January 17, 2005
Volume 7, Issue 8
DCIA's Four Questions
By special request, we are republishing the four questions that the Distributed Computing Industry Association (DCIA) believes can help distinguish the more promising from the less well-conceived approaches offered by companies or groups of companies as commercial solutions for the P2P distribution channel. These should help prioritize where to invest resources in further development and support:
1) From the content rights-holder's perspective, does the proposed solution offer the ability to determine whether or not to license an individual work for P2P redistribution, to determine multiple concurrent wholesale pricing scenarios and other terms-and-conditions, to set various usage parameters, and to readily make changes to any of the above?
2) From the consumer's perspective, does the proposed solution offer the ability to access public-domain, un-copyrighted, and copyrighted works seamlessly and on attractive terms that reflect that in this distribution channel, the P2P software user contributes storage, bandwidth, transmission, and even some of the marketing expenses, normally borne by infrastructure providers?
3) From the P2P software provider's perspective, does the proposed solution protect, if not enhance, the performance of current applications in terms of such important parameters as convenience of overall usage, speed of search, level of accessible content inventories, efficiency of content delivery, choice of alternative content selections, and sense of community?
4) From society's perspective, does the proposed solution fully capitalize on the promise of emerging technologies and advanced business models in the digital realm to benefit creators and consumers of content, such as the ability to simultaneously offer a given file as a free (ad-supported / promotional) version, as part of an opt-in subscription (e.g., tethered virtual-streaming), and as an a la carte purchase with usage rights closely approximating ownership of physical copies where time-and device-shifting are supported?
Altnet Seeks Patent Royalties from P2P
Excerpted from CNET News Report by John Borland
Just a few months after suing the Recording Industry Association of America, DCIA Member Altnet has begun seeking royalties from file-swapping companies over the same patent issues.
For almost two years, Brilliant Digital Entertainment's subsidiary Altnet has said it has patent rights to a basic means of identifying files in peer-to-peer distribution. Now it's finally sending letters to popular file-swapping companies such as LimeWire, BearShare and StreamCast Networks, saying they need to pay for licenses.
"There was time needed to determine how other peer-to-peer applications were working," said Larry Hadley, a Los Angeles attorney representing Altnet on the issue. "No lawsuits have been filed at this time, but this is placing companies on notice that their software uses Altnet's patented technology. If they wish to continue using it, then they need to obtain a license."
The company sued the RIAA and several peer-to-peer network-monitoring companies in September, charging that by spying on the file-swapping networks, they were also infringing on the patents.
That case is scheduled to go to trial in late October.
Although the issue is unlikely to stall any of the file-swapping companies' technology development for now, it does add a new legal wrinkle to an industry segment already mired in litigation.
The patents involved are based on ways of identifying a file using a technique called a "hash," a common feature of many computer applications that need to authenticate digital content. Altnet purchased the rights to the patents in peer-to-peer applications in 2003.
Report from CEO Marty Lafferty
 The period for submitting public comments following up on the Federal Trade Commission (FTC) P2P Workshop expires this Tuesday (1/18). Full transcripts of the workshop for Day One and Day Two are now available online.
For those who were unable to attend, Day One Opening Remarks of Chairman Deborah Majoras and Day Two Opening Remarks of Commissioner Pamela Jones Harbour provide an excellent introduction.
Since the workshop, DCIA Members RazorPop and SMARTguard Software have submitted addenda, as has economist Michael Einhorn, who will be kicking off the DCIA's special evening session at Media Summit – New York on February 9th (please see below for more information about this event).
Their panel presentations as well as those of DCIA Member INTENT MediaWorks, recently named DCIA industry measurement resource BigChampagne, P2P PATROL participant BayTSP, and the DCIA are also posted online, as are our trade association comments.
This workshop not only represents the latest in a series of FTC efforts to assess the impact of new and significant technologies on consumers and businesses, but also provides an excellent public record of the state of the emerging distributed computing industry as of year-end 2004, with a particular focus on consumer protection and competition issues.
As the FTC noted, "P2P file-sharing technology enables individuals to share files, including music, video, or software. Because the files do not reside in a central location – they are stored on the hard drives of users – P2P file-sharing technology allows for faster file transfer and conservation of bandwidth."
We are proud to be participating in the 2005 Media Summit – New York (MSNY) on February 9th and 10th. This event has been developed by Digital Hollywood's Victor Harwood into the premier international conference on motion pictures, television, cable and satellite, broadband, wireless, publishing, radio, magazines, news and print media, advertising, and marketing.
This year's keynote conversations will feature Bob Wright, Chairman & Chief Executive Officer, NBC Universal; and Mel Karmazin, Chief Executive Officer, SIRIUS Satellite Radio.
The DCIA will be moderating "Next Generation P2P Music and Film - DRM, Paid for Pass-Along and Other Legal Distributed Computing Models and the Entertainment Industries" featuring speakers Andy Moss, Director of Technical Policy, Microsoft; Marc Morgenstern, Vice President and General Manager, Overpeer; Michael Petricone, VP Government Relations, CEA Consumer Electronics Association; Mike Weiss, President & CEO, StreamCast Networks (owner of Morpheus); Richard Conlon, Vice President, Marketing and Business Development, Media Licensing, BMI; and Scott Kessler, Senior Investment Officer, Information Technology Group, Standard & Poor's.
