January 31, 2005
Volume 7, Issue 10
January Issue of P2P Journal
The January 2005 P2P Journal, published by DCIA Member Project V-G's Raymond Gao, is now available online. This issue features an article about building interoperability among different P2P platforms and a review of Ian Taylor's new book "From P2P to Web Services and Grids, Peers in a Client/Server World."
Indie911 at South by Southwest
DCIA Member Indie911 is gearing up for a big week at the South by Southwest (SXSW) Music and Film Festival in Austin, TX culminating in a major live performance event at MoMo's on March 18th with Amanda Ghost, Grace Potter and the Nocturnals, Samantha, and Shiny Toy Guns.
Indie911 will distribute the event to peer-to-peer (P2P) users through fellow DCIA Member INTENT MediaWorks.
Contact Indie911 CEO Justin Goldberg at 310-943-7164 or justin@indie911.com this week to learn about sponsorship opportunities.
RazorPop Launches TrustyFiles 2.4
DCIA Member RazorPop last week released TrustyFiles 2.4 High Performance File Sharing, an update focused on rewriting and tuning the network core for maximum performance.
"The results speak for themselves," said Marc Freedman, RazorPop Founder & CEO.
RazorPop's TrustyFiles enables users to search and download hundreds of millions of files through the Kazaa/FastTrack, Gnutella, Gnutella 2, and BitTorrent P2P file-sharing programs. TrustyFiles is available free of charge, with no spyware and no additional bundled software.
TrustyFiles 2.4 is a small 1.6 MB download and provides security against invasive users through an Internet connection blocklist and virus-scanning support to reject infected files.
Other features include global search results, multi-source downloading, partial file downloading, multiple sharing directories, file compression, and support for TrustyLinks, Gnutella Magnet links, Kazaa sig2dat links, and torrent files.
Go-Kart Signs with the Orchard
The Orchard, the world's leading distributor and marketer of independent music, last week announced that it has signed DCIA Member Go-Kart Records, the punk/hardcore label featuring music from Anti-Flag, Buzzcocks, Down by Law, and Lunachicks, among others, for distribution through The Orchard's global digital distribution and marketing network.
Go-Kart Records signed along with fourteen other leading American and European independent record labels, adding to The Orchard's roster of thousands of labels spanning over 72 countries and every music genre representing more than 300,000 tracks.
Report from CEO Marty Lafferty
 Last Monday marked the US Supreme Court's deadline for filing amicus (or friend-of-the-court) briefs in support of the plaintiffs' position in the MGM v. Grokster case scheduled for oral arguments on March 29th.
Led by the RIAA and MPAA and other copyright-owner organizations, an entertainment industry coalition responded by urging the high court to reverse the unanimous decision of a three-judge panel of the 9th US Circuit Court of Appeals and, in so doing, overturn the Betamax doctrine (please see below).
According to ZDNet, "Legal observers say the outcome of the case could affect virtually every consumer electronics and computer manufacturer, as well as software and entertainment companies."
The lower court found that Grokster and Streamcast Networks (owner of Morpheus) are not responsible for abusers of their respective peer-to-peer (P2P) file-sharing software programs who infringe on copyrights by redistributing unauthorized content files.
This ruling was based on the 1984 precedent set by the Supreme Court (aka "the Betamax doctrine") in deciding that Sony was not liable for copyright violations committed by users of its VCRs because the technology was also capable of uses that did not infringe on copyright.
Government officials filing briefs included Paul Clement, acting solicitor general of the US Department of Justice, Senators Orrin Hatch (R-UT) and Patrick Leahy (D-VT), and thirty-nine state Attorneys General.
Several law professors and economists submitted amici briefs – including seven faculty members from the University of Chicago. Eight international trade groups asserted that the US breached its obligations to deter copyright infringement.
Music industry artists such as Avril Lavigne, the Barenaked Ladies, Bonnie Raitt, Brian Wilson of the Beach Boys, Dido, the Dixie Chicks, the Eagles, Kenny Rogers, Reba McEntire, Sarah McLachlan, Sheryl Crow, Sum 41, and Tom Jones also signed on.
According to Donald Verrelli of Jenner & Block, who will argue the case on behalf of the record and movie industry plaintiffs, at least twenty entities filed.
Their briefs, however, failed to address salient facts regarding leading P2P software suppliers. For three years, these firms have made good-faith efforts to license content from major entertainment rights aggregators in order to serve as authorized content resellers.
Because no licensed major entertainment content is yet available in the P2P distribution channel, the primary business of the P2P companies still remains separate from content for the most part. As a result, revenue per user at this point would be the same whether an individual redistributed a million files or no files, and whether such files were licensed or not.
