May 9, 2005
Volume 8, Issue 12
Welcome to Cybersky-TV
Please warmly welcome Cybersky-TV to the Operations 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.
Internet television (IPTV or TVoIP) has been around for several years, but in most implementations has required a traditional client/server architecture: the client computer asks for a TV signal and the server computer sends a data stream containing the signal to the client. In order to broadcast, therefore, providers have had to send literally thousands of identical streams from their servers to viewers' PCs.
With peer-to-peer (P2P) technology, however, data can be distributed in a far more cost-effective manner. Cybersky-TV took a P2P approach to television signal retransmission, developing the ByteTornado protocol, saving bandwidth for providers' servers in particular, and for the whole Internet infrastructure as a whole.
Similar to existing P2P protocols such as BitTorrent, eDonkey, Gnutella and Kazaa, ByteTornado shares data delivery workloads across inter-connected clients as well as distributor-server infrastructures and in so doing drastically decreases operational costs for stream providers.
ByteTornado builds up an intelligent network, self-balancing and rebuilding itself by means of rapid node creation and replacement. It is optimized for multicasting real-time data (TV signals) over broadband IP networks. Please see Cybertelly and the Cybersky-Project for details.
Its enormous speed, which is instantly available, can be utilized in various applications such as webcam communities, web conferencing, file sharing, web phones, streaming media, and content delivery networks (CDNs).
Newsweek says Cybersky-TV "is proposing to do for TV programs what Napster did for music a few years ago. And if successful, Cybersky could well shake up the television industry just as Napster – and now Kazaa and Grokster – rattled the music and film worlds."
Cybersky is a pun on the name of its German inventor, Guido Ciburski, a television software engineer who runs TC Unterhaltungselektronik (TCU), a small, innovative TV technology company in the Rhineland town of Koblenz.
Cybersky-TV now offers a free software application for very efficient retransmission of television signals by means of P2P technology. It allows users with a broadband Internet connection to share TV channels, irrespective of whether initial reception is by cable, terrestrial, or satellite, or whether the signals are analog or digital. Shared channels can be viewed almost in real time by Cybersky-TV software users.
P2P Gets a Big Nod
Excerpted from Digital Music News
Last week Nielsen Entertainment announced a strategic relationship with BigChampagne, the official data resource of the DCIA, which will deliver a mix of Nielsen's measurement of terrestrial, satellite, and digital radio airplay with BigChampagne's file-sharing charts in an effort to provide customers with a comprehensive report on music consumption.
Does this mean P2P has finally come of age? 16-year old file-sharers hardly need the endorsement of Nielsen to validate their use of peer-to-peer software, but the move is highly symbolic within the industry. Nielsen is a relatively conservative media measurement company, and incorporating P2P into their data pool is a big deal. The move represents a growing sentiment among top digital music executives that P2P is here to stay, with trading volume continuously increasing despite aggressive lawsuits from the RIAA.
The move also continues to put the MGM v. Grokster case in a different light, with most viewing the case as largely irrelevant to the overall P2P phenomenon. No matter what the Supreme Court decides, it is very likely that file sharing will still be with us, with the concept of "shutting down" peer-to-peer largely a pipe dream. Now, Nielsen has joined those voices, recognizing the relevancy of file-sharing data and affirming its long-term role.
The Nielsen expansion into P2P monitoring also puts a tough spotlight on the RIAA, which remains determined to exterminate the infringing file-swapper. But 10,000 lawsuits have failed to make a substantial dent, with even widespread spoofing failing to curtail a steady increase of new users. That doesn't make unauthorized file sharing right, but it does make it relevant, and critical information that marketers and industry decision makers can no longer afford to ignore.
Report from CEO Marty Lafferty
 We are grateful to the Federalist Society for inviting us to participate with the MPAA in its "MGM v. Grokster" debate last week, and sincerely thank Loeb & Loeb for graciously hosting this event at its Century City headquarters.
Beyond the therapeutic value to participants of being permitted to air differences publicly and the provocative value to attendees of being able to consider their opposing viewpoints, the greatest value to the DCIA came from listening to the MPAA's John Malcolm.
We sought points of commonality upon which our respective trade association members can develop solutions for what remain the greatest obstacles to commercial development of the distributed computing industry.
John did an excellent job of articulating the MPAA's public position on behalf of its members, who are petitioners in this case, and we tried to discern from his remarks those elements that may be helpful for the purpose of reconciliation.
As an audience member asked during the Q&A, an important question is what can be done to help affected parties move past the win-lose mentality of litigation to a more constructive and mutually beneficial approach that will provide major entertainment companies and P2P software distributors with new revenue sources?
