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THE online REPORTER
June 21-July 8, 2005 - Issue 450
Published weekly by Rider Research

This issue marks the ninth anniversary of The Online Reporter.  Thanks for your support.

Entertainment Technology - Online Music & Movie Services - Broadband & Home Networking

BROADBAND BEAT

ENABLING TECHNOLOGY

LIES, DAMN LIES, & STATISTICS

SHOW TIME

 

ONLINE MUSIC SERVICES

HOME NETWORKING

PRODUCT WATCH

MOBILE MEDIA

DIGIGRAMS

THE   online REPORTER is published weekly by Rider Research; 13188 Perkins Road; Baton Rouge, LA 70810, USA
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One More Week 'til Freedom


We will not publish Friday July 1. This week's edition - number 450 - will be the last one before all our worker bees take a week off. Publication will resume July 8.

June 24       yes        issue 450
July 1          no          no issue
July 8          yes        issue 451--This marks our ninth anniversary
Back to Headlines

Look Ma! No Wires! First Ultra-Wideband-based HDTV, Media Server

The first Ultra-Wideband-enabled (UWB), high-definition LCD television, which eliminates the need for a cable to a set-top box - allowing for placement anywhere in the home - comes from the China's largest home appliance maker Haier (pronounced "higher"). It uses UWB chips from Freescale Semiconductor, which are capable of transferring up to 110 Mbps at distances of up to 20 meters (20 yards). Freescale chairman and CEO Michel Mayer and Haier executive VP Shariff Kan broadcast high-definition video and audio streams wirelessly from a Haier digital media server to Haier's 37-inch HDTV located across the stage at the Freescale Technology Forum. It's not home networking in the traditional sense of a PC data network. However, UWB gear is a major step towards a wireless network capable of delivering multiple high-definition video streams around the home.

"UWB gives consumers the freedom to place the television anywhere they would like in the room, without requiring a physical connection to a set-top box, digital video recorder or media server," said Haier VP Yu Zi Da. Haier plans to ship the 37-inch TV and accompanying digital media server in China in Q4 and in the US by 2006.

              Competing Home Networking Technologies

HomePlug Uses existing AC wiring but currently has speed limitations.
Wi-Fi Ethernet-based wireless speed and security challenged.
Wired Ethernet Consumers resist cost and mess of running new cables.
MoCA Uses existing coax cable.
Ultra-Wideband No wires, high speed, secure. Proprietary and incompatible user interfaces could be a weakness.

"Freescale's Ultra-Wideband solution provides the wireless experience our customers desire," said Da. "UWB gives consumers the freedom to place the television anywhere they would like in the room, without requiring a physical connection to a set-top box, digital video recorder or media server. We have worked closely with Freescale over the past two years on integrating UWB and look forward to continuing this collaboration with a variety of consumer products."


Haier's Wireless TV and Media Server (Except for AC Cords, Of Course)

Ultra-Wideband Candidates - Display video from a camcorder on a TV - Transfer video from a camcorder to a PC - Display digital photos on a TV - Connecting printers, external hard disks, scanners, cable modems to a PC - Connecting portable MP3 players to a stereo - Connecting portable video players to a TV - Connecting a flat-panel TV hanging on a wall to its electronics

Freescale's UWB technology can transfer multiple high-definition or MPEG2 movie streams up to 110 Mbps at distances up to 20 meters. The major benefit for consumers is that home entertainment gear can be placed anywhere without the need to install any wires to connect devices. Current wireless video solutions such as Wi-Fi do not have the bandwidth to accommodate HD or MPEG2 streams, which require a minimum of 20 Mbps each. Current Wi-Fi solutions, according to Freescale, are only capable of broadcasting standard definition (SD) video streams at 5 Mbps to 7 Mbps. The fastest data rate publicly announced for UWB is 252 Mbps, but it is believed to be capable of up to 480 Mbps.

---------------------------------

Ultra-Wideband Candidates

Display video from a camcorder on a TV

Transfer video from a camcorder to a PC

Display digital photos on a TV

Connecting printers, external hard disks, scanners, cable modems to a PC

Connecting portable MP3 players to a stereo

Connecting portable video players to a TV

Connecting a flat-panel TV hanging on a wall to its electronic
s

---------------------------------

UWB's biggest obstacles to full deployment are: 1. Intel is developing and promoting an alternative UWB technology. Nature may abhor a vacuum, but consumers abhor incompatible "standards" - see Betamax v VHS or, more recently, Blu-ray v HD DVD.

2. Will there be an open standards interface that, for example, will allow any CE makers to connect to Haier's boxes? Can a camcorder maker develop compatible software that will allow videos to be played on the Haier TV?

Competing Home Networking Technologies - HomePlug - Uses existing AC wiring but currently has speed limitations. - Wi-Fi - Ethernet-based wireless - speed and security challenged. - Wired Ethernet - Consumers resist cost and mess of running new cables. - MoCA - Uses existing coax cable. - Ultra-Wideband - No wires, high speed, secure. Proprietary and incompatible user interfaces could be a weakness.

Haier says it's currently developing other UWB-enabled products. The TV is a 37-inch, liquid crystal display (LCD) HDTV with 1080i resolution. It supports both SD and HD video and uses a component/DVI interface. The Freescale UWB antenna is embedded inside the television and is not visible to the user. No additional equipment is required and consumers need only a power source for the actual television.

The digital media server is the size of a standard digital video device such as a DVD player but includes DVR functions, a DVD player and a tuner.

Caroline Gabriel, who publishes Wireless Watch says, "Technically some of the vendors are hugely advanced, especially Freescale and Pulse Link, but the problem - apart from the failure by the industry to agree on a standard - is the highly restrictive FCC regulations in the US, and not being permitted in any other part of the world as yet - with an uncertain timetable for that, and doubts over how far regulations will be harmonized. All of which takes the sting out of the technical advances, for now at least."

"This first UWB-enabled consumer product marks the beginning of great wireless experiences for consumers," said Franz Fink, senior VP and general manager for Freescale's wireless and

mobile systems group. "UWB is now a proven technology designed to enhance user experiences by providing a wireless connection with the speed and quality they demand."

Ultra-Wideband is engineered to deliver wire-like performance in an indoor wireless environment. That makes it better suited for CE gear where video, particularly high-definition video, is used.

This week, Haier made an offer to buy the US-based venerable-but-financially struggling appliance maker Maytag. It made an offer of $1.28 billion with the US buyout groups Bain Capital Partners and Blackstone Capital Partners IV. Haier no doubt wants to move upscale in its markets (US) and its products (wireless HDTVs and media servers). The average monthly income in China is still only about $100, although there is a burgeoning middle-class. Wal-Mart and other discount chains, to which Haier supplies much of its products, also squeeze Haier on its prices.   Back to Headlines 

Digital Media: It's All About Portability, Copyrights, Usage Habits 

By Susan Schrank

"Downloading in this era is the marijuana of the 1970s - everyone's doing it and they don't think it should be illegal," said Gary Shapiro, president and CEO of the Consumer Electronics Association (CEA) during his keynote address at Digital Media Wire's Digital Media Conference.

The conference, held in McLean, Virginia on June 17, brought together executives from all aspects of the digital media industry from technology companies and content providers, to industry associations and law firms. It included panel discussions, "Q&A" sessions and two keynote addresses - one by Shapiro and one by Robert Marshall, president and CEO of WeatherBug.

Throughout the day, "mobility," "convergence," "portability" and making digital content more accessible to the consumer were recurring themes. Two other important subject matters discussed on several occasions were the impending Supreme Court decision on the Grokster case as well as legitimate uses for peer-to-peer technology.

The Focus is on Mobility During a panel discussion on "Digital Living: Entertainment for the Connected Consumer," when asked what they consider the single innovation that will fuel growth, the panel seemed to agree that interoperability - the ability to share music among a PC, cell phone, MP3 player and other devices - is key.

Ted Cohen, senior VP of digital development & distribution for EMI Music, said that the music industry is now "living with the challenge that we have to evolve or die." But, Cohen reminded the crowd, this evolution must still respect intellectual property rights.

Cohen said that the industry has finally come to the conclusion that it doesn't "want to sell you the same thing five times anymore." It is apparently ready to give the consumer what he has wanted all along - the ability to purchase a download for a cell phone and be able to play it on the PC or "whatever" without having to buy it again.

Perry Solomon, senior director of business development at FAST Search & Transfer, thinks the key application is one that would help consumers find what they like out of all of the content that's out there. Of course, that's what his company does - it works with companies to develop business models to help them do this.

Cohen agreed with Solomon, saying that the consumer's goal is to "get me to what I want quicker."

Brad Singer, VP of products and markets at PaymentOne, said that it's important to make the payment process as painless as possible. Operators are trying to make it easy for consumers to "put it on my broadband tab." He also believes that it's important to syndicate both content and payment to make things as easy as possible for the consumer.

Drew Denbo, director of business developments for music at RealNetworks, believes that portability is most important. He said that the lack of portability was the main reason people left the company's Rhapsody subscription music service. Consumers want to access their music anywhere, without having to sign up for multiple services. This, he said, is why the company came out with the Rhapsody To Go service that lets subscribers transfer their tethered downloads to any of the scores of compatible portable MP3 players.

Denbo also talked about the fact that the company is "getting Rhapsody around the home" via media adapters and home networks. Denbo sees the PC as a great tool for navigating through a music collection. "I envision giving people the ability to do the heavy lifting," such as playlist management, from the PC, but "not require the PC to be on to access music from a set-top or other device."

According to Cohen, the good thing about subscription services is that "at the core, they let you listen to music." They don't force you to create playlists, but let you listen to whatever you want.

Sean Wargo, director of industry analysis for the CEA, said that portability is what is driving consumer interest in digital music services. Consumers want portability, but they still want quality.

Denbo added that community is also important, and mentioned that Real is starting to build community features into Rhapsody, such as "Playlist Central" and blogs.

