December 5, 2005
Volume 11, Issue 6
INTENT MediaWorks Previews myPeer
DCIA Member INTENT MediaWorks unveiled myPeer, its new closed peer-to-peer (P2P) software application, at the 2005 Digital Entertainment & Media Expo (DEMXPO) last week.
"Our new myPeer offering brings fully licensed, advertising-supported music and entertainment content directly to P2P users everywhere," said INTENT MediaWorks Founder & CEO Les Ottolenghi, "fulfilling the promise that P2P has held out to consumers for the legal distribution of content."
With myPeer, INTENT is distributing licensed music, movies, videos, IPTV programming, games, software, e-books, and photos through closed P2P networks. To receive the digital content, consumers have the choice of viewing advertisements or paying directly.
For myPeer's commercial launch on December 15th, INTENT is targeting students at 200 universities across the country, and anticipates surpassing 250,000 users within weeks of its launch.
The company is distributing myPeer as both standalone P2P software and, when combined with INTENT's patent-pending digital media e-commerce platform, Palladium, as an application services provider (ASP) for content owners including major media companies, independents, online retailers, corporations, affinity groups, artists, and producers.
Skype 2.0 Offers High-Quality Internet Video
DCIA Member Skype, the global Internet communications company, and On2 Technologies last week announced that the beta version of Skype 2.0 – the newest version of Skype's revolutionary software that allows anyone with an Internet connection to make free Internet calls – is using On2 codec technology to deliver high-quality video.
The new Skype Video offering will allow Skype users to see and send real-time video.
Skype has licensed current and future versions of On2 Technologies video compression software, the TrueMotion video codec, and has worked closely with On2 to integrate its compression technology with Skype 2.0 to ensure a superior Internet calling experience for Skype users worldwide.
Available in 27 languages, Skype is being used by people in almost every country around the world, and "Skyping" has become a global phenomenon. The latest version of the software has further simplified the Skype interface, making it even easier for people to see and speak with their family, friends, and colleagues.
BPL Delivers KlikVU Video Content
DCIA Member KlikVU last week announced an agreement with Gridline Communications Holdings to stream video-on-demand (VOD) programming, including movies, TV programs, sports, foreign language films, etc. using Microsoft Windows Media to Gridline subscribers worldwide. KlikVU video content will be streamed through Gridline's Broadband over Powerline (BPL) global network.
BPL technology provides high-speed broadband connectivity over power lines, to businesses, organizations, institutions, and homes, at speeds up to 100 Mbps full-duplex, for connecting to a variety of services and applications through existing electrical outlets. BPL provides bandwidth speeds far in excess of what is available with current technologies such as DSL or cable modem. Gridline is now developing joint ventures and strategic alliances, such as the ISTEC alliance, to deliver this technology throughout the US and international markets.
"KlikVU is a new Media over Internet Protocol (MoIP) company that specializes in online distribution, syndication, and streaming of video content. KlikVU's MoIP is the best and most cost-effective solution for streaming VOD over the Internet. KlikVU makes improved Internet video streaming available to content owners, so more people get more viewing choices, and more filmmakers reach their audiences and generate revenues," said Lowell Feuer, CEO of KlikVU.
Report from CEO Marty Lafferty
 Kudos to DEMXPO show director Andrew Kraft for building on the foundation Ned and Tinzar Sherman established with last year's DECA. DCIA Member Alston & Bird sponsored DEMXPO 2005; DCIA Member PlayFirst President & CEO John Welch served on its Advisory Board; and the DCIA was proud to be a Media Sponsor.
Alston & Bird's New York Managing Partner Aydin Caginalp deserves special recognition for hosting the DEMXPO VIP dinner and moderating "A New Day: Emerging Business Models in Digital Music Distribution."
On Aydin's panel, peer-to-peer (P2P) subscription service iMesh Executive Chairman Robert Summer provided an infringement-prevention retrospective tracing this critical issue back to the eighties. Recently named Mashboxx CEO Mike Bebel gave an update on this promising soon-to-launch P2P paid download service. Universal Music Group (UMG) eLabs President Larry Kenswil said, "The time is right to emphasize the carrot rather than the stick," and UMG is working to make music licensing less cumbersome globally.
