April 18, 2005
Volume 8, Issue 9
Welcome Vmedia Research
Please warmly welcome Vmedia Research, Inc. to the Platform Group. We look forward to providing valuable services to this newest DCIA Member and supporting its contributions to commercial development of the distributed computing industry.
The mobile lifestyle is quickly evolving into a global, mainstream phenomenon. Mobile devices keep us on-time, on-track and connected to work, family, and friends. Music has been the mainstay of mobile entertainment for years. Now consumers want more – they want movies, TV shows, and video games to go. And they expect their mobile devices to provide the same simple, quality entertainment experience they enjoy at home.
Vmedia Research is making that experience possible with miniature optical media. 1GB and 2GB Vmedia discs are the miniature, mobile equivalent of DVDs – ideal for cost effective, high volume replication and distribution of prerecorded content. Windows Media, MPEG4, and other content compression codecs allow feature-length movies and fully-featured video games to be replicated on a single Vmedia disc.
Vmedia's drive is packaged into an easily integrated component for OEMs. The miniature, low power-consumption drive is designed to be embedded in mobile CE devices including handheld game consoles, PDAs, smartphones, handheld PCs, portable video players, and hybrid mobile entertainment platforms. Multi-national OEMs are developing a variety of Vmedia players and embedding its miniature optical drive in mobile devices.
Perhaps of greatest interest to the distributed computing industry, Vmedia's wireless player delivers video entertainment to users with 802.11b/g WiFi enabled mobile devices. Small enough to tuck in a pocket, Vmedia's wireless player is smart enough to stay in sleep mode until the user is ready to watch a movie, TV show, or play a video game.
Claria's New Web Intelligence Center
DCIA Member Claria, a pioneer and leader in the behavioral marketing space, announced last week that in addition to the launch of its BehaviorLink ad network, it is also launching the Web Intelligence Center. This new offering provides marketers access to numerous metrics based on consumer behavioral data to help them create more relevant advertising and content. Its standard reports include usage intensity, cross-traffic, cross-browse, loyalty, and new-to-brand indices.
According to Claria CMO & SVP Scott Eagle, "The Web Intelligence Center will offer our advertising and publishing partners unprecedented insights into consumer behavior. We are committed to leading the industry by providing the next generation of analytics to assist in their content personalization and marketing efforts."
The Web Intelligence Center is an analytics platform that helps provide marketers with unprecedented insight and analysis into anonymous consumer behavior across a broad spectrum of the Web, rather than on a single site or limited group of sites. It enables advertisers and publishers to have a broader understanding of the interests of their consumer audience; what content users are seeking to meet their information needs; what activities users perform before and after they see an ad - in increments of hours, days, weeks, or months; and how behavior differs among various levels of category usage and/or brand loyalty.
A New Online Service
Excerpted from AP Report
Skype Technologies, which makes software that lets Internet users call one another free anywhere in the world, said Friday that it was offering two new premium services and that the number of downloads of its basic software had topped 100 million.
The new services are SkypeIn, which allows users to get regular phone numbers and receive calls from landline or mobile phones without paying roaming charges, and Skype Voicemail, which permits users to receive voicemail from any user or traditional phone.
Skype is integrated in the current release of Kazaa Media Desktop distributed by DCIA Member Sharman Networks.
Report from CEO Marty Lafferty
 The RIAA filed copyright infringement lawsuits against 405 students at 18 US colleges last week, coinciding with IFPI's filing of almost 1,000 such suits in 11 countries.
Complaints were capped at 25 per school with the average recipient accused of sharing 2,300 major-label music tracks and the highest 13,600.
An MPAA statement said there is evidence of similar infringement at 140 other campuses in 41 states.
This brings the total number of cases to over 10,300 in the United States and nearly 12,000 internationally in two years, during which time peer-to-peer (P2P) file-sharing has continued steadily to increase, according to BigChampagne.
These latest American lawsuits are focused on student users of Internet2, a network utilized by 200 universities to share advanced applications at speeds up to one-thousand times faster than broadband. i2hub software facilitates the downloading of feature-length movies in less than thirty seconds.
Meanwhile, a Seattle-area woman has sued her ISP for disclosing her name and contact information without court authorization to the RIAA. Dawnell Leadbetter, a Comcast broadband subscriber and mother of two teenagers, said she was told to pay $4,500 for downloading major-label music or face an RIAA lawsuit for hundreds-of-thousands of dollars.
And 3,000 miles away a Duke University student plans to "plead guilty to file-sharing and see if the recording industry follows through with its threatened $3 million dollar lawsuit." Jordan Greene believes the RIAA is using its power and money unfairly and, for him, the moral issues at stake overcome practical concerns. "Worst case, I'll declare bankruptcy," he said.
Peter Lasch, one of Greene's professors, said, "I don't believe that lawsuits and punishment and unilateral discipline are the right approach."