When asked what "big things" will drive the digital media industry in the future, the panel answered:

Cohen: "Mobile is huge"
Denbo: "Interoperability"
Singer: "Large-scale syndication"
Solomon: "Consumer choice, convenience"
Wargo "Real estate; who will be the interface for all the products? The interaction point?"

Consumer Electronics Change the World 
During his keynote address, the CEA's Shapiro declared that consumer electronics is "one of the coolest, hottest, neatest industries." And it certainly should be, considering it's worth some $120 billion.

According to Shapiro, the average American owns 25 consumer electronics products, which should make the CEA's 2,000 member companies very happy. "No other association can say its members' products are literally changing the world we live in," he said.

Shapiro also took on the content owners, saying that the "real threats" to the CE industry come from intellectual property (IP) policing. The way he sees it, the copyright holders are doing their best to increase limits on fair use and increase penalties for those who download or share unlicensed copies of copyrighted material.

According to the CEA, the following points about digital media are "certain facts"

-Digital technology may threaten distribution by rights holders, but it has spurred a renaissance in creativity - anyone is now a creator.
-IP is not real property. Copyrights are vague; they're not permanent, tangible property.
-To the copyright industry, downloading is stealing. It's often compared to stealing a car or clothes. The punishment can be higher for downloading a CD from the Internet than if you were to steal a physical disc from a retailer. Downloaders get jail time or huge fine; those who steal from a store only face misdemeanor charges.
-Non-commercial home recording is not piracy; it falls under fair use. But, thanks to lobbyists, the laws have been expanded to include all downloading.
-Protecting existing business models is not the primary purpose of IP laws.

Although Shapiro discussed the above as if they were facts, other speakers disagreed with his comments.

Fair Use Still Going Strong 
Fritz Attaway, executive VP and general counsel for the MPAA, said that Shapiro was incorrect when he stated that fair use rights have been decreasing. During a Q&A session, Attaway, who's been with the MPAA since 1976, said that it's the fair use restrictions have actually been decreasing. He said that the legal definition of "fair use" hasn't changed since 1976. Since then, new technologies have been created that let consumers exercise fair use in ways they never could before. As an example, Attaway cited that back in the '70s, consumers were unable to "make fair use" of motion pictures; today, he pointed out, it's easy and millions of people do it.

Attaway said that the basic rights of copyright holders have not changed in the past 29 years, except for the expansion of term length. Even the DMCA, he said, didn't create any new copyrights, but rather, it helped copyright owners protect the rights they already had.

When questioned on the 1983 Betamax decision, Attaway said that while he might not believe that it was the right decision, it has worked overall. He said he hopes that the Supreme Court will follow the Betamax decision when formulating its decision on Grokster because the Betamax ruling looked at how the product was being used - mainly for time shifting. The decision was that it fell under fair use and should be allowed to continue. The same process should be applied to Grokster, said Attaway, who said that "in this case, the defendant clearly created it for infringing purposes," it is clearly used for infringing purposes and is clearly costing music and motion picture industries lots of money.

"We are not opposed to peer-to-peer technology at all," Attaway responded when asked if there is any file sharing that is OK. Rather, he said, the industry is opposed to the way in which P2P technology is used. He believes that if the industry can find a way to distribute movies via peer-to-peer networks, it would be a good thing - as long as the rights holders get paid, of course. Attaway mentioned a number of things that P2P services can do to encourage the legitimate use of their technology, including better informing consumers about copyrights and putting better restrictions on the service and the files that are swapped.

According to Attaway, network license fees do not cover most of the cost of network television production. The producers make money from additional markets, such as foreign markets and the aftermarket (syndication, DVDs and the like. When consumers swap TV show files over P2P networks, these markets are eliminated.

Although he believes in digital rights management, he did admit, "No DRM is going to be perfect or uncircumventable. There's always going to be leakage. It's just a matter of keeping the leakage under control."   Respond to this article
Back to Headlines 

EMI's Cohen: Consumer Empowerment over Digital Media is 'Phenomenal'

During a Q&A session at Digital Media Wire's 2nd annual Digital Media Conference, Ted Cohen, senior VP of digital development and distribution at EMI, noted that until five years ago, a consumer interested in music would go to a record store and either buy a CD or not. "If you did, we were happy," Cohen said. "If you didn't, we were miserable."

Times have certainly changed. Now, there's a plethora of digital services including single downloads, subscription services, ringtones and more.

Cohen, whose job includes looking at new technology opportunities and see how they can be used to move the industry forward, believes that "it's a good time for the industry to find what resonates with consumers."

He appeared at the conference with his bag of goodies - a slew of cool gadgets, ranging from cell phones to iPods to a PSP, that travel with him everywhere. He sees mobile devices as a good way to distribute music videos, movie trailers and other short-form video, calling it "short attention-span theater." He says that mobile music and video presents providers with an opportunity to get their content in front of people and get quick feedback.

Cohen turned to a fairy tale to describe how he ranks multi-function devices:

The Sony PSP is the "Papa Bear"

The Gizmondo is the "Mama Bear"

The Nokia N-Gage is "Baby Bear"

And, although he didn't include it in the list, Apple's iPod is king of them all. And Cohen should know - he has seven of them. Perhaps iPod should be called the "King Bear."

Cohen expects that there will eventually be one main feature set that "will resonate" with consumers, but the features won't be limited to a single device. They will, however, all offer "personal ways to define your media usage."

As a consumer, he sees this "multiplicity of offerings" as exciting. "I don't have to make a choice" of how or where to get content delivered. "The empowerment we have as consumers is phenomenal," he said.

As a part of the industry, he believes it is "time to wrap our heads around new business models." He also said that the industry has never had a problem with peer-to-peer technology, just with the way that it is used.   Back to Headlines 

All Phone Calls Will Be Free

"All phone calls will be free. That's obviously an issue for the phone companies." - Niklas Zennstrom, developer, along with Janus Friis, of the Skype Internet telephony network and creator of the Kazaa P2P network, in a BBC article "How Skype and Kazaa Changed the Net."

Asked how Skype, one of the so-called VoIP services, could offer free phone service, Zennstrom likened the service to Google, which no one pays to use. He said in the article "When you go and search on Google you don't pay for that. But sometimes you click on an advert and Google makes money on that. It's the same thing with Skype. Some users are paying for services, but not everyone."

Zennstrom said he believes the losers will be the telcos who do not understand that there is a change going on. "This is a disruptive technology that shifts the industry," Zennstrom told the BBC. He added that Skype will take away revenue from phone calls, which is where the telcos get the bulk of their money.

"On the other hand," he said, "Skype, just like Kazaa and other software, is encouraging people to buy broadband connections. Today, less than half of the population has broadband. This enables the phone companies to sell broadband to the other half."   Back to Headlines 

Letters, We Get Letters (E-Mail, at Least)

From an e-mail we received about last week's article "MSN TV Everywhere and On Schedule:"

"Reading the article on MSN TV at the trade show - not a very good piece, too much about connected PC - you know that is hardly the core issue for customers - TV is supposed to be for everyone, not just PC owners.

"This paragraph is amazing:
"'Microsoft said it is doing ports of MSN TV to run on [existing ?] set-top boxes made by Motorola ... ZTE, all the MSN TV boxes will run Windows CE.'
"WinCE does not run on half of the architectures out there, and absolutely needs an MMU (memory management unit). For example, it won't run on boxes using TI DSP chips, or the Sigma-designed ARM. These guys at the booth are really up to their ears in BS.
"Sorry, had to let off some steam. Can't stand BS."

To which we reply:
The e-mail makes good and valid points. We wanted to report what Microsoft said. Two different Microsoft employees in the company's booth told us basically the same thing.

We write about the DVR functions and connected PCs and set-top boxes because that is the focus of our newsletter. We do not write about TV except as it relates to digital media.

SBC and Swisscom will be in big trouble if Microsoft doesn't come through more or less on time. BellSouth isn't betting its future, at least publicly, on IPTV. Nor is Verizon, which will deliver conventional cable TV-like broadcasting signals over its fiber network, at least initially. Without IPTV, the telcos are just another TV service and that might get them only a 10% to 15% market share - not enough to make it.

Frankly, I don't see how the phone companies can assure their financial future without IPTV and fiber at least to the neighborhood. Internet telephony and the cable TV outfits' bundling of phone service will start cutting into the telcos' revenue big time in 2006. If the cable TV companies were to cut their broadband rates - unlikely, they could decimate the phone companies' broadband revenues. Then the telcos only cash cow would be their corporate business.  Respond to this article
Back to Headlines 

MediaBay To Offer BBC Audiobook Downloads

MediaBay inked a deal to offer digital downloads of BBC Audiobooks UK's vast library of audiobooks. The titles are in a wide variety of lifestyle categories and literary genres such as biography, comedy, drama, history, quiz shows and travel. The collection also includes a number of famous series - "Doctor Who," "Sherlock Holmes," "Monty Python" and "The Hitchhiker's Guide to the Galaxy." The digital titles will be available for download to folks in the US via the MSN Music as part of an exclusive deal between MediaBay and MSN. MediaBay also plans to offer the audiobook downloads on Larry King Audio (www.larrykingaudio.com/) as well ad distribute them through its growing network of affiliate sites.  Back to Headlines 

BROADBAND BEAT

EarthLink Promises NYC $20/Month Broadband

Last week we reported on attempts to bring affordable broadband to every New York City residence. Brinton Young, executive VP of strategy for EarthLink told the June 10th NYC broadband hearing that EarthLink would provide wireless broadband for under $20 per month at a speed of 1 Mbps. His complete presentation follows:

"Good morning. Thank you for giving me the chance to speak to you today. My name is Brinton Young and I run strategy at EarthLink. I live in Pasadena, California but I'm glad to be back in New York City. My mother is a Brooklyn girl. And I have many happy memories of vacations and Christmas in this city, the city that sets the world standard for excellence in so many of the arts and professions.

