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Where's
the Beef? Not in Residential Phones, That's For Sure The major US telcos - Verizon, SBC, BellSouth and Qwest - seem to repeatedly underestimate the cable TV companies. The cablecos have major content partnerships, increase their broadband speeds and find other ways to ensnare customers, while the so-called Baby Bells seem to think that lowering their DSL prices and announcing some far-off fiber optic scheme is enough to compete in the broadband market. Louisiana local phone company Eatel is busy installing fiber optic cable to every home it passes and planning to launch a TV service as well. Essentially, this tiny telco is doing is what the major telcos need to do in order to successfully compete with cable - sharpen their shovels and start digging trenches. It is surprising that the telcos are investing billions of dollars to buy up other phone companies. What they should do, perhaps jointly, is buy one of the satellite TV services ,in order to gain access to TV programming, and TiVo, in order to get some market-leading DVR technology. The satellite TV services have managed to do in the subscription TV market what the phone companies have not managed in the broadband world - take market share away from the cable TV companies. The Baby Bells don't need more phone business - they need access to content (entertainment and information) to deliver over their networks and they need the most advanced set-top box with built-in DVRfunctions. That's where the future is. The most likely acquisition candidate would seem to be EchoStar with its Dish Network. However, Rupert Murdoch, whose News Corp controls EchoStar rival DirecTV with 34% ownership, has always been willing to do joint deals to help him achieve a competitive advantage. There is no certain future for the telcos in making mere marketing/money collection deals with the satellite TV services as each has done. The satellite TV services clearly intend to offer broadband too. DirecTV is putting up enough satellites to become a force in broadband. The fact that it recently hired a high-level broadband VP is a strong signal of its intent. The residential landline phone business is dying. Consumers will no longer pay big bucks just to pick up the phone and make a call from point A to point B. The future, as the cable TV companies discovered some time ago, is in broadband access and delivering entertainment to the home. I, as many others have done, recently cancelled my home phone service - I'm rarely there and even then it's better to call me on my cell. At the same time, my DirecTV bill runs over $100 a month. Compare the two: Zero for phone service but over $1,200 a year for entertainment and another $500 or so a year for Internet access. Where's the beef? There's certainly none left in residential phone service. PS: While they're in the acquisition mode, one or several of the telcos ought to buy TiVo and thus obtain state-of-the art DVR technology. The integrated DVR/set-top box with dual tuners that TiVo developed for DirecTV several years ago still beats anything the cable TV companies have come up with. There are unconfirmed reports that TiVo is about to land a major deal with Comcast - it had the deal in hand some time ago, according to the New York Times but TiVo founder and then-CEO Mike Ramsay, who recently resigned his position, turned it down because, reportedly, he didn't want to spend engineering time doing a Comcast box. Once TiVo gets the Comcast deal, if it does, it's going to be politically difficult for the phone companies to acquire it. Entertainment/information
delivery networks and DVRs - that's where the beef will be.
Back
to Headlines BT Putting Artificial Caps on Broadband Downlods Faster broadband - up to 8 Mbps - coupled with limits on download volumes will be coming soon from BT, according to various reports. BT and consequently its broadband resellers will reportedly change from billing subscribers based on their access speed to billing them based on how much they download. BT seems to anticipate increasing amounts of video downloads and is licking its chops. The telco recently set-up its own BT online video download service called BT Entertainment. DSL access speeds are governed by, among other things, the distance to the user from the phone company's nearest central office. One complication to the idea of changing by download volume is the differing access speeds each subscriber will have based on how far they are from the nearest central office. Users near a central office will get higher speeds at the same price than more distant users pay for slower speeds. In April, BT will begin testing an upgraded ADSL network with speeds from 2 Mbps to 8 Mbps. Some of the company's ISP resellers such as PlusNet expect the higher speeds to be widely available this summer, according to CNET. PlusNet this week said that starting in April its broadband customers will be able to get speeds of up to 8 Mbps "where available." "Speed will no longer be a factor in how people buy broadband," PlusNet marketing director Marco Potesta said, echoing what BT execs have recently been saying. PlusNet, like BT, has until now priced its broadband based on the access speed, ranging from £22 ($42) a month for 512 Kbps to £40 ($76) a month for 2 Mbps. Beginning April, 22 pounds will buy 30 gigabytes of peak-time download data per month plus another 230 GBs during off-peak hours. Users can pay more, of course, to get more download volume. Another scheme is to pay £15 ($28) a month plus an additional £1.50 ($2.84) for each gigabyte of download. No point in making the choices simple, is there? All this is also complicated by the fact that BT still doesn't know where it can deliver 8 Mbps. One certain result is that two people paying the same, based on their download volumes, will be getting substantially different access speeds. According to Dave Burstein of the DSL Prime newsletter, "The news from BT, of a cap that limits Internet video to less than 50 minutes, is distressing. The BT broadband team are among the world's most knowledgeable Internet executives; they know bandwidth is now cheap enough that the cap is unjustified. There's no good reason for a BT's move other than to make life harder for video competing with the service they are going to offer later this year or early 2006. They previously hoped to block outside video by limiting speeds to 512 Kbps, a third the typical US rate and a tenth what most of Paris can get. But Bulldog and others started grabbing share with higher speeds." Burstein touches on what seems certain to become a major controversy in the broadband industry - the attempt by the broadband services to control the content that is distributed over their infrastructure. Perhaps the broadband services are even thinking about extracting a "tax" on content providers for the use of their broadband network. Burstein says that in order to make the issue clear to consumers, the caps on download volumes should be measured in terms of video time, not gigabytes. Standard definition video such as Movielink pre-encoded video downloads requires between 1.3 Mbps and 2.1 Mbps using state-of-the-art MPEG-4 or Microsoft's WMA 10 encoding. Coincidentally, that is the same as SBC's data rate for Lightspeed. Converting from megabits per second to minutes of video, 1.3 Mbps is 4.68 gigabits per hour, or 0.585 gigabytes per hour (plus overhead). The higher speed of 2.1 megabits is 7.56 gigabits, or just under one gigabyte per hour. That means 25 hours per month of video at the lower speed; 15 hours per month of video at SBC's higher speed. Burstein contends that BT knows that there is no cost justification for the 15 gig cap they've imposed on their BT Retail customers because the effective cost of bandwidth to an operation like BT is now about 25 cents a gig and dropping rapidly. The lower costs of bandwidth means the video Internet is finally ready to explode. "Customers hate bandwidth caps," Burstein says, "so they disappear where competition is strong." BT gets away with it because it has a monopoly in much of Britain. It's cable competitors also limit bandwidth severely despite the criticism they receive. He says that BT "couldn't get away with the caps if someone like Free.fr was a player in the UK market. "BT's proposed new pricing structure is carefully crafted to keep competitors out," Burstein said. "BT has fiber in place to essentially every exchange and sufficient volume to be profitable in the vast majority, which means they have low marginal costs throughout the system. So the recent price cut, for larger exchanges only, is clearly an attempt to dissuade any new entrant such as Cable and Wireless' Bulldog or NTL from putting in facilities. There's a minimum cost for each exchange they have to meet, requiring a certain volume of customers, so all new carriers begin in the larger territories." UK citizens' best hope is more
competition. Perhaps the electric utilities can get their act
together with Powerline technology. Perhaps the satellite TV
services will see the broadband opportunity. Lastly, perhaps
the kinks in WiMAX technology get worked out and someone other
than BT will build a national wireless broadband network.