In "The Big Debate: Subscription, Download, and the Next Big Thing," MP3Tunes' Michael Robertson questioned the viability of current business models for online music, urging further exploration. Groove Mobile's Adam Sexton underscored the rapidly growing importance of the mobile content platform, which already represents an order-of-magnitude more users than iPods. EMI's Ted Cohen outlined today's price-value proposition for music. Napster's Brad Duea said the company is diversifying. And the Orchard's Greg Scholl cited rapid global expansion without using DRM.
Keynote speaker Tom Rogers, CEO of TiVo, expanding on the company's announcement of its potentially history-making deal with INTEL, spoke about TiVo's emergence as a branded user interface for broadband IPTV, which holds promise to make TiVo much more than a DVR in the future.
Of special interest to DCIA participants was "Politics and the Future of Digital Entertainment." Panelists remarked at how much more civil this session was than its counterpart last year, and that more communications than ever is taking place among the parties who look forward to next year when deals should be in place and businesses growing.
Mike Weiss, CEO of StreamCast Networks, distributor of Morpheus, spoke about expanded capabilities of P2P software in such areas as communications. RIAA Chairman & CEO Mitch Bainwol welcomed new commercial P2P offerings and expressed optimism about future development. Congresswoman Mary Bono (D-CA) said that Congress will continue to take a keen interest in and keep a close eye on this emerging distribution channel.
Also noteworthy was the session led by Dave Jaworski, CEO of PassAlong Networks, operator of p2pRevolution, on the next generation of content creators, featuring a panel of teenaged singer-songwriters and movie makers. Their overall message and attitude towards P2P file sharing were eye-opening for media executives (please see final DCINFO article below). Dave also announced PassAlong's alliance with Varsity Media Group (please also see related story below).
Winners of the 2005 Digital Entertainment & Media Excellence (DEMX) Awards included AOL Chairman & CEO Jon Miller for visionary of the year, MS Xbox Live Arcade for innovator of the year, Bungie Studios' "Halo 2" for best console game, Jamdat Mobile's "DOOM RPG" for best mobile game, the US Army's "America's Army" for best advergame, GoldPocket Interactive for best television technology, Motorola iRadio for best radio service, and National Geographic's "Inside 9/11" DVD Set for best use of technology for educational programming.
CNET News provides additional DEMXPO coverage. Share wisely, and take care.
Trymedia Custom Games Toolbar
Macrovision last week announced the availability of an exclusive games web browser toolbar that extends to the desktop the power of Macrovision subsidiary DCIA Member Trymedia Systems, the world's largest online game distribution network.
The custom games toolbar will serve as a cross-promotional tool for Macrovision's portal and retail customers to reach game-oriented consumers. For consumers, the web browser toolbar offers quick access to the latest game trials, easier web searches, and a pop-up blocker.
"Our digital distribution technology was originally created on the principle of finding a way to sell downloadable games that works well for both consumers and businesses alike," said Fred Amoroso, Macrovision CEO. "With this toolbar Macrovision is carrying on that tradition of creating new ways to provide value to both the end-user and the games marketplace."
The custom games toolbar downloads quickly and displays automatically at the top of a user's open web browser. A search field allows game fans to search the web easily using all or one of the top search engines without having to type in their URLs. Popular and new games available for download in a try-before-you-buy-format are featured in pull-down menus.
Digital River Acquires Commerce5
DCIA Member Digital River announced last week that it had signed an agreement to acquire Commerce5, a provider of e-commerce outsourcing specializing in the high-tech manufacturing and consumer electronics markets, for approximately $45 million in cash.
With the deal, Digital River acquires 40 Commerce5 customer contracts, including companies such as ATI Technologies, Fujitsu Computer Products of America, Gateway, Lexmark International, Sharp Electronics, Sony Electronics and Western Digital Corporation.
Joel Ronning, CEO of Digital River, said the acquisition enables the company to extend its market reach and accelerate growth in the broader high-tech marketplace.
Commerce5 enables customers to sell online through their own or third party e-commerce sites and is known for its ability to handle complex product catalogs.
