General Manager, Broadband Cable Business, Texas Instruments Bob Engel, Director of Marketing, HP Digital Entertainment Mike Fidler, Senior Vice President, Home Products Division, Sony Electronics David Henry, Senior Vice President, & General Manager Control Devices, Logitech Peter Lee, Vice-President, Business Development New Technology, The Walt Disney Company Bill Leszinske, Director, Digital Home Marketing and Planning Desktop Platforms Group, Intel Corporation Bill Loewenthal, Vice President, Business Development, Advanced Center of Technology Vice President, Product Marketing, ReplayTV, D&M Holdings Sean Ryan, Vice President, Music Services, RealNetworks, Inc. Bill Taylor, Senior Vice President, Broadband, Motorola Registration Information Candi Richardson, Director Business Development-Events 817-355-1113 or candi@parksassociates.com ******************************************************************************************* Verizon's 30 Mbps Mega-Pipe Dream Verizon, seemingly in synch with the FCC's removal last week of forced network access requirements, is accelerating the installation of its fiber optic network to homes and businesses to six more states, bringing the total to nine. It will increase by about two million the number of homes and businesses the network passes by the end of 2005 to a total of three million. Verizon's spend on the project will exceed $800 million - just between now and year-end. "Verizon is building a broadband future for America," said Paul Lacouture, president of Verizon's Network Services Group. "The future will ride on the bandwidth of fiber optics." Verizon and the other phone companies have been under increasing financial pressure - declining residential lines as cell phones and Internet telephony (VoIP) proliferate, a minority broadband market share that caused a self-induced price war and the cable TV companies' ability to bundle TV programming with broadband and telephone service. The phone companies are being
forced to find new technology to compete with the cable TV
services and fiber optics is a potent weapon. Verizon's
announcement is sure to send chills into the executive offices
of the cable TV companies and bring applause from digital
media buffs that want more content delivered over the Net.
With Internet speeds up to 30 Mbps, widespread deployment of
fiber optic will have a major impact on a number of existing
businesses and paradigms: 1 The cable and satellite TV companies will feel the heat on two fronts: The faster Internet speeds consumers can get from broadband and the ability of the phone companies to offer full-blown TV programming. 2. Price wars for broadband. The cable TV companies have been able to avoid a broadband price war so far because they can offer higher broadband speeds than the phone companies with their outdated copper wires. The price vs value proposition changes once the phone companies can offer faster speeds than the cable TV services can technologically deliver. 3. Price wars for TV content. The existing duopoly of cable and satellite TV companies will be challenged by the entry of the phone companies into the equation. Wanting to maximize their revenue on their enormous fiber optic investments, the phone companies will offer everything but the kitchen sink. 4. Lots of new consumer services will become available in abundance ranging from enormous selections of movies on demand to home-to-home video telephony. 5. The impact on the satellite TV companies will come initially from the phone companies no longer needing to sell TV service in order to compete with the bundles that the cable TV companies offer. The phone companies will, by that time, have built up a TV subscriber database that they will try to convert from satellite to fiber optic TV service. 6. Pricing for broadband will be stratified based on speed. "Broadband-on-demand" pricing will be available so that a consumer, for example, can increase broadband speed temporarily to download a movie. 7. Fiber optic competition, when added to the already strong competition from satellite TV, will make exclusive content more necessary in order to differentiate. Content costs big bucks and that will drive consolidation in the cable TV industry. To fight back, the cable TV companies may have to deploy fiber optic also, which could also drive the debt-laden cable TV companies into mergers. 8. Cable TV stock prices will be under pressure as they reduce pricing and margins in order to compete. 9. King content becomes richer. A completely new distribution channel will need lots of content. Increased content demand will raise prices. The winners will be Disney and its ABC, General Electric and its NBC and Universal, Viacom, Sony with its Columbia and MGM libraries as well as many other content producers. 10. With three industries - cable TV, satellite TV and the phone companies - competing for TV program subscribers, every set-top box will have a DVR for pre-downloading movies and other entertainment/education/information videos. It's unclear whether TiVo would benefit from the surge in DVR demand. In fact, TiVo today does not have a single bundling deal with any cable TV company and its DirecTV deal appears to be in peril. TiVo's current pricing would seem to put it at a disadvantage but its superior electronic program guide could give one or more of the phone companies a competitive differentiation. It's certain that lots of disk drives will be sold to go into all those set-top box DVRs. On the other hand, a case could be made that the phone companies, with a 30 Mbps pipe into the home, will not need local storage in the home. They might prefer to store all the customer's content centrally and stream it on demand. 11. Fiber optic will drive the price for current DSL, cable modem and satellite broadband down to the point where it'll make no sense for anyone to have a dial-up connection. Dial-up has survived for two reasons: Low cost and universal availability. The low cost factor will disappear. 12. Entertainment
portals/aggregators such as AOL and MSN could be big winners
if they can convince the phone companies to let them be the
primary content portals. The phone companies will be busy
gathering content for their TV-over-fiber service and might
farm out their entertainment portals. On the other hand, the
telcos, at least until their defeat in the broadband market,
had an arrogance that led them to believe they could do it
all. There are other consumer benefits in fiber optic, particularly in healthcare. Tele-medicine would permit a specialist in one city to immediately view medical videos such as angiograms made in another location. Verizon also said it would hire another 3,000 to 5,000 employees to work on the project. The more competition, the better for the consumer. And the sooner consumers will have "any content, anytime, anywhere." Facts about Verizon's Fiber Optic Network - Called fiber-to-the-premises (FTTP). - Carries data at the speed of light. - Passes three million homes. - Nine states: some or all of the states of Virginia, Delaware, Maryland, Massachusetts, New York, Pennsylvania, California, Florida and Texas. - Between 3,000 and 5,000 new employees hired by the end of 2005. - Video services on the FTTP network begin next year. - Fiber broadband Internet access services offer download speeds of up to 5 Mbps, 15 Mbps and 30 Mbps, with upstream speeds of up to 2 Mbps for the first two products and 5 Mbps for the third. The 5 Mbps service sells for $34.95 per month, when purchased with a package of Verizon services, and $39.95 when purchased separately. - A fiber-optic cable is used instead of the existing copper-wire - Fiber engineering eliminates electronics between the customer and the network so that problems of providing repairs and power for equipment in the field are reduced. - Buying hundreds of new vehicles, computers, test equipment and other supplies - An $800 million capital
investment in FTTP this year. Back
to Headlines
Outback Gets Satellite Broadband Telstra will use AsiaSat's
fleet of satellites to offer two-way broadband in Australia's
rural areas such as the outback. Back
to Headlines
Broadband Users Want Downloaded Movies Consumers with a broadband Internet connection want most to be able to download movies for watching at their convenience, according to research firm OTX Research. After interviewing 1,000 broadband users between the ages of 13 and 64, the researcher found that one-third wanted to download movies for storing on their hard disks. Some 14% want to download videos on cards, 7% would like to download movie previews and 5% want TV shows. Maven Networks, the study's sponsor, sells software that lets a company create, deliver, measure and manage full-screen, interactive video applications targeted at users with high-speed Internet connections. The typical video produced with its software is five-10 minutes in length and is sponsored, such as the American Express-sponsored Jerry Seinfeld skit with an animated Superman. BMW, National Geographic and Reebok also use Maven's product. AtomFilms uses Maven software to deliver three free short-form movies a week to a user's PC, typically one-30 minutes in length. The study found that 71% said
they would download a branded video channel to their desktop.