Back
to Headlines "Sony will buy Apple" - That one keeps popping up. What Sony needs is a Steve Jobs or his equivalent to drag the company into the digital media era, something that current Sony president Kunitake Ando has been unable to do. It's 2005 and Sony still does not have a successful entry in any of the digital media product categories - portable media player, DVR, media server, home networking, online music service or entertainment PC. "Apple will buy TiVo" - A new rumor, possibly started by those who paid $8 a share or more for TiVo stock that hovers in the $4's. TiVo's problem is something that Apple could solve. It has become apparent that DVRs are going to be sold by the cable and satellite TV services, not by the retailers that TiVo was hoping for. Without a new deal with such as Comcast or a re-energized deal with DirecTV, TiVo simply won't have the necessary distribution channel regardless of how much technology it has. TiVo's dual-tuner DirecTV model is generally rated as the best integration of DVR and set-top box. No doubt Apple could have made the software smoother and more intuitive - but it's unlikely that Apple could add much assistance to landing a big deal with a cable company. After all, the cable companies already have two technology giants, Motorola and Scientific-Atlanta, willing to do their bidding. Then there's Paul Allen's Digeo with its DVR software that'll have an insider's advantage with most of the US cable companies. Who Should Buy TiVo - The companies that need TiVo or a TiVo equivalent product are the telcos - Verizon, SBC, BellSouth or Qwest - individually or in some joint effort. If they want to compete with the cable TV services in offering broadband delivered entertainment - DVRs that function as home media centers The cable TV services through their two set-top box suppliers, Motorola and Scientific-Atlanta, have already locked up the two best alternatives to TiVo's technology. Motorola recently acquired Ucentric for its DVR and home networking technology. The other significant DVR technology is Digeo, in which Paul Allen's Vulcan Ventures is the main investor. Allen also runs cable TV company Charter Communications. Digeo has licensed its technology to Scientific-Atlanta, which has sold about 70,000 Digeo-based boxes to Charter. That leaves the phone companies
with slim pickings unless they can get access to TiVo
technology. The best way to do that would be to buy the
company - and buy it before one of the cable TV companies such
as Time Warner Cable or Comcast. Back
to Headlines CEA, Retailers to Develop Training Programs The Consumer Electronics Association (CEA) and the North American Retail Dealers Association (NARDA) agreed to partner to "leverage the training and educational efforts of NARDA and CEA to provide the best tools to strengthen retail and service management skills," among other things. Goodness knows that the coming avalanche of digital media products will require well-trained sales, support and management people in the electronics retail stores. The two groups agreed to create programs and training to build the electronics industry. Training and educational programs will include such as NARDA's Institute of Retail and Service Center Management and CEA's CEknowhow.com. NARDA members operate some
3,000 stores and generate over $10 billion in sales. CEA has
almost 2,000 corporate members involved in the $113 billion
consumer technology industry. Back
to Headlines Nielsen Delays Measuring DVR Usage Nielsen, which measures TV and
Internet audiences, has postponed until 2006 a new service
that would measure DVR usage. It will earmark part of a
planned $2.5 million investment into the accuracy of its TV
ratings for additional development of the digital video
recorder measurement service. The DVR usage service will offer
same-day ratings. The two satellite TV services DirecTV and
EchoStar have been particularly aggressive in pushing DVRs,
and consequently the cable TV services have begun doing so
also. Back
to Headlines The digital media age is about the Internet delivering music, movies, games, other entertainment and information on-demand. Consumers will gain control over what they get, when they get it and where they get it. 1) Wireless networking. Entertainment will be the driving force for installing wireless networks in millions of homes particularly as network speeds increase to 100 Mbps, permitting movies, TV shows and home videos that are downloaded or stored on a PC to be played on TV sets in other rooms. 2) Built-in digital video recorder functions à la TiVo will be included in entertainment appliances such as TVs and set-top boxes. By connecting them to the home network, consumers will be able to access movies, TV shows and other TV-broadcasted content in any room at any time. 3) A digital media interconnection standard, probably a combination of Windows and UPnP, that will automatically synch up connected multi-vendor digital entertainment products and display a common user interface menu for operating any connected device - a standard that could lead to (gasp!) a universal remote control. 4) Handheld personal video players such as those from Archos and HandHeld Entertainment. Millions will use them to watch downloaded and pre-recorded video. 5) Digital Media-enabled cell phones that let you talk, play games, take pictures, personalize ringtones, surf the Web, listen to music, watch news and sports and preview movie trailers. 6) Streaming media for accessing Web-based radio, news and sports highlights, plus dedicated music genre channels. Streaming will one day deliver full-length movies, music videos, TV programs and information videos to millions of Internet-connected homes around the globe. 7) Smaller, less expensive
storage products with larger capacities such as DVDs, tiny
hard disks and memory products that will drive down costs and
increase both capacity and fidelity - in other words:
"More, better, cheaper."
Back
to Headlines Preview of Looming Battle Between Cable TV, Phone Companies A preview of the looming major battle between the phone and cable TV services is taking place in a small, sparsely populated parish in Louisiana. The preview promises to show what the phone companies and cable TV services are willing to do to protect their future - perhaps even their existence. Eatel (nee East Ascension Telephone), a tiny local phone service provider located in southeast Louisiana, will offer TV service to its phone service subscribers in Ascension parish by March 1. Eatel has been installing a fiber-optic network to deliver TV programs and broadband access in competition with major cableco Cox Cable. Eatel marketing manager Jason Domangue said the service will be available to about one-third of the homes in Eatel's territory when it goes live. OK, Cable TV! Match This Service
Monthly
Services Cox $131.95 unlimited phone, basic TV and 4 Mbps broadband Domangue says Eatel's fiber optic marketing will be based on value, not price. It will offer discounts for service bundles. Eatel says its high-speed Internet access will be twice the speed of Cox' and that it will offer more TV channels than Cox for the same price. Eatel's basic bundle phone service, 10 Mbps broadband and TV, will be $100 a month. Its digital TV service starts at $50 a month. For $90 a month, Eatel subscribers can get most channels including the premium ones such as HBO and Cinemax. Eatel's other competition for TV will be EchoStar and DirecTV, the two satellite services that have taken market share from the cable TV services. Eatel still considers Cox as its primary competitor, however. Cox Cable, which competes with
TV-challenged BellSouth in the adjacent East Baton Rouge
parish, charges $131.95 a month for unlimited phone use, a
basic package of TV channels and 4 Mbps Internet access.
Back
to Headlines Verizon Signs with TVN Entertainment Verizon has done a deal with digital content aggregator TVN Entertainment to provide video-on-demand (VoD) programming and services for Verizon's upcoming FiOS TV service. TVN will provide Verizon with VoD programming including new film releases, a library of previous releases, independent films, family and children's programming and a number of free on-demand networks. FiOS TV will also offer digital TV channels, high-definition programming and an electronic program guide (EPG) over Verizon's fiber-to-the-premises network. Verizon's fiber network in now under construction in parts of 12 states. Customers will be able to buy FiOS TV as a stand-alone service or packaged with voice and FiOS high-speed broadband - both of which are already available in some areas. Terry Denson, VP of marketing
and programming for Verizon FiOS TV, said that FiOS TV
customers would be delighted at how easy it will be to choose
from thousands of hours of VoD programming. Verizon will also
use other TVN services such as its TVNow rapid-turnaround
service that enables subscribers to order news and events,
such as the presidential inauguration, within hours of their
occurrence. Back
to Headlines Is 2005 the Year of Broadband over Power Lines? Few have taken seriously the possibility that the electric utility companies can develop satisfactory broadband technology that will run over the electrical grid and throughout the home, making every AC outlet a network connection and a gateway to the Internet. Even fewer think the conservatively run utility companies can find the initiative- the spunkiness- to take on the cable TV and phone companies in what is already a competitive market. The skeptics point to the difficulty the US phone companies had to getting focused on residential broadband, a lapse that let the cable TV companies gain, uniquely in the world, a big market share. Most doubters think the electric utility companies' management is even more "dinosauric." The possibility of broadband over powerline (BPL), as it's come to be called, keeps popping up. It may be "primed for real growth in 2005 and beyond" across the United States, according to a new white paper released Thursday by the New Millennium Research Council (NMRC). It says that trials and actual commercial deployments of BPL systems are on the rise, with over 20 projects in operation in 2004 and more expected to come online in 2005. By one estimate, roughly a quarter million homes in the United States already had the opportunity to choose BPL services in 2004. "Is 2005 the year of BPL?" is the question the report attempts to answer. Titled "Powering the Broadband Market in 2005 and Beyond," the NMRC white paper says there are a number of signs that suggest this could be the time the technology begins to emerge as a viable competitor in the broadband market. It posits that electric utilities across the country are currently deploying the necessary technology to provide broadband and other advanced communications services, such as voice-over-Internet Protocol (VoIP), via the power lines. If BPL becomes viable, it could dramatically change the landscape of the broadband market, offering competition to the phone and cable TV companies by delivering high-quality service to remote areas. The report says that BPL technology already is available in sections of New York City (Ambient) and, in the first citywide commercial BPL network in the US, in the suburban Washington, DC community of Manassas, Virginia (Communication Technologies, also known as COMTek). The report profiles both companies. COMTek president and CEO Joseph Fergus said, "The industry is finally moving beyond the theoretical stage to the real thing - actual commercial deployments of BPL that are being pioneered today by companies like COMTek. BPL isn't the answer for every community and, in some cases, the technology is likely to be blended with other broadband platforms in order to provide the widest possible coverage. But the bottom line is unmistakable - BPL is finally here in a real way that will touch the lives of millions of additional US consumers and businesses in 2005 and beyond." Robert Olsen, professor of electrical engineering at Washington State University, said it was possible to deploy BPL networks that offer connection speeds comparable to those of the phone companies' DSL or the cable TV systems. "It is doubtful, however, that data rates significantly higher than this will be possible without a very significant investment in 'conditioning' the power system," he said. "While numerical limits on electromagnetic emissions set by the FCC can be met, it will depend upon exactly how the FCC defines harmful interference." Barry Goodstadt, VP and senior consultant with market research firm Harris Interactive, said, in conjunction with the issuance of the report, that "There are challenges that remain for BPL, including mitigating interference and constructing viable business models to attract more customers and create more revenue. Experts feel that while the technology might be ready, electric utility companies and their partners still need to find ways to effectively compete in the broadband market. Regulators and policymakers are working to create clear rules for BPL and this could help utilities develop business plans that work." BPL's status and future still seem uncertain: -Speed - It can compete with the current phone and cable TV companies' technologies but probably not against the faster speed both are planning for the near future such as that offered by fiber optic wiring. -Interference - There are still some unresolved issues with the AC power interfering with the broadband data. -Range - If feasible, BPL could bring high-speed Internet access to many homes that the cable TV and the phone companies cannot reach. -Home Networking - With BPL, every home is networked with one or more network outlets already installed. -Cost - Prices seem comparable to existing DSL and cable TV technology. -Management Spunk - Executives at the electric utilities, by most any count, would rate third in "spunkiness" behind the cable TV and phone companies. Companies that come out of highly regulated, "un-competitive" industries generally don't fare well when they enter a market with entrenched competitors. How BPL Works By bundling radio-frequency (RF) energy on the same line with the electric current that is already being carried, data can be transmitted without the need for a separate line. Since the electric current, which is used to provide power to the end users, and RF energy signals carrying the data operate at different frequencies (with electric current traveling at lower frequencies and data at higher levels), the two don't interfere with each other. Technological advances in the
past several years have enabled electric companies to place
devices along existing wires and poles to provide broadband
services. Known as Access BPL, the systems require a
connection from the Internet backbone at a power substation,
repeaters (in some cases) and couplers along the medium
voltage power lines that transmit the data signals, and then a
final converter that transfers the signal from the medium
voltage to the low voltage lines that go into homes. Once
inside the home, the signal can be accessed at any electrical
outlet with a BPL modem. Back
to Headlines Telcos Competition Needs Strong to Move Forward "Jason Meyers of Telephony laments 'how the spate of mega-carrier mergers could threaten innovation and slow the adoption of new technologies: It appears to be happening already. As it prepares to merge with Sprint, Nextel reportedly is ending its trial of Flarion's Flash-OFDM broadband wireless technology. ... None of this can be good news for the acceptance and integration of new technologies-at least in the short-term.' "Everything I've learned
covering telecom suggests the best way to move the industry
forward is with strong competition, which means the mergers
that cut US wireless carriers from six to four should never
have been allowed, and the coming demise of AT&T and MCI,
both already half-dead, will compound the problem. Pip Coburn
of USB has a explanation of this the business schools will
soon glom on to, that mega-corporations only move forward when
they have enough pressure to overcome the 'total perceived
pain of adoption' of something new. Ideally, that pressure is
strong competition (possibly cable in the US; Free.fr in Paris
and Yahoo BB in Tokyo); when competition is weak, you need an
active government agent, currently out of style in the
west." - Dave Burstein in his DSL Prime newsletter
Back
to Headlines Hughes to Provide Direcway Broadband to Airplanes Hughes Network Systems has
signed up aviation services provider Row 44 to use its
Direcway satellite broadband service. Direcway will give Row
44 high-speed connectivity of up to 30 Mbps to the aircraft.
