September 12, 2005
Volume 10, Issue 6
BlueMaze Entertainment & Nautica Jeans
DCIA Member BlueMaze Entertainment will launch its ground-breaking lifestyle Branded Music Marketing program featuring BlueMaze's Virtual-CD for The Nautica Jeans Company this Tuesday September 13th at Macy's locations in California. Plastic Music Mix Download Cards will be handed out in select retail stores to consumers who try-on Nautica Jeans.
The cards will tease the BlueMaze-Nautica website that will feature a Nautica Jeans branded Virtual-CD containing free music downloads. Consumers will be encouraged to share the music by sending Virtual-CDs to friends in BlueMaze's innovative format.
Welcome Michiko Hashimoto
DCIA Member Services leader Karen Kaplowitz is very pleased to welcome Michiko Hashimoto to the DCIA as Member Services Director, Asia.
Michiko is a founder and Managing Director of Vision Bridge, LLC based in Tokyo. Vision Bridge is the first Japanese firm specializing in association management services, including membership database management, mailing services, meeting management, strategic marketing services, and consulting.
Michiko has more than 20 years of professional and business experience working with client organizations, including more than 10 years of planning and executing marketing awareness activities in Asia Pacific for an international technology standards body, The MFA Forum, where she served as Regional Manager.
In this capacity, she organized many international conferences, not only in Japan but also in China, Korea, Malaysia, Singapore, and India, soliciting speakers, providing operational management, event marketing, and publicity through trade and local media.
Michiko is also a CPA certification holder and a member of the American Institute of Certified Public Accountants. She is a member of Information Systems Audit & Control Association. Michiko holds a bachelor's degree in Literature from Tsuru University.
Michiko can be reached at +81 3 5909-0097 or michiko@dcia.info.
Mitsui & Dentsu Invest in US Web Companies
Excerpted from Online Media Daily Report by Shankar Gupta
Two Japanese companies, Mitsui and Dentsu, last Wednesday announced deals with American Internet companies, marking three Japanese companies in two days to unveil major financial deals with the US media and advertising sectors.
Mitsui said it invested in Feedster, a developer and distributor of an RSS platform. Feedster, based in San Francisco, boasts an index of over 13 million RSS feeds and blogs. Tokyo-based Mitsui owns businesses in sectors ranging from iron mining and steel production to consumer products and services.
Dentsu, a Tokyo-based advertising firm, announced a strategic partnership with 24/7 Real Media Wednesday, to form K.K. 24-7 Search, a search engine marketing firm that will provide sponsored search services to Dentsu's client base. The Dentsu Group is a major player in the global advertising market, with 6,000 clients and annual revenues approaching $3 billion.
Tuesday, LinkShare said it was being purchased for $425 million by Japanese portal and e-commerce firm Rakuten. The deal is billed as the first step in Rakuten's move into the United States to contend in the American market with Yahoo, which is a major competitor of Rakuten's in the Asian market.
Skype Forms Joint Venture in China
Excerpted from TMCnet Report by Ted Glanzer
Seeking to further capitalize on the fertile online communications market in Asia, DCIA Member Skype and Chinese website operator TOM Online announced the creation of a joint venture last Tuesday.
The agreement represents an extension of the two companies' existing relationship, which dates back to October 2004 with the development of a Chinese version of Skype.
"TOM Online has already been a wonderful partner to Skype and we're delighted now to take our relationship to the next level through the formation of this joint venture," said Skype co-founder and CEO Niklas Zennström.
China is the world's largest mobile phone market with more than 360 million subscribers at the end of June 2005. The number of Internet users in is expected to grow to approximately 154 million by 2007.
"In less than a year since beginning our cooperation with Skype, we have seen robust growth in user numbers," said TOM Online CEO Wang Lei Lei.
"This indicates Chinese Internet users' readiness to take advantage of the latest communications technologies. This joint venture agreement is a testament to both companies' confidence in the tremendous business potential of Skype's unrivalled technology strength and TOM Online's unique knowledge of the Chinese market."
Report from CEO Marty Lafferty
 In response to last Monday's Australian Federal Court ruling in the Universal v. Sharman case, the DCIA reaffirms our commitment to foster commercial development of the distributed computing industry.
