September 26, 2005
Volume 10, Issue 8
File-Sharing Services May Reform
Excerpted from Los Angeles Times report by Joseph Menn
The head of DCIA Member eDonkey, said Monday that a transformation of the software was imminent.
Other companies are expected to make similar moves after the Supreme Court's June ruling on MGM v. Grokster.
A multimillion-dollar question: whether the entertainment industry will bless the conversions, or continue its relentless legal and legislative battle against file sharing, or a little of each.
Even if all the companies comply, piracy rates might not change much. That's because the programs that sit on users' computers find each other on a variety of networks, and those programs can be made by different people.
"None of these companies is essential in the mix," said Eric Garland, chief executive of DCIA industry data resource BigChampagne.
eDonkey CEO Sam Yagan said he did not know whether the next version of eDonkey software would use filters, a payment scheme, or other means for cracking down on piracy, but that some fix "is certainly imminent."
"It's important to us that we're operating within the letter of the law and the spirit of the law," he said, "and up until the Supreme Court ruled I was confident that we were."
P2P Services Seek Pact with Record Studios
Excerpted from New York Times Report by Saul Hansell
At least five online file-sharing companies have started trying to reach an accord with the music industry to convert the free trading of copyrighted music on their networks to paid services, according to several recording industry and file-sharing executives.
iMesh, a file-sharing service that last year reached an accord with the music industry to convert to a paid service, has made overtures to acquire a number of the other file-sharing services, on the condition that they settle their claims with the recording industry, said Robert Summer, Executive Chairman of iMesh.
Mr. Summer declined to say how much money iMesh was offering the other services, but said "I don't think anyone will get rich off these deals." Rather, he thinks that such arrangements offer the owners of those services the ability to avoid litigation.
iMesh has agreements with all the major record labels and plans to introduce its service to consumers "imminently," Mr. Summer said.
While iMesh has taken nearly a year to develop its paid service - allowing free trading of files in the interim - the industry is likely to demand that other services stop free file-trading relatively quickly. That will require complex software development and business negotiations.
INTENT MediaWorks Selects Seamless P2P
Seamless Wi-Fi (OTC BB: SLWF) subsidiary, DCIA Member Seamless P2P, last week announced that it has deployed for beta testing its proprietary Phenom V1.2 Encryption Software product for fellow DCIA Member INTENT MediaWorks.
INTENT MediaWorks is one of the largest distributors of authorized peer-to-peer (P2P) download digital media in the world. INTENT helps content owners tap into and profit from the secure, legitimate distribution of digital media through P2P networks and the web.
The company integrates the viral power and authentic nature of P2P file sharing with online marketing to sell music, videos, and advertising to an audience of over 60 million consumers per month.
Luke Rippy, President of Seamless P2P, said, "INTENT MediaWorks' decision to test our encryption software provides perhaps the greatest validation of our technology to date. INTENT is a leader and pioneer in the P2P space. The success of its marketing and distribution depends largely on the level of security it provides."
Seamless P2P is the developer of the proprietary Phenom Encryption Software. Phenom allows secure communications over Wi-Fi, local area networks (LANs), and wide area networks (WANs) with its Virtual Internet Extranet Network technology. Phenom provides secure peer mail, chat, file transfer, and remote PC access in a two-megabyte download. Phenom Software's Application Protocol Interface (API) also supports voice over Internet protocol (VoIP), video voice conferencing, and white boarding.
Report from CEO Marty Lafferty
 Congratulations to Digital Hollywood President Victor Harwood for producing an exceptionally valuable and stimulating conference last week. With 1,800 attendees, the energy level was high and the tone of panel discussions upbeat. The two-day Digital Rights Management (DRM) and Anti-Piracy Track was especially timely and relevant.
We thank in particular the industry leaders who participated in our frank and candid panel discussion on the state of the rapidly evolving P2P channel for distributing entertainment content.
Les Ottolenghi, President, INTENT MediaWorks, stressed the importance of addressing current consumer behavior in advancing viable P2P business models. This focus has led INTENT to explore ad-supported approaches where the legitimate "paid service" has as its core a free robust sponsored offering. INTENT's fine-tuning of its myPeer prototypes has driven ad-supported legal downloads from 3,000 per hour to 3,000 per minute with relatively unknown independent artists, ultimately achieving a 78% conversion rate in its collegiate test markets. The needs now are to align optimal business models with major-label licensing and consumer P2P usage, and to determine how new content fits into the new systems. Key drivers going forward will be transportability and the creation and aggregation of communities of interest.