Row 44 will use it for in-flight entertainment, consumer
connections and flight deck data. Hughes has about 750,000
Direcway broadband users in 85 countries. It's available on
five continents. Back
to Headlines The Vision Thing: 'Worrying Not about Bandwidth But about Content by Year-end' The next 12 months will be the key, says Andrew Burke, CEO of BT Entertainment, a new broadband education and entertainment division that BT formed last year to develop, license and deliver content such as on-demand music, gaming, TV and movies, according to MediaGuardian.co.uk. "Broadband is getting bigger and bigger for us. As bandwidth increases, it becomes much more video-ready as a medium. The ability to deliver niche content to particular communities is becoming a reality," Burke is quoted as saying. MediaGuardian goes on to report that BT is testing MPEG-4 so it can deliver more content of higher quality. BT Entertainment recently bulked up its executive staff by adding the Dan Marks, president of Universal Studios Networks UK, to develop its video-on-demand over broadband strategy. People are after more than merely high-speed browsing and music downloads, according to Burke. "This year is about taking community, communications and entertainment and putting them together," he said. MediaGuardian points out as an example of Burke's vision a site that the Philharmonia orchestra recently launched. The Sound Exchange, at www.philharmonia.co.uk/thesoundexchange, is a free site that provides new ways of interacting with audiences. Funded by BT and five years in development, the Sound Exchange offers musical education in chat rooms and question-and-answer sessions with the musicians, plus video demonstrations by the orchestra. Users can submit their own compositions and choose from thousands of free music downloads. The site will also host live, interactive concert Webcasts, the first of which is scheduled for April 23. BT's Rich Media unit is the technical platform for Sound Exchange. BT and other broadband ISPs on both sides of the Atlantic and Pacific are counting on the ability to serve niche markets to help grow their business. The webzine quotes Burke as saying, audience is getting much more spread across all ages and demographics. It used to be young, Internet guys on their PCs, but it isn't now." "It's a vision
thing," Burke told the paper. "There is so much
going on in the content area not just by us but by everyone,
which is why by the end of this year we will be worrying not
about bandwidth but about content propositions."
Back
to Headlines The DSL Demonstration of the Year
Dave Burstein of DSL Prime says that the DSL demonstration of
the year will take place Tuesday morning March 8 at the Fast
Net Futures conference in San Jose. Metalink and Ikanos are
promising to show a DSL network with 100 Mbps - up and down -
using simple circuit boards, wire spools long enough for
almost any apartment building and a computer attached to show
the throughput. Last year, the two companies used similar gear
to show a throughput of 107 Mbps downstream, 30 Mbps upstream.
Reportedly there are customers waiting for the technology in
Seoul, Tokyo and Hong Kong. Burstein says that the 100 Mbps
symmetrical service is the natural choice for customers in
apartment buildings in California, London, Paris and his block
in Manhattan. He calls it "the choice for fiber to the
curb or basement." Back
to Headlines RIAA Pocketing an 'Easy $25,269,000' in US Suits The RIAA and the major record labels will pocket an "easy $25,269,000" if all 8,423 of the people they have threatened to sue settle for what the RIAA says is an average settlement of $3,000, according to the University of Texas newspaper The Daily Texan. The paper calculates the cost of legal filing fees at $200 per 50 filings because the RIAA was able to file multiple subpoenas before November. It reports that federal courts in Austin, unlike others, decided that the RIAA may not file blanket-style subpoenas but must file separate paperwork for each IP address. The way the deal works is that the RIAA files a subpoena against the ISP of an alleged copyright infringer to force the ISP to reveal the offender's identity and location. The RIAA can then file suit against the alleged infringer. However, before filing the suit, the RIAA must write the infringer and offer to settle. Assuming each person receives a letter that includes a phone number of a settlement center, each person decides to pay a little now instead of a lot later by settling and each person settles for the average $3,000, then for $200 the RIAA could make an easy $150,000. The Daily Texan, of course, omits the costs of legal fees - big ones, we'd bet - that the RIAA and the labels are forking over to their law firms. According to the paper, in the letter the RIAA sends to those whose identities it has obtained there's a phone number to a settlement center. The settlement center reportedly tells those who call how many files they were sharing. It says that if the caller had shared 500 or fewer tracks, then the RIAA may have overlooked them. The settlement company sends out a packet of settlement documents with the warning that the alleged infringer has 90 days to settle before a case against him, using his real identity, is filed in court. Andrew Tran, a reporter with the paper, called the settlement center pretending to be a distressed student. The following dialogue occurred, as reported in the paper: When Tran asked the man answering at the settlement center what the documents meant, the man said, "There has been a John Doe lawsuit filed against your IP address. The letter you have received from Time Warner is an indication to you that the law firm of Mitchell, Silberberg, and Knupp in Los Angeles, attorneys for the record company, is seeking the personal information associated with that IP address." When Tran asked for an explanation of what that means, he was told, "Time Warner will turn that info over to the law firm in a matter of days, and the letter is your opportunity to appear in court, if you wish to argue why or why not that information should be leaked. Nobody has won that argument, yet." Tran told the settlement center representative that he could not possibly be guilty and suggested that perhaps it was one of his roommates. The settlement rep said, "If this is a roommate situation, you are still the one singled out, because you are the account holder for the Internet connection. You are responsible for activity on that account." When Tran told him that it didn't seem very fair, the man replied, "You should settle with us and dispose of the situation, sir. If your roommates were the ones who actually did the downloading, and you never partook in downloading or listening to music or what not, you might be able to approach them and say, 'we have a problem, help me out here.' But at this point in time you will be the one who will remain on the subpoena." Tran says that the man did not tell him that it was a fact he could bring up in court, but rather tried to sell him on settling. The settlement rep also told Tran, "And the roommates. We don't have any information pertaining to them, and they will not be pursued at this time." Tran then asked him whether his credit would be affected, whether he would be reported to any credit agencies. The settlement guy replied, "Not at this time; you are a John Doe. If the situation moves forward where I am not able to negotiate a settlement with you, it will go into a named situation, where you will be named in a federal lawsuit." Tran said that he could feel his shoulders getting heavier and his heart beating even though he was only pretending to be sued. As to what would happen next, Tran was told, "You will be served with a complaint and a summons to appear in court, and by that time your name will be public knowledge to all those people interested in who's being sued by whom. It won't affect your credit at this point. But if you are named in a federal lawsuit, it could also affect your job opportunities, because on employment applications, many times they will ask, 'have you ever been party to a lawsuit?' And you would have to check 'yes' at that time, because that would be public knowledge." The man warned Tran that he
should settle after Tran thanked him for his time and said
goodbye. Back
to Headlines Copyright Enforcement Comes to Russia Russian authorities are reportedly investigating the Russian Web site Allofmymp3.com for selling downloadable digital copies of copyrighted music illegally. The site's principles are believed to be offering the music both in Russia and internationally without the authorization of the rights holders. The Computer Crimes unit of Moscow City Police, which was doing the investigation, turned the investigation's report over to Moscow's City Prosecutor's office on February 8. The International Federation of the Phonographic Industry (IFPI), on behalf of its members, also submitted a formal complaint to the prosecutor's office on the same day, urging prosecution. The prosecutor has 30 days from the date of receiving evidence to decide whether to proceed with a criminal prosecution. IFPI's complaint alleges that Allofmp3.com has not been licensed to distribute its members' repertoire in Russia or internationally. IFPI Moscow regional director Igor Pozhitkov said, "We have consistently said that Allofmp3.com is not licensed to distribute our members' repertoire in Russia or anywhere else. We are pleased that the police are bringing this important case to the attention of the prosecutor. We very much hope and expect that the prosecutor will proceed with this case, which involves the sale and digital distribution of copyrighted music without the consent or authorization of the rights holders." IFPI, headquartered in London,
has a regional office in Moscow plus others in Brussels, Hong
Kong and Miami. The Miami office covers Central and South
America. The organization has 1,450 members in 75 countries
and affiliated industry associations in 48 countries.
