November 8, 2004
Volume 6, Issue 10
Digital Containers Adds P2P Radio Classics
DCIA Member Digital Containers, developer of a multimedia secure-file format that encompasses music, video, games, software, and other data, announced Friday that it has signed an agreement with MP3 audio-book provider Paperback Digital.
Under terms of the agreement, Digital Containers will distribute the original "Frankenstein" radio broadcasts from the 1930s for sale via peer-to-peer (P2P) file-sharing software.
The series programs, which have been re-mastered, cleaned, and transformed into MP3 audio books, will be securely packaged with additional background information about the series and a catalogue offering collector's memorabilia for sale, forming a complete digital collector's item.
Digital Containers' patented secure e-commerce software protects all types of digital content regardless of whether it's downloaded from a web-front store or posted on file-sharing programs. It ensures that rights holders are appropriately compensated each time a new consumer views or listens to their content, and provides ways to recommend and sell additional digital content. Finally, it does not require proprietary software to be pre-installed on playback devices.
According to Mike Segrove, CEO of Paperback Digital, "We partnered with Digital Containers for three reasons. Packaging our content into secure digital containers allows us to access a new distribution channel – the P2P referral-network environment. This also reduces our need to create physical media, saving us manufacturing, warehousing, and distribution costs."
"Second, we can add value to our audio books by providing additional background content that we could not offer on a CD. And third, we gain a new revenue stream by being able to cross-sell additional digital content and collector's items, like posters, holiday ornaments, comic books, etc. using Digital Containers' e-catalogue and shopping cart features."
Each digital radio broadcast runs approximately 25 minutes and is commercial free. The entire "Frankenstein" series of 13 episodes is priced at $9.00 and will include the right to download the programs to an MP3 player. Individual broadcasts will sell for $.99 for the first 90 days and will be $2.95 thereafter. The price to purchase the CD version is $14.95.
Report from CEO Marty Lafferty
 Congratulations to Ned and Tinzar Sherman for their tremendous accomplishment in mounting the first annual Billboard Digital Entertainment Conference & Awards (DECA) last week. The closing panels of the conference were particularly relevant to our industry.
Chris Marlowe moderated the penultimate session featuring Congressman Howard Berman (D-CA) and focusing on regulatory issues. We congratulate Congressman Berman on his re-election and commend his leadership on spyware legislation during the 108th Congress.
This panel also captured the continuing debate between major music labels and leading P2P software distributors, personified by Mitch Bainwol, Chairman & CEO of the Recording Industry Association of America (RIAA), and Mike Weiss, CEO of Streamcast Networks (owner of Morpheus).
Discussion included hypotheticals – such as whether inventors of new content distribution technologies have a moral imperative to ensure that their offerings cannot be used for infringement before deploying them; and whether caretakers of aggregated copyrights have a moral imperative to adopt more efficient distribution technologies as they become available rather than resisting them.
Such arguments help distinguish use from abuse as well as expediency from principle in relation to what is essentially a neutral technology.
The panel also touched on whether current P2P software providers, theoretically, would have a business absent pop-music infringement. We have previously discussed that there are at least five compelling reasons why they would, which range from decreasing software development costs to dramatically increasing non-infringing usages. But more important, these companies are for the most part not yet in the business that they want to be in.
The back-and-forth over recent press reports of potential movement towards prospective solutions that would accelerate entering that business underscored a current practical dilemma. Unprecedented consumer adoption and steadily growing usage of P2P has created a market – or traffic – equivalent to several of the world's largest media markets combined.
P2P software providers understand the value of this aggregated audience and want to protect it even as solutions delivering higher revenue per transaction are introduced. Music industry rights holders publicly at least seem not to appreciate this and may be harming their own interests as a result.
After speculation as to whether the Supreme Court may take-up the MGM vs. Grokster case, Congressman Berman urged the private sector to move forward aggressively to resolve the current stand-off between major labels and P2Ps or Congress will be forced to step in.
The DCIA-moderated closing panel centered on the future of digital entertainment channels and featured Ted Cohen, SVP EMI Records; Bram Cohen, Founder, BitTorrent; and DCIA Member participants Phil Corwin, Chief Lobbyist, Sharman Networks (Owner of Kazaa); Marc Freedman, CEO, RazorPop (Owner of TrustyFiles); Tom Meredith, CEO, P2P Cash; and Chip Venters, CEO, Digital Containers.
Phil Corwin said his lobbying role is in part to prevent ill-advised legislative actions that would imperil industry growth, so that innovative companies – such as those of the other panelists – can commercially develop P2P to its full potential. He wants to see Kazaa's business model evolve from software sales and advertising to include more attractive content revenue-sharing opportunities.
Bram Cohen articulated his futurist's vision where costs of digital production, bandwidth, processing, and storage decline; while bandwidth, processing speeds, and storage capacity all increase; with the net effect of drastically lowering the incremental costs for content redistribution, driving a proliferation of content and increased commoditization.
Tom Meredith said that he sees the introduction of token-based highly decentralized micro-payment systems bringing transaction expenses down to make truly low-cost content purchases feasible.
