June 6, 2005
Volume 9, Issue 4
Welcome New Member PlayFirst
Please warmly welcome PlayFirst, Inc. to the Content 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.
In announcing its formation in September 2004, co-founders John Welch, Brad Edelman, and Jason Rubinstein dedicated PlayFirst to a new model of online game publishing.
"The online game industry is still at its dawn," said PlayFirst CEO John Welch. "Our management team is bringing a new model of publishing to what we see as an emerging market: popular games. With strong capital, expertise, technology, and a focus on this market, PlayFirst plans to bring the best game-play to all online consumer entertainment platforms – starting with Internet downloads."
PlayFirst is focused on creating and publishing popular games that appeal to the mass market through multiple consumer platforms. PlayFirst's game portfolio is accessible and entertaining to both new and seasoned online game players who comprise the downloadable games market that IDC forecasts will grow to $760 million by 2007.
As Internet penetration has grown to 90 million users in the US alone, including 30 million broadband customers, the Web has become a viable distribution outlet, and PlayFirst has attracted channel partners such as Big Fish Games, MSN Games, Oberon, RealArcade, Shockwave, and fellow DCIA Member Trymedia Systems to help market its games online.
As a full-service publisher, PlayFirst has a holistic go-to-market strategy for its games, working with leading developers to choose and tailor game concepts. PlayFirst has experience transforming brands from other media into successful games with mass-market appeal. PlayFirst works with both internal and external game developers to transform inspired ideas into commercial successes.
"Interactive entertainment on PCs and other consumer devices has started to supplant traditional forms of media such as music, box office, and television," said Janice Roberts, Managing Director at PlayFirst investment firm Mayfield. "We see a tremendous opportunity for PlayFirst to expand the market for games beyond today's hard core gamers to the broader market on all relevant platforms."
Gus Tai, General Partner of Trinity Ventures, added, "If anyone has the know-how to make the enjoyment of games as simple and broad as going to the movies or buying music, this is the team to do it."
Some See Benefits of File Sharing
Excerpted from LA Times Report by Jon Healey
Brady Lahr sees a vein of gold waiting to be tapped. Lahr, co-founder and President of Kufala Recordings, is one of a number of file-sharing advocates who argue that P2P networks can play an important role in e-commerce.
"We really want to sell our material through this new sales channel," said Lahr, whose Santa Monica-based label specializes in concert CDs. "It really gives new artists or breaking artists an opportunity to expose themselves to a new audience."
To many independent labels, the main goal is simply to introduce music fans around the globe to little-known artists who have no chance of being played on commercial radio stations. The payoff they hope for in the long term is greater CD sales; any downloads they sell on P2P networks are icing on the cake.
"It is small, but everything starts small," Chief Executive Daniel Glass of Artemis Records said of his company's revenue from Kazaa and other popular file-sharing networks. "To not be part of it is insane."
Executives at four DCIA Member companies that distribute authorized copies of songs and games said demand for their wares was small yet growing quickly.
The four – Altnet Inc., a subsidiary of Brilliant Digital Entertainment of Sherman Oaks; INTENT MediaWorks of Atlanta; Shared Media Licensing Inc. of Seattle; and Trymedia Systems Inc. of San Francisco – estimate that authorized downloads account for as many as 20 million files a month.
The iTunes Music Store has a distinct advantage: It can offer music from the major labels, which have refused to let their songs be sold on virtually every file-sharing network.
That's a crucial problem for the file-sharing networks, said Chief Executive Eric Garland of BigChampagne, a firm in Beverly Hills that monitors those networks. "If you don't have any top sellers available for sale, then you are not, first and foremost, a place to buy music."
Still, Glass remains enthusiastic, noting the steady growth in sales and the relationships the label is building with advertisers on the networks.
Beth Appleton, head of new media and business development for V2, the independent label whose roster includes the White Stripes and Moby, said it was important just to give users the opportunity to pay for what they copy. "The Kazaa environment is where we're converting and educating people who download music into legal downloaders," she said.
Part of the process is trying alternatives to the 99-cents-per-download model championed by Apple. For example, INTENT MediaWorks and Altnet are using ad revenue to subsidize downloads, and Shared Media Licensing is encouraging people to sell its files to other users by giving them some of the proceeds.
Report from CEO Marty Lafferty
 It is the season for university commencements and, on Friday, the Massachusetts Institute of Technology (MIT) ceremoniously launched more than two-thousand freshly degreed, highly qualified, and extraordinarily talented innovators into the marketplace.
Appropriately, MIT Hindu Chaplain Swami Tyagananda led the internationally diverse assemblage in an invocation of clear understanding and courage to pursue goals of social justice, harmony, and peace with single-minded attention.
In his commencement address, QUALCOMM Chairman & CEO Irwin Jacobs painted a future vision of small mobile devices with enhanced chipsets enabled by a host of distributed computing software applications making extremely low-cost dissemination of entertainment and information ubiquitous.
