August 1, 2005
Volume 9, Issue 12
P2P PATROL Expands Law Enforcement Support
P2P PATROL (Peer-to-Peer Parents And Teens React On Line) announced last week that DCIA Member RazorPop's XFiles 2.4 will be provided free to law enforcement agencies and that P2P PATROL will receive financial contributions from the multi-state NEW VOICE OF P2P concert tour starring Scooter Scudieri.
The first P2P client software developed exclusively for law enforcement, XFiles, was introduced by RazorPop CEO Marc Freedman at the May 2005 P2P PATROL Meeting in San Francisco, CA. XFiles 2.4 Law Enforcement software will now be distributed at no charge to qualified government agencies to help combat online distribution of criminally obscene content.
XFiles reduces investigation time and enables more effective casework by searching and downloading files over multiple P2P networks, including BitTorrent, FastTrack, and Gnutella.
"It's imperative for child pornographers to know they are not welcome in the P2P environment," said Freedman. "The best way for us to demonstrate this is to put our software in the hands of agents doing these important investigations."
The "NEW VOICE OF P2P" concert tour will be comprised of 45 live concerts at leading universities and town centers in 30 major east-coast markets over a period of 10 weeks featuring 5 top independent musical artists. It is being produced by produced by Beneath the Noise (BTN) – a marketing and concert promotion firm specializing in college events.
Growing out of the tour will be an online contest for participants and fans to produce and share the most creative multimedia music videos/remixes from concert coverage plus added original content.
Profits from the tour will help support P2P PATROL, which includes licensing XFiles for law enforcement and funding the operation of cpHotline.org. Please contact NVP@dcia.info for more information.
Tech Interests Grilled at Senate Hearing
Excerpted from In the Know Report by Public Knowledge
What started out July 28th as a relatively cordial Senate Commerce Committee hearing on the Grokster case ended a couple hours later with angry Senatorial comments directed at the P2P industry over what legislators see as the prevalence of illegal activities on P2P-enabled networks.
The charge was led by Sen. Barbara Boxer (D-CA) joined by Committee Chairman Ted Stevens (R-AK), who noted that he and Boxer rarely agree on anything, "But when we do, people should listen." The main targets of her wrath were Adam Eisgrau, Executive Director of P2P United, and, to a lesser extent, Dave Baker, VP of Law and Public Policy for Earthlink, an ISP.
Boxer said she and other Senators had sent a letter to P2P United, among others, asking what they were doing to prevent or reduce access to pornography. She also said, referring to posting of copyrighted material, "Theft is wrong, no matter." Her bottom line: "If you don't move to protect copyright or children, that will not sit well. The whole world is watching."
Stevens agreed, saying other Senators are continually asking him when the Commerce Committee will do something about pornography, and that there has to be some way of protecting intellectual property. Stevens said, "We want to see what is going on, see what might be done to terminate illegal activity." He said there will be hearings in the fall on Internet pornography.
Neither Senator seemed interested in the responses by Eisgrau and Baker that there is no technical way for open systems to filter content for networks that transmit, as Baker put it 'trillions of bits every hour.' Boxer cited companies that will filter unauthorized works, but Eisgrau replied that those are closed systems and not P2P open architecture. He said there would be 'lots of ramifications if only closed peer-to-peer systems' were lawful. The senators seemed agitated that no one would take responsibility for monitoring, much less stopping the objectionable activities.
The entertainment industry witnesses agreed with Boxer and Stevens. In a typical example of entertainment-industry views, Mitch Bainwol, CEO of the Recording Industry Association of America, asserted that P2P companies could stop illegal activities now, but are choosing not to.
When discussion turned to the formal topic of the hearing – the Supreme Court's decision in the Grokster case – there was little enthusiasm for major legislative actions in response to the Court's unanimous opinion.
Fritz Attaway, Executive Vice President of the Motion Picture Association of America, said that if the Grokster decision and other tools weren't sufficient to curb copyright infringement, his group may return to the Hill to ask for help.