It also found that 76% of respondents would accept
Internet-delivered videos for receiving specific information
from companies of interest. Back
to Headlines
Value of Content Libraries Increasing The Online Reporter has predicted on numerous occasions that the Internet will offer content owners the greatest opportunity ever for selling their goodies to people in broadband-connected homes that are networked with devices for storing and playing digital media content. It will be become even larger than the DVD industry because of the ease and timeliness with which people can both acquire and play digital content. The result will drive media companies to build and maximize their libraries of content. When asked on CNBC's "Closing Bell" about the perception that the movie industry's Achilles' Heel is that it's a one trick pony business with no automatically recurring revenue, MGM chairman and CEO Alex Yemenidjian, said, "That is a misconception that we had no success in dispelling." He said that new film production had become a smaller percentage of company revenue as it built up its library. "Our primary focus was on increasing the value of the library," he said. During the last for years the cash flow from MGM's library doubled to $450 million a year from $225 million a year. Yemenidjian said that he would stay at MGM for six to eight months after Sony takes over before leaving. Stock price changes from April 1999 until now: MGM
up 41% Powell: FCC Decisions 'Breathtaking,' 'Groundbreaking' When he appeared on CNBC's "Kudlow & Cramer" show last Thursday, FCC chairman Michael Powell called two recent FCC decisions (see TOR416) that he says will open up the broadband market "breathtaking." He described as bold and positive the decision not to force the phone companies to provide their competitors access to the fiber optic cables they run to the home, even if they only run them to the neighborhood - the so-called curb. He said the policy would provide "regulatory relief" in exchange for companies to invest large quantities of capital to "bring dramatically higher-speed, next-generation" broadband to the mass market. He said the policy was an important landmark that would move the US up from its recent 10th or 11th ranking in broadband implementation. Powell said that nothing would ever send data faster because fiber permits data to be sent at the speed of light. He took a shot at his fellow commissioner Michael Copps, who faulted the FCC for the US' low broadband rating but voted against the policy. Powell says he expects the phone companies to accelerate their fiber deployment to the home, a move that would make lots of fiber optic manufacturers happy and result in increased hiring. Powell called the FCC's powerline policy "groundbreaking." He said that the FCC's decision to impose standards on powerline broadband installations would bring a third competitor, the electric utilities, to broadband. The thought of "every AC outlet in the home becoming a broadband connection" made the always-positive Powell almost giddy. The show hosts also asked
Powell about the FCC's inability to regulate satellite radio -
a prime motive behind shock jock Howard Stern's recent
decision to leave over-the-air radio for a satellite radio
service. Powell explained that the Supreme Court allows more
regulation of content on media companies that use public
airways such as over-the-air radio and TV stations as opposed
to newspapers, cable TV or satellite TV and radio that use
more private distribution conduits. As such, he said that
satellite radio was virtually outside FCC regulations. In any
event, he said, the FCC is prohibited from preventing any
program from airing. It can only review and subject a program
to scrutiny and possible fines after it has aired.
Back
to Headlines
Back in 2003 Forrester Research predicted that Norway would become Europe's leading broadband country by 2008. Telenor is doing its part by ramping up its ADSL rollout plans in order to provide broadband access to 90% of Norway's population by the end of 2005. Low prices, fierce competition and Norwegians' purchasing power - Norway is the only European net exporter of oil - are driving the market. Morten Karlsen Sørby, head of Telenor's Norwegian market activities, said that the Norwegian Post and Telecommunications Authority - the government's regulation agency - confirmed that Norway occupies an advanced position internationally with 23% of Norwegian households already using broadband. And demand is continuing to rise. Sorby said the company was stepping up its broadband rollout by advancing the rollout schedule by one year. The company will "allocate all the necessary resources," he said. Telenor has already upgraded
76% of the 2,100 telephone exchanges it intends to equip with
ADSL. Sorby said that the company's ambition is to
"provide ADSL access to all 434 municipal centers in
Norway by the end of 2005." "Furthermore, we also
believe that in time, the technological development will
facilitate full national coverage," he said. Back
to Headlines
US Needs Faster, Less Expensive Broadband Access FCC commissioner Michael Copps
told the Financial Times that he believes US broadband is
"far behind" that found in countries such as Korea,
Japan and Canada. He was critical of the fact that US
consumers do not have access to higher connection speeds and
says that in other countries consumers have faster access
speeds and at lower prices. He called for the US to implement
a national broadband policy. Back
to Headlines
India Wants 20m Broadband Users by 2010 The Indian government's
Broadband Policy 2004 has set a goal of adding three million
broadband subscribers and six million total Internet
subscribers by December 2005. It also wants to have 20 million
broadband subscribers and 40 million Internet subscribers by
the end of 2010. Broadband Internet access in India runs $10
to $16 a month. Back
to Headlines
Movielink Adds War Documentaries Broadband movie-on-demand site Movielink has expanded its documentary catalog with the addition of the TV documentary series "Sworn to Secrecy: Secrets of War." Produced by the Documedia Group, the "Secrets of War" series has aired in more than 40 countries. It's based on intelligence from formerly classified documents and messages and includes interviews with experts, authors and eyewitnesses from around the world. The 65-hour series is narrated by Charlton Heston and also includes declassified and rare footage, 3D graphics, on-location shooting, historical retracing and extensive re-enactments. The series spans all the major conflicts of the 20th century. Titles available for download from Movielink include "The Ultra Enigma," "Weapons of the Shadow War," "Tools of Deception," "D-Day Deceptions," "Spies in the Sky," "Breaking the Japanese Code," "Battlefield Deceptions," "Spy Planes" and "Secret Submarines in WWII." As with all other Movielink titles, the documentaries are available to US broadband Internet users. Rental fees range from $1.99-$4.99, can be viewed as often as the user wants in a 24-hour period and can be stored for up to 30 days. Customers can also use the MultiPlay feature to re-rent titles for additional 24-hour viewing periods for up to 30 days after download. Movielink's other documentary
content includes a variety of titles from National
Geographic. Back
to Headlines
Folks who use TiVo and other
DVRs like to watch more in less time by fast-forwarding
through commercials, much to the consternation of advertisers.