Despite the absence of licensed major entertainment, a growing number of independent music labels and movie producers, as well as all major games publishers, have authorized distribution through the P2P channel. Thanks to them, file sharing has become the largest online distribution medium for licensed files, and P2P users have demonstrated their overwhelming willingness to select and pay for high-quality licensed files.
Grokster and Morpheus already have significant non-infringing uses, but cannot unilaterally filter unlicensed copyrighted files. This is not to say that an industry-wide approach involving multiple participants in the distribution chain might not be able to make content tracking feasible for revenue generating purposes. And notwithstanding the enormous resource drain to all affected parties caused by this continuing litigation, the DCIA will stay focused on such commercial solutions.
For example, in its filing, Digimarc noted that, "Digital watermarking offers a viable and proven means of enabling trusted transactions and innovative models of digital content distribution while protecting copyrights."
The deadline for amicus briefs supporting the defendants or neutral in their positioning is a month from now. AOL, CDT, DiMA, Google, ITAA, Microsoft, NetCoalition, and Yahoo have already filed, asking the Supreme Court to reaffirm Betamax.
In the IEEE filing, Andrew Greenberg wrote, "A careful balance must be struck between copyright incentives to create works and the right of the public to benefit from technical means to reproduce and distribute those works. File-sharing technology serves as the basis for the Internet and should be unrestricted to produce future revolutionary digital products."
At the CES convention in early January, the CEA's Gary Shapiro urged copyright owners to "resist the temptation to restrict technology, which will deprive the public of equal and fair access to information, entertainment, and education."
We agree with Charles Cooper, executive editor of commentary at CNET News, who summarized last week's blizzard of paperwork, "The content industry's strategy for dealing with the peer-to-peer challenge can be summed up in three words: sue the bastards. Everyone of sane mind can agree there's a need to address digital piracy. But how about trying something more nuanced than a sledgehammer approach?"
AlmondNet Patents New Technology
DCIA P2P Revenue Engine (P2PRE) participant AlmondNet announced last week that it has patented a technology that allows marketers to target consumers based on their search activity even after they have left the search engine's site.
The new service, dubbed "Post-Search," gathers search data through partnerships with companies that have access to Web users' search history. These could be Internet service providers, software companies that track user search activity, or the search providers themselves.
This tracking process is cookie-based; AlmondNet said its partners do not provide the company with access to personally identifiable information. AlmondNet retains individual behavior data for 30 days, but does not aggregate it into more specific profiles. AlmondNet then sells the search data to advertisers.
"We're very, very excited about the patent," said Roy Shkedi, AlmondNet's Founder & CEO. With the patent, other companies that want to use the same technique will need to pay AlmondNet a licensing fee or tap AlmondNet to provide the service.
German Court Rules for ISPs
Digital Media Wire
The Higher Regional Court of Frankfurt has ruled that ISPs in Germany are not obligated to reveal the identities of their subscribers who are accused of copyright infringement using file-sharing software, the German newspaper Heise reported.
The denial to record labels seeking to sue such anonymous file-swappers was the second such ruling delivered in Germany, in stark contrast to US precedent, where courts have enabled record labels and movie studios to file "John Doe" copyright suits that compel ISPs to reveal the identities of their customers.
The German court said that ISPs only supply technical access to the Internet, and aren't generally obligated to inspect the data transmitted along their networks, but must block access when they learn of illegal content.
DCIA Special from University of Phoenix
For over 25 years, University of Phoenix has been dedicated to serving the educational needs of working adults.
Now it has a special offer for DCIA Members and participants to earn a Bachelors of Science Degree in Information Technology or Masters Degree in either Technology Management or Computer Information Systems.
You may enroll throughout the year, because there is no waiting for semesters. To learn more, please contact Sye Smith at sye.smith@phoenix.edu or call 703-379-7599 x 6115.
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.
- 2005 Media Summit New York - Held at the McGraw Hill Building, February 9th–10th, this will be the premier international conference on entertainment, media, and distribution technologies. This year's theme is "Global Media + Technology Innovation = Communications Revolution."
The DCIA will present a special evening session "Making Money via P2P – Ten Companies in Two Hours" and networking event on 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.
- Supreme Court Oral Arguments – The US Supreme Court will hear arguments March 29th on whether companies that provide peer-to-peer (P2P) software violate copyright laws if their users commit copyright infringement. The Court's date for oral arguments in the case, MGM v. Grokster, coincides with an expected decision in a similar high-profile case in Australia, which involves Kazaa.
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