"EarthLink is an ISP. Our mission is to connect people to the Internet, and to deliver the best possible Internet experience to them. Today EarthLink offers service to over five million subscribers through dialup, cable, DSL and satellite, as well as mobile wireless. We have over a million broadband customers and have won the JD Powers Customer Satisfaction award for three years. But we have a problem and it is a problem we share with America. Broadband is too expensive. Two monopolies control the last mile to the home, EarthLink can buy access to that last mile from them, but at a high price, too high for us to turn it into a retail service, offer it to the public at a great price and make a return.

"Finding a cost effective third pipe to the home, to create level playing field for EarthLink to compete in broadband is our number one strategic challenge at EarthLink. For the last three years , we have done a lot of digging into the next generation of broadband technologies, digging in the form of trials, field tests, investments. There are many candidates - WiMAX and other emerging wireless, broadband over electrical power lines, to name a couple of promising categories.

"But today I want to focus on a particular approach to the last mile which I believe is ready to meet the need for affordable broadband access. It is Wi-Fi technology deployed in a mesh. The same Wi-Fi used for local networking and hot spots can be used to provide broadband to the home. In this system, Wi-Fi radios are being deployed on light poles in a grid throughout the city, spaced about 1,200 feet apart. Internet traffic passes through this mesh into the home of the consumer. With the right equipment inside the customer's home, it will deliver about 1 Mbps downstream.

"The power of this system is its low cost. It leverages the low cost of Wi-Fi chips, of which 50 million units are shipped annually in the US alone. It can be deployed for less than $25 per household passed. It doesn't need outdoor antennae or professional installers. I have seen it working in Chaska, Minnesota, where the service is offered for $15.95 a month and 30% of the town has signed up.

"Here's the point. Using this technology, we believe EarthLink can deliver 1 Mbps broadband for a retail price under $20. We are prepared to work with the city to make that happen.

"Here's the catch. We need access to the light poles. The economic model does not work with pole rentals of $60 per month, much less $250 per month, when the electricity usage costs less than a $1. In order to enable this low cost technology, the city needs to make its light poles available for a couple of dollars a month.

"Does the density of NYC present challenges? Of course. Are there technical issues still to be addressed and tested before we would be confident enough to build out the whole city? Of course, but we, together with our equipment partners, are working on them. Would a phased rollout be prudent? Yes, we think so.

"Is it important for kids to have broadband? Of course it is. My 11- and 12-year-old girls use it every night for their homework. Should government care about universal broadband access? Both Presidential candidates in the last election thought it was important. Does that mean the city of New York has to get in the business of building and running networks? No, it does not, but the city can facilitate the deployment of those networks by partnering with the private sector. EarthLink is prepared to be that partner."   Back to Headlines 

Verizon Brings Wireless Broadband to San Antonio

Verizon Wireless will offer a high-speed wireless network in San Antonio and surrounding areas that covers more than the usual hotspots at airport terminals and coffee shops. The network will cover everywhere in and around San Antonio and along the Interstate 35 corridor from San Antonio to Austin. Austin, Houston and the Dallas/Fort Worth areas already have access to the Verizon wireless broadband network.

"This launch of high-speed wireless broadband surpasses any wireless technology available," said Luis Cruz, regional president for Verizon Wireless. "San Antonio consumers and businesses now have access to the latest mobile wireless data and entertainment, making it possible for them to stay connected, informed and entertained via their wireless phones and computers - anywhere, anytime." The network uses a new technology known as Evolution Data-Optimized, or EV-DO. Customers will need a special $50-$100 PCMCIA card in their laptop. The monthly fee for unlimited use is $79.99. Speed will be in the 400 Kbps to 700 Kbps range, much faster than a dial-up connection and about one-half the rate of most DSL broadband connections.

Customers with EV-DO-equipped handsets and willing to pay another $15 a month can get unlimited access to more than 300 two- to five-minute video clips per day plus unlimited browsing on the Verizon Wireless news and information Web service.

Sprint PCS and Cingular Wireless both say they plan to launch their own broadband wireless networks in San Antonio later this year.

Verizon Wireless is also launching its new V CAST service in San Antonio for its phone customers. V CAST delivers short-form content on-demand such as games, music videos and news to cell phones over the EV-DO network.

Verizon Wireless is a joint venture of Verizon and the UK's Vodafone. Cingular is a joint venture of San Antonio-based SBC and Atlanta-based BellSouth.  Back to Headlines 

28m New Broadband Lines So Far This Year

The number of broadband lines worldwide reached 164 million as of March 31, an increase of 52 million lines since a year earlier, with 28 million lines added in the last six months alone, according to the latest analysis from Point Topic. The US is still the world's largest broadband country, with 36.5 million lines, and China remains in second place with 28.3, the report says.

The UK had the most growth of any "G7" country since the end of 2004, with one million new lines, a 16.5% increase. France was the only other G7 country passing 10% growth in the quarter - achieving 13.5% growth and adding 913,000 lines.

"Turkey led the rankings in terms of percentage growth," said Haroon Butt, senior analyst at Point Topic, "with a 37% growth in the quarter, adding 179,000 lines."

Poland led the Eastern European countries, achieving 24% growth and becoming the first Eastern European country to pass one million lines. Australia had 18% growth to reach 1.8 million lines in the quarter.

"In South Korea, the broadband market continues its path to saturation with growth of 1.4% in the quarter," said Butt. "We see slow growth in some other countries, especially the established 'early adopters' such as Taiwan and even Japan, our figures show less than 5% increase in the quarter."

DSL operators still dominate the world broadband market with 107 million out of the 164 million broadband subscribers opting for DSL, giving it a 65% market share. Cable modem broadband subscribers are only higher in the North American market, where the US and Canada have cable broadband shares of 59% and 52% respectively.

                   Broadband Market Share

Service                         World     US      Canada
Telcos/DSL Operators.......65..........41..........48
Cable TV..........................35..........59...........52

"In other major broadband markets, DSL clearly dominates, especially in Western Europe," added Butt.

DSL lines in France, Germany, UK and Italy are at least 70% of the total market. In Germany, they form almost 100% of national broadband lines.

In terms of broadband penetration, South Korea became the first country to reach 25 lines per 100 residents, with growth having started to saturate over 18 months ago.

Elsewhere, Western European countries have moved further up the penetration rankings, with Netherlands and Denmark in third and fourth place having passed 20 lines per 100 residents, and Switzerland in fifth place with almost 19 lines per 100 residents, having passed Canada.   Back to Headlines 

Deutsche Telekom Cuts Monthly Broadband Rate to 14.95

Deutsche Telekom's T-Online unit will reduce the monthly rate for its best-selling DSL package to 14.95 ($18) per month from 29.95 ($36) beginning in July, according to T-Online CEO Rainer Beaujean. Unlike SBC's price cut to $14.95, T-Online's is for both new and existing customers. The company fears the impact on its customer base by competitors such as Vodafone, freenet.de and United Internet. It sees what happened in France with France Telecom's Wanadoo unit losing substantial market share to lower prices from rival free.fr. Free.fr, for example, charges only 30 ($36) for "up to" 7 Mbps DSL, unlimited phone calls in France and 60 TV channels.

The big question is why, if broadband is $15 in Texas and $18 in Germany where everything else is priced higher than the States, why is most of the US paying $25 to $50 a month for broadband?

T-Online rivals freenet.de, United Internet and Vodafone's Arcor wireline operation ramped up their marketing earlier this month. "If we notice that our competitors would like to end the price war they've started themselves, that's the right moment for us to say, 'Here we are,'" Beaujean told Reuters. "We also know the trends abroad. We have learned in France that broadband market leader France Telecom's Wanadoo unit waited for too long. We learned from that and act faster."

United and freenet pay "wholesale" monthly fees to access Deutsche Telekom's DSL infrastructure. The wholesale rate is set by the German government, which tries to make sure there is sufficient margin between T-Online's retail rate and the wholesale rate for third-party ISPs such as freenet and United. Vodafone's Arcor and Telecom Italia's HanseNet have their own networks and do not use Deutsche Telekom's.

Beaujean said the rate decreases will cause a 400 million ($481 million) decline in T-Online's expected revenue this year, from 2.5 billion ($3 billion) to 2.1 billion ($2.5 billion). Its 2004 revenues were 2.0 billion ($2.4 billion).   Back to Headlines 

Cox Offers Crippled Triple-Play Bundle

Cox Cable is offering an $89.95-a-month triple-play bundle of phone, broadband and TV services. Unfortunately, and unlike Cablevision's $99 triple-play bundle, it has shortcomings: long distance calls aren't included - they're five cents a minute. It's basic cable channels only and broadband speed is limited to 4 Mbps down and 0.5 Mbps up.   Back to Headlines 

Wireless and Mobile Broadband Coming to South Korea

South Korea's Korea Telecom (KT) plans to offer mobile wireless broadband service called WiBro that will allow users to access the Internet when traveling at 60 kilometers-per-hour (36 MPH). Access points are being built in Seoul and 19 other cities for a launch next year. Top access speed will be 1 Mbps. KT will offer the WiBro service to mobile phones, which will give users VoIP, high-speed Internet access and digital media broadcasting capabilities. The telco is working with HP and Intel to develop handsets for this.

"With WiBro we expect to provide new things such as location-based services, IP services and convergence," said KT CEO Ken Lee. "The goal is to create an environment that enhances life for citizens. The result is an economically vibrant city. This will be a catalyst for growth in the new age of Korea." KT has 55% of the countries broadband market share.