MIT President Susan Hockfield characterized MIT graduates as uniquely equipped to address technology issues and urged them to transmit the values that define the MIT community to other communities they will join. These values include leadership as an opportunity to serve, integrity as the touchstone of judgment, pursuit of truth, a drive toward excellence, and plain old-fashioned hard work.
Barun Singh, President of the Graduate Student Council, energetically exhorted the Class of 2005 to exemplify the spirit of fearless invention and resourcefulness ingrained in them at MIT as tomorrow's leaders, designers, and problem-solvers.
"You have demonstrated the ability to reason. Be open to unconventional solutions. Keep alive your passion and drive. The world needs this, and it waits for you."
Indeed, the distributed computing industry already benefits greatly from MIT alumni in positions of leadership, and most assuredly its graduates will play key roles in devising solutions to the outstanding problems that the DCIA still seeks to address.
The June MIT Technology Review distributed to commencement attendees had this to say.
"This spring, lawyers for MGM Studios argued before the US Supreme Court that Grokster, the maker of a peer-to-peer (P2P) Internet file-sharing system, should pay damages to copyright holders for facilitating mass piracy of their digital content.
One simple fact underlies the current debate over intellectual-property rights, the theme of this special issue of Technology Review: every time you download a music file or use some other artifact of digital culture, you are making a copy. If you don't have permission, or the use is not 'fair,' you may be breaking the law and infringing the rights of copyright owners.
Until recently, there was little that copyright owners could do about it; but there are now effective digital rights management (DRM) technologies designed to limit copying, remixing, and redistribution. Is this increase in the potential power of copyright owners a good thing?
Stanford University law professor Lawrence Lessig, who submitted a friend-of-the-court brief in the Grokster case, leads off with an essay on copyright and free expression. Healthy societies, Lessig argues, give citizens the freedom to 'remix' bits and pieces of copyrighted works such as songs, writings, images, and software (see The People Own Ideas).
But today, he warns, those very bits and pieces are disappearing behind DRM technologies. If communities want to hold onto their ideals of open communication, Lessig says, they should look to the free-software movement, which encourages software developers to let anyone run, analyze, adapt, improve, and redistribute their code.
It's an attractive vision – but an idealistic one, according to Richard Epstein, a professor at the University of Chicago Law School, where he and Lessig were once colleagues (see The Creators Own Ideas). Epstein asks where Lessig expects to find his free-culture volunteers if they must give up their livelihoods – that is, their exclusive right to profit from their own intellectual labor – in the process. Without state-enforced copyrights, there's little incentive to create, argues Epstein.
US society seems destined to divide into two camps: communities that thrive on free copying and others that profit from copyrights.
These are probably unstoppable trends. The courts and legislators should strive for balance: preserving a place for reasonable and limited copyrights, while simultaneously abjuring extreme limits on society's ability to 'remix' culture.
In the case of Grokster, the Supreme Court could do worse than look to its own 1984 decision in Sony v. Universal Studios. In that case, Universal charged that Sony's Betamax VCR encouraged copyright infringement. The Court let Sony off the hook, citing the VCR's 'substantial noninfringing uses.'
The Court was right at the time. Let's hope the Grokster decision is just as far-seeing."
Likely at some other prestigious college commencement ceremony – for fine-arts students rather than engineers – the opposite point has been argued. But hopefully, there, too, a prayer to find the path to peace and balance and harmony was also given.
It is that path that the DCIA wants to encourage in the wake of whatever the Supreme Court decides with respect to MGM v. Grokster.
Marketplace solutions, combining new business models with innovative technical support services stand to make P2P the most attractive and profitable distribution channel in history, where consumers, content providers, and technology suppliers all benefit from improved efficiencies.
We look forward to this year's graduating classes helping current industry participants achieve this success.
Ms. Cherry Goes P2P
Excerpted from Thug Life Army Report
DCIA Member INTENT MediaWorks will be distributing fellow Member MusicDish Network's female hip-hop rap artist Ms. Cherry's music video for her single "It's Whatever" on major peer-to-peer (P2P) networks, including eDonkey and fellow Member Sharman Networks' Kazaa.
INTENT has worked with artists such as the 'Internet Rock Star' Scooter Scudieri and New York based musician Jillian Ann (both also DCIA Members) who received over 50 million searches in 3 quarters from file-sharing networks.
"It's Whatever" is a battle rap about real beef in a club. Laila Ali, the pro fighting daughter of "The Greatest" Mohamed Ali, used the single as her theme song and entrance music for a recent bout, a fight where she opened up a Costco sized can of whup-ass on her sad-sack opponent.
In addition to having her song played to thousands of fight fans, Ms. Cherry appeared at the Urban Network Conference in Palm Springs, California, which she followed with a sixteen-city promotional tour for Rhythm and Streets.