KSL Media is touting a 10-second ad format, once used
exclusively for game show promos, called TV10 that doesn't run
in the ad breaks, making it harder to zap the ads. TV10s
appear "in-program," catching viewers unaware and
thus too late to zap. The company says that TV10s may become
more valuable even though they cost less than ads that
traditionally appear in clusters. Recent studies showed high
recall rates for the TV10s. Back
to Headlines
TiVo Determined To Remain on Top TiVo remains determined to ride the current surge in DVR interest. In addition to its DirecTV bundling deal, the company is aiming at cable TV subscribers. It says it now has 4,000 stores in the US selling its products and is launching a major ad campaign. It has lowered the price of the 40-hour model to $99 after rebate, according to sales VP Joe Miller. The monthly TiVo fee is $12.95 for the first box and $6.95 for each additional one in the same household. The company is trying to expand
its base of users beyond those that bought their TiVo through
DirecTV, which has said it will soon start selling DVRs from
News Corp's DVR operation. The DirecTV version of TiVo's is
restricted from being able to use the unit's Internet/local
network connector, which limits its use as a receptacle for
downloaded movies. This could change, say, if DirecTV were to
get a cut of the deal so TiVo, in its new alliance with
Netflix, could use DirecTV's satellites to download movies,
which is how current DirecTV-TiVo users get some content such
as previews. Back
to Headlines
MPAA CEO: Emerging Digital Technologies Offer Opportunity New MPAA CEO Dan Glickman says that the movie studios must actively adopt emerging digital technologies while continuing their fight against piracy according to a BBCnews report. Glickman, who succeeded Jack Valenti as the organization's chief, said that digital technologies would open new markets and opportunities for the film industry. The movie industry has moved faster to adapt to Internet and digital possibilities than the recording industry. However, its tightly controlled Movielink and CinemaNow online movie services are restrictive in usage rights and very limited in movie selection. Although the MPAA claims that
more than 2.6 billion digital video files are copied each
month - that includes both DVD-to-DVD and Internet copying -
the biggest barrier to even greater piracy is the size of
movie files. Using a dial-up connection to download a movie is
virtually impossible. Copying a movie with a 1 Mbps or 2 Mbps
broadband connection takes seemingly forever. Online movie
copying will begin to soar once the cable TV companies ratchet
their speeds up to the 8 Mbps to 10 Mbps range. It will become
a nightmare for the studios when the phone companies begin
offering 300 Mbps over fiber optic lines. Want to bet that by
then the studios will be offering lots of movies on much less
restrictive terms via the online movie services? Back
to Headlines
AOL, Movielink Offer Free, Discounted Movie Downloads America Online and Movielink have hooked up to expand on a partnership they forged in January giving AOL for Broadband members discounts on some Movielink downloads. The original five-week promotion offered a small selection of recently released movies for download at 99 cents each. The new alliance adds free downloads of classic titles along with the 80% discount on select new movies. AOL for Broadband members can go to "AOL Keyword: Movielink" and choose from 10 classic movies to download for free during the first month. After that AOL will offer five new classics each month. The initial batch of freebies includes "Steel Magnolias" and "Against All Odds." The 99-cent titles available at launch include "13 Going on 30," "Hellboy," "The Prince and Me," "The Big Bounce" and "Agent Cody Banks 2." The companies say they expanded the agreement due to the "overwhelming success" of the prior deal that helped boost Movielink's download numbers by 15%. For as long as this new promo lasts, AOL for Broadband members will have access to rotating monthly discounts on new movies as well as additional discounted new and classic movies each week. AOL for Broadband members can
download other titles in the Movielink library at regular
prices. Back
to Headlines
LIES,
DAMN LIES AND STATISTICS MP3 Files Declining in Popularity The number of MP3 files on consumers' PC is declining because companies like Apple, Microsoft, RealNetworks and Sony are pushing their own formats, according to research house NPD. We maintain that users, yes, even P2P addicts, are switching to Microsoft's WMA format because it compresses better while at the same time increasing quality. NPD says that MP3 file usage has been declining for some time. MP3 is still the standard - every handheld media player supports it - but there is no doubt that Microsoft's WMA and the AAC format that Apple's iTunes uses are increasingly popular. It's not surprising considering that MP3 is ancient in technology terms. MP3 files still account for 72% of all music on PCs, says NPD, but that's down from 82% a year ago. "People are still getting MP3s and putting them on hard drives but are deleting them at a rate faster than they're acquiring them," said NPD. Microsoft's WMA and Apple's AAC gained about 5% "hard-drive share" in the past year. NPD surveyed the hard-drive contents of 40,000 people in the US through an online panel. NPD researchers estimate that
there was a net loss of about 742 million MP3 files from US
hard drives between August 2003 and July 2004. NPD did not say
how many billions of tracks people added to their hard disks
during that time. There were probably only a couple of hundred
thousand from the legal download services; the majority of new
tracks came from downloads off the P2P networks and from
people making copies from their, and others', CDs.
Back
to Headlines
40m DVD Recorders To Be Sold in 2006 Over 40 million DVD recorders
will be sold globally in 2006, according to research firm
Understanding&Solutions in a report sponsored by the RAM
Promotion Group. The report says that DVD-RAM has a 55% share
of the worldwide DVD recorder market and that sales of DVD-RAM
units are expected to grow by 116% in 2004. Back
to Headlines
Kazaa Loses P2P Lead to eDonkey P2P network eDonkey now has more file-sharing users than Sharman Networks' Kazaa, according to the cyber sleuth firm BayTSP. eDonkey averaged 2.54 million users a day in September. Kazaa hit just 2.48 million. The labels have no doubt targeted Kazaa users with warnings, lawsuits, spoofs and the other weapons. Kazaa has more users in the US than does eDonkey, but many Kazaa users have switched to eDonkey because there are less of the labels' harassments to deal with and because it handles large files, such as movies, better than Kazaa. Movies have become increasingly popular as more and more users get high-speed broadband and DVD players with software to copy movies. Back to Headlines *************************************************************************************************** "The first key to wisdom is constant and frequent questioning…for by doubting we are led to question and by questioning we arrive at truth." - Peter Abelard (1079-1142) - dialectician, philosopher and theologian. We try to arrive at the truth each week by questioning the people who run companies like yours. Try some of the wisdom yourself by subscribing to The Online Reporter. At $595 a year, it's a pittance for the knowledge