Eisgrau proposed a new, voluntary collection mechanism that could turn millions of infringements into royalties and dollars for artists, including small artists not affiliated with major record labels. Bainwol rejected the idea.
Report from CEO Marty Lafferty
 We laud Chairman Stevens, Co-chairman Inouye, and their US Senate Commerce Committee colleagues for conducting last week's MGM v. Grokster Hearing, which exposed several important issues and served as a quality benchmark for industry progress.
Let us begin by answering the Committee's questions about what the distributed computing industry is doing to combat criminally obscene content and copyright infringement.
P2P PATROL is a DCIA-led working group formed in May 2004 with diverse participation from the private sector – including valuable contributions from P2P United members – as well as federal, state, and regional law enforcement agencies. To date, P2P PATROL has mounted three programs, focusing on education, deterrence, and enforcement.
Its educational focus is to provide everyday P2P users with the tools needed to recognize, remove, and report criminally obscene content inadvertently encountered online. P2P PATROL owes a major debt of gratitude to ASACP and Cydata Services for their contribution of the award-winning cpHotline.org as a data processing resource saving literally years of development time and expense. In addition, password-protected parent filters have been deployed by major P2Ps, and specialized clients have been developed by DCIA Member SMARTguard Software.
Deterrence focuses on turning back those who may be on the verge of becoming involved in illegal content trafficking, for example by means of pop-up warnings displayed on major P2P software programs in response to certain law-enforcement-supplied triggers: "The search term you entered has been associated with child pornography. Any person who receives, reproduces, or redistributes a visual depiction of a minor engaged in sexually explicit conduct shall be subject to severe fines and imprisonment. P2P PATROL reports suspected violations of Title 18, USC 2252 to the FBI."
P2P PATROL's enforcement program has as its focus supporting the work of law enforcement agencies in identifying, apprehending, and prosecuting abusers of P2P software who perpetrate distribution of criminally obscene material. This has included quarterly working sessions leading to the development and provision of forensics software, the purpose of which is to enhance the productivity of agents conducting P2P investigations, and "THE NEW VOICE OF P2P" fundraiser to support further work in this area. Those interested in contributing to P2P PATROL's work to eradicate the scourge of child pornography from the file-sharing environment should contact sari@dcia.info.
According to last month's Government Accounting Office (GAO) report, pornography is easily accessible using popular search engines Google and Yahoo, while leading P2P software program Kazaa, distributed by DCIA Member Sharman Networks, identifies titles and metadata to effectively block pornographic and erotic images. Yahoo uses a system that requires users to designate specific words to be blocked, which GAO contends still lets porn sneak by. The GAO did not provide details on Google's filtering, but said it was not as effective as MSN's system. The GAO says Kazaa's filter was effective in blocking pornographic images in its searches.
P2P PATROL intends to present a status update on its work, including the new multimedia educoncert featuring DCIA Member Scooter Scudieri, for Congress in the fall.
In response to copyright infringement, the industry has also done a great deal, developing and testing new business models, advancing technology solutions, and conducting industry self-regulation initiatives, despite the absence to date of participation by major labels and studios.
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 others – including consumers.
Thus far, DCIA Members have developed and deployed solutions needed to secure and promote rights-holder entered content for major P2P software programs as well as some search engines and websites, despite being hampered by a very limited amount of test content. Examples of DCIA Member companies actively engaged in this – and their solutions, include Altnet – TopSearch; INTENT MediaWorks – myPeer; Shared Media Licensing – Weed; Trymedia Systems – ActiveMark; and Unity Tunes – Unified DRIV. P2P DRM, e-commerce, payment services, and related solutions providers now include an impressive roster of highly qualified firms such as Clickshare, Digital Containers, Digital Rivers, Javien, KlikVU, P2P Cash, Predixis, Relatable, RightsLine, Softwrap, SVC Financial, and Telcordia.
