October 10, 2005
Volume 10, Issue 10
Welcome Fun Little Movies
Please warmly welcome Fun Little Movies to the Content Group. We look forward to providing valuable services to this newest DCIA Member and supporting its contributions to the distributed computing industry.
Fun Little Movies (FLM) is the first mobile channel to offer original, live-action comedy content. FLM's repertoire includes "Comedy USA," "Funny Commercials," "Gagsters," "The Jelly Donut Saga," "Kid's Comedy," "Love Bytes," "Mini-Bikers," and "Spacey Movie." Its broadcast partners include Sprint, MSFT Windows Mobile, and Smart Video. FLMs have previously been made for networks including HBO, Showtime, CBS, PBS, Playboy, Comedy Central, and MTV.
FLM has won 20 awards and honors including a finalist's place for Best Short at the Cannes Film Festival. A leader in mobile content, FLM won Best Comedy at CTIA's World's Smallest Film Festival for "Love Bytes." Please click here for more information.
INTENT & Sovereign Artists Team on 'BERLIN'
DCIA Member Sovereign Artists, the two-year-old record label whose eclectic artist roster includes Heart, Don Grusin, Bill Frisell/Petra Haden, The Crickets, Loudon Wainwright, Chris Hillman, and Dee Dee Bridgewater, is set to makes its first major foray into the world of exclusive-to-online digital sales with its release of the critically-acclaimed band 98LB Weakling's first of three new EP releases "BERLIN."
What makes the online release of "BERLIN" unique is the manner in which the CD will be released in a series of three EP's rolled-out with fellow DCIA Member INTENT MediaWorks (IMW), a leader in the fast-growing authorized peer-to-peer (P2P) distribution channel, and various other leading online retailers and entertainment portals.
In another coup for the up-and-coming band, 98LB Weakling is one of a handful of bands to be featured on the recently announced ROKR iTunes phone. Its track, "Live Forever," was personally selected by executives at Apple to kick-off the debut of the phone. "Live Forever" will also be the theme song for the new reality series, "The Gym" premiering this month on Discovery Channel.
Heading-up Sovereign Digital's sales and marketing efforts is Chip Schutzman who oversees all online activities for the label. Chip has extensive experience in online marketing, research, and development and views the digital retail market as a key component in the success of future digital releases for Sovereign Digital.
"In the ever-changing landscape of the music industry marketplace, it is important to be open to new ways of delivering and presenting content," says Chip Schutzman. "Our goal is to find and nurture artists and deliver their music in whatever format consumers wish to receive it. The manner in which Sovereign Artists is digitally rolling-out 98LB Weakling's first of three EP digital only releases is just the beginning for us."
Digital River & PlayFirst Partner for Games
DCIA Member PlayFirst, the leading full-service publisher of popular games, last week announced an agreement with fellow DCIA Member Digital River, a global leader in e-commerce outsourcing.
Through the Digital River oneNetwork online sales channel, PlayFirst's portfolio of top-quality downloadable games will be available for purchase through some of the most popular online retailers on the Internet.
"By combining its core strength in downloadable software and focus on PC games, Digital River has become a strategic new e-commerce provider for PlayFirst," said Rich Roberts, PlayFirst's Vice President of Sales and Business Development. "As we seek to aggressively expand the market opportunity for popular games, Digital River provides a robust marketplace through an established online sales channel."
Under the agreement, PlayFirst joins Digital River's network of thousands of software publishers and online retailers on the Internet. PlayFirst's portfolio of immersive, artistic, and innovative games, which includes titles such as the new "TriJinx: A Kristine Kross Mystery," will be available to customers of oneNetwork.
"PlayFirst is a publisher that brings authority, expertise, and success in the casual games business," said Tom Venable, Senior Vice President of Retail Sales for Digital River. "It's important that we are not only offering our customers the best games available on the Web, but also aligning our company with leading game publishers such as PlayFirst as we further expand our business in this growing market."
Report from CEO Marty Lafferty
 The report released last week by Friedman Billings Ramsey (FBR) discussed in "Analysts Predict IPTV Takeover" is noteworthy (please see below).