Talmon Marco, Co-Founder, iMesh, noted that legitimate major content has been virtually non-existent on major P2Ps. However, major labels are now moving in the right direction as shown by their settling with iMesh for a figure of $4.1M versus turning down $1B for Napster and the relative impact of these decisions in the marketplace. iMesh selected a subscription-centered business model based on studies showing P2P users' willingness to pay. The new iMesh that is about to launch will facilitate discovering music from known and unknown artists plus offer community and many other exciting features. Going forward, there should be a focus on ensuring that content display hardware will work properly and provide interoperability with the new licensed P2P offerings.
Srivats Sampath, President & CEO, Mercora, declared that PCs are increasingly serving as twenty-first century radios and that Mercora's P2P radio model now represents 45% of US radio content. The best use of P2P, given its characteristics for supporting an enormous inventory of music tracks, is for discovery of new bands and songs, with users then deciding what they have the strongest interest in paying for and then buying it. Free listening, with artists compensated through advertising revenue, must be a key part of a successful mix. People simply won't pay for unsampled works. As anonymity is removed from P2P, the user experience will go from just "I want music" to "I want to be part of a community and share."
John Beezer, President, Shared Media Licensing, that developed and distributes the Weed technology, which rewards file sharers as micro-distributors for their role in helping to disseminate licensed content, sees positive change occurring with a number of promising new initiatives emerging in P2P. Weed has been a pioneer in helping to move forward through the important learning stage for P2P of how to best monetize copyrighted works. SML envisions a distributed hash table architecture where individual artists can simply drop new tracks into their shared folders and have them instantly enter commercial distribution. It is important to be realistic, and not introduce technological advances that leave consumers out. There is still a fear of filtering out there. Now is the time to embrace and extend, because it is "better to light a single candle than to curse the darknets."
Randall Crockett, VP of Operations, DRM Networks, compared P2P's still primitive stage of commercial development to "selling catsup popsicles to women in white gloves." The immediate future inevitably will involve more centralized and closed architectures as in the paid-P2P-download model of DRM Networks' customer Wurld Media, but not closed off. The value of marketing will become more important in this space. Now is the time for major content rights holders to empower themselves by embracing and harnessing P2P technologies for their choice of distribution and compensation models. Technologists need to build better systems within the systems already being widely used – and not abandon them.
Chip Venters, CEO, Digital Containers, sees parallels of P2P super-distribution with advances in nano-technology, and clearly envisions opportunities for both push and pull marketing. There is now pressure for software providers to convert to sanctioned offerings and to educate users and draw them in. A major question is whether the current P2P brand names will survive and, if so, will their intrinsic value be manifest in different types of communities as users no longer remain anonymous. It is time for rights-holders to drop the double-standard with respect to digital distribution technologies. The sanctioned iTunes for instance facilitates ripping; on average, iPod capacity is filled with less than 5% licensed works, the rest being illegitimate. The technology sector also would do well to follow the recent lead of MSFT in becoming more P2P-embracing.
Panelists concluded with a consensus that the future of P2P as a digital distribution platform can be summarized as "what you want anywhere anytime."
The DCIA Fall Meeting was very productive. DCIA Member Services leader Karen Kaplowitz announced that recruitment has now surpassed sixty (60) Members. ASACP's Joan Irvine presented features and benefits, as well as participation terms-and-conditions, for the P2P PATROL's new cpHotline service. Talmon Marco gave a presentation on the new iMesh followed by Les Ottolenghi on the new myPeer. New business discussions included an important proposal for an open-standards content security measure that holds great promise and will now be further developed. Michael Einhorn presented a draft of his new white paper; all attendees will receive the final version. Several strategic action items were identified for follow-up. Please feel free to contact me for more information at 888-864-DCIA or marty@dcia.info.
Three Members Sign with SNOCAP
SNOCAP, the "first end-to-end provider of digital licensing and copyright management services for the digital music marketplace," announced agreements last week with some of the industry's most prominent independent labels, including DCIA Members Kufala Recordings, Nettwerk Music Group, and V2 Records, to enable the digital distribution of their content through commercial P2P services electing to affiliate with SNOCAP.
"V2 recognizes that online distribution via P2P is the perfect vehicle to reach fans directly and cost effectively," said Andy Gershon, President of V2 Records. "We are very pleased to be working with SNOCAP and look forward to delivering V2's repertoire in the very near future."