Their models work well mechanically and these companies are poised for enormous growth as the P2P channel matures. It is too early to draw conclusions about sales volume, however, and results-to-date are skewed by not yet having licenses for major label or studio content and not yet having complete solutions for consumer-entered content, for example as outlined in the P2P Revenue Engine (P2PRE) proposal. New providers are now putting forward credible approaches to accomplish this, which augur especially well for P2P's future. More than anything, the private sector needs time and encouragement for all of these supplemental technologies to be adopted and implemented, and for participation of major entertainment rights holders.
We also advocate the establishment of independently coordinated authorities around the globe to help establish P2P file-sharing best practices, growing out of the Consumer Disclosures Working Group (CDWG), and then to serve as an ongoing resource for industry participant certification and dispute resolution. These authorities should provide mechanisms for registering copyrighted works, supporting inter-operability of DRM and payment service solutions, plus monitoring and reporting progress to participants in reducing instances of copyright infringement as a percentage of the universe of P2P transactions. Of course, any technology approved for adoption should be based on open standards and developed with broad input from the affected industries.
As a preliminary step towards achieving this objective, interested parties are invited to join the MGM v. Grokster Response Working Group (MGRWG), which the DCIA established within weeks of the Supreme Court ruling. We are especially interested in recruiting additional content rights holders, peer-to-peer (P2P) software distributors, and delivery solutions providers. The principal goal of MGRWG is to recommend a set of best practices for the distribution of P2P software with the object of promoting its use in ways that do not infringe copyright through affirmative steps taken to foster non-infringement.
Our purposes are to enhance and not diminish benefits in security, cost, and efficiency of P2P software for storing and transmitting electronic files, and to encourage further commercial development of beneficial distributed computing technologies. We intend for end-users to be able to prominently employ ad hoc P2P networks for sharing copyrighted music and video files – with proper authorization.
Here are a few additional comments about Thursday's hearing.
In response to the question about what ISPs could contribute to eliminating P2P copyright infringement, as was originally proposed in October 2003, ISPs could at the relatively low cost of $40 million for blanket US coverage, add router metering to the approximately 1,000 domestic points-of-presence (POPs) to track-and-bill (as opposed to block-and-stop) all P2P protocol traffic regardless of which software clients were being used. Exempting ISPs from certain associated liabilities could help gain their acceptance in lieu of their making DMCA safe-harbor arguments – that some call the ISPs' 'Sergeant Schultz defense.'
While it is not news that proposals for voluntary P2P collective licensing schemes have been considered non-starters among multi-national entertainment rights aggregators, newly deployed advertising-supported licensed music P2P models from DCIA Members Altnet and INTENT MediaWorks, independently, could actually be more attractive for all parties. These new approaches convert P2P into a kind of 'radio on steroids' with file-by-file streaming ad tips and tails and interactive banners and tiles, making it possible to generate more net revenue in the P2P distribution channel for a hit single than an entire CD at retail – while still being free to users.
We welcome the RIAA-sanctioned Wurld Media launch this Friday of Peer Impact (PI). PI could be to P2P what Converse's re-marketing of Chuck Taylors has been to the world of footwear, competing with later arrivals Adidas, AirWalk, Lugz, New Balance, Sketchers, Vans, etc. PI is a nostalgic retro-tribute to centralized-search Napster – essentially what the original Napster would have looked like in 1999 with licensed content.
But the problem with a retro-Napster, even with the belts-and-suspenders protection of ISP POP 'toll booths,' is that progress has already challenged their relevance. Pundits now project that in the coming school year the cool new file-sharing trend will involve iPod-cellphones and multiple brand cellphone-MP3 players connected to WiFi LANs. From middle schools to high schools, students will be spending end-of-day study halls downloading new playlists from their class 'cyber DJs' for after-school listening; college kids will be doing the same thing in dorms 24X7; and random consumers, from pedestrians at retail malls to drivers on interstates, will be sharing music tracks with each other using wirelessly networked devices and the newest P2P apps optimized for the next level of personal portability. Monitoring this traffic will pose even greater challenges than we currently face.
All of which beings us back to what is becoming a guiding principle for viable solutions – use per-file techniques – where each song, video, game, or software program carries its security and monetization system with it as it is redistributed in increasingly dynamic networked environments.