and intelligence we provide. Rider Research Inc 516 759-7025 paperboy@riderresearch.com *************************************************************************************************** Landmark $367m File-Sharing Suit Starts Down Under A $367 million ($500 million Australian) copyright lawsuit the Australian Recording Industry Association (ARIA) brought against the owner of a song-sharing Web site and its ISP will start next week in an Australian Federal Court. The 31 Australian and international record companies involved are counting on the suit against Stephen Cooper, who ran the MP3s4free.net Web site that he set up in 1998, and his ISP ComCen to be one of two such lawsuits down under that will begin the end of the "free music" phenomenon that Napster started. The labels consider the case a landmark one in their battle against the use of the Net to illegally copy music. The other case involves Sharman Networks, owner of the Kazaa file-sharing software and Web site. Cooper's Web site wasn't a traditional P2P network. Instead, it had links to locations worldwide where music tracks were stored on everything from personal to government computers. The ARIA says that Cooper was one of the biggest copyright infringers in the world. At its peak, his site had upwards of 190 million visitors a year. The Web site was closed last year following raids on Cooper's home in Brisbane and his ISP. Information-gathering raids also initiated the Sharman suit. The ARIA and labels hope to define in court and in the public mind the difference between legitimate online music services and sites that use others' copyrighted music without authorization to make a profit. Estimates are that Cooper's annual income from the operation varied from $185 to $47,000 ($250 to $64,000 Australian). The money was made mostly over the last few years and was primarily from US advertisers, Cooper said. Cooper's site is believed to have been the fourth-largest source of music piracy on the Internet before its shutdown two weeks after the raids. ARIA piracy investigations manager Michael Speck told the Sydney Morning Herald, "It's an opportunity for the Australian courts to rule definitively on the impact of copyright law on the Internet and thereby effectively deal with the mythology of the Internet that allows people to make vast fortunes from other people's property." He said that there was a public myth that if someone downloaded songs from another Internet user, he was doing nothing wrong. The misconception, Speck said, was that if someone copied a file from another Internet user then the Web site was not at fault. "This is the most important Internet piracy case before the Australian courts and the result will have an impact around the world," he said. "The court's judgment will be the definitive answer to the mythology that allows people like Mr Cooper to act as if they didn't know anything was wrong." Cooper, an ex-policeman and unemployed when he started the site, told the Brisbane Courier-Mail that he would never have started the Web site if he had known he was doing anything wrong and that he did not have the money to defend the case. "There are no millions of dollars stashed away anywhere, no secret garages full of Porsches and Ferraris, he said, possibly referring to Sharman CEO Nikki Hemming. ARIA documents filed in the case show that the US Music Publishers' Association warned Cooper that a civil suit would be filed unless he shut down the site. The ARIA said it used weeks of
surveillance, forensic Internet tracking and the raids to
gather evidence. Back
to Headlines
'This Is a Recording. You Have Been Disconnected from the Net' UCLA has implemented a quarantine project that automatically shuts off a student's network access, except to university resources, whenever a copyright holder sends a notice of alleged infringement to a student according to Wired News. The student can reinstate his network access by visiting a Web site and agreeing to the university's acceptable use policy. A record is kept of the student's IP address in case he commits a future offense. UCLA says that the quarantine approach "emphasizes and complies with legal requirements while ensuring balance with campus judicial policy." The quarantine appears to be working. Of the 52 claims received during the quarter, 22 claims (42%) arrived in the first two weeks of classes, whereas the additional 30 claims (58%) were received in the remaining eight weeks. The quarantine applies only to those in student housing - approximately 7,500 - which is only about 20% of the school's total enrollment. UCLA worked with Universal
Studios, which developed its Automated Copyright Notice System
(ACNS) for sending notices in both XML format and as a legal
document to purported copyright infringers. Universal sends
out 1,000 to 4,000 notices a day, according to the
article. Back
to Headlines
Copyright Holders, Radio Stations Strike $1.7b Licensing Deal US music copyright holders and radio stations reached a milestone licensing agreement this week in excess of $1.7 billion - the largest licensing deal in the history of radio. The deal, agreed upon by the American Society of Composers, Authors and Publishers (ASCAP), which has some 190,000 members, and the Radio Music License Committee (RMLC), which represents most of the nearly 12,000 commercial radio stations in the US, was approved by Federal District Court Judge William Conner on October 15. It gives the radio stations the right to play ASCAP music both over the air and as part of a simultaneous stream over the Internet. The agreement finalizes license
fees for 2001-2003 and also sets new licenses for 2004-2009.
The new settlement replaces revenue-based fees with set
payments that guarantee "significant" income to
ASCAP members. It's support to benefit both the copyright
holders and radio stations due to a new "simplified and
streamlined" administration process. Back
to Headlines
D-Link Links PCs, TVs, Stereos D-Link has been shipping since June a new media device that wirelessly streams digital music, video and photos stored on PCs to TV sets and stereos in other rooms. The MediaLounge DSM-320 uses
Wi-Fi 802.11g at 54 Mbps to link the home PC to the TV and
stereo gear. It can also connect to the PC through a regular
wired Ethernet network cable. The TV connection is via a SCART
(with video, A/V and RGB), RCA A/V or S-video cable. It also
comes with digital audio outputs for Coax or optical fiber.
The DSM-320 can be used for displaying digital photos and
videos on a TV and for playback of MP3 files on a stereo.
Suggested retail is $199 (£158) and the street price seems to
be under $170.
D-Link's Wireless Media Player Stream Video, Music and Photos The media player comes with a remote control and supports the Universal Plug and Play (UPnP) standard for ease of installation. The DSM-320 supports standards such as MP3, JPEG, MPEG1/2/4, AVI, Xvid and QuickTime for streaming video and audio content. Users can play music playlists such as M3U and PLS on the stereo system. It displays photos slideshows in JPEG, JPEG2000, TIFF, GIF, BMP or PNG formats. AV jacks on the back panel of the DSM-320 allow direct connection to the TV. With the included remote control, users can access media content stored on the PC, browse music files, watch videos and display photos, all on the TV. The DSM-320 also lets users access online media content such as Radio@AOL on the TV through an existing broadband Internet connection.