The Korean Electronics and Telecomm-unications Research Institute claims that WiBro will boost the countries production by $21 billion (11.8 billion) and increase exports by $7.25 billion (4 billion).   Back to Headlines 

30m Broadband Users In China

China had 30 million broadband subscribers at the end of March, up 5.3 million in five months, according to China's Ministry of Information Industry by way of DSL Prime. Market research outfit Point Topic puts China's broadband numbers at 28.3 million on March 31.   Back to Headlines 

Broadband for All

"Providing broadband connectivity to all, at the most reasonable prices shall be my top most priority." - India's Minister for Communications and Information Techn-ology Dayanidhi Maran   Back to Headlines 

Seven Technologies That Will Disrupt the Media Industries & Accelerate a Revolution in Home Entertainment

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 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 

ENABLING TECHNOLOGY

Coding Nabs Another Mobile Music Service

Coding Technologies, which says it's the leading provider of audio compression technology for mobile, broadcasting and Internet music services, has been one of the big (although somewhat silent) winners in digital media. The company is convinced that the future of downloaded music services are those that download directly to portable devices such as cell phones rather than those, like Apple's iTunes, that download to a PC and then copy to a portable device.

The company this week announced it's signed up a deal for Japan's mobile carrier KDDI to use Coding's compression technology in its "EZ Chaku-Uta Full" download music service. "KDDI has shown that music players tethered to PCs shall be replaced by multimedia phones," said David Frerichs, VP and US general manager of Coding Technologies. "EZ 'Chaku-Uta Full' brings the future now."

KDDI passed the 10 million milestone of complete song downloads sold by the EZ Chaku-Uta Full service. Started on November 19, 2004 EZ "Chaku-Uta Full" uses Coding Technologies' MPEG-4-based aacPlus format. With 30,000 tracks available, the service is now selling songs at a rate of approximately two million tracks per month at a very profitable 300 Yen ($2.75) per track.

By way of comparison, iTunes has sold 400 million downloads.

Listeners can preview songs for free and then purchase them for direct download to their mobile handset. Tracks can also be copied to removable memory cards on enabled cell phone handsets to increase the size of the listener's library. Users can set the downloaded tracks as ringtones in addition to listening to them. Nine handsets currently are compatible with the EZ Chaku-Uta Full service, including units from Toshiba, Hitachi, Sanyo, Casio, Kyocera and Sony Ericsson. The service is now a standard feature on all new CDMA 1x WIN handsets.

"We have a top market share in 3G because of advanced services like EZ 'Chaku-Uta Full'," said Makoto Takahashi, VP and general manager of KDDI's content division. "aacPlus is a key part of the economic engine that allows us to deliver quality services to our customers," he said.

Coding's Trophy Room 
Mobile content services that use Coding Technologies' aacPlus include KDDI, Loudeye, Melodeo, mobZilla, mmO2, Musiwave, Nokia, Secure Digital Container, SFR, SK Telecom, Telefonica and Vodafone. mmO2 selected MPEG-4 aacPlus as the audio compression standard for the O2 Music service because it wanted to be able to offer a wide selection of music that can be cheaply and quickly downloaded by the consumer.

Nokia has a broad license to aacPlus and is incorporating it in various products including the cooperative venture between Nokia, Microsoft and Loudeye.

SK Telecom uses aacPlus in its 3G content service offerings. It currently provides music-on-demand and video-on-demand to over one million 3G subscribers in Korea. With the addition of MPEG-4 aacPlus, download costs for subscribers and operating costs for SK Telecom go down significantly because of its better compression.

Vodafone Germany has based its Vodafone Live Music download service on aacPlus.

The following mobile phone manufacturers are shipping or have announced phones with aacPlus: Samsung, Nokia, LG, Motorola, Hitachi, Sanyo, Toshiba, Casio, Sendo, Curitel and Siemens.

Mobile platform vendors Ericsson Mobile Platform, Qualcomm and TTPcom have all integrated aacPlus.

Mobile tools vendors Emuzed, McubeWorks, Nero, Nextreaming OnTimeTek, Orban, Packet Video and RealNetworks all support aacPlus.

Some Background
The aging technology of the MP3 format - universally loved and used by consumers for storing music files in a digital format - makes it ripe for a replacement. Newer schemes such as aac and Microsoft's Windows Media Audio (WMA) format provide better sound quality in smaller file sizes. Smaller files mean faster downloads - important for the comparatively slow cell phone networks - and take less storage space - important for cell phones and their comparatively smaller storage capacities. The biggest boost for aac, the genealogical child of MP3, has been Apple's adoption of it as the format of choice for iPod and iTunes. Apple uses aac LC as the format for its iTunes music service, not aacPlus. However, many labels use Coding Technologies' encoding tools to generate tracks for use on the iTunes service. Given the success of aacPlus in mobile devices - an estimated 20 million such handsets are expected to be shipped in 2005 - and the success of KDDI and other services, one wonders how long Apple can resist the trend towards truly mobile download services.

The aac format is based on the industry standard MPEG-4 compression scheme so it's viewed by many as an industry standard as opposed to Microsoft's proprietary WMA format. Coding Technologies offers an enhanced aac that's called aacPlus. Its "Spectral Band Replication" technology is a backward and forward compatible method to enhance the efficiency of any audio codec. The company says its products are fundamental enablers of open standards such as MPEG, Digital Radio Mondiale, HD Radio and the DVD Forum.

Coding Technologies is a spinout of the joint effort of Fraunhofer Institute (creator of MP3), Dolby, AT&T and Sony that developed the aac technology.

By-the-way: Sony owns the name "Chaku-Uta Full" but we could not find out whether it owns any of the service, which includes content from several labels, including Sony.   Back to Headlines 

LIES, DAMN LIES, & STATISTICS

DVD Recorder Sales to Surpass DVD Players

Worldwide revenues for DVD players (as opposed to DVD recorders) will have their first ever decline this year with sales projected to fall 1% to $19.8 billion, according to Strategy Analytics. DVD recorders are becoming more popular than DVD players, the market researcher said. Worldwide sales of DVD recorders reached 8.9 million units in 2004 and are expected to overtake play-only machines in 2008, with annual sales of 90.9 million units in 2010.

Higher-value DVD recorders are beginning to replace players, but this trend will not prevent a continued fall in overall revenues, according to the company.

"High prices and product complexity have held back demand for DVD recorders, but these factors are now diminishing," said Peter King, director of the Strategy Analytics Connected Home service. Currently, Japan and Europe lead in DVD recorder adoption. In the US, consumers are more likely to own DVR gear, either as a separate set-top box, such as a TiVo unit, that all the US cable and satellite pay-TV services offer. Outside the US, DVD recorders with a built-in hard disk are more popular as replacements for VCRs for recording TV shows. With a DVR, consumers record a TV show on the hard disk and then copy it to a DVD.  Back to Headlines 

UK Internet Ad Spending Increases 51.5%

Internet ad spending in the UK in the year's first quarter again surpassed the rest of the advertising market with an increase of 51.5%. This compares with a 5.3% increase for ads in all media, according to the Advertising Association in conjunction with the World Advertising Research Center. Internet advertising accounted for 210 million during the quarter.   Back to Headlines 

8.5m P2P File Sharers on Average at Any Time

There are an average of 8.5 million people using peer-to-peer networks for downloads at any given time, said BigChampagne, which monitors online traffic. They love their music - with three out of four files downloaded through peer-to-peer networks being music tracks, according to BigChampagne's Online Media Measurement. Movies only make up about 2% of downloads, the company said. However, the number of movie files available has increased to 50 million from last year's 30 million. Other videos such as TV shows and adult stuff accounted for almost 9% of downloads.

Despite the best efforts of the record labels and movie studios - both legal and educational - the average number of people connected to P2P networks has grown from 5.5 million in 2003 to 8.5 million through the first five-and-a-half months of this year. Two dips occurred. One was when the first wave of publicity hit about the RIAA's intent to sue individual US residents it believed were violating copyrights. The other was when it actually started filing the suits.

                              Average Simultaneous P2P Users

Period                       Worldwide                    US                   US as % of World Total

June, 2003                   4,362,489                   3,113,631                   71.4%

July, 2003                    3,484,100                   2,418,593                   69.4%

August, 2003                3,847,567                   2,630,960                   68.4%

September, 2003           4,319,181                   2,891,645                   66.9%

October, 2003               6,142,506                   3,764,032                   61.3%

November, 2003            4,392,814                   2,498,431                   56.9%

December, 2003            5,602,384                   3,239,298                   57.8%

January, 2004                6,046,998                  3,528,419                   58.4%

February, 2004              6,831,368                   4,039,989                   59.1%

March, 2004                  7,370,644                   4,603,571                   62.5%

April, 2004                    7,639,481                   4,688,988                   61.4%

May, 2004                    7,286,378                   4,589,255                   62.9%

June, 2004                   7,401,432                   4,583,920                   61.9%

July, 2004                    7,116,270                    4,584,111                   64.4%

August, 2004                6,822,692                    4,549,801                   66.7%

September, 2004           6,771,548                   4,687,536                    69.2%

October, 2004                6,255,986                   4,435,395                   70.9%

November, 2004              7,452,184                   5,445,275                   73.1%

December, 2004              7,582,248                   5,500,314                   72.5%

January, 2005                 8,385,612                   6,129,512                   73.1%

February, 2005                8,524,938                   6,183,636                   72.5%

March, 2005                    8,282,986                   6,016,247                   72.6%

April, 2005                      8,629,307                   6,297,457                   73.0%

May, 2005                       8,665,319                   6,290,327                   72.6%

June, 2005 *                     8,722,793                   6,422,725                   73.6%
* Through June 17, 2005                                                 

 Period                    Annual Average              Users             Annual Average Users         

 Year 2003                    5,518,899                   2,936,656                   53.2%

 Year 2004                    7,048,102                   4,603,048                   65.3%

 2005 to Date *              8,535,159                   6,223,317                   72.9%
* Through June 17, 2005                   Source: BigChampagne  

The sudden jump in the average file size from May 2004 to May 2005 reflects some slight increase in the number of video files. The typical music track is about 3MB.