Although we began the debate with divergent characterizations of the current business models employed by leading P2P software suppliers – as well as the reasons for them and the related actions of major entertainment rights holders, there seemed to be a consensus that the P2P firms have successfully aggregated a large global audience that demonstrates a strong appetite for discovering, acquiring, and helping to redistribute popular entertainment content.
The DCIA feels that these small but innovative companies deserve to be credited rather than condemned for fostering the development of usage habits for consumer-friendly applications that can facilitate "super-distribution" of a wide variety of files on a massive scale.
The amount of revenue currently generated by this audience, however, pales in contrast to similarly-sized established market segments, ranging from those of electronic media such as broadcast and cable, to events that rely on ticket-sales such as theatrical movies and concerts, precisely because of the lack of significant business participation by major entertainment companies.
It seems to us that today's major P2P software suppliers hold the greatest potential to become a highly efficient channel for authorized distribution of the copyrighted works of major entertainment rights holders and to be very competitive in terms of relative infrastructure costs.
For reasons that were hotly disputed during the debate, P2P companies have had to find ways to be self-sustaining that are independent from both the amount and the types of files being redistributed by the ad-hoc networks or communities of interest formed by their software users.
Nevertheless, it is clear that their businesses, as well as the entertainment companies' businesses, would be much better off if content from the majors were licensed and monetized through available P2P solutions for advertising and sponsorships, subscriptions and other forms of packaging, and a la carte sales and rentals.
In our view, it should also be clear that because of the way this channel has had to survive and evolve absent the involvement of major entertainment companies, margins it can now deliver to rights holders may be higher, and offers it can help content owners make to consumers more attractive, than competing channels. Because of its extraordinary efficiency, P2P file sharing is poised to be the most productive channel in the world today.
Without the participation of the major recording labels and motion picture studios, but primarily thanks to early-adopting games publishers and small progressive independent music and movie suppliers, leading P2P software firms, supported by digital rights management (DRM) and commerce-engine providers, have already become the largest distributors of authorized content on the Internet, generating ten times more licensed transactions per month than the older-architecture centralized-server online stores that have been favored so far by the majors.
But from our debate and discussion, were there any clues about where to begin to turn things around?
We believe there were two, and they would be akin to Starbucks expanding to sell coffee in supermarkets as well as its own specialty stores.
First may be a market extension of current online licensees of major entertainment content into the P2P environment. It could most readily be facilitated by licensed-content-only P2P distribution firms, which include several DCIA Members, entering into authorized sublicensing agreements with the online entities, subject to terms-and-conditions that have already been negotiated. We stand ready to support this activity in any way that we can.
Second may be direct licensing by the major entertainment companies of closed P2P software applications, which are designed to permit exclusive redistribution of pre-authorized rights-holder entered content only, and to secured file-sharing businesses that are independent from the open P2P software programs, but whose protected content files may be redistributed through them. Here again, there are DCIA Members who separately meet each of these criteria, and we support moving forward on this basis as another viable initial step with the majors.
Trymedia Expands Game Distribution
DCIA Member Trymedia Systems, a secure digital distribution services provider and operator of the world's largest distribution network for downloadable games, announced last week that it will offer titles from major game publishers Codemasters, Encore, a majority-owned subsidiary of Navarre Corporation, ValuSoft, a division of THQ, and Vivendi Universal Games.
These new additions join the 100 publishers currently offering more than 1,000 titles for download via Trymedia's global distribution network. Popular new titles such as "The Chronicles of Riddick: Escape From Butcher Bay Developer's Cut," "Chris Moneymaker's World Poker Championship," "Hoyle Casino 3D and Hoyle Poker Series," "Second Sight" and "Tribes: Vengeance" are now widely available for download trial and purchase.
"The growth of the Internet as a viable channel for game distribution is an exciting development for us," said Tomas Melian, VP, Integrated Marketing, Vivendi Universal Games. "Trymedia's leadership in digital distribution enables us to tap into new audiences and opportunities."
Publishers and developers use Trymedia's ActiveMARK technology to maximize the value of their PC games and enhance their secure digital distribution. Today, more than 200 million legitimate games have been downloaded using ActiveMARK and International Data Corporation estimates that by 2008, US downloadable game sales will reach $1 billion.
"The addition to these leading publishers, combined with the recent signings of all 10 top casual game content creators, will provide consumers with an even more comprehensive selection of downloadable games," said Alex Torrubia, co-founder and CEO of Trymedia. "Gamers can now choose from a selection of more than a thousand casual and core titles."
Each time consumers copy and share an ActiveMARK-enabled game, it automatically reverts to trial mode, allowing subsequent users to play the game for a limited amount of time before purchase. ActiveMARK also allows consumers to easily backup, play on multiple computers, and securely share their games.