DSM-320 Connects Directly to TV and Wirelessly to PC The DSM-320 is certified for Microsoft's PlaysForSure, which was developed to let consumers be sure that the portable music or video device they buy is compatible with music or video services built on Windows Media technology. D-Link has released several software updates for the box to improve its performance. Fortunately for the user, D-Link designed the unit to do automatic updates without any user intervention, unlike Windows PC. Improvements include: 1. A user can select tracks to play either by creating playlists or by selecting folders on the PC. 2. If the tracks have ID3 tags, songs can be selected title artist or album, all of which are displayed on the TV when the song is played. If the ID3 tracks are missing, the song will play without the identifying data being displayed. 3. It will play MP3 files of any compression size such as 64 kb or 128 kb. 4. D-Link intends to add shortly the ability to play WMA format files, increasingly popular even with P2P users. It already plays WMV video files. 5. The unit supports the
official release versions of DivX versions 4 and 5 but not the
DivX 3 version popular with many P2P users. Back
to Headlines
MPEG LA VP of licensing and
business development Larry Horn held a seminar called
"MPEG-2 Technology and China's DVD Industry" in
Shanghai on October 21. The seminar focused on the benefits of
using MPEG-2 technology via MPEG LA's MPEG-2 Patent Portfolio
License and the DVD industry in China. There has been concern
that China will continue down a road of developing its own DVD
standards. MPEG LA's MPEG-2 Patent Portfolio License has 800
licensees who account for most MPEG-2 products such as DVD
players and recorders; cable, satellite and terrestrial
digital set-top boxes; digital televisions; PCs with DVD
playback; DVD discs and game machines in the global market
including China. Back
to Headlines
IFPI's Berman: Single DRM Scheme a Necessity Jay Berman, head of the International Federation of Phonographic Industry (IFPI) is quoted in the Guardian newspaper as saying that the record labels will work together to pressure technology companies to establish a common standard for digital music downloads. The labels want a common standard to avoid a repeat of the videotape format wars between VHS and Betamax in the 1980s. Berman believes that a single digital rights management (DRM) technology rather than multiple schemes is necessary to popularize the legal online music services. The multiplicity of file formats and incompatibility of handheld music players is already causing consumer consternation. Look at RealNetworks' announcement that its new Harmony software will enable an iPod to play tracks in Real's format in addition to the AAC format favored by iTunes. Apple retorted by saying that it could, without notice, overwrite the RealNetworks software in the iPods, causing the consumer to be unable to play songs purchased from RealNetworks. It is that sort of silliness that endangers the online music market - the legit one. It also plays into Apple's hand to the detriment of RealNetworks as well as to the gaggle of Windows-based digital music players because consumers generally trust the market share leader when in doubt, in this case overwhelmingly Apple. Sony, which is in both the music and the online music industries, compounded the problem by dredging up its own file format and DRM scheme. Consumers started getting their music on the Net when file-swappers accepted MP3 as a "standard" file format for exchanging tracks. That led to the development of many PC-based media players starting with Winamp. That led to the beginnings of the handheld media players, which Apple has come to dominate. That domination would not have been possible had Apple omitted the ability to play MP3 tracks on the iPod. The problem with MP3s, of course, is that they cannot be copy protected by any DRM technology. Additionally, they are based on older compression formulas, which left the door open for other formats to try to establish themselves as standards in the public mind. Microsoft moved in and has made its WMA format one increasingly favored by file swappers. WMA files are smaller and sound better. Plus, every Windows PC comes with Windows Media Player. The challenge now is for the music industry to try to establish a standard this late in the game. For years, the labels, at great peril, ignored the Internet and digital media. The industry's first move was to treat the music technology revolution as a threat and spends millions in legal fees trying to close down the P2P networks. At first successful with that strategy when Napster was shut down, the labels were slow to implement online music services. The first few label-owned services were highly restrictive and consequently highly unsuccessful. Kazaa rose out of Napster's ashes and has proven difficult to close up. Two major P2P outfits, StreamCast and Grokster, escaped, at least temporarily, the labels' legal net. The labels have now been forced to pursue what was once considered the unacceptable legal strategy of suing individuals. Apple's iTunes sprang from the chaos of the labels' attempts at running their own online music services and breathed life into the market. Lots of other companies have jumped into the online music business, a few even before Apple, and there seems to be a new line of handheld music players launched every week. Out of the multiplicity of services and players, the record industry now wants to establish a standard to remove confusion from the marketplace. There appear to be three possible standards: 1. Use Apple's format and DRM. After all, it is the overwhelming market leader in both online sales and music players. Fighting the leader won't be easy because there are so many complications to establishing a standard once an industry is up and going. 2. Use Microsoft's WMA format and DRM. Microsoft already has lots of allies, both online music services and makers of digital media players. It also has the deep pockets to continue developing the technology and persuading consumers. Using Microsoft has two obstacles, however. One is that the early practitioners of online music by-and-large don't trust Microsoft. The second is that the labels themselves are fearful that Microsoft will try to collect the onerous license fees and extract the kinds of draconian terms that it imposed on PC makers. 3. Try to work with an existing industry group to develop their own standard much as the movie industry did with DVDs that have become big money makers. It's a bit late, but perhaps not too much to develop a new standard or enhance an existing one. Complications abound. Millions of music fans have already started their music libraries with existing formats. Gear makers need more than a year to begin implementing a new standard in their gizmos. It does become more evident
that a single standard is needed. Recent research shows that
online music sales may be leveling off at the same time that
P2P file swapping is increasing. Legit online downloads are
much too early in their projected growth curve to be
flattening. It's unclear at this point whether format
confusion and DRM incompatibility are the primary reasons for
the problem. The labels cannot afford to wait very long to
find out and fix the problem. Back
to Headlines
Access Home Content from Cell Phones France Telecom and Nokia are
working to bring more digital media content to mobile phones
according to DMeurope. They intend to use digital media
hardware, services, applications and content to allow mobile
phone users to access images, photos, videos and documents
stored on their home computers. The two want to use
non-proprietary end-to-end access enablers, Nokia's terminal
software platforms and the Symbian operating system. Sounds
like a cell phone version of what Orb Networks announced for
PCs. (See TOR issue 416.) Back
to Headlines
Samsung Unveils 5-Megapixel Camera Phone Samsung is upping the stakes in the camera phone market with a new mobile handset that promises to take pictures that match the quality of high-end digital cameras. The SCH-S250 phone boasts a five-megapixel camera, the first on the market, with a high-sensitivity flash. As with the company's other camera phones, the S250 can also act as a digital camcorder and has enough on-board memory - 92MB - to store up to 100 minutes of video. The phone comes standard with a 32MB auxiliary memory card as well. Rather than forcing friends and family to gather around the camera phone to view the video, the device can be connected to a TV to display video during shooting or view previously recorded footage. The phone has a "stretch" design so the lens and LCD are covered when the phone is closed. Slide the cover open to "stretch" the phone and give it the feel of a regular digital camera. The LCD is another first in a camera phone, Samsung claims. Rather than a typical display with 262,000-color resolution, the S250 has a QVGA TFD-LCD (thin film diode-liquid crystal display) that can reproduce 16 million colors - all the colors found in nature. Until now this type of display has only been used for upper-end TV sets and desktop monitors. Additional features include text-to-speech conversion so the user can listen to incoming text messages or to-do lists rather than having to read them, high image-quality games, 3D sound effects, an MP3 player, mobile banking capabilities and 64-polyphonic sound. If a call comes in while the user is playing a game, he can restore the game and resume play once the call is finished. The SCH-S250 will be available