Average File Size on the P2P network FastTrack

Period         Average File Size (in MB)
May, 2002....................3.22
May, 2003....................3.81
May, 2004....................5.51
May, 2005....................8.92
Source: BigChampagne

$60b Spent on Online Poker This Year

More than $60 billion will be gambled at online poker sites this year, according to a poll of industry experts conducted by Ireland-based Research and Markets. (Makes you wonder how much of the poker playing is done over corporate networks and on company time, doesn't it?) Out of the total, the sites will rake in about $4 billion over the next three years, the survey said. Most of the experts said poker will be the dominant form of online gambling by 2008 and that Europe will be the leading market. The firm predicted that bigger gambling brands like the UK's Ladbrokes will soon enter the space and force industry consolidation.   Back to Headlines 

Global Entertainment & Media Market To Reach $1.8t in 2009

The global entertainment and media (E&M) industry is in its strongest position since 2000, and will increase at a 7.3% compound annual growth rate (CAGR) to $1.8 trillion in 2009, according to the PricewaterhouseCoopers report "Global Entertainment and Media Outlook: 2005-2009." The consulting firm credits improved economic conditions, an advertising upswing and the expansion of online distribution of music, films, books and video games as the key drivers triggering end-user spending.

The Benefits of Broadband A significant amount of growth will come from new spending streams resulting from the increase in broadband and wireless use around the globe. Total revenue from these new spending streams will increase from a mere $11.4 billion last year to nearly $73 billion worldwide by 2009, according to the new PwC Outlook report.

"The entertainment and media industry continues to display an extraordinary ability to reinvent itself and create new revenue streams through innovative offerings that barely existed as recently as 2000," said Wayne Jackson, global leader of the PwC Entertainment & Media Practice. "Online and wireless video games, online film rental subscriptions, licensed digital distribution of music and the rapid adoption of ringtones and mobile music downloads are becoming critical components of the industry and driving significant revenues across all regions."

According to the report, Asia/Pacific will remain the fastest-growing region over the next five years, led by strong growth in China, which is on track to overtake Japan as the region's biggest market by 2008. China will experience the highest media and entertainment spending growth, with a 14.2% CAGR through 2009, excluding Internet access spending. Including Internet access fees, China's growth is expected to pass 25%. Overall, growth in Asia-Pac will be led by double-digit increases in the Internet, video games, casino gaming, TV distribution and recorded music segments.

PwC forecasts that a "favorable economic environment" and new spending streams will offset declining categories, and expects broadband to be the major growth catalyst across all regions. Broadband will lift overall Internet access spending as well as create new opportunities for online advertising and make online transactions faster and easier. Also, media content owners are starting to license more of their content to digital distribution services, which will help offset the negative impact of piracy.

Broadband will be the principal driver of Internet access spending during the next five years and will surpass the dial-up market. There is still huge potential for subscriber growth in Asia/Pacific, where access spending is expected to more than triple. In the US, EMEA and Canada, however, penetration is approaching saturation, and access spending will slow.

Growth Segments Online and wireless games are the fastest-growing components of the video game market. Online movie rental services will boost the DVD rental market. E-books, while making up only a small portion of the market, represent a growth segment that is set to bolster the professional and college book markets and provide new distribution opportunities for consumer books. The emerging video-on-demand and satellite radio services will also help create new spending streams destined to add to the media and entertainment market.

While the US is still the largest E&M market, the PwC report expects it to be the slowest-growing region, with a 5.6% CAGR through 2009, when it will account for $690 billion. Although economic conditions in the States will generally remain favorable, rising interest rates and higher energy costs will lead to slightly more moderate growth rates during the next five years. Some of the expected sluggishness of the US market will be replaced by growth in the EMEA region, which will recover after a few slow years. PwC expects the E&M market in EMEA to grow at a 6.5% CAGR to reach $572 billion in 2009.

Asia/Pacific will remain the world's third-largest region, with a projected average 11.6% CAGR, bringing it to $432 billion in 2009. Latin America's E&M market is projected to rise at an 8.2% CAGR to $47 billion in 2009. Canada is projected to expand at a 6% CAGR to $37 billion in 2009.

Growth in the Music & Movie Markets After several disappointing years, the worldwide market for recorded music finally reversed course in 2004 and grew by 5.7% to $38 billion, according to PwC. Over the next few years, consumer spending on recorded music will rise at an 8.3% CAGR to $56 billion in 2009. Not surprisingly, ringtones and digital distribution are the biggest growth drivers.

In the US, consumers will spend $18.8 billion on music in 2009, an 8% CAGR.

The report found that the home video market will grow due to more homes having DVD players, with DVD purchases driving the market, but generally at the expense of in-store rentals. The emerging online film rental subscription market will prop up the home market, while piracy will continue to wipe out some of the gains.

PwC's Outlook also includes in-depth global analyses and five-year market forecasts for eight other industry segments, including radio and out-of-home advertising, business information, magazine publishing, newspaper publishing, book publishing, theme parks and amusement parks, casino gaming (including gross gaming revenues generated on-site at casinos) and sports.   Back to Headlines 

75% of MP3 Owners Will Listen to Podcasts By 2010

According to The Diffusion Group (TDG), demand for podcasts is expected to grow from less than 15% of portable MP3 player owners in 2004 to 75% by 2010. In its new report, "Podcasting: Fact, Fiction and Opportunity," the market researcher forecasts that from 2004 through 2010, the use of podcasting among US consumers will see a compound annual growth rate of 101%

"Today the term 'podcast' refers to almost any online mobile content distribution service," TDC contributing analyst Marc Freedman. "It has taken on very general precepts, thus indicative of its status as a service category as opposed to a branded activity."

According to Freedman, although the popularity of the iPod essentially created demand for both MP3 players and inexpensive, downloadable content, it wasn't until consumers became aware of personal video recording and the wonders of time-shifting the enjoyment of content until it is more convenient that podcasting became a distinct activity.

"Consumers were already accustomed to downloading music for playback on portable devices - this is a well-engrained activity that precedes online digital music," said Freedman. "However, the downloading of online 'audio blogs' for portable on-demand consumption is certainly new. Yes, the roots of podcasting lie in non-commercial amateur blogging, but podcasting's non-commercial status is changing as more businesses begin to find creative ways to use this new delivery medium to push audio content."

Several commercial outfits that are testing the podcasting waters include ABC, NBC, National Public Radio, Infinity Broad-casting, TV Guide, Clear Channel Radio and BusinessWeek.   Back to Headlines 

SHOW TIME

BSkyB to Offer Broadband Downloaded Films, Sports

British satellite TV firm BSkyB plans to launch an Internet movie and sports download service later this year with sports content and about 200 movies on offer, at least initially. It'll be available free to the company's very top Sky World subscribers. Downloading a two-hour movie will take about two hours over a typical broadband connection. Interviews and trailers for films will also be available. Sports content available for download will include match highlights, interviews and archive footage.

BSkyB's cable TV competitors Telewest and NTL, both of which own their own broadband networks, recently announced plans for new video-on-demand services that will not require consumers to download flicks in advance - just click and view. The two cable TV services also have the advantage over BSkyB in that their customers can watch the on-demand content on their TVs. To watch shows downloaded to a PC, BSkyB users will need a digital media adapter or a pricey Microsoft-based Media Center PC that uses the TV set as its monitor. Another BSkyB competitor is London-based HomeChoice, which offers video-on-demand and live TV over a broadband connection.

Available free - but only to premium BSkyB subscribers - the service will use broadband to download the programs to a PC as opposed to using the satellite to download to a DVR-equipped set-top box. BSkyB's premium subscribers pay 41 ($75) a month and account for about half of the company's 7.7 million customers. The company's announced goal is to have 10 million subscribers by 2010. News Corp owns most of BskyB, as well as a controlling interest in US satellite TV service DirecTV.

Like those of most satellite TV services, BSkyB's set-top box has no "return path" that would allow the customer to communicate back with the company except via a bandwidth-deprived phone line that's used for simple tasks like paying for transactions and video games.

In short, the BSkyB service downloads content to a PC, meaning that most subscribers won't be able to watch it on their TVs. The good news is that it's free, at least to the company's premium subscribers.

BSkyB's new venture brings up several points: - There is a market for downloaded flicks despite the lackluster results from the US online movie services Movielink, CinemaNow and Starz Ticket on Real Movies. - The satellite TV service will find that not owning its own broadband service will hurt it competitively, particularly beginning in 2006 when the phone companies start offering service bundles that include TV programs. - Downloaded movies aren't "video-on-demand" in the sense that a consumer can on a whim decide to watch a movie and get instant access to it. They are more like video-on-delayed-demand (VODD). - The biggest single barrier to downloaded films' widespread acceptance is that the typical consumer does not have a home network that allows them to play the flicks that have been downloaded to a PC on the TV. The current spate of digital media adapters that stream video from a PC to a TV are pricey - in excess of $300 - and more difficult than necessary to set-up and use. - Every satellite and cable TV service will have to install DVR-equipped set-top boxes in virtually every home in order to be competitive in the "on-demand" world of the mid "oughts" - as in "ought-five," "ought-six."

Asked by MediaWeek whether broadband-delivered content potentially puts a question mark over the long-term viability of satellite delivered content, Sky replied that it still believes satellites are the best way to provide programs. A Sky spokesman also told the publication, "This isn't a response to what other companies are doing. It's a response to our customers. Consumers are enjoying the ability to take control over their viewing and this has been at the heart of Sky's success to date."