Back
to Headlines Professor: Take the Labels at Their Word University of Ottawa professor Michael Geist's latest column in the Toronto Star weighs in on the Canadian recording industry's rejection of alternative compensation systems because it prefers to rely on the free market. Geist points out, however, that "In fact, contrary to claims of faith in the free market, the music industry has been a leading proponent of government involvement, consistently seeking both financial support and legislative intervention from the federal government." He says that Canada "has never adopted an exclusively market-oriented approach to copyright and culture. As recently as last November,
the Canadian recording industry "urged the government to
expand its scope and funding of the Canada Music Fund, calling
for at least $35 million in annual support." He says that
the record companies, instead of focusing on new performers, a
better economy, reduced pricing and improved marketing,
continued to focus on government intervention As Canada heads
toward yet another round of copyright reform, he warns
policymakers and politicians to be mindful that they have
already used legislative intervention to establish many rights
and protections that have tilted the copyright balance heavily
toward creators at the expense of users. His conclusion is
that the "government ought to take the industry at its
word and stay on the sidelines." Geist is also Consulting Editor
to the Bureau of National Affairs and its BNA's Internet Law
News daily newsletter. Back
to Headlines LIES, DAMN LIES, AND STATISTICS Market research shop Verdict
reports that the Net was the fastest growing retail sector
last year, attracting one in four shoppers and attaining a
27.4% growth rate. Verdict said that the figures for buying
online are six times better than for the traditional retail
market over the last year. It also said that shopping via TV
channels such as QVC also grew by nearly 15% last year.
Back
to Headlines Video Ads Increasing Rapidly on the Net Online video advertising will surge over the next three years because consumers will seek more product information on the Net, according to Internet marketing company Viewpoint. The company cautioned that marketing execs have yet to master the new form of video commercials. "2004 was the year of people testing the water with Internet video ads," said Viewpoint CEO Jay Amato. "You will see more of this in 2005, and I think 2006 to 2007 will be a breakout time." Video ads usage increases as the number of broadband-connected households grows. Broadband-connected homes use the Net far more frequently to do product research - where, when, what and how to buy as well as doing product comparisons. Amato predicts that online advertising will begin cutting into the $60 billion spent on TV commercials. "People want to take TV experiences to the Web, but in a targeted way," he said. He says that Internet advertisers place ads within Internet videos that provide sought-after information, such as how-to demonstrations of cooking or home renovations, as well as news or entertainment. TiVo is experimenting with
downloaded videos that provide more details about products and
services than TV commercials do - and that can be targeted to
those who are interested in making a purchase.
Back
to Headlines European Landline Revenues To Drop $13b Research shop IDC says European
landline revenues will decline by $13 billion over the next
five years. Broadband and TV/video content are the only two
things that can fill the vacuum for the affected telcos.
Back
to Headlines Chinese Phone Companies Add 11.3m Broadband Customers China Netcom added 3.6 million subscribers in 2004, per Alastair Lynch of Merrill Lynch, and should do about the same in 2005. It reportedly charges about $10 a month for phone service. China Telecom, according to
Merrill Lynch, added 7.7 million customers, bringing its total
to 14.7 million, with a reported take of $11.50 per month per
user. Back
to Headlines Content Protection Revenues To Exceed $2b Digital Tech Consulting
forecasts that the global digital content protection market
will generate about $2 billion (€1.5 billion) by 2009, up
from an estimated $925 million (€701 million) in 2005, $460
million (€347 million) in 2003 and $600 million (€453
million) in 2004. The two fastest growing categories from 2003
to 2004 were digital pay TV and DVDs. Fast growing areas in
the future will be high-definition TV (HDTV), video-on-demand,
online music stores and smartphones.
Back
to Headlines Online Advertising Spend Tops $10b US online advertising grew to
about $10 billion in 2004 in compared with $7.3 billion in
2003, according to PricewaterhouseCoopers in a report
sponsored by the Interactive Advertising Bureau UK. It
estimates that online advertising increased by about 32% in
2004, six times faster than the overall US advertising market,
which increased only 5.6%.
Back
to Headlines Archos Selling 100GB Pocket Video Recorder/Player Archos is making it easier for consumers to take all their digital media content with them on a single device that weighs less than one of those 12-ounce bags of Starbucks coffee beans you can pick up at the grocery store - but costs nearly 10 times as much. The new Archos Pocket Video Recorder AV4100 is the first such portable media player/recorder to boast a 100GB hard drive. As with the other Archos PVRs, the AV4100 lets users record and play TV shows, music, movies, photos and data. The amount of content it can store, however, is in a realm of its own. Thanks to the 100GB hard drive on the AV4100, users of the 11.29-ounce (320 gram) device can: -Record up to 400 hours of TV
shows and other video content
The AV4100 100GB Pocket Video Recorder The AV4100 features advanced multimedia functions including recording and scheduling capabilities, full audio recording and playback, photo viewing and data storage. Users can transfer photos from a digital camera and data files from a PC or Macintosh with the included USB cable. The digital video recorder (DVR) functionality on the gadget lets users record TV programs and movies directly from a TV, VCR, cable set-top box or satellite receiver via the AV4100's TV Cradle. The unit boasts a 3.8-inch TFT LCD screen, an external speaker for listening to music and watching video without headphones and a built-in CompactFlash reader for transferring photos from digital cameras. The AV4100 measures 4.9"x3.1"x1" (125 mm x 78 mm x 26 mm). A single battery charge is good for up to 16 hours of music playback or four-and-a-half hours of video playback on the built-in LCD. Archos expects the AV4100 to
hit retail shelves and Web sites worldwide at the end of
February for roughly $800. Back
to Headlines Pace Micro Technology is making
Foxtel's cable TV-based DVB DVR. Foxtel is Australia's leading
subscription TV service provider. As reported last week, the
DVR will have a 160GB hard drive, record digital-quality
programming and have two tuners so that users can "record
one, watch another." The other usual DVR functions are
also included - pause live TV, instant replay and review, fast
forward, rewind, time-shift and automatic recording of
multiple episodes of a TV series. It will also record radio
programs. Back
to Headlines 'Where Are You?' Voice Activated Remote Controls Coming Opera Software has unveiled a voice-activated "Electronic Program Guide" (EPG) for media devices such as DVD players, DVRs and digital TV set-top boxes. Opera says it eliminates the need to "negotiate an array of remote controls." In addition to speech, it can also accept input from a keyboard or handwriting - so called "multimodal." "Opera is a leading player
in making technology easy and accessible for people in their
everyday lives, and the voice-enabled EPG is not science
fiction, but a compelling demonstration of what you can do
with Web technologies for home media," says Igor Jablokov,
director, Multimodal and Voice Portals, IBM Software Group.
Back
to Headlines Apple Seeds iPod Family with New mini, photo Models Apple made a big splash this week when it unveiled new members of the iPod family. Just about a year after introducing the 4GB iPod mini, the company has come out with the "second generation" of the petite portable digital music player - including the first for under two hundred bucks. The 4GB mini has been slightly revamped and now shares its name with a 6GB model as well. Both models feature increased battery life - up to 18 hours of playback on a single charge, twice that of the earlier version. They also boast an "ultra-portable, lightweight design" in four colors - silver, pink, blue or green. Making the iPod mini even more competitive against all the wannabes, Apple dropped the price of the 1,000-song, 4GB model to $199. The 6GB iPod mini, which holds 1,500 tracks, is $249 - the same that Apple used to charge for the 4GB model. In addition to the new mini models, Apple also spruced up its relatively new iPod photo line, with a slimmer 30GB version and a new 60GB player. The iPod photo, first introduced in October, is currently the only member of the iPod family with a high-resolution color display for viewing digital pictures and slideshows. As do its brethren, the iPod photo works seamlessly with Apple's iTunes jukebox software, which provides direct access to the iTunes Music Store. The unit comes with Apple's Auto-Sync technology, which lets users automatically download their complete digital music library onto the iPod photo with a single click and updates it whenever the device is plugged into a Mac or Windows PC. Apple also introduced the iPod Camera Connector, a new accessory that connects the iPod photo to a digital camera for importing pictures onto the iPod without having to first download them to a PC. Both models of the iPod photo hold up to 25,000 digital photos, which opens up a world of storage for digital camera users. The new, slim 30GB model holds
up to 7,500 songs and retails for $349. The 60GB model, which
sells for $449, can store 15,000 songs. Both are available
now. The iPod Camera Connector will be available in late march
for $29. Back
to Headlines PocketSensei Puts VideoHound on the iPod PocketSensei, which delivers digital versions of VideoHound's Golden Movie Retriever movie guide for the Palm OS platform, has released its first so-called MoviPod module for the Apple iPod. The print edition of VideoHound's Golden Movie Retriever provides reviews of more than 26,000 movies with ratings ranging from "Woof!" to "four bones." The comprehensive guide also contains cast, director, writer, cinematographer and composer indices with complete filmographies. PocketSensei takes the content of irreverent video guide and packages it into Palm-sized - and now iPod-sized - modules. The first MoviPod reviews Academy Award winners from 1927 through the present. In addition to witty reviews, it includes comprehensive film facts and entertaining trivia questions plus hyperlinks, one-click navigation and insider notes revealing behind-the-scenes facts. Future PocketSensei MoviPods based on VideoHound categories are likely to include such genres as "Alien Babes," "Bugs and Slugs" and "Killer Reptiles." MoviPod modules for the iPod
are $1.95 each. The Academy Award MoviPod is available at www.pocketsensei.com/movipod.htm.