in Korea this month. There's been no word on pricing or if the
phone will be offered in other regions. Back
to Headlines
The Orchard Grows with 11 Labels Digital music distributor The Orchard is adding content from 11 diverse record labels to its growing catalog of independent music. Through new distribution and marketing deals, the 11 additional labels will benefit from getting their catalogs out to the Orchard's extensive partner network. The Orchard provides music to most of the leading digital music services around the world including its sister company eMusic, iTunes, MSN, Musicmatch, RealNetworks and 70+ others. Its distribution partners also include real music ringtone providers. The newly signed labels include
punk label Amphetamine Reptile, comedy label Laugh,
underground heavy metal specialist Crash Music, industrial
music label Invisible, blues house Tomato Records,
dub/electronic outfit Universal Egg, Pirate Entertainment,
which distributes legal live show recordings, jazz fusion
label Amulet Records, Diesel Only (alternative country),
Napalm Records (metal) and Document Records, which puts out
blues, country, jazz and gospel recordings. Back
to Headlines
Ninemsn Updates Music Download Service for WMP 10, XP Media Center Edition 2005 Australian Web portal extraordinaire ninemsn is upgrading its music download service to take advantage of the newly launched Windows Media Player10, XP Media Center Edition 2005 and MSN Music. Microsoft formed ninemsn as a joint venture with Australia media giant Publishing and Broadcasting Limited (PBL), which brings TV content from Nine Network and magazine content from Australian Consolidated Press. Ninemsn is now included as the default music download service for Windows Media Player 10 in Australia. Users will be able to access the ninemsn music download service and buy, stream, store and listen to their music all within the player interface. Some four million Australians access the Windows Media Player 10 each month. The upgraded music service also has a couple of plug-ins for added features. With the recommendation service plug-in, whenever a user checks out a song or artist, additional similar tracks and artists are automatically recommended. An interactive playlist plug-in generates random auto playlists, genre playlists and artist playlists. It puts the user in control, letting him adjust the playlists by skipping tracks, pausing, repeating, re-ordering, shuffling, deleting and adding tracks and more. The music download service also has a new look and feel to bring it in line with the new MSN Music. It has also been tweaked to make it easier to integrate with MSN Search and MSN Messenger as well as future Microsoft products. The portal will also be
providing music, game, sports and news content from Channel
Nine and ACP as part of the new "Online Spotlight"
services in Windows XP Media Center Edition 2005. Ninemsn
content for Media Center Edition will be introduced over the
next year, starting with the music download service, which
will let consumers buy and listen to music on their PCs while
sitting on the sofa. Back
to Headlines
EMI Delivers Complete Album on Memory Card Recorded music has made the long trek from wax and vinyl records to eight-tracks to cassette tapes to CD and digital downloads. Now, EMI Music UK is releasing an album on a memory card that slips into a mobile phone to make music truly portable. In partnership with the Carphone Warehouse, the UK's largest independent mobile communications retailer, EMI is putting out the new greatest hits album from British pop star Robbie Williams on a tiny, stamp-sized memory card gizmo. Despite the small size, the card will include all the same music, text and cover art as the physical CD release. It's also supposed to deliver the music with CD quality, but one has to wonder just how good it will sound coming out of a cell phone speaker. Carphone Warehouse is the exclusive retailer of the album-on-memory card and will start selling the thing in its 600 UK stores in November. The companies believe that the new format "marks the start of another era in digital music - one that will make it more tangible and accessible, especially to folks without Internet access." "The UK is in love with the mobile and it's the one device that we know our artists' fans have with them at all times - so the memory card is simply the next logical chapter in the affair," said EMI digital media director Danny Van Emden. "The format looks and sounds great and offers the same visuals as the physical CD, but in a completely new, neat pocket-sized package." The Robbie Williams album on a
memory card is the first product in Carphone Warehouse's new
line of playmobile mobile entertainment products, which is
also launching next month. The playmobile brand is to focus on
"real brands, real artists and real music" and will
encompass ringtones, games, wallpaper, video clips and more
pre-loaded memory cards. The retailer is currently in
discussions with EMI to deliver additional pre-loaded memory
cards in time for the holiday season. Back
to Headlines
Singles Sales Continue To Decline in UK Sales of CD singles continued
to decline in the UK as the song "Call on Me" took
the number one position with sales of only 23,000 copies, the
lowest ever for the top hit. The Official UK Charts Company,
which compiles the top tunes list, says it's considering
combining download and singles sales to compute the rankings.
In prior years, it took sales of hundreds of thousands, even a
million to become number one. The all-time record was the
three million that Elton John's Princess Diana tribute
"Candle in the Wind" sold. By comparison, download
sales are running over 150,000 a week in the UK. A separate
download top tunes list has been published since September,
shortly after Apple and Napster entered the market.
Accelerating download sales is the spate of lawsuits the
labels have started in the UK against alleged copyright
infringers. As in the US the British courts have ruled that
ISPs must turn over the identity of its subscribers that the
labels think are illegally sharing tracks. Back
to Headlines
Most Downloaders Choose iTunes over other Services Despite the influx of digital music download stores over the past year, Apple's iTunes is still the dominant force, accounting for nearly 70% of the downloads from December-July, according to a recent study by NPD Group. Napster wrangled an 11% share while Musicmatch, RealNetworks and Wal-Mart each garnered 6% of the market. But market share isn't necessarily the most important consideration for the nascent download services. "Our research suggests that at this stage of the business, it's not so much about building share as it is about creating demand for paid downloads universally," NPD VP Russ Crupnick said. "The overriding challenge for paid music download services is to first make the concept enticing to a wider audience and then to build loyalties to a specific service." Getting a wider audience seems to be somewhat difficult. The number of folks downloading from the legit services peaked at 1.3 million in April and has since declined to about a million users a month, said Crupnick. According to the research firm, the statistical downturn coincides with the end of the promotional periods several of the services offered to attract new users. Crupnick advises that the download sites spread out their promotions "so that there is a cumulative positive effect on the target market." As consumers have grown more
comfortable with the new breed of download services, they've
also been spending more time involved in other digital
music-related activities. The number of consumers likely to
rip music from CDs to their computers increased to 9% in July,
up from 7% last December. The number of folks likely to burn
music to CDs was up as well - 14% in July vs 10% in December.
"Consumers who have used paid music services tell NPD
that they appreciate the ability to conveniently purchase
individual songs," Crupnick said. "They also see
benefits in quality and security compared to free peer-to-peer
alternatives." Back
to Headlines
Jobs: 'We Had A Chance to Reinvent the Music Business, and We Did' Apple's success with iPod and the iTunes Music Store has led to speculation that its future may lie with digital entertainment gear rather than with PCs where its track record has been spotty, especially when it comes to dominating a market. Business Week asked Apple chief
Steve Jobs if his company intended to expand its CE business.
