July 11, 2005
Volume 9, Issue 9
P2P Volume Climbs Again in June
Excerpted from Digital Music News Report
The average number of simultaneous users on peer-to-peer (P2P) networks inched up again in June, reaching 8.9 million according to figures from DCIA industry data resource BigChampagne. That is a substantial 20.1 percent jump over the same period last year. US users accounted for about 75 percent of the global total.
The increase is notable heading into the summer months, which normally produce a drop in P2P traffic. That seasonal effect could confuse any effect that the recent MGM v. Grokster decision has on overall volume, though so far there has not been a dip.
Overall, P2P traffic levels have been steadily increasing over the past few years. Current levels are now double what they were in September 2003.
Trymedia Systems Adds Peer Impact
Wurld Media (WM), a developer of P2P file-sharing software, announced last week that DCIA Member Trymedia Systems will make its library of downloadable video games available for purchase on WM's Peer Impact service, which is now in beta test.
Trymedia manages the world's largest catalog of more than 1,000 downloadable PC game titles from developers around the globe. Titles span genres from casual games like "Diner Dash" and "Rock and Roll Jeopardy" to the action-filled "The Chronicles of Riddick: Escape from Butcher Bay" and fantasy role-playing games like "Warlords Battlecry III." The majority of titles in the catalog are available for under $20.
Trymedia's ActiveMARK digital rights management (DRM) technology allows consumers to easily backup, play on multiple computers, and securely share their games. Most of Trymedia's games are offered on a try-before-you-buy basis, providing the chance to test drive games before committing to purchase them.
"Trymedia has successfully distributed legitimate games through P2P networks for several years. As the P2P market continues to evolve, we welcome new models like Peer Impact," said Alex Torrubia, CEO of Trymedia Systems.
In 2002, Trymedia became the first company to distribute legitimate video games files via P2P. Today Trymedia's vast distribution network provides legitimate downloadable game content across the Internet, including to major ISPs and portals in the US and Europe.
Kelly Clarkson Delivers Weed Remix
Excerpted from Digital Music News Report by Michael Baker
American Idol champion Kelly Clarkson has released a dance remix of her chart-munching single "Since You've Been Gone" in the Weed file-sharing format of DCIA Member Shared Media Licensing. The track will be offered exclusively as a Weed file, and not be sold through traditional retail channels.
Weed tracks are WMA files encoded with a unique DRM arrangement. Music fans can download a Weed track and listen for free 3 times. After that, users are prompted to pay for the file at a price set by the artist. If someone with whom the user has shared the file also decides to buy the track, the original purchaser as well as the artist make money.
The Weed format has been flying just under the radar for a couple of years. Though a notable list of former chart toppers and critics' favorites such as Heart, Sir Mix-A-Lot, and Sananda Maitreya have become fervent Weed advocates, the concept hasn't yet hit the big time. Clarkson's decision to Weedify a new version of her massively popular single could change that.
With Weed's hard-coded incentive to buy and share, not to mention its potential to create an unmediated remunerative connection between fans and artists, the format would seem the perfect solution.
Weed aficionados and P2P habitués have often claimed that they'll gladly pay for online music if it's easy to do so, and if they know that the artist is getting a reasonable chunk of the cash.
Report from CEO Marty Lafferty
 Despite an apparent resumption of divisive posturing by certain factions in the wake of the MGM v. Grokster ruling, we will not be deterred from continuing efforts to commercially develop the P2P channel, especially for authorized distribution of copyrighted works.
Everything will be done to bring affected parties together to achieve long-term solutions that will succeed in the marketplace.
As noted in last week's report, these endeavors do not have as their objective to filter-out copyrighted works, but rather to make the channel attractive for the secure and profitable distribution of these works.
Given the pace of broadband deployment and Internet-based software development, it is far preferable to focus on achieving the full potential of highly efficient P2P technologies for revenue generation – rather than on shortchanging that potential.
In the file-sharing environment that we are working to establish, rights holders will have the digital rights management (DRM) tools and support services to manage key aspects of every transaction – and to monetize them through such means as advertising support, sponsorships, cross promotion, packaging, subscriptions, and a la carte sales – whether their works are initially entered into redistribution by themselves or by other parties.
While it is regrettable that a major outcome of the US Supreme Court's ruling likely will be additional backwards-looking litigation – and even more unfortunate because parties on both sides over time have implemented changes in business practices paving the way for them to work together – we can now also engage in more constructive activities without the uncertainty as to what the Court's decision will be.
Specifically, the DCIA has embarked on three areas of activity comprising development of: 1) a comprehensive best practices regime based on analysis of the Supreme Court opinion and concurrences; 2) a promotional program highlighting licensed content P2P distribution, appropriate software usage, and protection of children online; and 3) a technology solution initiative that emphasizes a combination of "offensive" tactics (e.g., placement of DRM-protected and other licensed files at top of search results) with "defensive" tactics (e.g., conversion of unauthorized files into licensed quality-controlled versions) that have long-term viability.