Back
to Headlines Humax First to Make NDS DVRs for DirecTV South Korea's set-top box maker Humax is the first to announce that it's one of the companies making DVR-based set-top boxes for DirecTV that use the DVR software from NDS technology rather than TiVo. Called DirecTV DVR, the boxes are due out later this year. News Corp owns NDS and has a 34% controlling interest in DirecTV. Until now, DirecTV, the largest seller of DVRs, has only shipped TiVo-based boxes. The deal with Humax also includes some portion of DirecTV's basic non-DVR set-top boxes. The basic units will have interactive services. Due out later this year is an HDTV receiver capable of receiving MPEG-4 broadcasts. DirecTV executive VP and CTO Romulo Pontual said that the company is poised to introduce several "compelling" new products and services in 2005. He said that Humax has proven to be a cost-effective supplier of set-top boxes. The announcement that DirecTV
would buy DVRs with other than TiVo technology is considered
one of the main reasons for the drop in TiVo's share price.
Back
to Headlines TiVo Tops 3m, Foresees Long-Term Revenue Growth TiVo said that its number of subscribers grew by 698,000 in the fourth quarter ending January 31 to exceed three million. DirecTV, as it has in previous quarters, accounted for the majority of new subscribers. It added 447,000, while non-DirecTV TiVo subs grew by 251,000. Last fall, TiVo launched a pricey $50 million marketing scheme to increase the number of non-DirecTV users. The goal, it said at the time, was to have three million subscribers - a target it says would put it on the road to profitability by year-end 2005. TiVo Subscribers TiVo Standalone......................1.1 million Total.......................................3.0 million "Last year, we launched an aggressive growth plan that included increasing our subscription acquisition spending to grow our base, strengthen our market position, and fuel our recurring revenue model," said Mike Ramsay, who recently announced his resignation as TiVo chairman and CEO. "We accomplished our goal of doubling our sub base to over three million subscriptions." TiVo president Marty Yudkovitz resigned only weeks after Ramsay. TiVo critics, and there are many, complain the company is too dependent on DirecTV -at its mercy, so to speak. DirecTV has announced that it will soon start selling DVRs from TiVo competitor NDS. However, the TiVo-DirecTV deal has proven mutually beneficial. DirecTV carved out a large market share in competition with EchoStar and the cable TV services by offering TiVo DVRs at a substantial discount - as low as $99 installed. TiVo grew its installed base to three million and with that comes the certainty of a long-term monthly cash flow. TiVo users pay, directly or through DirecTV, a monthly fee in order to get the on-screen TV program guide that allows them to schedule the shows they want to record. DirecTV pays the TiVo monthly fee for its customers who have DirecTV's top-of-the-line package. TiVo customers pay $13 a month for the guide. It is not known what DirecTV pays for its TiVo customers. Sites such as slashdot.org say that a "TiVo death watch" has started - want to bet slashdot.org wishes it had three million subscribers forking over a monthly payment? Engadget.com is also reporting on the TiVo deathwatch "until further notice." Before the funeral services are scheduled, however, some thought needs to be given to the three-million-user base and its potential for generating revenue. First, DirecTV is not going to pull the plug on all those TiVo boxes it's sold and ship out NDS replacements. Second, preliminary reports on previews of the NDS DVR don't sound as if it's observably superior to TiVo, except perhaps for the speed of switching between channels. If, as reported, the NDS unit does not permit fast-forwarding through unwanted commercials, TiVo users will not accept it as a replacement. Additionally, TiVo has already announced three initiatives that could keep its revenue growing: -Opening the TiVo source code to outside developers would permit enhancements to be added at an accelerated rate. TiVo uses the Linux operating system, which developers are already familiar with. -TiVo announced an unspecified joint effort with Netflix that can only mean the two are attempting to get clearance from content providers to download movies, music and TV shows directly to TiVo. That would do away with the need for Netflix and its customers to mail DVDs back and forth, the need for warehouses spread across the US and computer systems and operators to keep up with where all the DVDs are. -Bringing in additional revenue from "long-form" commercials that are downloaded. They are short infomercials that offer more detail about a product, say a 10-15 minute video that provides more in-depth information about a car than a 30-second commercial can. Additionally TiVo is experimenting with being a content aggregator, perhaps in conjunction with Netflix. Aside from the obvious movies and TV shows, the aggregation could include what is expected to be a large quantity of films - both entertainment and educational - that independent producers are beginning to create for distribution over the Net. The biggest criticism of TiVo
deals with its management's failure to land any other cable or
satellite TV service. Reports filter out that TiVo is still
knocking on the doors at Comcast, the largest US cable TV
service. Also, any failure on the part of NDS to deliver a
TiVo superior DVR could re-energize the deal with DirecTV,
which knows that its main competitor isn't TiVo - it's the
other satellite and cable TV services. Back
to Headlines MP3tunes Unveils 'Personal Digital Music Recorder' MP3tunes, the new digital music venture from MP3.com and Linspire founder Michael Robertson, has come out with a new gadget that lets consumers collect and entire music collection in one central location and listen to it from just about anywhere on any device. Dubbed MP3beamer, the music player is available as either a software application or as a standalone hardware device about one-third the size of a typical PC. With either version, users can rip music from a CD by simply inserting the disc into the CD drive. The MP3beamer software automatically rips the full disc within three or four minutes, and pulls artist, album and track name as well. The ripped tracks are recorded in MP3 format. MP3 files stored on a PC as well as tracks purchased from a digital music store can be transferred to MP3beamer either over the Internet or via a USB device. Once stored to MP3beamer, the music can be streamed to PCs, home stereos, PDAs and portable devices. MP3beamer can play music in every room of the house over a Wi-Fi or wired network using a media receiver, such as those from Linksys and SMC. A number of devices can connect to MP3beamer simultaneously, with each playing different songs. "The MP3beamer is the jukebox in the sky, but it lives in your computer room," said CEO Robertson. "It acts like your own personal digital music recorder (DMR). Just as a digital video recorder stores video and allows you to play it back on TVs, a DMR lets you add a music track or album to MP3beamer and immediately have it available on your home stereo, iTunes, PDA or portable device - virtually any device with speakers or a headphone jack."
The MP3beamer Interface MP3beamer works with Windows, Mac and Linux computers. It uses the latest Linspire operating system and the Lsongs music manager program, which handles importing music files and auto-ripping of CDs. The hardware unit, which can
store some 1,400 CDs, is $399. The software version is $69.95.
Back
to Headlines ***************************** - Robert Evans, the movie mogul behind movies like "Chinatown" and "The Godfather" Every week in The Online Reporter, we try to bring you all sides of every issue. Call 225-769-7130 for your own
subscription. FCC: Cable Losing Ground to Satellite TV Services The US cable TV services are dominating the broadband market with a 60%-66% market share and are threatening the telcos in the residential phone market. Their vulnerability is their traditional stronghold of TV programming where the two US satellite TV outfits are taking market share. The FCC in its "11th Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming" report for the 12 months ending June 2004 compared cable and satellite growth: In commenting on the delivery
of video over the Net, the FCC said:
Satellite 20.18 23.0 14% Satellite TV services account
for 25.1% of all MVPD households "Streaming video is currently most viable when delivered over broadband networks. As of June 2004, an estimated 64 million Americans subscribed to an Internet access service, and 30.1 million of those subscribed to a high-speed Internet access service, or about 47% of all subscribers. "Most near-term uses of
video available over the Web will be downloadable video.
Traditionally, downloadable video has been stored and viewed
over the personal computer; however, video also is becoming
available for download directly to a set-top box to be viewed
over the television, similar to MVPD video-on-demand services.