Macrovision Acquires Trymedia Systems
Macrovision Corporation (Nasdaq:MVSN) last week announced the closing of a definitive agreement to acquire DCIA Member Trymedia Systems, the leading provider of secure digital distribution products and services for the video gaming industry, and operator of the world's largest distribution network for downloadable PC games.
Trymedia will become part of Macrovision's new business unit offering a complete, end-to-end solution for game publishers to secure, distribute, promote, and continuously renew their video games. The new unit will provide value-added services to casual and core game publishers designed to maximize the value of game titles. Retailers, portals, Internet service providers (ISPs), and cable multiple system operators (MSOs) can offer the world's largest catalog of more than 1,200 legitimate downloadable games to their consumer audiences.
Macrovision agreed to acquire Trymedia and its worldwide operations for $34 million in a cash transaction. Macrovision will continue to provide support for all of Trymedia's products and distribution services. Macrovision will discuss the Trymedia acquisition in more detail during the company's quarterly earnings investor & analyst conference call on August 1st at 5:00 PM ET.
"This acquisition, along with the formation of our new business unit, underscores Macrovision's strategic focus to efficiently enable our customers to distribute their games both on and offline," said Fred Amoroso, President & CEO of Macrovision. "Consumers today want to be able to get their game content when they want it, where they want it, and that requires a distribution system that enables that flexibility securely, while also protecting the content from massive unauthorized usage."
"This union brings together two leaders in their respective areas and validates the need for an online distribution offering as a part of any complete game value management solution," said Alex Torrubia, CEO and co-founder of Trymedia Systems. "Together, our current customer base includes the top 10 PC game publishers, the leading casual game producers, and a network of over 300 distribution partners worldwide. The combination of Macrovision and Trymedia creates the premier solution to deliver significant revenue-generating value to our customers."
For more information on the acquisition and a list of FAQs, please visit the Macrovision website.
It's the Revolution – Bring Your Guitar
Excerpted from Graffiti Report by Jeanne Mozier
In 2002, Scooter Scudieri dubbed himself the "First Rock Star" – Internet being the unstated initial word – as a marketing gambit for the original Global Entertainment Media Summit. Now a major record company is trying to steal the sobriquet and create a fictional persona. They shouldn't waste their time. No work of fiction could surpass Scooter. What record company would give their First Rock Star action figure a mission statement, or make him poster boy for the Distributed Computing Industry Association, an umbrella group of 50 peer-to-peer organizations?
Tucked away in his cottage along Town Run in Shepherdstown, WV with the historic mill wheel as a backyard view, Scooter works diligently on both his music and his revolutionary global marketing plan for its distribution. He is laying the groundwork, circumventing the obstacles and preparing with what he has lots of ....time, for when the wave breaks and he's swept to the top of a decentralized, open world linked without fear by the technology. It seems to be working. John Perry Barlow, Internet guru and former 'Grateful Dead' lyricist dubbed him a "harbinger." He toured with Jewel, recording a live concert while on the road. A hot LA film company created a DVD for him. He recently spoke at the Digital Media Conference in Washington, DC where he was the only artist present. His badge read Internet Rock Star and he was dressed as he was the evening I interviewed him. Same jeans. Same print shirt. Same curly locks.
"The technology has caught up to my vision," he said explaining his intense focus on digital marketing. His vision is more than being a rock star in control of his music. Scooter's ultimate goal is the Music for Peace world tour that will spread the word that "we can live in a world without fear, as one race – the human race." Fame and fortune will help.
World fame may seem a bit immodest for a simple West Virginia boy but Scudieri is a Virgo, like our governor, and Virgos are NEVER immodest. They are simply obsessed with solving the problem in a detailed and logical fashion. Scooter's designated problem is how does the little guy or gal get their message out in a world controlled by major corporations?
"I met with record companies. They treated me like garbage. The statistics show that record companies have a 95% failure rate." Scooter wondered why he would want to sign up for that track. Why he would want to follow the humiliating "American Idol" way? He didn't. He invented his own path.