We would take its findings further by incorporating the impact of rapidly advancing P2P software, which combines decentralized search with swarming, and additional types of content, in FBR's analyses and projections.
Our view is that civilization is experiencing an even more profoundly significant digital conversion than the FBR report describes.
Traditionally, video content was transmitted through coaxial cable or satellite down-linking, voice communication was transmitted through telco lines or wireless cells, music was transmitted through over-the-air broadcast, and data was transmitted through dial-up modem or broadband service.
Moving forward, all electronic content will become merged into fungible digital bits that will all be available through a choice of IP pipelines whether fiber-optic plants owned by cable, telco, or power companies, and/or some combination of satellite and cellular wireless.
Reception will be possible on any networked-device platform, with consumers free to decide they would like to do such iconoclastic activities as watch TV programs on their cell-phone screens or have long-distance conversations sitting in-front of their six-foot diagonal home-theater LCD screens using surround-sound speakers.
The source for content and vehicle for communications will be enhanced P2P, integrating technologies that improve search with discovery-and-recommendation engines and break large files into thousands of tiny pieces for more efficient transmission, rather than conventional web portals as suggested by FBR.
The impact on entertainment is that viewers and listeners will have instant access to all prerecorded content ever produced that has been digitized and placed in any P2P user's shared-folder, as well as the ability to be switched instantly to any live event, such as a newscast, sporting event, musical concert, or interactive game, anywhere in the world.
For business models to succeed in this environment, they must work with current and foreseeable P2P applications, including open-source clients and swarming transfer protocols, as well as the new set of music-industry-sanctioned closed P2Ps that, for now at least, revert to centrally indexed search technology.
To be fully effective, digital entertainment business models should address both the intentional authorized introduction by rights holders and their agents of secured files of copyrighted works – and their continued protection as they are redistributed from user-to-user no matter what software program(s) are being used; as well as the unauthorized introduction of unsecured files of such works by third parties including end-users – and their continued prevention from being redistributed in unauthorized form.
As previously noted, there are two fundamental tasks to accomplish with respect to securely redistributing copyrighted works:
First, P2P digital rights management (DRM) must be applied to each file (permitting rights-holder[s] to set price and/or imbed ads, define usage terms, etc.), then multiple variations of the secured licensed version of the file must be created (supporting robust viral redistribution), and finally these initial authorized copies must be seeded into the file-sharing environment in such a way that they will appear at the top of search results on both closed and open P2P software programs (using algorithms unique to each protocol) and other search engines.
Second, a system must be supported that essentially mirrors the decentralized architecture of the new darknet P2P applications, extended to include torrent technologies which break files into smaller pieces, that blocks redistribution of unauthorized files of registered copyrighted works (without comprising consumer privacy or interfering with redistribution of other files), that reconstitutes usable quality-controlled portions of copyrighted-works files into licensed versions (to optimize the efficiency of a distributed computing environment), and that provides detailed specific measurement data regarding file traffic.
To date, DCIA Members have developed and deployed solutions needed for the first task that work well mechanically. These companies are poised for enormous growth as the P2P channel adds the new music-industry-sanctioned closed systems and a multitude of new open-source clients.
New solutions providers are now proposing credible approaches to accomplish the second task, and the DCIA will encourage their adoption through the new BASCAP and MovieLabs as well as individual major entertainment companies. With these in place, delivery of licensed digital media content can evolve into a secure user-friendly model for super-distribution.
The distributed computing industry is actively exploring innovative business models for monetizing copyrighted works in the file-sharing marketplace through advertising support, sponsorships, cross-promotion, packaging, subscriptions, and a la carte sales. The industry is building better DRM and payment solutions every day, and is investing in research and development to open the door to greater innovation.
We also offer our services to help major music labels and publishers resolve current licensing disputes negatively affecting the digital music space, which will be especially detrimental to roll-outs of the new closed P2Ps. The challenges facing these players to facilitate file-sharing user-base conversions and consumer acceptance are great enough without added licensing complications.