The crunk new single "It's Whatever," with its banging beat and Ms. Cherry's feisty lyrics, has clubs jumping all over the South. Confident in her ability to hold her own as an emcee, this multi-talented beauty isn't just another female relying on her sexuality to sell records; Ms. Cherry is the total package.
Fans of crunk can download her music video and DCIA Member RazorPop's TrustyFiles P2P application here. Check out the Ms. Cherry web site here.
City Canyons Records Down Under
DCIA Member City Canyons Records' artists Jen Elliott and Bluestruck, Peter Ulrich (former percussionist of the legendary Dead Can Dance) and Valerian are now being distributed in Australia and New Zealand through a distribution deal with Indie-CDs.com. Under the arrangement, Indie-CDs.com is providing both online and "brick and mortar" distribution.
New York label City Canyons is a relatively new kid on the block," said Malcom Fielding of Indie-CDs.com. "But while it may be small, it has high quality titles. We're really happy that City Canyons has given us Australia/New Zealand distribution for its releases." Fielding also pointed to the "very tight and rocky album of blues based pop ballads" in Elliott's "The Secret's Out," the delightful "hard, punchy rock with lyrics with meaning" of Valerian's "Intimations Of Sorrow" and the mystical journey "that will surprise and please darkwave fans" in Ulrich's "Enter the Mysterium."
Manhattan-based City Canyons Records released its first album, Elliott's "The Secret's Out," in November 2003, followed by UK rocker David Steele's "Underneath the Ice" and Finnish band Valerian's "Intimations Of Sorrow" a year later.
Since then, the fast-growing indie has expanded its reach across the globe. Through a recent licensing agreement with Music&Words, a record label based in the Netherlands, City Canyons' latest release, Peter Ulrich's "Enter the Mysterium," is being distributed throughout Europe.
Skype Forecasts Profitability
DCIA Member Skype, the leading Internet telecommunications software provider, expects to see a profit this year and plans to launch video-conferencing, corporate services, and a dedicated Wi-Fi phone.
Niklas Zennstrom, head of the private Luxembourg company, said 39 million people are using its free software to make internet-based calls worldwide at no cost. He also disclosed that the company was attracting 150,000 new clients a day without advertising.
In addition, 1.4 million of those 39 million are now using Skype's pre-pay service to call people outside the company's system, Zennstrom told a telecommunications conference in Paris.
Zennstrom, whose business is worrying traditional telco firms – Telecom has called it a "competitive threat" – said takeup of the company's pay-services was progressing as expected.
Last month, Skype introduced a voicemail and phone access service that allows users to be reached from a handset, fixed or mobile, as opposed to only a computer.
"The model we have is to get as many people as possible to use free versions of Skype – it creates a platform for value-added services," Zennstrom said.
Although subscribers pay just a few dollars, the revenue will help the two-year-old startup become profitable this year, he said.
Coming Events of Interest
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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. 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. Take home tools and knowledge of immediate value with focused conference tracks for media, marketing, advertising and online publishing.
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Digital Media Summit - DCIA Members Shared Media Licensing's President John Beezer and Trymedia Systems' SVP Gabe Zichermann and industry data resource BigChampagne's COO Adam Toll will be featured speakers at iHollywood Forum's 4th annual Digital Media Summit being held at the Universal Hilton in LA June 7th-8th. This conference is for senior executives whose businesses involve generating revenue from creation, distribution, and delivery of digital content, services, and media.
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DCIA Summer Meeting – The DCIA will hold its Summer 2005 Meeting on Thursday evening, June 16th, from 7 to 9 PM, at the Hilton McLean in Tysons Corner, McLean, VA. This meeting will focus on advancing commercial solutions for P2P distribution of entertainment content. A light buffet dinner will be served. Non-Member Registration Fee: $100. No charge to registered Digital Media Conference delegates. Please contact DCIA Member Services leader Karen Kaplowitz at 888-890-4240 or karen@dcia.info for more information.
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Digital Media Conference – The 2nd annual Washington Digital Media Conference is set for Friday June 17th at the Hilton McLean in Tysons Corner. 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. Featured speakers this year include DCIA Member representatives Les Ottolenghi, CEO of INTENT MediaWorks, Tom Meredith, CEO of P2P Cash, Marc Freedman, CEO of RazorPop, Russ Reeder, CEO of RightsLine, Internet Rock Star Scooter Scudieri, Phil Corwin, US lobbyist for DCIA Member Sharman Networks, and DCIA Best Practices leader Elaine Reiss.
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DRM Strategies Conference – Jupitermedia's comprehensive event on digital rights management business and technology issues will be held July 27th-28th at the Puck Building in NYC. This is a must-attend for those involved in content security in both consumer media distribution and information security. The conference will feature leading industry figures who will introduce the fundamentals of DRM, shed light on future DRM directions, and provide incendiary debate on today's controversial issues of online piracy and digital copyright.
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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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