"Through this acquisition, we can offer clients and consumers a more complete package of high-tech products from highly complementary markets," said Ronning. "Moving forward, we plan to leverage the natural affinities in our product lines to enhance third-party selling opportunities in Digital River's online reseller channel, expand relationships with leading distribution partners and accelerate our growth in 2006 and beyond."
Grace Potter & The Nocturnals' Indie911
DCIA Member Indie911 is taking on MySpace and iTunes by detouring from the mainstream. In these uncertain times for the US music industry, Indie911 helped an unsigned band sell over $6,000 of music per month and top it off with a sold out-tour grossing over $35,000 in a single week.
Through digital downloads, a streaming music video, and its "Caffeinated Distribution" service, Indie911 has successfully marketed Grace Potter & The Nocturnals' independent releases throughout the country.
Indie911 was founded in March 2004 by former Sony A&R executive Justin Goldberg as an alternative support system for artists. Indie911 now boasts over 3,000 artist members and handles various sales and promotional functions for musicians and labels including music sales, ring-tones, online marketing, and film & TV licensing.
Indie911 is unique in that it combines an extensive online social network with its emerging artist network. This enables its artists to interact directly with their audiences, who in turn help promote and digitally distribute the music and video they listen to most often as it becomes publicly playable on their own personalized pages and through P2P distribution.
Branded Entertainment Moves to Internet
Excerpted from MediaPost Report
Marketers are discovering a new option for branded entertainment: the Internet. So far, most branded entertainment, in which marketers sponsor entire programs or insert products and product references into programming, has been restricted to broadcast and cable TV. But as marketers continue to realize the power of the Internet as an advertising and communication vehicle, their attitudes are changing.
This is especially true now that media companies are beginning to either recycle or develop new Internet programming. For example, the traditional networks, along with ESPN, Scripps, MTV, Comedy Central and others have either launched or are planning to launch channels that will deliver on-demand video content to the Web.
Most of the early efforts have been focused on repurposing existing made-for-TV content. Realizing, however, that this is of limited value to consumers, the big players are developing Internet-only offerings. Please click here for more.
Nareos Launches PeerReach P2P Service
Nareos, a pioneering digital content solutions provider, last week announced distribution agreements with online music store CD Baby, eLabel INgrooves and international digital music distributor Digital Rights Agency. The move marks the global launch of Nareos' PeerReach solution, which enables legal music downloads on P2P networks. These agreements increase Nareos' catalog to over 1 million tracks.
CD Baby, (representing over 100,000 artists), INgrooves (over 350 music labels) and DRA (225 music labels) will be able to distribute their music content legally via global P2P file-sharing networks. Nareos' revolutionary PeerReach solution uses unique technology to promote legitimate content to the top of P2P file lists, charging $0.99 for extremely fast, high-quality virus-free downloads.
Nareos' CEO Alexander Lazovsky commented that, "We are thrilled to be partnering with CD Baby, Ingrooves and DRA. This is testament to the potential of PeerReach to revolutionize how music labels view P2P networks as profitable music distribution channels. Our goal is to provide people with a convenient and secure way to evaluate and purchase music on P2P networks. We are proud to enable music fans to legally download music and to be promoting new and alternative artists along the way".
LamaBox: P2P Content at Push of Button
Excerpted from ZDNet Report by Lars Pasveer
A Dutch company is offering a new Linux-based home media player designed to give Internet users easy access to content from P2P networks. Called the LamaBox, the VCR-size player is "fully integrated with the Internet, including connection to the big P2P networks."
This lets users "choose from an impressive collection of audio and video. The latest movies and television shows, playable on your television at the press of a button." The device also enables users to burn downloads to DVD.
The fact that the LamaBox is designed to access networks where copyrighted material is routinely shared raises legal issues. But LamaBox said the device only makes such material accessible, much in the same way Internet providers facilitate access.
"The sole responsibility lies with the provider and user of content," said LamaBox.
Currently the LamaBox is set to access BitTorrent, eDonkey , FastTrack (the network used by Kazaa), Gnutella, and Overnet. Users can also listen to Internet radio stations and view online video streams.
Because the device is based on Linux, open-source software governed by the GNU Public License, users are allowed to modify the device as they see fit. LamaBox currently delivers several hand-built models: The cheapest one has 40GB of storage and costs 279 euros ($328). A 400GB LamaBox with DVD burner is also available and costs 479 euros ($564).