Affected parties need quickly to reverse recent failures to reach agreements for royalties with leading online subscription services, a negotiation stalemate reached last week with Microsoft, and growing public acrimony with Apple, as well as underlying problems of incomplete catalogs, usage restrictions, and consumer apathy.
In terms of business models and technology support to realize them, DCIA Members are committed to providing the best solutions possible, and engaging on every level to find new and better commercial and technical means to secure and promote licensed content so that it will be possible for every P2P transaction to be monetized with terms and conditions established by rights holders, whether the subject content is initially entered into redistribution by rights holders or by consumers.
SVC Financial Completes Funding
DCIA Member SVC Financial Services (OTC BB: SVCX), a leading innovator of media and mobile transaction solutions, last week announced the completion of a funding round designed to enable the company to accelerate the deployment of its products nationally and internationally. Joseph Stevens & Company, a NY-based broker-dealer, acted as the placement agent in the transaction. The terms of the transaction are set forth in the company's current report on Form 8-K that was filed with the Securities and Exchange Commission.
The investment is SVC Financial's latest milestone in its strategy to build the sales, marketing, and support infrastructure required to address the rapidly increasing near-term global demand for its products. The funding comes on the heels of the company's recent announcement that it was expanding its Scoot Mobile Money product to a wider array of mobile devices. Scoot Mobile Money allows any cell phone user to store, send, receive and transact funds anywhere in the world. SVC notes that Scoot mobile money is the unsurpassed low-cost solution to meet the ever-increasing global demand for funds transfer, un-banked money management, and secure payment remittances and reimbursements.
"This round provides resources for SVC Financial to intensify a range of initiatives aimed at making Scoot the premier 'mobile money' product on the market today; such as brand marketing and co-op support for our distribution partners, such as Merit Financial, one of the premier distributors of prepaid and stored value cards in the United States," said Christopher Haigh, SVC Financial CEO.
Skype Sets New Telecom Trends
The Daily Free Press conducted its own test of the popular VoIP program from DCIA Member Skype, to give a first-hand report.
Tester Kentado Yoshida reports that the installation process took approximately two minutes with a T1 connection. The main interface looks similar to an AOL Instant Messenger buddy list with two telephone buttons on the bottom.
After dialing an overseas contact, the normal rings of a telephone came through the speakers until the person called using Skype picked up. Her voice came in clearly amid minor background static.
To find other people on Skype, there is a search feature that allows users to have all of their contacts on Outlook Express fed through the Skype database. Otherwise one can search for a friend in the Skype database with a name or e-mail address.
Further proof of VoIP's rise to prominence came Tuesday, when America Online announced its own VoIP service, TotalTalk.
Internet giant Microsoft also released a statement announcing a partnership to enhance VoIP service for small and midsize businesses.
Analysts Predict IPTV Takeover
Excerpted from Broadcasting & Cable Report by John Eggerton
In a new report to investors on cable and broadband, Friedman Billings Ramsey (FBR) media analysts Alan Bezoza and Brian Coynes say that cable's biggest competitive threat for video delivery is not the short-term competition from telcos but the long-term threat of Internet-based content delivery.
The report says the Internet will become the primary deliverer of video content, with companies like Google, Yahoo, and AOL becoming the next big aggregators and distributors of content.
The Internet has made "on demand" content the baseline going forward, says FBR.
The report predicts that unless cable, telco, and satellite companies adopt Internet-based video delivery models, "their value in the new value chain will become limited to data transport services."
It says cable is in a good position in the short term to compete on the IP video front. But it sees broadband access as the real future of cable in the long term. Looking 10 years down the pipe, FBR sees cable becoming "utility companies providing bandwidth to consumers running different applications over their data access."
Back on the video side, with a lot of delivery systems competing for product, FBR sees the "pendulum of power" shifting to content providers, though they will first have to figure out how people are pay for that content (subscription or advertising).
Not surprisingly, FBR also sees growth in the PC and home networking markets that, it believes, will become the TV sets of the future.
