May 10, 2004
Volume 4, Issue 8
Elaine Reiss to Head Best Practices
In order to clearly define best practices for the integration of advertising with distributing computing software, continue our work with the CDT-led Consumer Software Working Group (CSWG), and ensure that our industry's self-regulatory initiatives meet with FTC and Congressional acceptance, the DCIA has named Elaine Reiss as Best Practices leader. She has already begun her assignment, participating in the CSWG meeting/call last Thursday.
Elaine is a dynamic executive with broad experience in information technology, advertising, and the public sector. She has held the role of general counsel and developed extensive knowledge of communications, intellectual property, and regulatory issues within diverse industries. Elaine chaired the 4 A's legal committee, and led advertising industry coalitions on advertising directed to children, over-the-counter drug advertising, and food advertising.
Elaine's private sector experience includes serving for more than 20 years at Ogilvy & Mather in senior roles including as Executive Vice-President and General Counsel. In that position she testified before the FTC, FCC, and other federal government agencies, on behalf of industry-wide issues such as advertising directed to children. She also trained the agency's staff and clients on advertising legal issues such as copyright, trademark, and regulatory compliance.
Elaine has also worked as the Deputy Commissioner and General Counsel for the NYC Department of Information Technology and Telecommunications, where she negotiated major telecom agreements and conducted public hearings throughout the five boroughs.
In addition she served as Senior Vice President and Director of the National Advertising Division, Council of Better Business Bureaus, where she spearheaded the advertising agency's self-regulatory unit. Elaine selected cases, raised funds, and served as chief public spokesperson on behalf of advertising industry self-regulation.
Elaine also currently serves as Chairman of the Administrative Law Committee for the NYC Bar Association, and is active in the NYC Civil Rights Coalition, NY State Division for Women, and ABA . She holds a Master of Laws in Trade Regulation from NYU Law School and a Doctor of Jurisprudence from Columbia University . She can be reached at elaine@dcia.info.
Report from CEO Marty Lafferty
 I sincerely hope you'll be able to join us at the USC Davidson Executive Conference Center for our quarterly general meeting this Wednesday, May 12th from 5:30 PM to 8:30 PM . This Spring Meeting promises to be our most valuable and stimulating event to date.
The meeting will kickoff with a networking buffet dinner bringing together the Hollywood creative and business community, attendees of the Electronic Entertainment Exposition (E3), and DCIA Members.
Opening remarks will be given by Nikki Hemming , CEO of DCIA Charter Member Sharman Networks, and Elliot Maxwell , Project Leader, Digital Connections Council, Committee for Economic Development. All participants will receive the new CED Report "PROMOTING INNOVATION AND ECONOMIC GROWTH: THE SPECIAL PROBLEM OF DIGITAL INTELLECTUAL PROPERTY."
The five conclusions of this comprehensive and illuminating report can serve as a guide to success for all who are involved in cutting edge issues in the entertainment and technology sectors.
Next, one of two keynote sessions will feature Harvard Business School 's Felix Oberholzer-Gee and Rich Feldman, President of Feldman Research Lab, in a lively discussion of the highly controversial Harvard/UNC P2P Music Study.
It is extremely important to leaders of record labels and peer-to-peer software suppliers to know as much as they can about the true nature of the phenomenon of music file sharing. Is it closer to the traditional role of radio - to promote sampling and to drive music-buying decisions? Or is it closer to the traditional role of retail stores - to facilitate the actual purchasing of music? Or is it something totally new?
The level of DRM and encryption to be applied, the role of advertising, pricing and packaging decisions, and other critical business determinations, all depend on the accuracy of this knowledge. And to date, marketplace research has often raised more questions than answers. Our goal is to foster a better understanding of consumer behavior to inform improved decision making.
Our centerpiece keynote will be a panel on digital distribution of games. We are thrilled to have Kevin Bachus , President of Infinium Labs; Rich Roberts, director of Atari; Jason Rubinstein, GM of UbiSoft; John Welch, CEO of PlayFirst; and Gabe Zichermann , VP of new DCIA Member Trymedia Systems. John Gaudiosi of iHollywood Gamemaker will moderate.
The games industry has been a much earlier adopter of P2P for legitimate paid content distribution than music, and has already scored a number of impressive successes - and we will analyze them so that others can learn from these examples. But there are also concerns over copyright infringement, and we will address these head-on as well, with a discussion of steps to counter this problem.
Our focus will be on what is working now and what more is needed to ensure a robust and profitable marketplace for licensed digital distribution of games, with an emphasis on the special issues of commercial redistribution in P2P environments.