Scooter's solution of choice is the Internet and the peer-to-peer (or P2P as those in the know say) exchange process that allows his music to traverse the world in a heartbeat building an ardent fan base in the process. Scooter is hailed in industry magazines as the Internet's most searched independent rock musician. Maybe all those searchers are wannabe musicians seeking a how-to manual. No problem. Scooter created a syllabus: Capture Your Spirit, Keep Your Soul, and teaches his self-promotion method at prestigious institutes of higher learning including Berklee College of Music in Boston. But it's the downloads of his music that are key in the pyramid of success he's building.
"My video 'Mother of God' was downloaded 50,000 times in April on the P2P networks. It broke 100,000 downloads in June and 250,000 by the end of July," said Scooter. He plans to take this count to the bank via the emerging world of corporate sponsorship.
Here's how he explained it to me, a self-proclaimed ignoramus in the brave new world of online music. Scooter works with P2P companies that offer legal file sharing using digital rights management. This connects the music to the hard drive of everyone who downloads it providing a path for "viral marketing" of the sound. Tack on corporate sponsorship for a specific tune and it goes like this. You give your email address, pay a quarter to PayPal and get Scooter's song which has a corporate sponsor's icon in the corner with a link to them. For every download, which can be tracked, the company pays a couple cents each to him. The sponsor is allowed to "refresh" its link every couple months, meaning that it gets instantly sent to everyone who has downloaded the song. Needless to say, Nike should be able to see the potential. On the other hand, the record companies seem unable to figure out how to make it pay for them so they sue the fans. According to Scooter's essay of analysis, the recent Supreme Court ruling on MGM v. Grokster supports the direction of P2P digital rights management.
Music Industry Summit
Increasing success has forced Scooter to modify his business mantra: "no agent, no manager, no record company." He admits, almost apologetically, that he now has a $400 an hour lawyer. "I have to keep saying that to remind myself it's true," said the musician who has handled all his own copyright and contract issues since high school. "I had to start getting legal advice," he explained. "Peer-to-peer is a contract, audits are needed."
Scooter recently played a concert in the park in Berkeley Springs where he attended high school, graduating second in his class in 1986. He played music in school but his persona as "First Rock Star" not to mention global music profile came as a shock to many classmates who recalled him as quiet and retiring.
Oh yes....the music. It is Scooter, his acoustic guitar and a selection of original rockin' message songs that as Scooter says are "a powerful affirmation of human spirit" and pour from him in one fluid motion. "People may not recognize my songs when they first hear them but they go home humming," he said. The Songwriters Hall of Fame agreed, naming him best of new writers in 2003. It's easy to hear for yourself. Just check www.firstrockstar.com, listen to a few bars then pay your quarter and download it to your iPod.
You are now part of Scooter's brave new global army where nothing gets between the musician and his fans.
Coming Events of Interest
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– August 9th-10th in San Francisco, CA. If your business involves creating music content, sales, recording, services, distribution, mobile and wireless, marketing, or management, you can't afford to miss Music 2.0. Attendees include record label executives, music managers, artists, professional service providers, software developers, wireless carriers, entertainment companies, device makers, manufacturers, and developers. DCIA Member Shared Media Licensing President John Beezer is a featured speaker.
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Future of Music – September 11th-13th in Washington, DC. Since 2001, the FMC Policy Summit has played host to over 500 stellar panelists and speakers including musicians, business leaders, scholars, policymakers, legal experts, and advocates. Widely praised by advocates and industry alike, FMC's events have gained a reputation as a kind of Geneva where all sides in any number of contentious music industry fights can get together and play nice for a few days.
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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.
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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.
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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 Renay San Miguel from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
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Internet Telephony Conference & EXPO – DCIA Member Skype CEO and founder Niklas Zennström will deliver the keynote address at this major conference at the Los Angeles Convention Center, CA October 24th–27th. His address, which will be delivered live from London via Internet Telephony Videoconference, will take place Tuesday, October 25th at 12:15 PM PT. Click here to register for the show.
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