BBC P2P System for TV Shows
Excerpted from Digital Silence Report
Our friends in the UK have something new to look forward to: the BBC's iMP P2P system for TV shows. iMP is an application in development offering UK viewers the chance to catch up on TV and radio programs they may have missed for up to seven days after they have been broadcast, using the Internet to download programs to their home computers. iMP uses P2P distribution technology to legally distribute these programs.
Seven days after the program transmission date the program file expires (using Digital Rights Management - DRM - software) and users will no longer be able to watch it. DRM also prevents users from e-mailing the files to other computer users or sharing it via disc.
You can take a little tour through this technology here. It may be far from perfect, but it will be a great help for those who watch the shows soon after they air and accidentally forget to record their favorite shows.
Internet TV Trials Widen Scope in China
Excerpted from Variety Report by Arthur Jones
China Telecom and regional media conglom Shanghai Media Group are on the verge of launching their first joint trial of Internet protocol television.
IPTV has been available in restricted areas of China since 2001, but technological and licensing uncertainties have limited expansion.
The new trial, which will kick off sometime this month, will take IPTV to 17 cities.
The Shanghai Media Group also has pacted with China Netcom for a more limited trial in the northern city of Harbin.
Online Pioneer Shakes Up TV
Excerpted from NY Times Report by Saul Hansell
Jeremy Allaire has a long history of shaking up the established order as an Internet pioneer.
Mr. Allaire was an architect of the evolution of Macromedia's Flash system into a video format that is now second only to Microsoft's Windows Media platform in popularity for delivering video on the Internet. Now, he has started a new company called Brightcove.
As with his earlier ventures, Mr. Allaire intends to shake up an industry - this time, the world of television - by allowing all types of video producers, from media giants to anyone who has a camcorder, to put their work on the Internet and make money if anyone watches it.
Set in an office building at the Massachusetts Institute of Technology, Brightcove will offer three interrelated online services. It has tools that let television producers load their video onto its servers, arrange them into programs and display them to Internet users. It will help producers charge fees for their video, if they choose, or sell advertising on their behalf to insert into the programs. And it will broker deals between video creators and websites that want to display the video, arranging for the profits from such arrangements to be split any number of ways.
"We are trying to create a new kind of online media distribution business that has the scale of Google, Amazon, or eBay," Mr. Allaire, 34, said. Some big companies, including Viacom and A&E Networks, are already experimenting with Brightcove's service.
"Look at what Google has done to the world of Web pages," said Josh Bernoff, an analyst with Forrester Research. "Brightcove may be able to do the same for video programming."
"We're letting producers reach 300 million people instantly with high-quality video content and they don't have to sign a contract," Mr. Allaire said. "We say, 'Use it, and if you are successful we are successful.' "
Apple Video iPod Intro Expected
Excerpted from Digital Media Wire
Apple has invited reporters to a special event Wednesday October 12th in San Jose, CA that has many speculating the company plans to introduce a long-rumored version of its iPod that also plays video.
"Apple Computer has begun production of a new version of its iPod digital music player that will be capable of playing videos, AppleInsider has learned," according to a post on the Apple enthusiast site. "Sources who claim to have seen the new iPod describe it as being similar to Apple's 60 GB iPod photo player, but several millimeters thinner."
The reporters' invite, which says only "One more thing…" is a nod to how Apple CEO Steve Jobs usually introduces a new product at the conclusion of a keynote speech.
Share Your Office PC: 4 New P2P Apps
Excerpted from CNET Review by Robert Vamosi
In the past, if you needed remote access to a sales document or a presentation or if you were collaborating with a coworker in another office, you had three options: send the file via snail mail or e-mail; open a temporary FTP site from which you could obtain the file; or maintain a permanent VPN – with the latter two requiring the services of an IT department. With the rise of peer-to-peer (P2P) file sharing, however, there's yet another option.
Groove Virtual Office, Laplink ShareDirect, FolderShare, and BeInSync are online services that allow you to open a folder or a series of folders and share the contents with others. Groove offers built-in virtual meeting tools and many customization options. ShareDirect provides the strongest encryption and, like Groove, offers built-in virus protection. FolderShare works with either Windows or Mac and can transfer large files easily. BeInSync works only with Windows and allows you to share with groups of up to nine others simultaneously.
