January 19, 2004
Volume 3, Issue 4
Welcome BME, DCI, and Grokster
Please warmly welcome BlueMaze Entertainment, Inc. (BME), Digital Containers, Inc. (DCI), and Grokster, Ltd. (Grokster) - the newest Members of the DCIA. BME, DCI, and Grokster bring important new voices to DCIA's Content, Platform and Operations Groups, respectively, and their views will be significant as we continue to develop business models and introduce win-win solutions for peer-to-peer (P2P) digital media distribution.
BlueMaze Entertainment has emerged as an innovative thought leader and production engine for the next generation of independent music. Founded in early 2000, BME is a new kind of progressive music label. BME's value is its network of artists, producers, composers, engineers, affiliate labels and lifestyle-marketing agents. BME has its ear to the ground for the freshest progressive-urban sounds. BME's comprehensive network, combined with its recording studios in New York and Atlanta , allows the company to identify and nurture commercially viable sounds and styles.
To date, BME has developed several highly successful music marketing programs, including promotional CD and event series for the Enyce Clothing Company; music licensing and composition for Jansport, Factor X, Old Navy, Nike, and Canon; the Atlanta Progressive Urban Music event series co-sponsored by Sam Adams, Courvoisier, Stoli, Gravis Footwear, and Wherehouse Music; Macromedia's award-winning website BlueMaze.com; pioneering the $0.99 MP3 downloadable single; as well as launching and supporting emerging artists Jawz of Life, TrancesArc, Eject, and Maya Azucena.
Digital Containers makes it possible for organizations and individuals - from the largest movie company to the smallest garage band, from fledgling authors to professional photographers - to legally and profitably package, protect, distribute, and monetize all types of digital content in P2P distribution. DCI's software operates on any device with a web browser/java virtual machine; so most computer, PDA, and cell phone users worldwide are already equipped to use DCI's products. DCI's digital rights management (DRM) technology is highly efficient and offers the most practical method for protecting, authorizing, authenticating, and granting access to digital content files.
DCI's patented technologies allow individual music, movie, and other content files to be continuously and easily protected, tracked, and paid for every time they are opened. The company supports the powerful new "super distribution" business model. Enterprises face a growing need to efficiently publish, secure and deliver large files such as training videos, product launch presentations, price lists, and other communications tools to employees, business partners, and customers without complicated integration costs or hassles for users. P2P has the potential to circumvent the limitations of current approaches--both technical and organizational--to improve communication, collaboration, information sharing and delivery.
Grokster offers advanced P2P file-sharing software that enables users to distribute digital files, including images, audio, video, games, reports, and documents. Content developers and owners may easily broadcast their files to a global audience using Grokster software. Grokster is a privately held international software company providing cutting edge person-to-person software. Grokster software accesses the FastTrack P2P Stack.
Under the terms of Grokster's recent deal with DCIA Charter Member Altnet, Inc., Grokster 2.6 will leverage Altnet's TopSearch Gold Icon program, a paid search utility that gives preferential placement results to keyword requests for delivery of authorized music, software, videos and games. Grokster joins Kazaa, MetaMachine (owner and operator of eDonkey and Overnet), and Excite's "My Search Toolbar" as Altnet distribution partners. The partnership will make Altnet's entire licensed catalogue of music, video, software and games files available to millions of Grokster users, and will incorporate Altnet's payment gateway, which allows micro-payments via a one-click process.
PlayLouder Plans Spring Launch
PlayLouder
Digital Media Wire reports that UK based PlayLouder MSP, developer of an Internet access service that legitimizes file-sharing by offering a share of fees to artists and copyright holders, has announced plans to launch its service in Spring 2004. The company said it has signed independent labels including Cooking Vinyl, Gut Records, The Echo Label, Wall of Sound, and Tummy Touch to provide tracks for the service, and that it is in negotiations with major labels, with deals "expected to be announced shortly."
Report from CEO Marty Lafferty
 Congratulations to the National Journal on its inaugural Tech Policy Roundtable: "Can Congress Tame Internet Piracy?"
Technology Daily's Editor-in-Chief, Lou Peck, introduced the panel and Senior Writer Drew Clark moderated.
Participants included the Consumer Electronics Association's (CEA) Gary Shapiro, Verizon Communications' Sarah Deutsch, Entertainment Software Association's (ESA) Ed Desmond, Motion Picture Association of America's (MPAA) Fritz Attaway, Public Knowledge's Gigi Sohn, Recording Industry Association of America's (RIAA) Mitch Glazier, and me.
Lou outlined the political, technical and legal landscape of current P2P issues. Drew then led our discussion of consumer education and copyright enforcement, issues of legal liability and privacy, and potential solutions. Content from this session should provide valuable input to the upcoming P2P Summit being organized by Senator Norm Coleman.