A more positive remedy, Lasch said, could involve discussion opportunities about the ongoing struggle to define intellectual property rights. "As places of knowledge, discussion, and debate, we have a special responsibility," he said.
As the Electronic Frontier Foundation's (EFF) Fred von Lohmann asked during a file-sharing debate at Cornell University last week, "When are we going to start focusing more on the carrot and less on the stick?"
For two years, a Joint Committee of the Higher Education and Entertainment Communities has examined the 4,168 American universities and colleges serving nearly 16 million students. So far, fewer than 1% have signed up for RIAA-endorsed digital music services, typically made available only in residence halls, and achieving low penetration rates. Of these, MusicNet, acquired last week by Baker Capital, has shown the greatest potential with its Ctrax service.
The DCIA would like to propose to the music industry the following alternative joint endeavor – think of it as a straw-man for which we are not wed to specifics, but rather to the general principles it represents.
Choose four universities from among the 200 with Internet2 service to conduct competing market trials of P2P music business models during the academic year 2005-2006. At the first explore an advertising-supported business model, at the second a subscription business model, at the third an a la carte business model, and at the fourth a combination of all three.
The P2P distribution channel is sufficiently robust to allow rights holders to simultaneously offer users alternative value propositions for the same title within a compelling user interface. For instance, a student could select from an ad-supported promotional version, an opt-in monthly subscription of like-genre content, or an individual purchase of a song – all attractively presented on a single screen – or sample the free version and then trade-up.
Other considerations such as number of copies for additional playback devices permitted for a prescribed offering can also be evaluated during the school-year to find the best balance between fair use and profitability.
Each market trial will compete against the others to optimize net-revenue-per-student and value-delivered-per-music-track. The ad-supported trial, for example, will seek to define the ideal mix of banners and tiles as well streaming tip and tail ads that will generate the highest cost-per-thousand (CPM) rates along with greatest usage and satisfaction for associated content. It should already be abundantly clear that this business model alone can generate much more revenue per music track from P2P than conventional radio.
To begin this effort, for each participating campus, assemble a ten-person leadership team of one big-four major-label content expert, one industry-leading P2P software developer, one DRM professional, one payment-solutions supplier, one consumer services marketer, one faculty member, and four representative undergraduates (freshman, sophomore, junior, senior).
Provide resource allocations as reasonably needed to ensure that each model will receive a fair-and-honest market trial. And as Larry Dignan advised in Hack to School, study skilled users. See what devices they use. Ask what they're being used for. Watch usage in progress. Set expectations. Establish penalties for unauthorized use. Encourage involvement.
As a special summer project, have each ten-person team develop the plan for a back-to-school P2P music offering within the parameters of its assigned business model. When classes resume, launch the market trial and run it for the fall semester and then compare results with the others. Over the winter break, plan changes to improve upon results from the fall during the spring semester, and then re-launch the offering.
We believe that such a constructive approach will lead to much more valuable learning for the benefit of content rights holders, technology suppliers, service companies, and consumers than the current almost exclusive emphasis on enforcement, which empirical evidence suggests has thus far proven to be futile. The DCIA stands ready to fully support such a cooperative effort.
The Power of Distributed Computing
Excerpted from GreenThinkers.org Blog
Distributed computing represents an exciting way to gain knowledge and solve problems needing a large amount or computing power – as well as to distribute content very efficiently. Distributed computing is the process of combining the power of several computers to collaboratively run a single task. These projects will often run in the background, taking advantage of moments when participating computers are idle.
Following in the footsteps of SETI@home, Einstein@home, and Google Compute, the first climate prediction experiment relying on the disseminated power of 90,000 personal computers has predicted potential global warming trends. The results were first published in Nature.
According to Stephen Leahy in Wired: "The PCs, located in 150 countries, allowed British scientists to run more than 50,000 simulations of the future global climate, many more than the 'best ever' 128 simulations using supercomputers," said Myles Allen, chief scientist of climateprediction.net.
Now It's a P2P World
Excerpted from OpinionWire
Microsoft hit the jackpot with Groove Networks, a ready-made .NET peer-to-peer (P2P) platform.
Its acquisition of Groove - a company specializing in P2P collaboration software - will make corporate IT managers think again about the innate power of the corporate PC, and also re-establish the company as a leader in the provision of information worker tools and technologies.
Founded in 1997 by Ray Ozzie, Groove has, over the last three years, steadily acquired key accounts, keen investors, and critical acclaim.
Microsoft's interest in Groove Networks goes back to October 2001 when the company invested $51 million in the Windows-centric P2P platform. It would appear that Microsoft is now finally going to harvest the fruits of that investment; plugging the last major gap in the company's portfolio of collaboration products and technologies.
P2P technology is just as important in the enterprise as centralized technology, and so the acquisition of Groove Networks may well prove to be as important to Microsoft as that of Lotus by IBM back in 1995.