The LamaBox can hold as much as 1.5 terabytes of information when all three hard drive slots are in use, according to the company. The Linux Advanced Media Application (LAMA) media center uses a modestly powered VIA processor, chosen to minimize heat generation and the subsequent need for noisy fans.
Content Owners Should Embrace BitTorrent
Excerpted from Ovum Report by Jonathan Arber
The BitTorrent P2P file-sharing protocol has been steadily picking up users since its release in 2003, but over the last six months it has really taken off - its creator Bram Cohen claims that BitTorrent accounts for a third of all Internet traffic.
Most recently, it hit the headlines when Cohen met with the head of the MPAA to discuss how BitTorrent could be used for legitimate commercial services.
The BitTorrent protocol was designed to transfer large files over the web to multiple users without wasting bandwidth or crippling networks. It was quickly taken up by users to share copyrighted content, because it's ideal for sharing content such as movies, DVDs, and software.
It is largely due to BitTorrent that file-sharing activity has swung away from music, towards software and movies, which often appear only hours or days after (or sometimes before!) their cinema release - hence the MPAA's interest. Indeed, over 50% of file-sharing activity on the web is now attributed to BitTorrent - and this figure is growing.
Music labels, movie studios and software houses increasingly realize that BitTorrent is not only hugely popular, but that its decentralized nature means it is virtually unstoppable. As soon as one torrent link site is shut down, another five pop up to take its place, and the lack of a central network makes it hard to find targets for concrete legal action.
However, we believe that there's a massive opportunity here for the content owners. At present, BitTorrent clients are still relatively complex to use, putting off ordinary consumers. On top of this, users have to wade through the murkier recesses of the web to find the sites hosting torrent links.
There is no reason why content owners can't build their own torrent sites, offering links to download versions of their files with DRM (digital rights management) protection, or even build an iTunes-style interface through which users can buy and download large pieces of content such as movies or software.
A combination of the speed and efficiency of the BitTorrent protocol and the commercial savvy of the big content players could easily entice many users to start downloading movies and software over the web, which also greatly reduces distribution costs. Of course, the price would have to be right, and there are all sorts of revenue-cannibalization and channel issues.
Rather than fruitlessly chasing those BitTorrent users who spread copyrighted material, content owners should look towards using the protocol to offer new distribution services that are easy to use and reliable.
PassAlong Networks to Power VTracks
PassAlong Networks, developer of innovative technologies for digital music, and Varsity Media Group, an entertainment media company dedicated to teenagers worldwide, announced last week that PassAlong will power VTracks.PassAlong.com – Varsity Media Group's online digital music offering featured at VarsityTV.com, one of the fastest growing teen communities on the Internet.
"We are excited to be working with Varsity Media Group to help expand their entertainment offering to include digital music," said Dave Jaworski, CEO and Co-Founder of PassAlong Networks. "By powering VTracks.com, we will provide VarsityTV.com members with an experience that is community-based, with the ability to share digital music in our unique and legal Passing-and-Points environment."
VarsityTV.com members will have access to more than 1.1 million available tracks licensed by PassAlong from major record labels and independent catalogs.
"Through this initiative, we are able to continue to provide teens with a place they can go to experience entertainment on their own terms," said Kelly Hoffman, Varsity Media Group's CEO and Founder.
A Very Costly Image Problem
Excerpted from Digital Music News Report by Paul Resnikoff
At a DEMXPO panel Wednesday, a group of well-spoken college students succinctly described the perfect storm of factors that have been so punishing to labels. These students probably haven't read the expensive research reports that are routinely published on the matter; they were merely describing their purchasing choices and preferences.
But the laundry list of problems was once again out in the open, and includes a negative reaction to CD bundling and pricing, incompatible and sometimes destructive CD-protection schemes, complicated codecs surrounding paid downloads, and an over-arching feeling that record labels are disingenuous. These are deep issues, and are part of a very profound and disruptive shift in the recording industry today.
Many of the panelists clearly viewed major record labels as faceless corporate entities, and that image problem is hurting sales. More than one college student wanted money to go directly to the artist, and not the label, betraying a deep distrust of how artists are being compensated.