He responded, "I've always wanted to own and control the
primary technology in everything we do. Take audio. For years,
the primary technology was the marking mechanism inside a CD
or a DVD player. But we became convinced that software was
going to be the primary technology, and we're a pretty good
software company. So we developed iTunes. We're a good
hardware company, too, but we're really good at software. So
that led us to believe that we had a chance to reinvent the
music business, and we did." Back
to Headlines
Turning Jukeboxes into Wi-Fi Hotspots Ecast and Pronto Networks are partnering to turn jukeboxes into Wi-Fi hotspots. Ecast is a broadband network operator that provides a digital media software platform for pay-per-use jukeboxes and other digital media vending devices. It will begin offering Wi-Fi Internet access through its national network of digital-downloading jukebox locations with the help of Pronto Networks, a leading provider of carrier-class operations support systems software for managing large scale Wi-Fi networks. Through the new "Ecast Unplugged" service, which gives jukebox operators the ability to add Wi-Fi to any broadband-enabled Ecast location, patrons will be able to surf the Net, access e-mail and send instant messages from thousands of restaurants and taverns throughout the US. Robbie Vann-Adibé, Ecast's chief executive, said that tests in 10 locations showed that customers stay longer and spend more money at venues where they can log on. Security features of Pronto's
Wi-Fi solution also let venues connect additional
broadband-enabled devices, like ATMs, credit card
authorization machines, business computers and coin-operated
devices, to a second wired Ethernet port, subjugating wired
traffic to an isolated, secure LAN subnet. As a result, Wi-Fi
users are prevented from spreading a potential computer virus
or from hacking into devices on the local area
network. Back
to Headlines
Most-Played CDs on the Internet For the Week Ending October 17 This
Last 1
1
Green Day/American Idiot
(Reprise) Meedio Offers Cheaper, Customizable Alternative To Windows XP Media Centers Most folks out there who want to access their music, digital photos and downloaded movies on their TV have to go out and buy some software, hardware or both that would let them do just that. If they couldn't find exactly what they need, they'd buy the closest thing and, if they're technically oriented or have techie friends, find a way to get everything connected. Not Pablo Pissanetzky. He wasn't satisfied with what was out there, so he developed his own digital media center software and put it out on the Web as freeware. As more and more people started downloading the free application, Pissanetzky realized that the software could be turned into a commercial product. Meedio Essentials Weather Service The result is Meedio LLC, a Houston-based outfit he co-founded with CEO Victor Koosh in September 2003. Pissanetsky serves as CTO. The first product, Meedio Essentials, came out in July. An alternative to Microsoft's Windows XP Media Center Edition PCs, which can run upwards of $2,500, Meedio Essentials lets users organize, manage and access their digital photos, music and movies on a TV using a remote control, touchscreen or PDA for $60. With the software, consumers can import, organize, browse, search and play media files from any hard drive on their home network. They can also browse, open, copy, paste and delete files and folders from any hard drive and launch games and other applications. One of the more interesting features of Meedio Essentials is how it can be customized for different users. It has customizable multi-level, password-protected menus so Dad's view brings up different applications, music and movie files than Junior's. The software makes it easy for a parent to filter what the kids can access by putting only approved content in the kids' menus and password-protecting the parents' menu views. Pissanetzky's own Meedio Essentials system is set up so his young daughter can click the remote, find the menu option with her picture next to it and choose from among a small selection of music and movie titles also represented with pictures so she'll know which to pick. Meedio TV Recording Service Another reason folks might find Meedio Essentials appealing is that it runs on lower-end PCs than the pricey Windows Media Center machines. So now, instead of tossing out the old PC or putting it in a closet when you get a new one, install the Meedio software, hide the device behind the TV and you have a digital media center without having to go out and buy a whole new system. For fans of the neater living room, the software can also run on one of those new network-attached storage devices that can sit on top of the TV set or fit on a shelf in an entertainment center. The Windows-based software is built on an open platform, and Meedio invites third-party developers to create plug-ins to make the software even more functional. According to Pissanetzky, some 400 developers have expressed interest and there are now more than 100 plug-ins available for download, many of them for free. These add-ins include one that provides movie show times and previews, one for downloading movie descriptions, an Internet browser, graphs that show free disk space, a POP e-mail client, a motherboard monitor, a "Name That Tune" game, news feeds, a text-to-speech converter, webcam software and a video-to-DVD burner. Meedio provides free local weather information that's updated frequently in the background. There's also a link to view comic strips on the Internet and a "food & drink" app that lets users import recipes and view them on screen or, with a plug-in, print them out. Meedio TV, a second application that integrates tightly with Meedio Essentials will be out before the end of the year. Meedio TV lets users watch, pause, schedule, record and time-shift TV programs using a standard PC. The company claims it's "the most customizable DVR on the market." Meedio Housebot The initial release of Meedio TV will support analog TV tuner cards, DVB-C, DVB-S and DVB-T capture cards, videotext and time shifting. It includes an integrated 14-day electronic program guide and a TV scheduler. Users can search for TV shows by various methods - actor, show name, keyword and more. Pissanetzky describes it as "kind of like a Google search on a program guide." Meedio TV also supports automatic recording by keyword; repeating scheduled recordings; auto wake-up to record; manual recordings and external TV tuners. It has an integrated media module where users can browse, categorize and search for programs they've recorded. Future releases of the TV product will add support for HDTV tuners, local and remote multi-tuners with streaming support, a Web interface for viewing the EPG and recording schedule. It will also support Web streaming of video content, real-time or scheduled re-encoding and automatic commercial detection. Meedio also offers a home automation server dubbed Meedio HouseBot that controls lights, appliances, A/V equipment and other home electronics. It lets users create custom graphical "software remotes" that can be used to control all the connected devices from a PC, touchscreen or handheld device. The company is currently working to integrate HouseBot with the two digital media products. Meedio Essentials and Meedio TV
each sell for $59.95. A bundle of the two products will be
available for $99.95. Meedio HouseBot is
$99.95. Back
to Headlines
Ama Brings PMP with 6.5-inch Screen to US Folks in the US who are thinking about getting one of those portable digital media players will soon have another option, one that's been available to consumers in Asia, Australia and Europe since June. Ama Technologies will be selling and marketing a branded version of the DVX-POD 7010 from Taiwanese CE manufacturer MobiNote starting in November. The DVX-POD is a portable media player (PMP) with a 6.5-inch screen and 720x480 resolution, which Ama claims is the highest resolution currently available in a portable video player. According to Ama CEO Morgan Tam, his company "aims to bring mobile devices that allow users to enhance personal experiences, embrace freedom, and expand possibilities." With the DVX-POD, users can watch and record movies, TV shows and home videos; listen to music; view photos and images and transfer data from a computer. The 20GB hard drive is large enough to store 30 movies, 5,000 songs or 20,000 photos. The batteries last for four hours of video play or 12 hours of audio listening. The player connects directly to a TV for recording and downloading content. It has a one-click scroll wheel for easy navigation. Ama offers free software upgrades and says its player has a simpler interface and better format compatibility than the other PMPs out there. Ama will start selling the DVX-POD
7010 from its Web site (www.amatechnologies.com) next month
for $599. Additional retail channels will be added in the
future. Back
to Headlines
SoniqCast Debuts Aireo 2 Wireless MP3 Player SoniqCast has launched the next generation of its Aireo Wi-Fi-enabled MP3 player. The new Aireo 2 is smaller, lighter (by half an ounce) and has a much larger capacity - more than 10 times as much - than the original Aireo. The 6.3-ounce, 20GB hard drive Aireo 2 provides wireless access to music as well as other audio content, such as downloadable newspapers, magazines, talk radio and audiobooks from Audible.com. Unlike other MP3 players, the Aireo doesn't need to be connected to a PC to download content, it just needs to be in a Wi-Fi hotspot or anywhere else with a wireless Internet connection. It can even automatically update or refresh content or be configured to download the morning's audio newspaper at a specific time each day, so it's ready when you are. The new player also has a built-in FM transmitter so it can play through a car's stereo, an FM stereo receiver and recorder, a rechargeable lithium-ion battery, dual headphone jacks for two listeners and support for MP3, WMA and WAV music files. Although SoniqCast does sell
its own version of the Aireo 2, it is also in discussions with
OEMs to deliver branded models. Back
to Headlines
Digital Mind Delivers 100GB MP3 Player Digital Mind Corporation has released the first 100GB portable music player. The new addition to its DMC Xclef 500 family of music players eclipses even the 80GB model the company unveiled earlier this year. The 100GB Xclef 500, which supports MP3, WMA, Ogg Vorbis, WAV and ASF music files, can hold up to 25,000 songs. "Its massive 100GB hard drive makes it the 'King Kong' of portable music products," Digital Mind president and CEO Jim Collier crowed. The player also boasts 20+ hours of battery life, direct MP3 encoding, voice recording, FM radio and FM recording and support for both PCs and Macs. The DMC Xclef 500 100GB player
is $449. For folks who don't require quite as much storage,
the 80GB model is $349, the 60GB is $299 and the 40GB is
$249. Back
to Headlines
Need Music? Listen To Your Watch Technotunes Inc, the New York-based high-tech fashion watch designer, come started selling its line of MP3 watches. In addition to the typical inner workings of a watch, the fashionable timepieces also have 256MB of flash memory and a built-in rechargeable battery that provides nine hours of playback per charge. The MP3 player battery is separate from the watch battery, so playing music won't affect how well the thing keeps time. The watch has a modified USB port that doubles as an earphone jack. It comes with an adapter that supports most standard noise-canceling headphones. The music player, which plays both MP3 and WMA files, can accept downloads from Macs and Windows PCs. It can act as a portable hard drive, storing non-music files such as documents, spreadsheets and presentations. For folks who are rough on watches, all the Technotunes MP3 models are water resistant to 30 meters (99 feet). Available in a variety of
colors and styles, the analog (dial) watches retail for $199.