Scooter Scudieri Performs Live
DCIA Member Scooter Scudieri performed his original song "AMERICA" live on stage at the United for Peace & Justice rally in Washington, DC that was attended by an estimated 100,000 people this weekend.
Scooter previously was the first artist to support the DCIA Hurricane Katrina relief fund-raising effort with "THIS TOO WILL PASS," which was downloaded more than 12,000 times within three days of its release into the P2P file-sharing environment.
His "MOTHER OF GOD" music video set P2P download records averaging 125,000 per month last summer.
Mercora P2P Radio
Excerpted from Digital Media Wire Report
Mercora, a provider of a P2P-based streaming radio network, announced last Tuesday that its IM Radio service now produces over 45% of all daily US radio programming, including terrestrial AM/FM, satellite and online radio. Mercora's users broadcast their own individual radio channels to a P2P audience, and collectively offer a daily average of 35,000 channels and 840,000 hours of programming.
The statistics cited by Santa Clara, CA-based Mercora reflect the number of channels and hours of programming offered, but not the number of listeners to Mercora user stations.
Telcordia VoIP Routing Registry
DCIA Member Telcordia is accelerating the penetration of commercial VoIP telephony services, with the introduction of the Telcordia VoIP Routing Registry. Part of Telcordia's IMS portfolio, the new service enables cross-carrier VoIP calling, driving the widespread consumer adoption of IP-based communication services. The Telcordia VoIP Routing Registry, currently in trials at Tier 1 carriers and cable operators, paves the way for wireline, wireless, and cable operators to cost effectively offer IMS-enabled converged services over IP networks, such as multimedia and video services.
"We forecast that the number of VoIP subscribers worldwide will grow from 9.5 million in 2005 to 97 million in 2009" said Patrick Kelly, Partner, OSS Observer. "One of the challenges in supporting VoIP is efficient call routing because of the many different types of access networks and local exchange providers. A VoIP routing registry is a sensible approach to improving network efficiency and providing CSPs with more control in the areas of revenue assurance and service interconnection."
Digital River & ARTS PDF
DCIA Member Digital River (NASDAQ:DRIV), a global leader in e-commerce outsourcing, last week announced it is providing international e-commerce support for ARTS PDF, a leading developer of PDF tools for PDF professionals. Based on the agreement, Digital River built and launched ARTS PDF's global online stores.
In addition to hosting the sites, which display in 11 languages and currencies, Digital River is processing online order transactions, digitally delivering the company's popular award-winning PDF software, and providing fraud prevention screening and customer service support.
"As an e-commerce outsourcer, Digital River acts as an e-commerce department, helping companies open online sales channels, expand into international markets, and grow their customer bases," said Dave Alampi, Digital River's Vice President of Marketing.
In addition to managing the ARTS PDF online stores, Digital River is making ARTS PDF software available for sale on hundreds of online retail, content, and portal sites in the Digital River oneNetwork online sales channel. oneNetwork provides Digital River clients the opportunity to generate increased visibility and incremental sales for their products through indirect sales programs.
"Outsourcing our e-commerce operations to Digital River has helped us expand our direct and indirect online sales opportunities," said Gary Armstrong, Vice President of Sales for ARTS PDF.
PlayFirst & Glu Mobile Diner Dash
Glu Mobile, a leading creator and global publisher of mobile entertainment, and DCIA Member PlayFirst, the leading full-service publisher of downloadable popular games for the PC, announced last week that Glu will publish a number of PlayFirst titles for mobile, including the wildly popular Diner Dash.
"PlayFirst has emerged as a leader in the casual games market and shares Glu's goal of delivering entertaining games to a wide variety of people," said Robert Nashak, Senior Vice President of Production, Glu Mobile. "Diner Dash combines a simple game mechanic with a gaming experience that includes character development and a fun storyline and is an example of a game with broad consumer appeal that is perfectly suited for the mobile platform."
"Expanding our publishing reach to the mobile phone has always been a keenly anticipated milestone in our roadmap," said Kenny Dinkin, Vice President and Executive Producer, PlayFirst. "As a full-service publisher, our commitment to developers is to take their accessible, engaging games to the places where the mass market seeks digital entertainment. Because of the tricky nature of the mobile business we knew we'd need to partner with an established mobile publisher, and Glu's expertise in development and global deployment of titles made this decision easy."