BSkyB's satellite TV service is the dominant pay-TV service in the UK, unlike in the US where the cable TV companies dominate. However, DirecTV and EchoStar have brought the US cable TV services' growth in new pay-TV subscribers to a virtual halt. The three major US phone companies have, at least for the short term, hitched up with a satellite TV service and intend long-term to upgrade their own wired networks to deliver TV programming. Respond to this article   Back to Headlines 

Game, Set, BT

BT landed a deal from the All England Lawn Tennis Club to deliver video from Wimbledon to broadband users via the Web. BT Broadband and BT Yahoo Broadband customers will get free access to six hours of live multi-court commentary a day, plus end-of-day highlights, match reruns, video news updates, player interviews, behind-the-scenes programming, archives of golden moments, classic matches, player video profiles and end-of-championship reviews. Selected clips from the day's highlights, the archive and reviews will be available to all visitors for free. Non-BT customers can access all the videos for a one-time 7 ($12.75) fee. Those who sign up for BT broadband via the Wimbledon Web site can save 10% at Wimbledon's online shop. BT will provide its BT Openzone Wi-Fi to those who attend the tournament.   Back to Headlines 

Movielink to Deliver Movies to Hotel Guests

Movielink, a studio-backed Internet video-on-demand venture, is currently working with LodgeNet, a provider of interactive TV and broadband services to hoteliers, to enable movie downloads to hotel guests' laptop computers over its interactive TV and broadband access systems.   Back to Headlines 

ONLINE MUSIC SERVICES

The State of Radio - the Start of a Revolution 

by Susan Schrank

There are some 282 million unique radio listeners in the US, according to Dan Mason, former president of Infinity Radio and current advisor to iBiquity Digital. That's roughly 94% of the population.

Over the past several years the radio industry has undergone several major changes. Now, in addition to AM and FM, consumers can tune into satellite radio or listen to thousands of Internet radio stations. They can listen to radio at home, in the car, on their MP3 player and even on some cell phones. With the satellite services, they can take the receiver with them. With home networking, they can listen to Internet radio in rooms where there's no PC.

During a panel about the evolution of radio at the Digital Media Conference, Dave Ulmer, director marketing for Motorola Media Solutions, told the audience he likes the idea of device convergence, but said that it's important to avoid the "toaster oven" syndrome - you have a toaster, you have an oven, but when you put them together, you get a lousy toaster and a lousy oven. Camera phones are a good example of successful convergence. Consumers buy camera phones, but still purchase standalone digital cameras as well.

According to Ulmer, Motorola has become a company with three distinct units - cell phones, home networking solutions and automotive solutions. About a year-and-a-half ago it decided how it could get all three to work together, with the major result being the iRadio, a service that lets consumers take their favorite music - from their own digital collections or Internet radio - wherever they go. The idea is to offer users a "continuous radio experience," such as picking up a song in the car at the exact spot where they stopped it on the home stereo.

The mobile handset of the future, according to Ulmer, will have a phone, storage, a music player, stereo-quality sound and Bluetooth support. Motorola has had a phone with the RealNetworks media player on the market since last year. It has since announced an "iTunes" phone and recently announced handsets that will support Windows Media.

With all these new choices, the consumer is more in control of his media decisions than ever before. Ulmer believes that the consumer is gaining control the in the same way that happened with television with cable, satellite and on-demand programming. He called it "me-casting," the ability to choose exactly what I want to watch or listen to. With traditional broadcasting, Ulmer said, the user has to listen to whatever content the broadcaster wants to provide.

Ulmer quoted some Motorola research that found that when people first get an iPod, they pretty much stop listening to the radio. Six months later, however, their radio listening time increases by 25% because they want more new music. With the radio, they can discover new music without having to pay for a service or buy a CD or song download.

Another New Option Rather than focus on where consumers can listen to music, Srivats Sampath, founder and CEO of Mercora, build a company that expands what they can listen to. Essentially, Mercora took "peer-to-peer and made it legal," said Sampath. Instead of letting subscribers download music, Mercora works with a broadcasting method, turning it into a potentially worldwide Internet radio network.

Mercora's IM Radio lets users search, find and legally listen to music provided by individual Webcasters from around the world in near-CD-quality sound. According to Sampath, it currently broadcasts eight million songs a day.

Whenever a song is played, the company pays royalties to SoundExchange, a performing rights organization that collects royalties for sound recordings played over non-traditional radio systems. SoundExchange collects royalties from Internet and satellite radio broadcasters as well as cable and satellite TV music services.

The rights available to Mercora listeners depend on the country the user lives in. By year-end, said Sampath, it will be a "legal radio broadcast network" in seven or eight countries.

For radio fans wanting more than AM or FM but don't need the thousands of "channels" offered on Mercora, they can join the millions of folks who've turned to satellite radio.

According to Lee Abrams, chief programming officer of XM Satellite Radio, his company has 70% of the US market coast-to-coast. It also recently got approval to offer its services in Canada. XM, like its competitor Sirius, offers roughly 150 channels in all sorts of genres from rock music to talk radio.

Three decades ago, FM radio came on the air and took a huge chunk of the market away from AM by offering stereo sound, a wider variety of music and fewer commercials. XM's vision, said Abrams, is for the company to "have the same effect on FM that FM had on AM."

What's Next? According to Sampath, radio used to be a "lean back experience," where the listener would lean back and enjoy the music. Now, thanks to the ability to listen on a PC, the listener can search for and discover the music he wants to listen to, making it a "lean forward" experience. Now, he said, the listener can listen to "what I want, not what you want to give me."

With all the new gadgets and music services out there, consumers are often stunned into indecision, what Motorola's Ulmer called the "deer in headlights effect." Ulmer believes that the industry will sort itself out - that the "iconic products" that survive the upheaval will be around for a long time. "But for now, it's a mess," he said.   Back to Headlines 

College Digital Media Network Creating a 'Ruckus'

University networks represent "broadband for the next generation," according to William Raduchel, chairman and CEO of Ruckus Network. Ruckus provides a digital media network offering music downloads and subscriptions, movie and video downloads and campus-based programming to college and university campuses across the US.

According to Raduchel, the typical college student on campus has access to a 100 Mbps symmetric broadband connection - a far better guaranteed connection speed than is available to consumers and most businesses. Raduchel said that the average student spends six-and-a-half hours a day connected to the Net, but only about six hours a week watching TV. Multiply that by the roughly 3.5 million kids on campus and the content industry is presented with a massive potential captive audience that has some serious available bandwidth over which to download gigabyte after gigabyte of content.

Raduchel told the audience at Digital Media Wire's Digital Media Conference that "kids download to get prestige." He said that some college students download music libraries that are big enough to play non-stop for 20-30 days. They then post their music on P2P sites to show their personality, as if to say "you can tell a lot about who I am by the type of music I am sharing." This ability to share who they are is a large part of why kids want all this music, Raduchel said. They "use media to find friends and use friends to find media." It's all about "prestige, personality and community."

The average number of songs on a college student's hard drive has grown from 1,000 to 6,000 over the past year, according to Raduchel.

As for Ruckus, it provides a legal way for college students to access hundreds of thousands of songs, see what music their friends are listening to and become part of a larger community. And, with the Ruckus subscription service, the kids can copy the music they like to their hard drive or a portable player and, if they don't like it, they can delete it and try again instead of having to decide what to buy up front, as they would with an la carte download service like iTunes.

Raduchel is the former executive VP and CTO of AOL Time Warner. Prior to that he was chief strategy officer and executive committee member at Sun Microsystems. He also spent time as a professor of economics at Harvard University. The creation of Ruckus brought Raduchel out of semi-retirement "to the cutting edge."

While Ruckus works to build up the roster of schools signing up to offer its network, it will also be experimenting with letting kids in separate dorm rooms watch movies (presumably streamed over the network) "together" and chat on instant messaging while doing so.   Back to Headlines 

Yahoo Music, BigChampagne Share Data

BigChampagne will incorporate information from Yahoo Music into its syndicated chart, which reports on the world's most popular online music. New offerings from BigChampagne will include branded Yahoo Music charts as well as integrated tools for exploring the relationship between online consumption and traditional outlets.

BigChampagne subscribers in the radio and recording industries will have analytic tools for comparing what's on the airwaves with what's popular online - by market, by format and by station. Additional information from BigChampagne's strategic partner Nielsen Entertainment includes in excess of 100 million song detections annually on more than 1,200 radio stations in over 130 markets in the US.

BigChampagne will share proprietary information about the most popular artists and songs online with Yahoo Music, giving the music portal additional empirical information about what online music fans want, by market and by format.

"The airplay on Yahoo Music has been moving the needle on music sales and awareness for quite some time now," said Jay Frank, head of programming and label relations for Yahoo Music. "BigCham-pagne's new offering is a great new way for the music industry to truly aggregate what today's online music listener enjoys and how they are truly impacting the marketplace."

BigChampagne CEO Eric Garland said, "Our company is focused on early insight into the often subtle relationship between impressions and response from the marketplace. Nowhere is that response more immediate, leading and predictive than among Yahoo Music fans."   Back to Headlines 

HOME NETWORKING

Home Networking Is the Weakest Link

Home networking is the weak link in the digital media business. That comment was heard several times at SuperComm a few weeks back and now two research shops are saying it, too. It's like waking up one day and everyone has started saying the same thing you've been saying for several years.

Only the four horsemen of the Net - spam, viruses, adware and spyware - can shut down the digital media business. However, the industry will remain small until the majority of homes have a proper entertainment network. A home network will need to have speeds capable of carrying multiple streams of high-definition video based on standards that every hardware maker and software developer can engineer products for, and be sufficiently secure to satisfy the content producers.

When the announcement of the Haier UWB-based HDTV and media server first hit, the immediate question was how other non-Haier gear could be connected.

The Time Has Come For a Mandated Home Networking Standard ABI Research says that a wide variety of networking technology exists or will arrive soon for networking digital media gear in the home, including Wi-Fi, UWB, Bluetooth, powerline (HomePlug) and multimedia-over-coax (MoCA). There's more choice than homogeneity in home networking, however, the company says. It's actually a question of too much choice, because home networking completely lacks homogeneity.

"There is a place for most of these technologies in the future of home networking, says Vamsi Sistla, director of broadband and residential entertainment at ABI Research. "Each method's proponents may say that their way is the one that will eventually win out, but that is not realistic, and nobody is asking, 'How can we all coexist?'"