This was an initial ruling and the case is not yet completed, and while the DCIA is optimistic that its ultimate conclusion will lead to continued expansion of this global industry, we must also re-emphasize the greater importance of achieving long-term commercial solutions based on marketplace and technological realities.
The DCIA urges renewed efforts to develop and deploy market solutions as a more valuable and enduring approach than seeking answers in the courts. Enormous challenges in harnessing digital technologies for the distribution of popular entertainment content still remain, but can best be addressed by parties working together rather than pursuing litigation.
The Distributed Computing Industry Association was formed in 2003 to assist all affected parties – content, P2P, and support interests – in finding common ground and building a robust new digital marketplace.
The hope that these parties would devote at least as much attention to the business of finding new business models as they have devoted to the litigation that was raging in 2003 has not been fully realized. Some parties have refrained from serious pursuit of commercial solutions with the false hope that litigation would solve their problems. Driving Napster out of business did not stop copyright infringement; nor will attempting to drive current leading P2P companies out of business.
The DCIA is not a party to any litigation; nor does it take sides in litigation except to promote its mission, the commercial development of distributed computing. The trade association provides a neutral forum for Members and other industry players to work together to advance new business models.
Of the major lawsuits prosecuted by the content community, the Australian case, once it reaches its conclusion through the completion of an ongoing appeal process, will mark the end of one of the major disputes. And the primary takeaway from Judge Wilcox's initial ruling was his exhortation of the parties to work together.
The court cited two areas for collaboration as perhaps the most promising, although beyond the scope of this case: "more widespread licensing of copyrighted works" and "making compact discs (CDs) less susceptible to ripping." The DCIA provides a forum to explore various approaches for implementing such measures on a practical level.
Judge Wilcox committed "not to make an order which the respondents are not able to obey, except at the unacceptable cost of preventing the sharing of files which do not infringe the applicants' copyright." Again, the best, if not only way, to accomplish this is through cooperative efforts. As the judge noted, "There needs to be an opportunity for the respondents to modify the Kazaa system in a targeted way, so as to protect the applicants' copyright interests (as far as possible) but without unnecessarily intruding on others' freedom of speech and communication."
The DCIA supports a timely exploration of the feasibility of the court's prescribed, "keyword filtering and gold-file flood filtering" given that "the injunctive order will be satisfied if the respondents take either of these steps" and that "continuation of the Kazaa Internet file-sharing system shall not be regarded as a contravention if that system is modified so that the software program received by all new users contains" one of these solutions. The DCIA's interest is in the broader implications of such approaches.
To this end, promptly upon the final conclusion of the judicial proceedings in this case, the DCIA proposes the formation of a working group of voluntary participants with a diversity of interests to develop recommendations for optimal approaches to P2P filtering based on real-world conditions. Alternatives such as Macrovision's recently announced Hawkeye, Audible Magic's relevant solutions, and Loudeye's OverPeer offerings should also be evaluated in this context.
The court acknowledged that "even with the best will in the world, the respondents cannot totally prevent copyright infringement by users." But by working together with the applicants, certainly much more can be achieved than has been by prolonged estrangement.
As Judge Wilcox stated, "Even an imperfect filter would go far to protect copyright owners, provided they were prepared to go to the trouble of providing and updating a list of keywords (titles, performers etc.)". Again, this type of collaboration – rather than litigation – is essential to make progress in curtailing online copyright infringement and has always been at the heart of the DCIA's mission.
Indeed, the cooperative measures needed to implement gold-file flood filtering comprise the major steps required to license content for monetized P2P distribution, and perhaps will pave the way for that ultimate outcome, which would be the most beneficial result for the parties.
It is also worth noting that Judge Wilcox concluded that, "It is not realistic to believe legal action against individual infringers will stamp out, or even significantly reduce, file-sharing infringements of copyright."
The DCIA questions whether litigation will accomplish the ultimate objectives of the parties here: new business models that leverage technological advancements and respect content owners' rights. With this ruling, content interests have now taken refuge in the courts in their attempts to drive Napster out of business, taken refuge in the courts to in their attempts to drive Grokster and Morpheus out of business; and taken refuge in the courts in their attempts to drive Kazaa and Altnet out of business.