Despite its relative low quality, streaming video remains
popular, and many firms continue to develop a great deal of
content." Back
to Headlines Intel Delivers Movie Via Wireless Internet Intel's latest trick for raising the profile of WiMAX was to present a film at the Sundance Film Festival, delivered over the wireless Internet. The film "Rize" was the first to be delivered in this way. Intel technicians in Hillsboro, Oregon, encrypted Rize, which was shot on high-definition digital video. The file was streamed to Salt Lake City, and then beamed via microwave links to Park City and through a WiMAX connection to the top of a 10,000-foot mountain where the showing was staged. A receiver at the ski lodge sent the file to an HP Media Center PC, where it was decoded and projected through a high-end digital projector. Intel's wireless chief Sean Maloney, who introduced the film, said Intel has proved that real movies can be sent to theatres through the air from remote locations. Analysts said the technology could, in future, enable films to be sent to venues around the world simultaneously, saving shipping costs, supporting international launches and combating piracy. It could also make it cost effective for smaller venues such as cafes to show feature films without significant investment in infrastructure. The above article is special to
The Online Reporter from Rethink Research's Blueprint Wi-Fi
Watch, published weekly and focused on business and technology
developments in the Wi-Fi industry. Contact sales@riderresearch.com
for a sample copy and subscription details. Back
to Headlines CinemaNow Thinking IPO Next Year CinemaNow's newly appointed
president Bruce Eisen acknowledges that one of his goals is to
prepare the broadband video-on-demand company for an initial
public offering, according to the Hollywood Reporter.
"There's a lot of interest in what we're doing from both
Main Street and Wall Street," Eisen said. He said that
the company might go public as early as next year. "It's
certainly what we're working toward," he said. CinemaNow
has broadband rights to 6,500 titles, including television
shows, short films, independent movies and studio releases
from such as Warner Bros, Disney, Universal, Sony and 20th
Century Fox. CinemaNow investors include Microsoft, Cisco
Systems, Blockbuster, Lions Gate Entertainment and VC firm
Menlo Ventures. Back
to Headlines CinemaNow Offers 'Big Brother' On-Demand Broadband video-on-demand outfit CinemaNow and reality TV producer Endemol USA have inked a deal to offer more than 75 hours of reality TV programming for download via the CinemaNow Web site. The deal marks the first time that complete seasons of "Big Brother" and other Endemol properties will be available in their entirety on-demand over the Internet. The addition of unscripted TV content to the CinemaNow service gives a "second life" to the shows, turning them into a continued revenue stream even after the show is off the air. CinemaNow customers will be able to download individual episodes or entire season packages of Endemol series on a pay-per-view and sell-through basis or as part of CinemaNow's Premium Plus subscription service. Season three of the CBS show "Big Brother" is the first Endemol title available on CinemaNow. It will later add "Anything For Love," a relationship series that originally aired on Fox, and "Under One Roof," a family-based reality show that was on UPN. No word yet on whether
Endemol's other hits including "Fear Factor" and
"Extreme Makeover; Home Edition" will be added to
the CinemaNow library. Back
to Headlines MTV Appearing on a Media Center PC Near You MTV Networks, the TV music
channel for the young, is working with Microsoft to deliver
VoD services, initially in the US, to various Windows
Media-based products, most notable PCs that use Microsoft's XP
Media Center Edition operating system. MTV anticipates that
entertainment PCs that use Media Center software will become
popular devices in the dens and living rooms. MTV sees a day
when its video programming will be viewable on PCs, cell
phones, portable media players and DVRs as well as TVs. MTV
video programs on Media Center PCs could also help Microsoft
get sales of that product ramped up.
Back
to Headlines EMI Licenses Content to Peer Impact Wurld Media, which is readying its Peer Impact peer-to-peer digital download service for launch later this year, has signed a licensing deal with EMI Music, the last holdout among the major labels. Sony BMG, Universal Music and Warner Music signed on last year to provide content for Peer Impact. Peer Impact offers a legal, safe alternative to traditional P2P networks and also provides an incentive not offered by any of the major music download services - its members can earn money when they share music with others. Only high-quality legal versions of songs are traded through the Peer Impact system. Once a member pays to download a song, his PC then becomes a "peer" from which others then download tracks they purchase. To participate and become a "paid redistributor" members need to leave their computers on. If the machine is used as a fulfillment source for a download, the member is given credit for the sale. The credit can be used towards future purchases through the Peer Impact network. "Our agreement with EMI Music is essential to Peer Impact's viability, as we now have all the major record labels' entire catalogs available for download," said Wurld Media chairman and CEO Greg Kerber. "Peer Impact isn't just a network where you can spend money, it's a network where you can earn cash to buy more music, and the catalog is growing daily. We also intend to expand our content offerings in the areas of film and videogames soon after launch." Currently in beta, Peer Impact
will lunch with a huge catalog of "pristine industry
inventory, not filtered or commingled with unprotected
content, spyware, viruses or pornography." The company is
in talks with independent music labels, videogame publishers
and movie studios to expand the content it can offer its
members. Back
to Headlines Parks Associates hosted a Webcast on Thursday to discuss findings from its recent research regarding "Music Applications on the PC." According to Parks research director John Barrett, digital music services initially focused on subscription services. That business model, however, never really took off and was quickly overshadowed by à la carte downloads thanks to the launch of Apple's iTunes Music Store. Now, says Barrett, the trend is starting to shift back towards subscription services, a situation that should give thanks to Microsoft's new Windows Media 10 technologies and its Janus digital rights management scheme that makes these subscription services "portable." Another point from the research is that while the music industry may blame peer-to-peer networks for the decline in music sales, Parks found that the digital format itself may be partially responsible. It used to be that consumers would rush out and buy a "Greatest Hits" CD if it promised one or two previously unreleased tracks, or buy a soundtrack album to get that one song from a favorite artist. Now, that same consumer can just go to iTunes, Napster or any number of other Web sites and spend three or four bucks to download just the songs he wants instead of shelling out $30 for two CDs. Also, instead of buying compilation CDs and end up paying for some songs they like and some they don't, consumers can now visit a digital music site and create a personalized compilation CD that just contains their favorite songs. Additionally, the need to repurchase music the consumer already owns is disappearing - no more having to replace a worn out cassette or a scratched CD. Now, it's download the album from a digital music store and burn a CD. If the disc gets ruined, no problem - just burn another copy. Barrett also reported some data from a focus group Parks held with college students who download music off the Internet. The group was asked why, if they get free music off the P2P networks, do they also spend money to purchase legal downloads from one of the fee-based services. The students gave three main reasons: -The fee-based services usually have higher-quality downloads than those available on P2P networks. Peersters will often pay an iTunes or a Napster to get a better quality recording of a favorite song. -P2P users will purchase music from bands or artists they want to support. More often than not, these are lesser-known artists because they are often believed to need the money more than well-established acts. -Despite the many millions of
songs available on peer-to-peer networks, sometimes you just
can't find the tracks you want, which necessitates a visit to
a for-pay download site. Back
to Headlines Yahoo Japan To Offer Music Downloads Yahoo Japan has partnered with Sony-backed digital music distribution firm Label Gate to launch a music download service. The Japanese service will be based on Label Gate's existing Mora download service that launched in April 2004. It will offer some 73,000 tracks from 39 Japanese record labels. The files will be encoded in Sony's ATRAC3 format. According to Macworld UK, users will be able to download the tracks to a PC, compatible mobile phone and portable music players as well as Sony's PlayStation Portable handheld multimedia player. Individual track prices will
range from 158 yen-368 yen ($1.52-$354 or 79 pence-£1.84).
Back
to Headlines MSN Music Premieres Eminem's 'Mockingbird' Video MSN Music is the only music
download site chosen for the online premiere of the new music
video "Mockingbird" from rapper Eminem. The premiere
is the latest result from a close collaboration between MSN
Music and Universal Music Group, which recently brought the
video for "E-Pro" from singer/songwriter Beck to the
site. Back
to Headlines Sprint's Sanyo MM-5600 Plays Music, Takes Pictures Sprint, which is usually ahead of the crowd of0US mobile operators with its multimedia offebings, isn't slowing down. The telco teamed up with Sanyo to unveil the Sprint PCS Vision Multimedia Phone MM-5600 by Sanyo, a snazzy new handset with a built-in media player for stereo-quality music, plus a camera, camcorder and removable memory card. The MM-5600's MP3/AAC player lets users listen to music files transferred to a PC and stored on the phone's miniSD card. Consumers can transfer unprotected MP3 files from a PC to the phone via the included USB cable. The media player also lets users view video content at up to 15 frames per second. The phone boasts a 1.3-megapixel camera with flash, digital zoom and a macro setting for capturing close-ups. It also has camcorder functionality. Additional features include a 16MB removable miniSD memory card that can be used to store images, video clips and music files. The files on the card can be downloaded to a PC for backup. The miniSD card with adapter can be used to print photos from a printer or kiosk that supports SD cards. Customers can also print images stored on the card or the phone by connecting directly to a PictBridge-enabled printer or send pictures to any participating Fujifilm "Get the Picture Online Service" retail photofinisher for in-store pick-up.