Closing remarks will be provided by Christian von Burkleo, Senior Vice President of DCIA Charter Member Altnet, now the world's largest distributor of legally traded games, music, and movies on the Internet.
Please register now and visit the site of our event producer iHollywood, to whom we are very grateful for their exceptionally high quality service and expertise.
Congressional Online Pornography Hearing
Witness Testimony and Hearing Webcast
The DCIA participated at Thursday's hearing conducted under auspices of the House Energy & Commerce Committee. CEO Marty Lafferty made these points:
In the absence of authorized mainstream content, the Internet so far has attracted a disproportionate amount of pornography.
Dissemination of criminally obscene content as well as legal adult material is facilitated by Internet browsers, search engines, e-mail, instant messaging, websites, peer-to-peer software, chat-rooms, and news groups, used regularly by 10s of millions of US citizens. And with an increasingly decentralized Internet, users themselves are frequently the sources of content entered into distribution.
Porn websites have increased by seventeen times since the year 2000, from 88,000 to 1,600,000. Today 34 million Americans visit them monthly. But reports of peer-to-peer child pornography are down, from 2% in 2002 to 1.4% in 2003, with the vast majority of the remaining 98+% coming from websites and chat-rooms. And unlike websites, there is no commercial child pornography on peer-to-peer.
Leading file-sharing software suppliers provide tools enabling parents to protect their children from exposure to undesirable content. Users can choose options to block adult content, which is the default setting, add more keywords to be blocked, prevent all video and images from being downloaded, and password-protect their filter settings. Use of these tools and monitoring of use by parents must remain the primary means for protecting children.
With peer-to-peer family filters set at the maximum level, NO files retrieved on searches for terms like Britney, Pokemon, or Olsen Twins, will contain pornography or child pornography. By contrast, MSN will return nearly 9,000 Olsen Twins porn results, Google 822,000 Pokemon porn, and Yahoo 1,260,000 Britney porn.
Peer-to-peer companies have also worked proactively with law enforcement to prosecute criminal abusers of their technology, and on deterrence and education to further combat child pornography.
But the real obstacle to realizing the potential of file-sharing technology is the refusal of major labels and movie studios to license their content for legitimate paid distribution by peer-to-peer. And it is this which deserves to be examined by Congress.
At 50 million licensed files per month, DCIA members are now the Web's largest legal distributors of music, movies, and games. This is accomplished through agreements with small independent suppliers, while the majors continue their boycott.
The entertainment industries' campaign to destroy peer-to-peer companies and to strangle file-sharing technology is based on the assertion that they are suffering great economic harm through copyright infringement by individuals. That is simply not true.
Their emphasis on peer-to-peer pornography is unreflective of the much larger amount transmitted by e-mail and instant messaging, not to mention far greater risks of obscenity on websites and predatory dangers in chat-rooms. And it is so dismissive of peer-to-peer suppliers' efforts to work with law enforcement and provide parental controls that it takes on the character of a red herring.
Both copyright infringement and exposure of children to pornography are real problems, and we condemn them. But how much more beneficial for all parties it would be if Congress adopted an alternative such as:
"Rights holders who wish to monetize digital distribution of their copyrighted works must provide non-discriminatory terms-and-conditions for all media."
Once the "carrot" of licensed content distribution can be offered, the "stick" of enforcement, focused where it should be - on creators and disseminators of illegal material - can be revisited.
Future of Music a Resounding Win
Hats off to Jenny Toomey and her team, including Michael Bracy, Peter DiCola, Walter McDonough, Kristen Thomson, and Brian Zisk for a highly successful fourth annual Future of Music Coalition policy summit last Sunday and Monday at George Washington University .
Highlights included Artemis Records' Danny Goldberg's keynote address and Senator Norm Coleman's providing a national policy perspective and message of involvement very important to all attendees.
Senator Coleman told songwriters, lawyers, and other music industry participants that if the recording industry wants to survive the trend of downloading music, the industry will have to adapt rather than fight evolving technology.
He said the recording industry is going to have to develop more competitive alternative business models in order to keep the industry running in an era of digital technology. But suing customers, he said, is not a good business strategy.
FCC commissioner Michael Copps spoke against the "Clear Channelization" of American radio and in opposition to further media consolidation. "We are skirting dangerously close to taking the public interest out of the public airwaves," Copps said.
An especially memorable moment came as Dean Kay brought ASCAP's ninetieth birthday celebration to the Future of Music's audience of musicians, record industry executives, lawmakers, and civil liberties activists. He set a constructive tone for the music and P2P sectors to come together and find commercial solutions in the very near future.
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