While some either cynically or naively propose forcing a migration to provisional closed P2P systems and/or continuing to use lawsuits and smear campaigns to express their opposition to real industry progress, it is right at this moment that we demonstrate our commitment to more positive alternatives.
Trying to drive global Internet users to abandon an ever-increasing abundance of open and inter-operable software applications, which facilitate the instantaneous transfer of files with greater and greater efficiency, ignores marketplace realities, and particularly the effects of an ongoing evolution to low-cost open-source program development.
It makes much more sense to put resources into projects concentrating on the third area of activity outlined above, which are distinguished by an emphasis on equipping individual files to carry the means of their protection and monetization with them as they are transported over public networks.
DCIA Members have relevant experience that can be applied in this initiative along with their expertise and capabilities to benefit not only legitimate business interests, but also consumers.
It is clear that certain of our industry's opponents are trying to leverage their powerful influence over judicial and legislative systems to perpetuate entrenched but no longer optimal business models, temporarily curtail or slow down technological advances, and maintain hegemony of now outdated processes for content exploitation.
They blame others for their own failures to exercise responsible stewardship in protecting copyrights during a more than two-decades-long conversion to digital content origination and distribution. While it may be hard not to recoil from their demands that third parties should now make investments to address problems arising from their own neglect, especially combined as they are with attempts at intimidation, to do so would not be productive. We need to come together to complete the tasks that must be done for all affected parties to move ahead.
It is important that those who oppose the growth of the distributed computing industry realize that our determination to continue developing P2P technologies for legitimate purposes is greater than their determination to restrain, obstruct, or suppress these efforts.
Indie911's New Podcast Channel
DCIA Member Indie911's show over the weekend featuring Grace Potter & The Nocturnals at Hotel Café in LA, "Was truly great," according to CEO Justin Goldberg. "Catch it on August 15th at Joe's Pub in NYC or at one of the four new Dave Matthews Band Second Stage shows in CA, KS, and TX. Also be sure to check out our newly launched indie911 podcast channel, already one of the top podcasts on iTunes."
According to The Diffusion Group (TDG), podcast demand is expected to grow from less than 15% of portable digital music player owners in 2004 to 75% by 2010. TDG's new report, Podcasting: Fact, Fiction and Opportunity, by DCIA Member RazorPop's CEO Marc Freedman, suggests that between 2004 and 2010, the use of podcasting among US consumers will enjoy a compound annual growth rate (CAGR) of 101%.
RazorPop's TrustyFiles Release
DCIA Member RazorPop, a P2P file-sharing developer and distributor, last week released an update of its popular TrustyFiles software in response to the recent Supreme Court ruling.
"We have always stood against copyright infringement," said Marc Freedman, CEO of RazorPop. "In our latest software release we make this clearer than ever. Upon installation, the first thing consumers see is a warning against using our software for infringement. The message is simple, direct, and unavoidable."
TrustyFiles 2.4.0.11 displays the following consumer advisory at installation: "TrustyFiles is legal software. However, it can be used illegally. Some files, such as popular music, movies, and software, are protected by copyright. It is illegal in the United States and many countries to infringe copyrights by downloading or sharing such files. Please use TrustyFiles responsibly and respect copyrighted content." Users then have the option to continue or quit TrustyFiles software installation.
RazorPop is an active supporter of the legal use of P2P technology. RazorPop promotes files that can be legally downloaded and shared at its Top P2P web site. RazorPop has offered a P2P subscription plan to major record labels. The company supports independent and top artists, music publishers, distributors, and other content providers with its P2P Street Team and Branded P2P marketing programs.
The TrustyFiles web site contains a prominent advisory on P2P software risks, such as copyright infringement, data security, viruses, and unwanted exposure to pornography. RazorPop works directly with governmental agencies to protect consumers and fight crimes against children.
Sony BMG Signs P2P iMesh
Excerpted from Reuters Report by Sue Zeidler
Music giant Sony BMG has reached a licensing agreement with file-swapping service iMesh, one of the first such tie-ups since a US Supreme Court decision clamping down on online copyright infringement.
The deal, confirmed on Friday by an iMesh representative, followed a high Court ruling that unauthorized networks could be held liable for the copyright infringement of their users. Analysts said that decision added momentum to the move toward networks sanctioned by media companies.
Once one of the most popular of post-Napster song-swapping networks, iMesh, formed in 1999, was sued by the record labels in 2003 for copyright infringement and settled for $4.1 million (2.35 million pounds).
The New York-based service said just after the June 27 Supreme Court ruling in favor of entertainment companies and against rival file-swapping network Grokster, a DCIA Member, that it would roll out a music industry "sanctioned" song-swapping service.
The privately held company also hired former Sony Music President Robert Summer as executive chairman to handle negotiations with the music industry.
P2P Emerges from Grokster Fire
Excerpted from PC Magazine Report by Libe Goad
The fallout of the recent Grokster v. MGM Supreme Court decision hasn't meant much to the wellspring of new legally minded P2P companies who are looking to turn a pirate's territory into a legitimate delivery system for music, movies and video games.