Diner Dash, originally a downloadable PC and Mac game, has been the No. 1 title on major game sites like Yahoo Games, MSN Games, and Shockwave. Developed by the award-winning independent studio gameLab, Diner Dash is the first PlayFirst game that Glu will publish for mobile and will be available to consumers worldwide via their cell phone carriers in the first half of 2006.
Predixis MusicMagic in Winamp Player
Predixis announced last week that MusicMagic playlist technology has been embedded into AOL's popular Winamp media player. A longtime leading digital media player, Winamp has a solid history of providing cutting edge features and a vast range of customization options. The latest version of the Winamp Player (5.1) has incorporated Predixis MusicMagic – giving Winamp users an easy way to automatically create song playlists from vast music collections.
MusicMagic's breakthrough acoustic technology finally solves the core problem with large digital music libraries: getting the right music at the right moment. By enabling listeners to generate instant playlists from their 'seed' song of choice, MusicMagic makes any music library more enjoyable, no matter how large and diverse. And in an industry first, the Predixis plugin for Winamp instantly recommends similar music for purchase, linking listeners directly to the AOL online music shop.
"Predixis is thrilled to have been invited to incorporate MusicMagic into the latest version of the Winamp player, one of the most utilized and respected audio players in the industry," said Matthew Dunn, CEO of Predixis. "We feel confident that the combination will provide music fans with the ultimate music listening experience."
City Canyons' Records Showcase
DCIA Member City Canyons Records - an exciting independent label – joined with national sponsor Black Dog Promotions and regional sponsor the New York City Guitar School to present the sixth in a string of highly acclaimed events that have become one of New York's most popular and prestigious ongoing showcases for independent music last week at Manhattan's Red Lion.
The stellar cast of roots and rock artists gathering for this event included Jen Elliott with Anne Husick, Matty Charles and the Valentines, Jessica Star, Early Grace and the Mighty Shakes. The night featured a mix of blues and blues influenced music (Jen Elliott and Jessica Star), country (Matty Charles and the Valentines), roots rock (Early Grace) and a blend of blues, rock and folk (The Mighty Shakes).
Coming Events of Interest
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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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Protecting Copyright and Innovation in a Post-Grokster World - The US Senate Judiciary Committee will conduct a hearing on the subject topic Wednesday September 28th in Room 226 of the Senate Dirksen Office Building in Washington, DC at 9:30 AM. DCIA Member MetaMachine CEO Sam Yagan will serve as a panelist.
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Atlanta Interactive Marketing Association – September 28th at the Global Learning & Conference Center, Atlanta, GA. AiMA Idols - Another reason to party. Bands and musicians from Atlanta's interactive marketing firms entertain at hot night club, eleven50. Free beer or wine and munchies. Lots of fun to play and network.
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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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Intelligent Selling Of Internet Media – October 11th at the Arlington, VA Hilton. Topics include terminology, metrics and measurement, ad serving, rich media, targeting, how buyers evaluate and buy, proven tips and techniques for increasing revenue from new and existing advertisers and how to creatively package and sell awareness and lead generation programs, maximizing sell-through.
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eMarketing-5 East – Boston, MA on October 18th. eM5 is the 6th annual eMarketing Association Conference. The event is open to both members and non-members, members receive a 10% discount off the registration rate. Topics include search, e-mail, banner, affiliate marketing, on and offline integration, rich media, legal issues, and more. These are high level presentations geared to experienced marketing and business professionals.
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The Future Of Branded Entertainment – October 19th at the Grand Hyatt, New York, NY. What will state-of-the-art programs look like in the future? How do you measure them? What's fair market value for getting a product into a media vehicle? And does it all really work? Marketing in the 21st century demands innovation, creativity and the next "big idea." Success is in the hands of marketing professionals with vision, courage and commitment.
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Search = Media – San Francisco, CA on October 20th. From marketers to publishers to television networks, search has forced all players in the media industry to reconsider how they do business. Drawing on recently published work and experiences with blogging, this event will introduce the concepts of the database of intentions, the point-to economy, and intent-over-content - and how they can help media companies thrive in a Web 2.0 world.
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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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The Blogging Enterprise – November 2nd in Austin, TX. A one-day conference that will explore blogging, podcasting and video podcasting and their potential benefits and value in building brands, educating prospects, making sales and cultivating customer loyalty. Attendees will depart with new ideas and a better sense for how to implement this new technology successfully.
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