The Sprint PCS Vision MM-5600 by Sanyo "This phone is the first to combine the power of mobile imaging with the portability of mobile music and entertainment," said Sprint VP of product marketing and strategy Jeff Hallock. "The MM-5600 by Sanyo offers high function, high-quality imaging, streaming video and music along with Sprint PCS Ready Link to meet our customers' needs to capture, share and experience life in motion." Coming in mid-march, the MM-5600 will be available across the US at Sprint stores and online for $429.99, or $279.99 after rebate. In addition to the new phone, Sprint has also tweaked its Picture Mail service to make it easier for wireless customers to store, share and print their favorite digital pictures taken with either a Sprint PCS Vision camera phone or standalone digital camera. On the Picture Mail Web site, powered by Light Surf, consumers can manage all their digital photos in one location by downloading pictures from their phone or uploading other digital images from a PC. Once the pictures from the PC are added to the Picture Mail account, users can e-mail them to friends or send them to a Sprint PCS Vision Phone to use as a screensaver or Caller ID image. Customers can also order professional prints of any digital photo stored in their Picture Mail online album. The Sprint PCS Vision Pictures
Pack is $15 a month for unlimited Picture Mail (take, upload,
send, preserve and enhance an unlimited number of pictures),
unlimited Sprint PCS Vision access, 100 SMS Text messages and
up to a $5 credit per month towards the download of premium
services. Sprint customers without a PCS Vision plan can pay
$5 per month to take, upload, send, preserve and enhance an
unlimited number of pictures. Back
to Headlines Cingular Delivers 'Idol' Services Cingular Wireless, which purchased rival AT&T Wireless last year, is taking over for that company as "official telecommunications sponsor" of TV talent search "American Idol." For the past three seasons, AT&T Wireless customers have been able to send text messages on their cell phones to vote for their favorite contestants, participate in a "TXT-n-Win" sweepstakes contest, answer "Idol" trivia questions and download ringtones based on the original versions of the tunes the contestants perform on the show. In addition to all that, this season all 49 million or so Cingular/AT&T Wireless customers will have access to a slew of new "Idol" exclusive content and features including: -A vote number reminder. Fans will receive text messages listing all the Idols and the codes fans need to type in to vote for each one so voters no longer have to remember the numbers that flash across the TV screen after each performance. -"Idol" Wireless Fan Club. Keeps fans up-to-date with the latest news on the contestants' activities. -Behind-the-scenes. Coca-Cola
is sponsoring this feature that sends
"Behind-the-scenes" pictures from "Idol"
to Cingular customers. Interested "Idol"
fans need to visit www.cingular.com/idol for pricing,
availability and additional details. Back
to Headlines Sho.com Mobilizes 'The L Word,' Other Originals Cable movie network Showtime has launched a mobile content store at www.sho.com as part of its new wireless initiative that also includes wireless text messaging campaigns, chats and live on-air polling. Initially, the site will feature content from the Showtime original series "The L Word," whose second season started on February 20. Content includes ringtones based on music featured in the series, including the show's new theme song, as well as mobile wallpaper including cast photos and the logo. Mobile content based on other Showtime original series will be added throughout the spring. March will bring ringtones, graphics and other content from the upcoming series "Fat Actress," which premieres on March 7. Mobile content from "Queer As Folk," which starts its fifth and final season later this year, will be added in April. The Showtime mobile store is
powered by m-Qube. Back
to Headlines Robert Clark Hits the Road with Sony Ericsson S710a Showing that a camera phone can be as much a serious camera as it is a phone, Sony Ericsson and award-winning photographer Robert Clark are capturing a trip across America with the Sony Ericsson S710a model. Dubbed the "Image America" tour, the journey has Clark traveling through 25 states over the next 50 days while "capturing spontaneous pictures through the viewfinder" of the S710a. Clark, whose work has appeared in numerous magazines including National Geographic and Sports Illustrated, said "The camera phone is revolutionizing how we see the world, allowing us to capture intimate moments more spontaneously than ever before. This tour aims to be a defining moment in the era of digital photography."
Sony Ericsson S710a Hits the Road Interested folks can browse
through an assortment of Clark's photos taken with the S710a
at www.americanphotomag.com/robertclark. Following the tour, a
selection of photos from the journey will be published in
American Photo Magazine and put on exhibit in New York for a
limited time. They will then be compiled into a commemorative
book. Back
to Headlines National Lampoon Going Wireless National Lampoon Inc, the company behind such movies as "Animal House" and "Vacation," is launching a National Lampoon-branded wireless content service. Created through a partnership with Walt Disney Internet Group's Starwave Mobile unit, the National Lampoon mobile content site will feature audio, video, text and graphics based on original material from the company's www.nationallampoon.com Web site, the National Lampoon independent college TV network and the National Lampoon Radio Hour syndicated sketch comedy show hosted by comedian Richard Belzer. National Lampoon has been a leading comedy brand for 30 years, producing feature films, TV programming, interactive entertainment, home video, audio CDs and books. The mobile content site is
expected to launch this spring for customers of all major US
wireless carriers including Verizon Wireless, Cingular, Sprint
and T-Mobile. Back
to Headlines Universal: Mobile Music to Grow to $13b Universal Mobile, the mobile
content division of Universal Music Group, forecasts that the
value of digital content sold via mobile phones will increase
from $5.3 billion (€4 billion) to $13 billion-$16 billion (€10
billion-€2 billion) over the next five years, according to
the Financial Times. Universal Mobile said that mobile music
revenues would become an increasingly important part of the
industry, potentially generating as much as online music
downloads. The FT article also said that EMI forecasts its
sales of digital music will increase from 2% of its total
revenues in 2004 to 25% by 2008.
Back
to Headlines LogicaCMG Intro's Mobile Music Service Wireless telecom services firm LogicaCMG has launched a new mobile music solution that lets consumers identify, purchase and download ringtones and full-length music tracks directly onto their mobile phone. Similar to a service from Shazam, when folks using the new LogicaCMG solution hear a song they like, they point the handset at the music source and the service identifies the track. Once the song is identified, the user can purchase a snippet to use as a ringtone, buy and download the track in MP3 format, buy a picture of the artist as mobile wallpaper or sign up for a subscription service to purchase additional tunes. LogicaCMG has had the service in trial with several European mobile networks including O2 Germany, which uses it as the backbone of its Musicspy recognition service. "The mobile music market is really going to take off in 2005 and we expect to see the success of today's iPod business will rapidly extend to music downloaded to the mobile phone," said Chris McDermott, CEO of LogicaCMG's telecoms business. "The potential for network operators worldwide to generate new revenue streams from it is enormous." Fraunhofer Institute, which developed the MP3 format, is supplying the music recognition technology for the LogicaCMG mobile music solution. In addition to the music
recognition, LogicaCMG provides digital rights management
that's compliant with the Open Mobile Alliance (OMA) DRM
standards 1.0 and 2.0, the music and a link to billing
systems. The company plans to offer support for additional
multimedia content, such as music video clips.
Back
to Headlines Action Engine Adds Live TV to Brand-n-Go Mobile application platform provider Action Engine has plans to integrate live TV streaming into its Brand-n-Go turnkey mobile applications pack. Brand-n-Go gives wireless users browserless access to mobile Internet content from such sites as Amazon.com, eBay, Fox Sports and Microsoft MapPoint. Subscribers use the interconnected Brand-n-Go apps to shop on Amazon, bid on eBay auctions, read news stories, check weather and stocks, get driving directions and find restaurants and movie times. Now, through Action Engine's partnership with SmartVideo Technology, the company is adding a live broadcast TV app, which will let users watch streaming TV shows right on a mobile phone. SmartVideo offers content from
MSNBC, CNBC, ABC News, ABC News Now, the Weather Channel and
DIC Entertainment. Back
to Headlines Sony Ceases PDA Manufacture, Blames Cell Phones Sony will stop making PDAs for the Japanese market in July. Cell phones that perform more and more office functions are said to be the reason. It stopped making them for markets outside of Japan last year. "The PDA market is being encroached by cell phones and other mobile devices that can offer similar functions, making it difficult for PDAs to maintain their position in the market," a Sony spokeswoman said. It's not giving up on the handheld market, however. The company said it considers the "mobile terminal business" as one of its growth opportunities - no doubt meaning such devices as its new PlayStation Portable (PSP) video gaming device, its Sony Ericsson cell phones and its Sonic Stage portable media player - the one that Sony president Kunitake Ando called a failure last week. Ando said that by year-end Sony would bring to market a music player "much more competitive than the iPod. We have put in place a very aggressive plan to become number one again," he said, according to newswire reports, referring to the position Sony once held with its Walkman during the pre-digital era. Ando believes that the iPod succeeded because of its ease of use. In order to catch up, Ando said that Sony must "develop software that makes use of our products more intuitive and simple." He might have added that Sony
would also have to make the unit play MP3 music tracks, a
strong consumer preference that Sony has ignored. Broadband in the Video Age The seminar explores specifically the access technologies and business models in delivering broadband. Agenda & Speakers Microsoft, Alcatel Do IPTV Deal Microsoft continued its quest for a large chunk of the coming IPTV market this week by doing a worldwide deal with Alcatel to accelerate the availability of IPTV for broadband operators worldwide. The duo said that this "precedent-setting agreement" between Alcatel, a supplier of "triple-play" solutions, and Microsoft, the world's largest software company, will kick start the "ecosystem of IPTV industry partners" and enable the world's phone companies to benefit from the economies of scale provided by large-scale IPTV deployments the two are involved in. Alcatel and Microsoft agreed to develop an integrated IPTV delivery solution using Alcatel's broadband, IP networking, development and integration of end-to-end multimedia and video solutions and Microsoft's TV software and "connected-entertainment experiences" across consumer devices. The two said they'd pursue a series of joint initiatives including: -Developing and customizing new applications to meet the unique needs of different cultures and markets around the world. -Enhancing application and network resilience for better reliability in large-scale deployments. -Integration of content, security and digital rights management to ensure secure delivery of high-quality content, to and throughout the home. -Managing quality of service through intelligent video packet handling. -End-to-end integration of management systems for the application platforms and all components of the network including the home network. Alcatel chairman and CEO Serge Tchuruk said his company wanted to collaborate with Microsoft and benefit from its leadership in TV software delivery platforms and innovative consumer experiences delivered across devices in the multimedia-connected home. He said, "We are committed to integrate the current Alcatel video solutions with Microsoft TV IPTV Edition, resulting in a market-leading integrated offering." Microsoft CEO Steve Ballmer
signaled the deal's importance to Microsoft by saying that
Alcatel's "deep understanding of broadband service
providers and leadership in broadband solutions and
integration make it a natural partner." Ballmer added
that, "Aligning our efforts will give customers an
unmatched network-access, software-delivery and
systems-integration solution. Together, Alcatel and Microsoft
will usher in a new generation of exciting entertainment,
information and communication services, enabled by the
marriage of powerful broadband networks and advanced
software." Back
to Headlines New Chip Detects Macrovision Anti-taping Technology Swiss chipmaker Micronas has developed a chip intended to improve the performance of consumer video and multimedia devices such as DVRs, set-top boxes and projectors. The company says that its fourth-generation product is a full-featured video acquisition integrated circuit with new features, most notably being component video input and detection of Macrovision 7.1 anti-taping technology. The new video decoder offers full Macrovision detection capabilities including color stripe support. Analog video signals protected by Macrovision are detected and decoded, allowing content owners to protect their videocassettes, digital pay per view programs and DVDs from unauthorized recording. Kai Scheffer, director of the
media home business line at Micronas, said, "Over the
years the company developed high-quality decoding packed with
robust video sync performance even in difficult environments.