A Conversation with Scott Eagle
Excerpted from Behavioral Insider by Paul Lewis
This week I chatted with Scott Eagle of Claria, which distributes software that runs on the desktops of millions of consumers. The software tracks consumers' online behavior and Claria uses the value of free software to garner consumer permission to have their behavior observed. Scott elaborated on three primary values for end consumers:
Paid-for Software and Content Since behavioral ads can deliver significantly higher click-through rates than standard run-of-site ads (and thus higher CPMs, CPAs, etc.), they allow software and content publishers to offer more tools (such as IM, calendars, etc.) and content for free or at reduced costs. Magazines have long made revenues selling mailing lists based on consumers' interests and consumers have enjoyed reduced subscription costs or sometimes even free periodicals (often requiring detailed profiling information).
Relevant Advertising Most consumers recognize they are going to see advertising, whether it is banners, pop-ups, or interstitials; it is part and parcel of the online experience. What behavioral marketing attempts to provide is relevancy. Magazines such as Auto Trader, Dupont Registry, or the original Computer Shopper contained NO content other than advertisements - and consumers were even willing to pay for them. As relevancy increases, advertising moves from nuisance to value.
Customized Content Scott highlighted an interesting fact that most people don't customize their online portal start page, but when they do, they spend 55 percent more time within the portal's content. What if your behavioral profile could automatically customize the content of the Web pages you visit?
The winning equation is all about adding relevant value - value to advertisers, value to publishers, and perhaps, most of all, value to consumers.
SVC Financial & Operation Soldier
DCIA Member SVC Financial Services, which will host the next working session of P2P PATROL on May 3rd, last week announced that Operation Soldier, a non-profit organization designed to care for deployed US troops in Iraq and Afghanistan and their families, will launch a fundraising initiative using the SVC Mazarin Media Platform.
The fundraising initiative, titled "Patriot Down," is intended to alleviate the financial burden of military families that have a loved one who has been seriously wounded in combat, among other things helping defray the costs of family members visiting wounded relatives in military hospitals.
"SVC's Mazarin Media Platform enables Operation Soldier to quickly and efficiently manage our funding application," said John Bush, Co-Founder of Operation Soldier.
"With the Mazarin Media Platform, we now have a fundraising solution that allows us to electronically reach a large audience of people who care and want to contribute to our soldiers and their families' needs. SVC's Payment Services Processor engine enables us to accept any size donation at the lowest possible cost, meaning most of the funds go directly to a very worthy cause."
Coming Events of Interest
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Copyright and Internet Intermediaries – The management of intellectual property in the online environment poses significant opportunities as well as challenges, and raises high stakes as the value of online transactions, both authorized and unauthorized, increases.
The World Intellectual Property Organization (WIPO) is sponsoring a seminar to help obtain a better understanding of these issues on April 18th at its headquarters in Geneva, Switzerland.
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Alternative Distribution: Beyond Basic Cable – On Wednesday April 20th from 12:30PM to 2:00 PM, during NAB in Las Vegas, the ITV Alliance will host a roundtable luncheon with 50 invited ITV executives.
There will be a host/facilitator leading the conversation at each table. During dessert, the 6 table hosts will debrief the audience and expand the dialogue.
Participants include British Telecom, Microsoft, Pappas Telecasting, NRTC, and Red Swoosh. Please RSVP at info@itvalliance.org.
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Cyberlaw in the Supreme Court – On April 30th, the Stanford Law Center for Internet and Society will host a discussion entitled "Cyberlaw in the Supreme Court."
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P2P PATROL Spring Meeting – P2P PATROL (Peer-to-Peer Parents And Teens React On Line) will hold its quarterly working session for participating law enforcement and private sector representatives Tuesday May 3rd at 9:30 AM.
DCIA Member SVC Financial Services will host this meeting at its HQ in San Francisco, CA. For more information, please contact sari@dcia.info.
The P2P PATROL initiative, a voluntary collaboration of technology companies and government agencies, offers programs focusing on education, deterrence, and enforcement for combating online child pornography, and operates the P2Ppatrol.com website.
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CONNECTIONS Digital Home Conference – This executive marketing conference, to be held May 11th-13th at the Hyatt Regency near the San Francisco Airport in Burlingame, CA combines Parks Associates' market and consumer expertise with insights from key industry strategists to provide a comprehensive analysis of current and future "Digital Living" technologies.
DCIA Members Digital Containers' CEO Chip Venters and Trymedia Systems' SVP Gabe Zichermann will be featured speakers.
Parks Associates' research shows that roughly one-third of all US households now have broadband access and nearly 20 million have a home network. The combination of these solutions is changing the paradigm for access to mainstream music, movies, television programs, and games. Currently one-third of all Internet households listen to online radio stations each month, and a comparable number download music files. Likewise, 10% of all Internet households access on-demand video content each month.
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