Unfortunately, there is a troubled history of labels using very slippery practices to short artists, and managers, booking agents, and accountants are often part of the sordid tale. Payola investigations, aggressive file-sharing lawsuits, and a rootkit disaster have only cemented that image, regardless of whether it actually maps to reality.
But somehow, it seems that the die has been cast, especially among an anti-corporate, echo-boomer generation. But even among adults, many of whom have plenty of disposable cash, P2P-based downloading is viewed as the most casual of offenses.
While a major part of the industry's problems lie in shifting consumer preferences or disruptive digital technologies, a big public relations issue is proving to be very destructive to overall profits. For an indie band with a die-hard following and trusted support, fans have shown a willingness to pay for open MP3 downloads.
But somehow the majors are having trouble getting music fans to play ball, and that could demand an image overhaul that has nothing to do with technology, pricing, or new formats.
Coming Events of Interest
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Intelligent Selling of Internet Media – December 5th at the Board of Trade Downtown Center, Toronto, CA. 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 site sell-through.
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Search Engine Strategies Conference & Expo – December 5th-8th in Chicago, IL. Real-time actionable information to grow your business through search engine marketing. Ins-and-outs from top search experts and the search engines themselves. Access to the world's most comprehensive gathering of search engine marketing & optimization-related solutions providers and potential partners. Please click here to learn more about this event.
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Copy Protection Technical Working Group (CPTWG) Meeting – December 7th at Sheraton Four Points Hotel, Los Angeles, CA. If you are interested in offering a presentation at this meeting, please as soon as possible so that CPTWG may schedule the agenda accordingly. Presentation guidelines can be found on the CPTWG website at www.cptwg.org.
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FutureMedia 2005 – December 8th in London, England. This C21 Media event is a must-attend one-day conference that brings attendees face-to-face with the players shaping the future of entertainment. FutureMedia 2005 is the meeting place for the converging media industries, where producers, channels, rights owners, technology suppliers, and advertisers come together to discuss the fast-changing environment.
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Digital Hollywood at CES – January 5th-7th at the Las Vegas Convention Center North Hall. The Consumer Electronics Show will have over 140,000 attendees; 2,500 exhibitors; 4,000 press representatives; and keynotes by Bill Gates, Chairman, Microsoft; Howard Stringer, Chairman & CEO, Sony; Paul Otellini, CEO, Intel; and Terry Semel, Chairman & CEO, Yahoo. The DCIA will moderate the "Next Generation P2P" panel on January 7th.
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MidemNet Forum at MIDEM – The World's Annual Forum for Digital & Mobile Music January 21st-22nd, Cannes, France. Confirmed keynotes to date are EMI Group Chairman Eric Nicoli; Ken Lombard, President of Starbucks Entertainment; Patricia Langrand, Senior EVP of Content for France Telecom and Nokia's EVP and GM of Multimedia Anssi Vanjoki. MidemNet forum will welcome the world's leading digital music experts and global authorities on mobile music.
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Media Summit New York – February 8th-9th in NYC. The 2006 Media Summit New York is the Premier International Conference on Motion Pictures, Television, Cable & Satellite, Broadband, Wireless, Publishing, Radio, Magazines, News & Print Media, Advertising and Marketing. The DCIA will participate with the CEA and MPAA in discussing "The Piracy Freight Train: As Entertainment, The Law & Technology Collide."
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Defining the Problem, Developing Solutions – The Anti-Spyware Coalition's first public workshop to be held on February 9th at the Capitol Hyatt in Washington, DC will address the impact of spyware on businesses and individuals and will include interactive panels on public education, policy and enforcement, corporate security, and industry guidelines. Confirmed speakers include FTC Chairman Deborah Majoras, Wall Street Journal Columnist Walt Mossberg, and Pew Internet and American Life Associate Director Susannah Fox.
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New Communications Forum 2006 – March 1st, Palo Alto, CA. NCF brings together the industry's leaders from around the globe to discuss the impact of participatory communications on media, marketing, PR, and advertising. This year the conference will examine how blogs, wikis, podcasts, and other emerging tools, technologies, and modes of communication are affecting organizations.
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