Chip Venters envisions an increasing role for digital rights management (DRM) solutions in the P2P space, and views their deployment as being the path by which major music labels will become comfortable enough to fully license the P2P distribution channel.
Marc Freedman emphasized the needs to offer consumers choices that fully take advantage of the flexible capabilities of digital technology and to apply value-added marketing to satisfy customer needs competitively.
Finally, Ted Cohen made the case that copyright holders should have the choice of whether or not – as well as how – their material is distributed online. It is not acceptable for consumers to redistribute works without authorization.
The well-paced and entertaining Digital Entertainment Awards Gala Dinner featured DCIA Member Trymedia Systems' SVP Gabe Zichermann presenting several games awards, Mitch Bainwol and Ted Cohen presenting a number of music awards, and Bram Cohen being recognized as a finalist in innovation.
Hopefully next year's awards will also feature P2Pers who by then will have broken new ground with fresh and exciting licensed-music distribution models.
Jun Group to Debut Original P2P TV Show
Jun Group, a provider of licensed content via peer-to-peer (P2P) software, announced that it plans to launch on November 30th what it calls the first TV show designed for distribution by means of file sharing.
The ad-supported show, "The Scene," will focus on an NYU student who is an avid file-swapper, and will include interactive features including links to webcams, secret chat rooms, instant messages, and e-mail.
According to Jun Group President, Mitchell Reichgut, "Most content that's available online was originally created for another medium. We're creating 'The Scene' specifically for P2P. It's meant to be viewed on the computer."
What makes "The Scene's" marketing plan unique, according to Reichgut, is that it will be distributed solely through the file-sharing community.
"File sharers have made it very clear that this is their preferred method of consuming content," he noted. "We are the first ones who have found a way to truly meet that demand. 'The Scene' won't be available on a web site. It'll be out on P2P with no strings attached."
The financial model for the show is simple. It will be paid for by corporate sponsorship. Jun Group is now in discussions with several major advertisers who will pay a fee for attaching their messages to the show. "The file-sharing audience is affluent and largely male, aged 18-34, and we can reach them quickly, reliably, and quantifiably. Our sponsors will only be paying for the people who download the show, or the people we drive to their websites. They won't have to rely on outdated ratings systems," he added.
According to Reichgut, Jun Group's new show is more evidence of the growing influence of P2P. "The file-sharing community is a legitimate mass medium – one that is maturing very quickly. Marketers who use file sharing have enormous credibility with consumers because the content is passed from friend to friend. If it wasn't great, no one would trade it."
RazorPop Announces BrandedP2P
DCIA Member RazorPop announced its BrandedP2P Partner Program, which enables major consumer entertainment and marketing companies to directly market and sell content through file-sharing programs. The program provides affiliates with their own custom P2P software and optional private network for their fans, customers, and visitors.
"It's time to take advantage of P2P's vast power and reach to promote and sell content," proclaimed RazorPop CEO Marc Freedman. "BrandedP2P gives our partners direct access to 80 million file sharers and provides them with three benefits."
"First, BrandedP2P delivers a new sales channel. Partners use the BrandedP2P software to directly promote and distribute their free and secured music, video, games, shareware, and other files directly to their BrandedP2P software users.
Second, BrandedP2P delivers brand muscle. With BrandedP2P software the partner 'owns' the user desktop. The partner's brand, including graphics, web link, home page, and news channel, are permanently and prominently displayed on the software application window.
Third, BrandedP2P delivers new customers. BrandedP2P is the ultimate viral referral program. When users download partner files they're automatically shared with and distributed to other users of P2P software."
Initial BrandedP2P Partners include music industry publisher Musicdish, fellow DCIA Member INTENT MediaWorks, and multi-platinum Grammy-Award winning artist Sananda Maitreya.
BrandedP2P software is powered by RazorPop's TrustyFiles high-performance file-sharing software, which can be set up to access and share files across multiple major P2P software programs.
Coming Events of Interest
- P2P File-Sharing: Consumer Protection and Competition Issues - The Federal Trade Commission (FTC) will host a public workshop December 15th-16th to explore consumer protection and competition issues associated with the distribution and use of P2P file-sharing software.
The workshop is intended to provide an opportunity to learn how P2P file-sharing works and to discuss current and future applications of the technology.
Interested parties are encouraged to submit comments electronically at FTC P2P Workshop Comments. A detailed agenda and additional information on the workshop will be posted on the FTC's web site at FTC P2P Workshop Agenda.
The workshop will focus on uses of P2P file-sharing technology, the role of P2P file-sharing technology in the economy, identification and disclosure of P2P file-sharing software program risks, technological solutions to protect consumers from risks associated with P2P file-sharing software programs, P2P file-sharing and music distribution, and P2P file-sharing and its impact on copyright holders.
- P2P PATROL - Parents And Teens React On Line - The industry's anti-child-pornography initiative will hold its quarterly working session with private sector and law enforcement representatives in Dallas, TX on February 1st. For more information and to learn how you can contribute to P2P PATROL, please contact sari@dcia.info or call 888-864-DCIA.
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