Among the issues addressed during the education and enforcement part of our discussion were the threat of pre-release movies and video, the state of consumer education and expectation, and the scope of P2P usage. We also discussed pending bills in Congress.
Legal and privacy issues included a discussion of responsibility for copyright infringement among the many constituencies in the distribution chain (including ISPs, P2P software companies, content owners, and individual users); privacy concerns raised by DMCA subpoenas and spyware; and the subject of content filtering. Among potential solutions, we discussed greater use of DRM technologies, levies on blank CDs and digital media devices, and the feasibility of compulsory license legislation.
Here are some key points of note to DCIA participants. Mitch underscored the need to warn consumers about the illegality of sharing unauthorized files, and Fritz suggested that the term file "redistribution" may be more precise than file "sharing." Gigi gave her view that current P2P issues are primarily about marketing: let the market work - keep Congress out - education is what is called for.
Gary noted that sales of CDs and DVDs were up in the fourth quarter of 2003, as was P2P downloading, and that a key issue is morality related to unauthorized content. Ed noted that videogames, at $10 billion in annual sales, represents the fastest growing segment in the entertainment industry and owes that success to staying current with consumer expectations, including commercial P2P distribution. Sarah said the real need is for business model solutions rather than knee-jerk Congressional action.
Mitch and Gigi disagreed over whether consumers would accept a high quality licensed file, for which they would need to pay a reasonable fee, over a file of unknown quality at no charge, if both were available to them. Gary added the analogy of the success of sales of bottled water, and Sarah compared the P2P issue to Prohibition. In general, and for a variety of reasons, the panel was not in favor of a compulsory licensing solution.
There were a number of excellent questions from attendees, and the session ended by encouraging the parties representing diverse interests to get together to work on solutions. Shared goals are to more effectively deliver legitimate content to consumers, and to improve efforts in education, deterrence, and enforcement.
Briefly on another note, it's said that a mark of innovative leadership is the attraction of arrow-in-the-back criticism. Kazaa, the flagship software application of DCIA Charter Member Sharman Networks, Ltd. (SNL), demonstrated its place at the top last week, publicly taking at least three such barbs. These ranged from inappropriate remarks made by Hewlett-Packard's Carly Fiorina at CES, to incorrect claims made by anti-virus firm TruSecure, to improper charges made by gay pornographer Titan Media.
In response to HP: the closest thing to "Kazaa's Law" may be what's expressed in its End User License Agreement (EULA) - please check it out. To TruSecure: Kazaa installs with powerful Bullguard anti-virus software already enabled - addressing 90% of the problems you've identified. To Titan Media: Kazaa provides a powerful family filter so parents can protect their children from undesirable content - you need to use DRM.
To all three, we would very much welcome your involvement in DCIA's process to protect copyrighted works in P2P distribution and to continue to provide users with a safe and secure on-line experience. We'd like to encourage your participation in DCIA's programs to develop and implement constructive solutions. And we would also ask that you refrain from disseminating misinformation.
P2P Music Model C and DCIA Winter Meeting
Media Summit
The DCIA plans to announce and distribute our third alternative P2P music distribution model on Wednesday February 4th. This will enable attendees of our Winter Quarterly General Meeting, which will take place on Monday February 9th, to have the opportunity to review it beforehand. We're very grateful for input from our key constituencies over the past few months in developing this model. DCIA participants will also be interested in the Media Summit New York DRM Workshop earlier that day.
DRM Technology Innovation: Content Integrity in Music, Film and Mobile, for example, in which we are participating, will examine new developments in DRM. Content is what entertainment and media companies produce, and the viability of their futures rests on their ability to manage that content and control its distribution, while at the same time making it available to an ever larger customer base. And that is the job of DRM technology firms, to make the film, music and mobile technology delivery systems safe for mass use. This session will explore, from the point of view of the technology companies, the possibilities and potential of DRM in the evolving content landscape. From CDs and DVDs to broadband and wireless delivery, DRM and content protection represents the bottom line of the future of these entities.
The DCIA's Winter 2004 Quarterly General Meeting, taking place in conjunction with the Media Summit, will be held in the NY Hilton and Towers at Rockefeller Center from 6:30 PM to 9:30 PM US ET on Monday evening February 9th. A light buffet dinner will be served.
Our full schedule includes a demonstration of new DRM technology, discussion of which aspects of the P2P music distribution models should be further developed, and potential legislative activity taking place in early 2004.
Please suggest additional agenda items and register for the DCIA Winter Quarterly General Meeting by e-mailing info@dcia.info. Information regarding hotel discounts and joint registration with the Media Summit will be provided upon request. Space is limited so please sign-up at your earliest convenience.
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