Consequently, customers are confused about what to buy. They and the makers of digital media gear are confused about how to install digital media devices on a home network. Home entertainment gear makers don't know what formats their equipment should support - ask Motorola and Scientific-Atlanta about which network should be embedded in their future DVRs. Gear makers are thus hesitant to commit to formats that may quickly become obsolete, perhaps even fail in the marketplace.

Sistla believes that the need for a universal standard, on which a multi-network translator/adaptor could be built, will eventually be recognized. "But where will such a standard come from?" he asks. "Not from networking technology vendors, with their own separate agendas. Not from the IC makers creating the chips for home entertainment devices."

Instead, ABI Research believes there is an opportunity for government - in the form of the FCC and its equivalents around the world - to mandate a single standard underpinning a media adaptor that could allow all these network technologies to talk to each other.

Such government-mandated standards already exist by the thousands. But, says Sistla, many questions remain: is there political will for such a move? Will the vested interests see the advantages and cooperate or will incompatibility rule, as is often the case in free markets? Would a universal standard be possible in a global CE market?

ABI Research has published a study called "Digital Home Media Networking" that examines the worldwide market in network-equipped audio and video consumer electronics, with particular focus on Wi-Fi, PLC and UWB technologies.

We think the FCC should first spend its time sorting out the US broadband woes - figuring out how to get every home with broadband access.

Broadband Services Will Spur Home Networking Market Beyond Traditional Retail Sales Data connectivity, VoIP and multimedia capabilities are driving the deployment of advanced customer premise equipment such as home networks, says market research house Parks Associates. It predicts the number of broadband households with a residential gateway (RG) will reach 69% by 2009, driven in large part by service providers in Parks' report "Home Networks & Residential Gateways: Analysis and Forecasts."

The report predicts home networking, as both equipment and service offerings, will be a major component in the competitive strategies of broadband carriers in the next five years. During that time, cable, DSL, and other broadband vendors will take aggressive steps to deploy VoIP and multimedia services, which will boost the market for RGs.

"Home networking equipment is shifting from low-cost and relatively limited devices sold at retail to integrated modem and router platforms that offer multimedia applications and advanced management software," said Kurt Scherf, VP and principal analyst at Parks Associates. "Broadband carriers are beginning to dictate the pace of the market for home networks, creating significant opportunities for third-party vendors to support more advanced features via customer premise equipment (CPE) and software solutions."

Many broadband providers, once reluctant players in the home networking arena, now view the deployment of network- and multimedia-capable CPE as a significant move to promote customer retention, lower support costs, and ultimately produce higher revenues, according to Scherf.

"In addition to building a more loyal customer base, the RG helps reduce support costs by providing a solution more integrated with a carrier's unique network and business needs," Scherf said. "Software partners who can assist both the carriers and equipment vendors in developing cost-effective CPE and provisioning services will be key partners in the home networking value chain."

The Parks report provides an analysis of the market for carrier-deployed data connectivity solutions. The report provides residential gateway forecasts and strategies for players in the home networking value chain. It also includes profiles of more than 30 key home networking players.   Back to Headlines 

Digeo Does Deal With Motorola

DVR developer Digeo will make a technical analysis as to whether it can port its Moxi TV interface to Motorola's DCT line of digital set-top boxes as part of Motorola's Horizon program for software developers. Digeo, with only about 125,000 of its boxes installed, has struggled to find a market segment it can dominate. Charter Communications, which like Digeo is run by Paul Allen's Vulcan Enterprises, and financially troubled Adelphia, which Time Warner and Comcast are carving up, are the only two major operators selling the Digeo gear. A smattering of smaller cable TV companies also offer Digeo boxes.

Rival TiVo, which sells through retailers and DirecTV, has shipped the most DVR boxes. Scientific-Atlanta, which sells through cable TV operators, follows in DVR market share with EchoStar.

It appears that the pay-TV services will become the dominant seller of DVRs to consumers. They have direct contact with their customers and an established billing relationship. The future for TiVo and Digeo appears to be deals with set-top box makers and their customers, the pay-TV providers. TiVo recently announced a deal with Comcast under which it will port its software to Motorola-supplied DVR set-top boxes.

Digeo's Moxi software already runs on Motorola's Broadband Media Center line of products. Moxi software integrates high-definition television with a dual-tuner digital video recorder, enabling a subscriber to watch one channel while recording another. Subscribers can also quickly search for and select on-demand video content, and access instant weather, sports and news via an interactive information ticker. Such additional capabilities help pay-TV operators increase their per-customer revenue and reduce so-called churn. Other potential revenue generating opportunities that the Moxi service offers are games and the display and management of the customer's photos on the TV.

Motorola has shipped more than 37 million digital set-tops worldwide, including 1.5 million high-definition digital video recorders (HD-DVRs).

Motorola's Horizon developers program is designed to provide, la PCs, independent software vendors with the tools and engineering support necessary to develop applications that are compatible with Motorola DCT set-tops.

"If the technical analysis study proves successful, the industry's easiest-to-use interface will be even more widely available, thereby helping cable companies achieve greater business benefits and fend off increasing competition from satellite and telco companies," said Digeo COO Bert Kolde.

The cable TV companies are competing with a moving target - one that's also unknown. The phone companies, especially the US ones and SwissCom, are counting on Microsoft's version of IPTV to provide capabilities far beyond what the cable and satellite TV companies currently offer. What Microsoft's MSN TV will be able to do and when it will be able to do it are still unknown's. Microsoft's two biggest MSN TV wins are SwissCom and SBC, both of which have postponed their initial launch.   Back to Headlines 

PRODUCT WATCH

New Morpheus Is 'Most Advanced' P2P Software

Just days before an expected Supreme Court ruling that could change the face of the music industry, StreamCast Networks has released the beta version of Morpheus 5.0, which it claims is the most advanced P2P file search and sharing software ever.

The Supreme Court is due to rule by the end of June on the landmark case that pits the music and movie industries against StreamCast and fellow P2P software outfit Grokster. The high court is reviewing the case after a district court and an appeals court both ruled that the P2P firms could not be held liable for the actions of their users, even when their software is used for infringing purposes.

As it waits for the decision that will determine its future, StreamCast has taken the covers off the new rev of Morpheus that has been in development for nearly two years.


The Samsung SCH-i370 is more than just a phone

"While some in the entertainment industry may view our powerful new technology as an even greater threat, we believe that Morpheus can prove to be one of the shining stars for their digital future if only they would be open-minded to work with us," said StreamCast CEO Michael Weiss. "Together we can find solutions a lot quicker than their attorneys ever will."

According to Weiss, everything in this latest version is new, "ranging from the Smart User Interface to the improved NEOnet search technology under the hood." He calls Morpheus 5 "a breakthrough product that elevates the file-sharing experience to an entirely new level."

Morpheus 5 adds support for integrated BitTorrent searches, which is supposed to add reliability and ease of use for finding and downloading all types of media files including MP3 audio, music, videos, movies, games, software, pictures and documents. The NEOnet technology provides "lightning fast" download speeds and superior search accuracy even for content that can't be found anywhere else, StreamCast claims.

One move sure to delight users is that the new version of Morpheus doesn't include any third-party bundled software - that means no spyware and no pop-up ads. It does include, however, user-enabled parental filters to keep unwanted content away from children and free anti-spoofing look-ups to help users avoid downloading bogus or spoofed files.

Additional features in the final version of Morpheus 5.0 series will include iPod compatibility, podcast searches, Mobile Morpheus and a custom Morpheus eWallet that will allow users to easily purchase in excess of one million authorized music, video and game files through Morpheus.

100,000 UMD Movies Sold

Sony has sold 100,000 copies of movies on the Universal Media Disc (UMD) format in Japan and the US, according to CNET's News.com. Sony developed the UMD optical disc and uses it in its PlayStation Portable (PSP) handheld game console. Sony will reportedly have 10 films available on UMD for the September launch of the PSP in Europe, with 10 more titles being released in mid-September. Paramount, Buena Vista, Fox, Universal and Disney also plan to publish titles in the UMD format.   Back to Headlines 

New Samsung Mobile Does Music, Business Apps and More

Verizon Wireless and Samsung have teamed up to bring "gadget enthusiasts" a mobile device with high-speed connectivity, a familiar user interface and essential hardware features." The new Samsung SCH-i730, available exclusively through Verizon Wireless, features Microsoft's Windows Mobile software and built-in support for EV-DO (Evolution-Data Optimized) and Bluetooth.

The Samsung SCH-i730, which is also being marketed as an essential for mobile business users, provides quick wireless access to the Internet via Verizon Wireless' BroadbandAccess, as well as easy data exchange with other Bluetooth-enabled devices. The phone also has an SD expansion slot for additional memory.

Designed with a sliding form factor, the i730 has a 65,000-color touch screen for viewing office applications and Web pages. It also has a fully integrated QWERTY keyboard to make it easier to type e-mail messages, take notes or work on documents using the Pocket Word application.

Additional phone features include:

- Comprehensive Windows Mobile support, including Pocket MSN Messenger, Microsoft Reader 2.0 for Pocket PC, Windows Media Player 10, Microsoft Pictures and ActiveSync.
- Built-in Wi-Fi, providing access to the Net from a local coffee shop or any other hotspot.
- SRS WOW audio. Built-in speakers offer consumers a rich listening experience.
- Advanced voice recognition that allows consumers to dial numbers, find contacts and open applications with the sound of their voice.
- Personal Information Manager (PIM) Backup Application. Personal information is never lost with the i730's PIM software.
- Large display. The 240 x 320 pixel, 2.8-inch, 65,000-color TFT touch- sensitive LCD display is capable of holding up to 17 lines of dynamically sized text.
- Compact design. Measuring only 5.2-inches x 2.8-inches x 0.6-inches and weighing 5.5 ounces with a standard battery, the i730 fits easily into a suit pocket, purse or briefcase.
- Speakerphone. An integrated speakerphone means that consumers can enjoy hands-free use of the i730.
- MP3 player and 3D audio equalizer for playing digital music with rich bass and full sound with SRS WOW XT audio technology and built-in stereo speakers.
- Advanced memory capabilities. The device has 64MB RAM/128MB Flash and an SD I/O expansion slot for scalable memory expansion.
- High-speed processor. The i730 is powered by an Intel PXA 272 (520MHz) processor
- Call management, including caller ID, voicemail, call forwarding, call waiting and call logs,
- Removable battery that can be removed and replaced with a fully charged battery while on the go, helping customers stay connected.
- Built-in Bluetooth wireless technology with support.