Darknets: Virtual Parties with Select Group
Excerpted from NY Times Report by Tim Gnatek
Despite all the openness of the Internet, there are still places you cannot saunter into on the Web. You must be invited.
These are "darknets": exclusive P2P networks in which membership is based on circles of trust, whose activities are veiled from the general public. And though people who are adept at configuring servers and comfortable with File Transfer Protocol have used such systems for years, a spate of new online services aimed at everyday users is sure to draw new attention to under-the-radar file sharing.
Darknets, like their P2P predecessors Napster, Kazaa, and Gnutella, allow users to browse and download digital files like movies and music from other people's computers. But while Napster and its ilk have allowed unrestricted access to files on any of the millions of connected computers, darknets are more discriminating.
In a darknet, users get access only through established relationships - and only when they have been invited to join. This selectivity promises greater privacy, regardless of whether the networks are used for sharing personal or pirated media.
File sharers may be enthusiastic about the possibilities such services provide, but there are questions as to whether any new service facilitating file swapping can avoid the legal scrutiny that has hampered open-access file-sharing systems.
Grouper, among the largest of the new services, hosts more than 100,000 private groups. Users can build their own darknets or request admission to thousands of publicly listed clubs whose members can browse through group folders, download files and communicate by instant messaging or group blogs.
Grouper is currently a free service, and contextual ads in its group directory help generate revenue; soon the company will include video ads and the option to buy photo prints or CDs. The people behind Grouper say they hope to eventually offer a premium service stripped of ads and the ability to control a PC from afar.
Although unauthorized versions of copyrighted material do sometimes drift across the network, the company says it makes great effort to distance itself from illegal activity.
"Our intent is not to circumvent the copyright world," said Josh Felser, a co-founder of Grouper. "This is about personally generated content."
Mr. Felser and other advocates of commercial darknets think they are fulfilling consumer demand for what might best be called personal distribution, a medium whose potential content expands with every video-equipped cellphone and pocket-size digital camera bought.
"The big play for us is personal video," Mr. Felser said last month, as he toyed with a moviemaking digital camera in his office in Mill Valley, CA. "Personal video is everywhere, and people want to share video that they create."
Music Distribution Statistics Mixed
Excerpted from Digital Music News Reports
A new paid download milestone was reached last week, as Gwen Stefani's "Hollaback Girl" crossed the one-million mark. And overall, an IFPI report
showed that global paid download volumes for the first half of the year tripled when compared to the same period in 2004.
But the results weren't so rosy in the physical sector. Both the RIAA and IFPI reported sizeable declines during the first six months of this year
and cumulative yearly CD sales in the US now lag 10.5 percent behind comparable figures from 2004.
Meanwhile, P2P file-sharing cooled a bit in September, though volume has increased tremendously when compared to the same month last year (9.3 million average P2P users as of September 2005 on a global basis versus 6.8 million in September 2004).
FMQB reports that, in the US, the average number of simultaneous users jumped 43.9 percent when compared to September of 2004. And when compared to September 2003, usage is up 133.3 percent. The US currently makes up 72.7 percent of worldwide P2P traffic.
According to figures supplied by DCIA industry data resource BigChampagne, the total number of simultaneous unique users on P2P networks averaged 6.75 million in the US during the month.
Coming Events of Interest
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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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TELECOM '05 – Venetian Conference Center, Las Vegas, NV, October 23rd–27th, TELECOM '05 brings buyers and sellers together, in one place and at one time, to explore the full potential that the future offers our integrated communications industry. The DCIA presents "Next Generation Peer-to-Peer – Where do Telcos Fit In?" looking at the ecosystems that have evolved to make P2P the content distribution system of the 21st century.
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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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P2P Litigation Summit - November 3rd at Northwestern University Law School, in Chicago, IL sponsored by Electronic Frontier Foundation (EFF) and Privacy Resolutions. This conference brings together public and private defense attorneys, clients, investigators, advocates, and academics to discuss the latest developments in P2P litigation. Please click here for more information and to register for the conference.
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