While Grokster and StreamCast face more time in court, P2P software companies like Peer Impact, Weed, and Mercora make strides in turning their file-sharing services into a legitimate industry with the potential for plenty of profit to spread to music labels, musicians and, in some cases, users.
Mercora is a P2P service on the rise. Instead of relying on the more-traditional music download service, the company allows users to search for specific songs from a large network of peers and then stream them over the Internet.
CEO Srivats Sampath said the P2P aspect of the company makes it different – and superior – to regular Internet radio services, saying the users can listen to up to 6 million tracks on any given day.
"People come onto the Mercora P2P network and bring content in," he said. "It's different because it's not just for downloading streamed songs for listeners; they're streaming songs to other people and other people come in and listen."
"The Supreme Court ruling never bothered us because if you look at the law, and look at the application, it's 100 percent compliant with the law," he said. "It definitively opens opportunities for new models to evolve."
Gartner research director Mike McGuire says that he can't predict if any P2P services will really be in the clear until Grokster and others receive a final verdict in the lower courts.
"Consumers are not really going to care either way," he said. "Consumers care about searching, finding, and getting the stuff they want."
P2P Starting to Mature
Excerpted from Intl Herald Tribune Report by Victoria Shannon
When Microsoft jumps into a new technology, when Web browsers start adding it as a feature of their software, when the US Supreme Court case confers it legitimacy, that's when you know the technology is going mainstream.
And that's where we are today with file sharing.
The concept of P2P dates back to the 1980s and uses the jargon that describes computers by their functions, like "host," "server," "master," "slave," and "peer."
According to one Internet dictionary, P2P is a "type of Internet network that allows users with the same program to connect with each other and access files on one another's hard drives without the intervention of a server computer."
The peers share storage space, bandwidth and processing power. P2P networks are handy when a large file needs to be distributed to many people. If the file is broken up into small pieces and each of the peers on the network can share a piece, a single server does not need to dedicate itself to the whole download.
So whether the file is a copyrighted movie or the bits and bytes of a phone conversation, P2P networks are filling an increasingly important role.
That is what DCIA Member Skype Technologies is doing with its free Internet phone service. It is little coincidence that the founders of Kazaa, now distributed by DCIA Member Sharman Networks, also started Skype. They took the P2P principle and applied it to moving digitized voices over the Internet. Skype has had more than 130 million downloads since October 2003.
Coming Events of Interest
-
Marketing to Teens – Teenagers spend over $175 billion annually! If you want your share of this market, for which spending has doubled over the last 10 years, attend this conference July 12th at the Marriott Marquis, NYC. This VNU event gathers top-level global brand marketing executives in advertising and entertainment, and includes a cross section of youth culture experts and thought leaders.
-
Casual Games Conference – Early registration ends today. The conference takes place July 19th-20th in Seattle, WA and provides insights to the business opportunities and design considerations required for developers, publishers, and distributors to succeed in this rapidly-expanding game industry segment. DCIA Members Trymedia Systems' Robb Lewis will moderate "Advergaming" and PlayFirst's Rich Roberts will speak on "Contracts and Royalties."
-
Cocktails with Jan Schakowsky – Flanagan Consulting will host cocktails with the Honorable Jan Schakowsky (D-IL), Member of the House Energy and Commerce Committee, Ranking Member of the House Subcommittee on Commerce, Trade and Consumer Protection, and Democratic Chief Deputy Whip on July 21st at 5:30 PM at Finemondo, 1319 F Street, NW, Washington, DC 20004. $500 individual contributors, $1,000 PACs. Please make checks payable to "Schakowsky for Congress."
-
Scooter Scudieri Concert – Berkeley Springs State Park (WV) will host a free concert by DCIA Member Scooter Scudieri at 5:30 PM on July 23rd. Scooter is a self-taught guitarist who recently opened for Jewel on a national tour. He also has performed with Dave Mathews and Nils Lofgren. In April 2003, he was awarded Best of the New Writers and his song, "The Usual," was placed on Volume One: Best of the Songwriters Hall of Fame compilation CD.
-
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.
-
Kagan's Digital Media Summit – The theme of this year's conference, which will be held on September 12th-13th at the Four Seasons / Mandalay Bay in Las Vegas, NV will be "New Opportunities For Monetizing Content." The DCIA will participate in the panel entitled "MIXING MEDIA'S POTION: Content Security Plus E-Commerce Fulfillment and On-Demand Delivery." DCIA Members receive a 50% discount on registration. Please contact DCIA Member Services leader Karen Kaplowitz for more information at 888-890-4240 or karen@dcia.info.
-
Digital Hollywood Fall – "Transforming the Entertainment Industry." Scheduled for September 19th-21st at Loews Santa Monica Beach Hotel in Los Angeles, CA. The preeminent digital media and entertainment conference in the country. This year featuring a series of special University Project workshops. The DCIA will moderate "Track I: Next Generation P2P Music and Film - DRM, Paid for Pass-Along and Other Legal Distributed Computing Models and the Entertainment Industries." DCIA Members are also planning to host entertainment.
-
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 Renay San Miguel from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
|