We will also be hosting a special evening session February 9th focusing on the P2P distribution channel. There are an increasing number of opportunities available now for entertainment content rights holders to do business in the steadily growing file-sharing marketplace. There are also an expanding number of case studies that demonstrate success along several metrics in so doing.
With Supreme Court action pending on MGM v. Grokster, the entertainment and technology sectors are moving to harness P2P file sharing for licensed content distribution.
As noted above, presenters will include Michael Einhorn, who will assess economics of this opportunity for entertainment industries; Trymedia Systems' Gabe Zichermann, who will deliver a case study on the early successes of P2P distribution for games; and INTENT MediaWorks' Les Ottolenghi, who will share accomplishments in developing advertising-supported distribution for the works of independent content providers and emerging artists. Les will also introduce the P2P Revenue Engine (P2PRE).
Digital Containers' Chip Venters will have an announcement of an industry breakthrough in DRM; Relatable's Pat Breslin will discuss how advances in acoustical fingerprinting are now poised to address the outstanding issue for major entertainment rights aggregators; Clickshare's Rick Lerner will introduce micro-payment solutions; P2P Cash's Tom Meredith will explore guaranteeing secure P2P transactions with P2P cash tokens; and Shared Media Licensing's Max Wells will discuss the "Weedshare" solution as well as conclude the presentation of P2PRE.
Alston & Bird's Aydin Caginalp will outline key considerations of terms and conditions for licensing content in P2P distribution; then Digital Static's Alford Harris will review original musical and multimedia content for the file-sharing channel, and the Jun Group's Mitchell Reichgut will discuss original video and multimedia content for P2P distribution.
More presenters will be announced next week and, finally, attendees at our session will also be invited to join presenters and other MSNY VIPs at Crash Mansion for an exclusive after-event party, featuring live music by City Canyons' Jen Elliott. We hope you'll plan to be there and look forward very much to meeting with you personally.
SightSound & Napster in Patent Dispute
Digital Media Wire
SightSound Technologies, a company that holds patents on the process of selling digital audio and video over the Internet, announced last Wednesday that it has filed a preliminary injunction against Napster, asking a judge to shut down the digital music service while a patent infringement lawsuit is considered.
In a statement, SightSound president and CEO Scott Sander said that Napster sidelined negotiations with his company for a license of its audio technologies by demanding the free inclusion of a video license at the eleventh hour.
"This lawsuit is the regrettable outcome of a long process that could have been resolved amicably," said Sander. "It is surprising that Napster has taken this road given that it seems to have been working to restore its brand value."
Sander added that he believes Napster may now request a reexamination of SightSound's patents with the US Patent and Trademark Office.
Last February, SightSound won a settlement in a six-year-old patent dispute with Bertelsmann subsidiaries CDnow and N2K.
A hearing on Pennsylvania-based SightSound's request for an injunction against Napster has been scheduled for March 3 before the US District Court for the Western District of Pennsylvania.
Hong Kong Makes First File-Sharing Arrest
Associated Press
Hong Kong authorities have made their first arrest for allegedly sharing copyrighted files over the Internet, a spokeswoman said.
The suspect used the popular file-sharing program BitTorrent, said Customs and Excise Department spokeswoman Agnes Law.
The 38-year-old man, who was not identified, is suspected of uploading the films "Daredevil," "Red Planet" and "Miss Congeniality" onto a Web site from which others could obtain them, Law said.
The suspect was not immediately charged and investigations are continuing, she said. Illegally distributing copies of copyrighted material carries a maximum penalty of four years' prison and a fine of $6,400 for every illegal copy.
BitTorrent uses innovative software that speeds up as the number of people sharing data increases.
Officials have promised to step up copyright protection efforts in Hong Kong, which is known for its fake luxury goods and illegally copied music and films.
Coming Events of Interest
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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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2005 Media Summit New York - Held at the McGraw Hill Building, February 9th–10th, this will be the premier international conference on motion pictures, television, cable & satellite, broadband, wireless, publishing, radio, magazines, news & print media, advertising and marketing. "Global Media + Technology Innovation = Communications Revolution" is this year's theme.
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The DCIA will hold its Winter General Meeting the evening of February 9th in conjunction with MSNY. Please contact Member Services leader Karen Kaplowitz at 888-890-4240 or karen@dcia.info for more information.
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Digital Music Forum - The 5th annual DMF is set for March 2nd at the French Institute Alliance Francaise in New York. DMF is the premier event for music industry decision-makers focused on business models and legal issues impacting music.
Shawn Fanning, Co-Founder of SnoCap will be the keynote this year, and featured panelists include Phil Corwin, Chief Lobbyist for DCIA Member Sharman Networks (owner of Kazaa); Jeff Bronikowski, VP of eLabs, Universal Music Group; Martin Elgison, Partner of DCIA Member Alston & Bird; and Ted Cohen, SVP of EMI Music.
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Canadian Music Week - Headquartered at the Fairmont Royal York in Toronto, March 2nd-5th, CMW will be the largest music and entertainment convention in Canada with delegates representing music broadcasters, manufacturers, retailers and distributors, new media/Internet companies, recording artists, and musicians.
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The DCIA Is proud to participate in "Redemption Song: Profit from P2P" moderated by LA Times correspondent Joseph Menn March 3rd at 2:45 PM. P2P has been the killer app driving the billion-dollar broadband business, and can generate new revenues for music rights-holders. There are a slew of new companies offering moneymaking P2P plans. This panel will consider whether it's time to talk carrot instead of stick.
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