But the content industry may be farther than ever from reining-in file sharing, according to recent statistics. P2P utilization is now at an all time high, marked by a 41% increase in average simultaneous users in the past year, according to DCIA industry data resource BigChampagne.
The DCIA sees the futility of relying primarily on courts to fashion commercial solutions, and will work to ensure that the content industries' wins in MGM v. Grokster and Universal v. Sharman do not herald another five years of failure to create viable new business models.
Representatives of DCIA Member companies and officials of the trade organization are available to comment on Monday's decision. Please contact DCIA Communications leader Kelly Larabee at 602-258-1416 or kelly@dcia.info to arrange interviews.
These DCIA officials are available: DCIA Chief Executive Officer (CEO) Marty Lafferty, DCIA Government Relations leader Doug Campbell, DCIA Member Services leader Karen Kaplowitz, and DCIA Best Practices leader Elaine Reiss.
Sony Plans New Digital Walkman Players
Excerpted from Digital Media Wire Report
Tokyo – On the same day rival Apple released a new iPod nano and an iTunes cell phone, Sony announced plans to expand its line of hard disk and flash memory-based digital music players later this year, Reuters reported. "Our previous models have been well accepted by customers in Japan and the United Kingdom. But we are not at all satisfied with where we are now," said Sony Connect co-president Koichiro Tsujino.
"I understand a certain company made an announcement earlier today. We will accelerate our challenge with these new models." Sony will introduce 20GB (about $315 in Japan) and 6GB hard disk-based Walkman models, in addition to three new flash memory-based players. The new players will launch in Japan on November 19th, and are expected to ship to foreign markets including the US by the end of the year.
P2P Traffic Dominates the Net
Excerpted from TopTechNews Report
A new study that looks at the impact of peer-to-peer (P2P) traffic on service-provider networks shows file swapping forges on unabated.
CacheLogic's global monitoring network shows 60 percent of all Internet traffic is the result of P2P file-sharing platforms, with eDonkey taking over the top spot from BitTorrent.
"The Whack-A-Mole game continues," says Andrew Parker, CacheLogic's CTO. "The authorities go after one P2P system and another one pops up."
At the end of 2004, BitTorrent accounted for 30 percent of all Internet traffic. But after the Motion Picture Association of America's moves to shut down BitTorrent tracking sites, centralized servers for locating distributed content, swappers began moving to other less-publicized services.
Today, eDonkey, a system that uses no centralized servers or tracking sites, consumes the most bandwidth of any application on the Internet, particularly overseas, according to Parker. In the US, Gnutella has seen resurgence in popularity among swappers.
Of the files being swapped on the four major file-sharing systems (eDonkey, BitTorrent, FastTrack, and Gnutella) 62 percent is video and 11 percent is audio, with the rest being miscellaneous file types.
The BBC has launched IMP, a download service that relies on P2P technology to deliver television programming to subscribers. Each program could be multi-gigabyte, which would be nearly impossible to serve to all BBC subscribers from a central location, Parker says.
Rupe's on a Roll
Excerpted from Variety Report by Jill Goldsmith & Ben Fritz
After promising to build an Internet empire, News Corp. has now spent about $1.5 billion on web properties since the Fox Interactive Media unit launched in mid-July.
News Corp. inked its third major deal in two months last Thursday, buying online vidgame media company IGN Entertainment for $650 million in cash. Deal comes after the conglomconglom recently bought MySpace parent Intermix Media for $580 million and college sports site Scout Media.
Rupert Murdoch seems most interested in the huge number of eyeballs, mostly young and male, that IGN will bring. It operates a network of vidgame news and review sites, as well as movie sites Rotten Tomatoes and Film Force and male lifestyle site Ask Men.
If MySpace and IGN were integrated today, News Corp. would be the fifth most trafficked network on the web, moving it up from a modest presence centered primarily on Fox Sports and Fox News just a few months ago.
But the overall strategy behind the conglom's web spending spree is not yet clear. With the reach and vidgame content of IGN; social networking capabilities of MySpace; and sports, news and entertainment content from Fox properties, News Corp. could easily put together a portal that would rival the likes of Yahoo and AOL.