The digital models are slightly more
expensive. Back
to Headlines
Apple is expected to announce a
U2 version of an iPod on October 26. The iPod will come
preloaded with the Irish rock band's next album "How to
Dismantle an Atomic Bomb," due November 23 from
Interscope Records. "No comment" was heard from
either Interscope, a Universal Music Group division, or Apple.
Apple uses a U2 single called "Vertigo" in one of
its current iPod TV commercials. iTunes subscribers might also
get exclusive access to content such as music videos
associated with the making of the album. Back
to Headlines
Online Retail Holiday Sales To Surge 20% Forrester Research says that
online retail sales during the holiday season - from the
American Thanksgiving to Christmas - will increase by 20% over
2003 to $13.2 billion. Online retail sales from 2002 to 2003
increased 31%. That should help the online music services that
no doubt will be pushing gift cards as a holiday shopping
solution. The online movie services could, of course, do the
same, but giving someone the gift of watching a movie isn't
quite the same as giving them a DVD. In any event, movie DVD
sales ought to hit an all-time high because the studios have
learned how to mine the gold in their libraries. Back
to Headlines
'Attract, Cultivate, Retain Talented People' "There is a misconception
that the number one job of a CEO is to make capital allocation
decisions. I think that's the second most important thing for
a CEO. The most important thing a CEO can do is to attract,
cultivate and retain talented people. That's the ultimate
competitive advantage in any business." - Alex
Yemenidjian, MGM chairman and CEO on CNBC's "Closing
Bell." Yemenidjian is very meticulous, even going so far
as to design his own shirts and their
collars. Back
to Headlines
Courtroom Connect is selling
video access to the Disney-Ovitz trial that started this week
over the Net. It's 10 bucks a day for individuals and $600 a
week for businesses. The morning session will be available
about an hour after the parties break for lunch and the
afternoon session will be available about an hour and a half
after the day's proceedings end (approximately 1pm EST and 6pm
EST each day). This will include the primary camera angle. The
user can pause, rewind and fast-forward the stream. Consumers
will have access to the trial for the entire day, but will not
be able to access the previous day's recordings. Back
to Headlines
Wi-Fi Becoming Like Public Restrooms "I don't know about you,
but I've been conditioned to expect free wireless access in
the hotels I stay in (or at the very least broadband access
via wired Ethernet). Those hotels with free Wi-Fi are ruining
the economics of Wi-Fi for everybody else. When I walk into a
United Airlines Red Carpet Club, a haven that I think is worth
the annual fee, I'm almost offended that they have the nerve
to dun me (via T-Mobile) for Wi-Fi access. Obviously, it's not
that I don't find Wi-Fi valuable; quite the contrary. But
Wi-Fi is becoming an amenity, like plumbing. More and more, it
is seen as silly to pay for it." - Columnist Rafe
Needleman in AlwaysOn Back
to Headlines
Yahoo Completes Musicmatch Buy Yahoo has completed its $160
million acquisition of Musicmatch, formally marking its
entrance into the music download space. Yahoo already offers
streaming Internet radio and music videos through its
LaunchCast unit. Musicmatch brings the Musicmatch Jukebox
music management software, the online Musicmatch Radio
network, the Musicmatch Music Store à la carte download
service and the new Musicmatch On Demand streaming
subscription service. Its catalog, which includes music from
all the major labels and plenty of independents, offers some
700,000 tracks. Back
to Headlines
When asked on CNBC's "Kudlow
and Cramer" about the possibility that the FCC might
regulate the satellite radio industry because it's becoming
too strong of a competitor to traditional over-the-air radio,
FCC chairman Michael Powell replied, "I hope not. This is
competition in the American capitalist system. If somebody's
got a better mousetrap, they can bring it to the market. They
can raise the money, bid for their spectrum at auction and
then go after the old-line radio industry that has made
contributions to America but has not faced this kind of
intensified competition. I think it can only be good. We
should have the courage of our convictions to bring new
technologies to market, let entrepreneurs take a shot and if
they become the dominant source for consumers, all the
better." Back
to Headlines
iPod sales have continued to
dominate the digital music player market. More than two
million were sold in the September quarter despite lots of
competitors, most recently new units from Virgin and Archos.
There has also been speculation that Apple would introduce
other iPod variants such as one with a display and a model
that used flash memory despite the fact that CEO Steve Jobs
has said that they don't have enough capacity. In any event,
Apple has proven masterful at its continuing iPod marketing.
Charlie Wolf, an analyst at Needham & Co said, "The
iPod has become a cult. It's a phenomenon." NPD Group
said Apple had a 61% share of the US market digital-music
players in August. Back
to Headlines
The UK Football League and
wireless broadband provider The Cloud are teaming up to offer
fans the ability to browse the Net on laptop PCs while
attending games. The project will take three years to
complete. It will start by making wireless access available to
the media and team employees and will ultimately be available
in stadium bars, conference rooms and hotels. Back
to Headlines
Clothes, Money, Car and an iPod After clothes, money and a car, the thing US teenagers want most is an iPod, according to a Piper Jaffray survey of 600 high school students. An iPod would probably rank pretty high on most music-loving adults' wish list too.
Back
to Headlines
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