As a result, the chips deliver a high-quality viewing
experience. We have sold more than five million VPX devices to
date and expect an increased demand for the VPX 322xF family
as we further expand into new and fast-growing markets like
DVRs and DVD recorders." Back
to Headlines Macrovision Puts RipGuard DVD Tool on General Release The following article is special to The Online Reporter from Rethink Research's Faultline newsletter. Contact Charles Hall at charles@riderresearch.com for a sample copy or subscription details. Macrovision has formally launched, for general consumption, a technology it's been talking about for some time - RipGuard DVD, built to fix the weakness in the Content Scrambling System (CSS) DVD encryption standard. CSS has been compromised for years and instead of chasing the next market, High Definition DVD, Macrovision thought it sensed more of an opportunity in the existing DVD format. DVD sales are constantly rising, and last quarter over one billion content DVDs were sold. Although breaking CSS is illegal in most countries, a program called DeCSS, which makes copying a DVD using a computer relatively easy, has been available from Web sites outside these countries. This is how most pirated copies of films reach the Internet, from bought or hired DVDs. Macrovision has been showing the studios this technology for a while now and has been talking about RipGuard openly, but still hadn't said exactly how it works. It talked Faultline through it in January. It implies that what it's done is examine all the software out there, including the rogue code of DeCSS, that allows devices to copy DVDs, and worked out a cluster of ways to stop each one, in most cases crashing the illegal copy code or forcing it to give error messages. By stopping the encryption from being broken, the original CSS can do its job. Like most similar systems it may only take weeks for someone to crack, but it is yet another hurdle thrown at the casual copier that may convince many of them to stop, although this approach is unlikely to prevent hard core pirates for long. The next generation of DVDs will have a content protection system designed specifically from an organization called Advanced Access Content System (AACS), formed last July by such notables as IBM, Intel, Microsoft, Panasonic, Sony, Toshiba, Disney and Warner Brothers. Faultline spoke with one candidate, Cryptography Research, that hopes its technology will be chosen as the basis of AACS protection, which has remote security renewability capability, in effect the ability to re-establish security on vulnerable devices after a device has been used to decrypt a DVD. When he spoke to Faultline in January about this, Macrovision marketing VP Adam Gervin said that he didn't expect RipGuard to be chosen for the HD DVD standard, but said that "a number of content owners will be putting RipGuard on 100% of their DVDs later this year, and with the number of DVDs shipping, we have no worries about revenue from our DVD product line." RipGuard DVD is available now
in some replication facilities, with general availability set
for the second quarter. Back
to Headlines ********************* The Online Reporter supports the work of the National Multiple Sclerosis Society. Multiple Sclerosis (MS) is the
leading neurological disabler of young to middle-aged adults. http://www.nationalmssociety.org
or call 1-800-fightMS Starbucks: An Entertainment Destination "Starbucks has made a
commitment to move into the music business. The Starbucks
brand was built around the customer experience. We aren't in
the coffee business; we feel we're in the people business. We
look through the customer lens. We needed permission from
customers to go beyond selling coffee and over time they have
given it to us. We sold millions of copies of the Ray Charles
album....The frequency of our customers' visits is a huge
asset. The digital side of the business is where the industry
is headed, and will play a significant role in our future.
We're using digital's growth to enhance the Starbucks
experience as an entertainment destination." - Starbucks
Entertainment president Ken Lombard in iMediaConnection.com.
Back
to Headlines 'Buy It Now' Comes to Set-top Boxes UK satellite TV service Sky has
been working with Barclaycard to launch a credit card that can
be used in set-top boxes to pay for goods and content. The
BSkyB set-top box used for Sky's digital service has an unused
card slot that will be activated this spring to read
"loyalty" and credit cards. Back
to Headlines Random House Buys into Mobile Content Company Random House has acquired a minority stake in Vocel, a start-up company offering educational content to cell phone users for a monthly fee. Vocel's patent-pending push technology sends interactive messages, such as practice questions for an upcoming exam, to a mobile phone. Back to Headlines
'Broadband Internet Becoming Part of Every Day Life' "Broadband is growing a
lot faster than normal dial-up Internet access. Prices are
coming down; so broadband Internet is becoming part of
everyday life. Music downloading is hot and Internet telephony
(VoIP) is very hot. The next big thing is more people spending
more time online." - Andreas Gutjahr, European marketing
manager at Nielsen//NetRatings. Back
to Headlines Warner Films & Cartoons Coming to AOL Broadband Films and cartoons from Warner
Bros are reportedly going to be available on AOL Broadband
later this year - some of the synergy that Steve Case and
Gerald Levin promised when they announced they intended to
merge the two companies together back in 2000.
Back
to Headlines Wal-Mart Runs Fifth-Largest US TV Network Who's the fifth largest TV
network in the US, based on number of viewers? Following the
big four - NBC, CBS, ABC and Fox - it's Wal-Mart, according to
the New York Times. Started in 1998, the Wal-Mart TV Network
is a Web-based network of in-store programming. The company
has TVs installed in its 2,600 stores, continuously running
ads and promos for the products it sells - all paid for by the
makers of those products. TV content includes previews of
movies soon-to-be-released on CD, cuts from sporting events
and rock concerts plus "feel good" messages from
Wal-Mart corporate. It captures the attention of some 130
million viewers every four weeks.
Back
to Headlines UK Government Launching Security Alert Service The UK government is set to
launch a free online security alert service called IT Safe
that will to notify home and small business computer users
about serious Internet security problems, according to the
BBC. It will help users deal with such things as serious
viruses, software vulnerabilities and threats to PCs and
mobile devices. "There is a clear need for
easy-to-understand and simple, independent advice for
non-technically minded people who use computers," said
Home Office Minister Hazel Blears. The Web site is
www.itsafe.gov.uk. The government estimates that it will issue
security alerts about six to 10 times a year. Now that's being
optimistic - seems like there's a new virus or threat every
week. Back
to Headlines Apple May Be Candidate to Use Cell Processor Apple may be a prime candidate
to use the IBM-Sony-Toshiba-developed cell microprocessor in
future digital media gear, according to Merrill Lynch analyst
Steven Milunovich. Back
to Headlines Google now lets users search
for local movie show times using a PC or cell phone. Users can
search for movies by title, plot or genre.
Back
to Headlines A mere few days after bloggers across the Web made it common knowledge that Winamp could be used to bypass the copy protection built into certain digital music services, AOL stepped in and disabled the feature that made it possible. The main victim of the blogs was the new Napster To Go portable digital music subscription service, which lets subscribers transfer all the music they want to a portable MP3 player for $14.95 a month. The user has access to the music for as long as he subscribes to the service. A little feature in AOL's Winamp music software somehow made it possible to burn the copy-protected tracks to CD. "Immediately upon discovering this flaw, we worked quickly to address it and to ensure that Winamp can continue to provide secure playback of Windows Media content," an AOL spokeswoman told CNET's News.com. "A fix is being implemented...in existing players, and a new player will be posted for users to download." According to CNET, "programmers are developing a patch that will be automatically pushed to the software's users."
Back
to Headlines
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