The only missing piece: a search engine. News Corp. is reported to be in talks to buy video search company Blinkx, which would give it traction in a burgeoning niche but still put it far behind Google. Murdoch has said he would spend up to $2 billion on the Internet space, potentially giving it another $500 million for Blinkx or other acquisition targets.
Media Companies Losing Battle
Excerpted from Ball State Daily News Report by David Swindle
According to the New York Times, on Monday, an Australian court ruled against Sharman Networks, the owner of the popular Internet file-sharing program Kazaa. The judge ordered that Sharman rework Kazaa to make it impossible for users to download copyrighted files.
The basic idea is that, while Kazaa does not encourage breaking copyright laws, the company knows that that's what many users do. So if you know that people are using your service to break the law, you're liable in some sense. But wouldn't that apply to just about every Internet service provider, too?
Fulfilling the judge's order is next to impossible because whatever copyright safeguards Kazaa might try and implement, people will get around them.
This is the nature of the Internet, its blessing and curse: You have millions of minds that will attack a problem or an idea. We see the principles of evolution manifesting in a virtual, technological universe. The record companies try to shut down one program; new ones show up in a day.
The Motion Picture Association of America and the Recording Industry Association of America are hopelessly outnumbered — it's like a technological Revolutionary War. The recording industry is the Redcoats, trying to fight a traditional battle by going through the courts. Meanwhile, the Internet is filled with invisible guerilla soldiers — minutemen — who know the territory.
And just as the revolutionary soldiers were fighting for freedom and a radical new paradigm, so are many file sharers.
To the British, what were those who raised arms against them? Traitors, guilty of treason against the crown. Likewise, today's file sharers are criminals, no different than petty shoplifters.
History has judged the founders as patriotic heroes, and while I doubt file sharers will receive similar accolades, the world's attitudes toward the free flow of art and information are rapidly evolving.
To quote Luke Sywalker addressing the gluttonous worm Jabba the Hutt, "You can either profit by this or be destroyed. It's your choice, but I warn you not to underestimate my powers."
The positive aspects of file sharing must be noted. Most downloaders spend money on CDs and DVDs. In fact, file sharing stimulates future purchases. Whether a friend loans me a CD or I copy it from someone else's computer — is there substantive difference? There is a strong chance I'll financially support the band in the future.
File sharing also grants survival to obscure media. Through file sharing, old Nintendo games, rare foreign films, or a complete series of beloved childhood cartoons, can continue to exist.
The world's media companies must heed the lessons of history: evolve or die.
Coming Events of Interest
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IBC in Amsterdam – DCIA Member RightsLine's Rights Intelligence System will be showcased at IBC in Amsterdam through September 13th. RightsLine was invited by Microsoft to participate in its Digital Studio where attendees can see a demonstration of RightsLine's solution working with Microsoft's Connected Services Framework. Please call Steve Stebbins at 714-397-0561 or e-mail sstebbins@rightsline.com.
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Future of Music – September 12th-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. The DCIA will participate in the panel entitled "The Ethics of Innovation." FMC's events have gained the 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 Digital Media Summit – The theme of this year's conference to be held September 12th-13th at the Four Seasons / Mandalay Bay in Las Vegas, NV will be "New Opportunities for Monetizing Content." DCIA Member INTENT MediaWorks' CEO Les Ottolenghi 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." 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." The DCIA Fall Meeting will be held Thursday morning September 22nd from 9:00 AM to noon at AGSK in Santa Monica. Please contact DCIA Member Services leader Karen Kaplowitz for more information at 888-890-4240 or karen@dcia.info.
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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 YellowBrix, and Marty Lafferty from the DCIA.
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OMMA East – In NYC on September 27th-28th, you can be a part of the most thought-provoking, timely and insightful marketing events of the year. Topics include ad networks, desktop and adware programs, local search, publishing consumer generated content, word-of-mouth online, RSS, podcasting, blogging, and integrated search planning. Click here to save 30% off of on-site registration.
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IP3 Awards – Join Public Knowledge in celebrating its 4th Anniversary and 2nd Annual IP3 (Intellectual Property, Information Policy & Internet Protocol) Awards September 29th at the Sewall-Belmont House in Washington, DC. Tickets are $100 per person for individuals/private corporations and $50 per person for academics/non-profits.
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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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