The i730 retails for $599.99 with a two-year customer agreement. It is currently available to large-volume customers and will be available for consumers in early July.   Back to Headlines 

EchoStar Goes Mobile

US satellite TV service EchoStar, owner of the Dish Network, is joining the rest of the world in going wireless and mobile through a deal with Archos, a maker of portable video players. The two companies this week completed a "strategic alliance" under which EchoStar invested approximately $9 million (7 million) in Archos in return for which Archos will provide portable digital video recorder technology and products to EchoStar. The investment is in Archos bonds that can be converted by EchoStar at anytime to about 26% of Archos' shares.

For its part, Archos will launch an extensive new product development initiative. It will provide EchoStar with portable digital video recorders that allow for high-speed transferring of video content directly from certain Dish Network set-top boxes to Archos portable devices. EchoStar says it picked Archos because its products are the "most advanced on the market today." The EchoStar portable DVR products are expected to be available in the summer to early fall. The two outfits promised more details "shortly."

"EchoStar is taking a unique technology approach by integrating the use of our portable video players with their Dish Network set-top boxes," said Archos founder and CEO Henri Crohas. "This is a major new initiative for both us and EchoStar."    Back to Headlines 

MP3 Player Market Up 200%

The market for portable audio players - both the Flash-based ones and those with hard disks, is expected to reach more than 104 million units by 2009, up from 27.8 million units last year, according to In-Stat.

Market drivers include falling prices, the availability of legal subscription and pay-per-download music, smaller hard disk drives and increasing Flash memory capacities.

A recent report by In-Stat found the following:

- Revenue for both hard disk- and Flash-based MP3 players reached approximately $4.5 billion, up nearly 200% over 2003.
- Apple is the leader in worldwide portable audio players with 30.2% of the combined hard disk- and Flash-based portable audio player market.
- Other leading vendors include Rio, iRiver and Creative.

In-Stat expects that 1GB or greater Flash MP3 players will represent just over 20% of all Flash-based MP3 player shipments worldwide by the end of this year. The number of consumers in the US who own an MP3 player grew from 16% in 2001 to 25% so far in 2005.    Back to Headlines 

MOBILE MEDIA

Cell Phone Users Want In-Flight Data, Not Voice

The FCC is considering lifting the ban on cell phone use on airplanes during flights. Some consider the proposal to be a positive move, while others see in-flight cell phone usage as a disturbance to other passengers. IDC recently conducted a survey on preferences regarding the use of mobile phones on airplanes.

Only 11% of the 50,000 respondents indicated that they approve of using cell phones for voice calls on planes, even if they were in designated calling areas. However, a resounding 64% approve of in-flight cell phone use - as long as it's for activities other than voice calls.

Of the 11 activities specified in the survey, in-flight text messaging was the most popular. The study also found a correlation between the level of interactivity of a service and the respondent's interest in using that service which, IDC says, demonstrates that interactivity is a foundational element for successful mobile phone applications among those surveyed.

If the ban on in-flight cell phone use were removed, the move might stimulate the mobile market by creating new opportunities both wireless carriers and the airlines, according to the market research firm. And the airlines could certainly use a revenue boost.

"Whether a mobile device vendor is interested in the in-flight market or not, the key finding from this survey remains the same: By comprehending the needs and criteria specific to the user segment and location, mobility companies can enhance their products to better serve and target the desired customers and market segments," said Dana Thorat, research manager for mobile users at IDC.    Back to Headlines 

DIGIGRAMS

France Telecom May Make Run at C&W

France Telecom might make a bid worth some $7.3 billion for the UK's Cable & Wireless, owner of the BullDog broadband service, according to a report in the Sunday Telegraph. France Telecom owns the UK's Orange broadband service. BullDog reportedly has 30% of the UK's DSL market. France Telecom reportedly wants to merge BullDog with its Wanadoo broadband operation. A France Telecom spokesman dismissed the rumors of the deal as pure fantasy.    Back to Headlines 

Want DSL? Sorry, You Can't Get It.

"Here again, the problem is that roughly 14% of the people who have called us and want DSL are actually in a qualified area. It's the most played-up thing in the Internet business that the media has done. It's made it sound like it's going to be the answer to everybody's prayers. But not everybody can get it. There is huge demand. But like everyone else, we are waiting for the phone company to extend its reach." - Gregg Harper, regional marketing director for Duro Communications in an article on Rednova.com. Duro is an ISP that uses the phone company's network to provide broadband access.    Back to Headlines 

600,000 Download BBC's First Beethoven Performance

Brits have downloaded almost 600,000 copies of the BBC's free downloads of performances of Beethoven's first five symphonies. The performances by the BBC Philharmonic, conducted by Gianandrea Noseda, were broadcast on BBC Radio 3 and also made available for streaming. "The response has been incredible and much bigger than we expected," said BBC Radio 3 controller Roger Wright. "The success shows Beethoven's enduring appeal and we hope this will encourage new audiences to explore online classical music." The BBC plans to air broadcasts and offer downloads of the remaining four Beethoven symphonies later this month. Unfortunately for those on the other side of the pond, Americans were able only to play the concerts, not download them.  Back to Headlines 

Preview of MGM v Grokster Ruling

The New York Times published a preview of the pending Supreme Court ruling in MGM v Grokster that will determine whether file-sharing companies are liable for infringement committed by file-swappers. The decision, due by the end of June, should come this week or next. The article, "The Court of Online Opinion Has Its Say on File Sharing," featured predictions about the court's possible rulings from sources on both sides of the issue. Most of the prognosticators believe that the Supreme Court will send the case back to the Court of Appeals, which upheld a lower court's decision against MGM and its fellow petitioners. Some think the Supreme Court will side cleanly with the industry. A minority said the high court would unequivocally side with the software companies.   Back to Headlines 

Phone Porn Abounds

Pornography producers, who have more video on the Net than any other genre, are using some new technology to deliver trailers of their adult videos to cell phones, according to Wired News. Vivid Entertainment uses Xobile's LeapScan technology to embed a URL into the barcode of an adult film title. Consumers scan the code with a camera phone and are directed to a site that will stream a G-rated trailer to the phone.   Back to Headlines 

Cleaning Up the Stables

"Karl Bode's forthright reporting on BroadbandReports.com is closer to the truth than the typical mealy-mouth coverage of the same story. The secret Universal Service Fund (USF) and Intercarrier Compensation Forum (ICF) funds are a perpetual scandal, as Bode makes clear in 'The FCC Finally Looks at the USF.' 'A decade of fraud and billions in misdirected funds later... A significant portion of your monthly DSL and landline bill goes to the Universal Service Fund (USF). Critics across ideologies have long charged the system is corrupt, dysfunctional, poorly managed and/are a slush fund for the US' major phone companies. After years of debate, the FCC has announced they'll finally take a look.' DSL Prime's position is the best way to protect universal service is to start by eliminating the massive waste in the program." - Dave Burstein in DSL Prime     Back to Headlines

Clear Channel To Podcast Content from 12 Stations

Clear Channel Radio is expanding its roster of podcast feeds following the podcasting debut of WHTZ-FM Z100's "Phone Tap." In the first two weeks that the "Phone Tap" podcast was available, more than 20,000 content segments were delivered via podcast, download or stream from the station's Web site. Due to the popularity of the podcast, Clear Channel is rolling out nearly 20 new feeds of popular on-air content from 12 additional stations. Those stations include WAQX-FM (New York), WKTU-FM (New York), KYSR-FM (Los Angeles), KGB-FM (San Diego), KHTS-FM (San Diego), KIOZ-FM (San Diego), KKRZ-FM (Portland, Oregon), WLW-AM (Cincinnati), KRZR-FM (Fresno, California), WDVE-FM (Pittsburgh) and WZZO-FM (Allentown, Pennsylvania).     Back to Headlines 

Digital Media Creates 'Shock and Awe'

"We're at an inflection point. We've gotten past our shock and awe period." - Ted Cohen, senior VP of digital development and distribution for EMI, speaking at Digital Media Wire's Digital Media Conference when asked about the current state of the media industry.    Back to Headlines 


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THE online REPORTER provides weekly reports and strategic analysis about digital consumer technology and the e-commerce activities of the movie and music companies.. It reports on all the power struggles that have been unleashed.
THE online REPORTER focuses on:

  • The Media Giants vs. the Technology Behemoths

  • Copyright, Intellectual Property and Patent Issues

  • The Merging of PCs and Home Entertainment

  • Online Music and Movie Services

  • Peer-to-Peer Networks

  • Digital Media Startups

  • Content Delivery Technology

  • Growth of Broadband

  • Industry Alliances and Schisms

  • Forecasts and Market Research

  • Enabling Technologies

  • Industry Standards and Formats

  • Encryption, Security and Privacy Technologies

  • Wins, Losses and Rain-outs

If ever that overused phrase "paradigm shift" was apt, it's now, about the Digital Media industry. There's not a company in the industry that's not worried about where it'll still be standing after the deluge - and that goes for leaders like AOL Time Warner as well as that feared monolith Microsoft.

Its format is concise and pointed, its style a touch brash and, with any luck, a bit controversial. Its object is to break the stories that give its readers the real inside track. It is pledged to fact and fair comment.

THE   online REPORTER - Intelligence for decision makers.


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