P2P PATROL Spring Meeting
Many thanks to DCIA Member SVC Financial Services for hosting the quarterly working session for P2P PATROL (Peer-to-Peer Parents And Teens React On Line), the DCIA-supported initiative to protect children in the P2P environment, last week at its headquarters in the San Francisco financial district.
P2P PATROL is a voluntary effort, bringing together private sector companies and government agencies, which has introduced enforcement, deterrence, and education programs, and operates the P2Ppatrol.com website. Attendees at the spring meeting included representatives of federal, state, and regional law enforcement agencies, trade groups, and leading P2P file-sharing industry companies.
P2P PATROL owes a debt of gratitude to ASACP for funding the work of Cydata Services, which completed the P2P application of CPHotline.org for discussion at this meeting.
SVC Financial's VP of Marketing & Business Development Bob Peak introduced its suite of fund-raising support services especially developed for non-profits, which P2P PATROL intends to explore more fully going forward. SVC Financial's recent work with ActiveMusic on cause-based concert tours is of particular relevance to P2P PATROL.
And finally, DCIA Member RazorPop and its CEO Marc Freedman deserve special recognition for doing a tremendous job in voluntarily developing at their own expense the TFLE "X-Files" forensics application for consideration by attendees at this meeting and for demonstration at upcoming meetings with government agencies. This product has great potential to help boost the productivity of enforcement activities.
New Outlook for Telcordia
Excerpted from Signal to Noise Report
It's a different telecommunications world. For evidence, there's Telcordia, a company that sprung directly from Ma Bell's womb and which was–perhaps still is–considered the telephone vendor of record. Now Telcordia is espousing cooperation, partnerships and, strangest of all, the desire to work with cable operators.
"It's a space for you to watch with us," said Richard George, the company's relatively new VP/GM of Cable. Telcordia is approaching the emerging cable voice space from its strength as an OSS vendor.
George said the company has signed contracts with Charter Communications, Time Warner Cable, and Cox and "re-established or established dialog with all MSOs in North America and in Mexico" as well as with the "international cable community."
Telcordia's pitch is simple: Cable is moving into a merged IP-based telecommunications space, and Telcordia understands software and how to control different services and applications. For instance, he said, the New Jersey-based vendor has developed a policy server that anticipates how to enable a cable operator to enhance the broadband experience by adding gaming or some kind of video download.
"If you can enable cable operators to create new revenue streams, particularly in IP, that's where significant business resides in the next couple years."
"We're very much committed to growing and improving our relationship with the telcos, but we also see ourselves having products and services that have applicability to other players in the arena," George said. "As convergence takes shape, Telcordia is uniquely positioned to leverage its pedigree."
Coming Events of Interest
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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.
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e-Commerce in the Age of Spyware – The Network Advertising Initiative (NAI) is hosting this event on May 12th at the Museum of Television & Radio in NYC focusing on the issue of spyware. NAI hopes to open a dialog from across the online spectrum that will lead to a balanced solution to the spyware problem. Panelists represent many of the players that will have an impact on the ultimate solution, including Jeff McFadden of DCIA Member Claria, Paul Martino of DCIA Member Alston & Bird, David Cavicke of the HR Commerce Committee, Lydia Parnes of the FTC, and Ari Schwartz of the CDT. NAI's objective is to establish and communicate clear standards for Internet advertising practices and to help protect consumer privacy online.
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OMMA WEST Conference & Expo – MediaPost presents two days of workshops and keynotes with more than 50 of the industry's knowledge leaders addressing Search, Behavioral Targeting, and Cross-Media Integration, June 6th-7th in San Francisco, CA. Consider the industry's most vital debates: how to re-aggregate media which has dis-integrated, and how to market in an era of consumer control. Share your experiences and meet your peers at the Meeting & Exhibition Hall. Take home tools and knowledge of immediate value with focused conference tracks for Media, Marketing, Advertising and Online Publishing. Hear the most provocative thinkers in the industry consider the state of modern marketing.
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Digital Media Conference – Mark your calendars! The 2nd Annual Digital Media Conference is now set for Friday, June 17th at the Hilton McLean in Tysons Corner, McLean, Virginia. This is a must-attend event for media, entertainment and technology businesses, educational institutions, and government agencies involved in the digital distribution of media, including information, education & entertainment products. More than 300 digital media industry decision-makers and policy-makers attended the 2004 conference, which was co-sponsored by the DCIA. Consumer Electronics Association (CEA) President & CEO Gary Shapiro will give the opening keynote at the 2005 event.
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Technology Law Institute – A Digital Media Rights panel will be featured September 20th at the Headquarters of the State Bar of Georgia, in downtown Atlanta, GA. Kilpatrick & Stockton's James Trigg will moderate with speakers Miles O'Brien from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
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