December 12, 2005
Volume 11, Issue 7
SVC Financial Helps SEDA
DCIA Member SVC Financial Services, a leading innovator of secure mobile transaction technology, last week announced that it will be working with Seeing Eye Dogs Australia (SEDA) to help pump up the agency's fundraising efforts down under. SEDA is committed to enriching the lives of the vision-impaired by giving them back their independence via a seeing-eye dog.
Fundraising is critical to SEDA's ongoing ability to fulfill its mission. SVC's Mazarin Media Platform allows the organization to leverage the full potential of web-based fundraising.
"We can only continue to enhance the mobility and independence of people who are blind or vision impaired throughout Australia with donations from the public," said Leigh Garwood, CEO of SEDA. "Through our partnership with SVC Financial, we'll be able to pursue advanced fundraising and reach a large, receptive audience anywhere we desire."
SVC's Mazarin Media Platform provides media-based applications delivery of rich media solutions for interactive marketing campaigns. These campaigns are designed to touch an emotional cord and provoke an immediate response. Mazarin solutions include templates for non-profit organizations, political fundraising, authors and publishing groups, music and entertainment, corporate and consumer marketing.
Sharman Plans for Kazaa Filtering
In a landmark decision on September 5th, Australian Federal Court Justice Murray Wilcox guaranteed the continued existence and operation of Kazaa, distributed by DCIA Member Sharman Networks, until an appeal can be heard in late February.
Judge Wilcox's order contained a requirement for representatives of the Australian Recording Industry Association (ARIA) to collaborate with Sharman in the deployment of an interim filtering technology by December 5th. Since then, Sharman has worked closely with authorities to develop the optimal solution for protecting copyrighted works from unauthorized distribution.
These efforts, which include the development of an Audible Magic filtering solution preferred by the parent companies of Australian music labels, have been thwarted by the lack of participation by the ARIA in defiance of the court order. On November 24th, Justice Wilcox expressed frustration with ARIA tactics, saying that its attorney "shot himself in the foot" by refusing to have record company technical experts attend a court-ordered meeting.
Last Monday, as a result of the ARIA's intransigence, Sharman elected to cease distribution of Kazaa in Australia, using proven geo-targeting technology and warnings prohibiting existing users from using the application, to ensure compliance with the December 5th date. According to a Sharman spokesperson, "We are doing everything in our power to comply with the Court's orders."
The court also ruled last week that it would maintain the confidentiality of affidavits submitted by Sharman until after it decides on the appeal.
Report from CEO Marty Lafferty
 The DCIA's Content, Operations, and Platform Groups each publicly offered its support for our proposed initiative to partner with the International Federation of Phonographic Industries (IFPI) to expedite delivery of music licensing agreements that will fully legitimize the peer-to-peer (P2P) file-sharing distribution channel.
The Content Group, comprised of more than twenty diverse entertainment industry content rights holders and resellers, was represented by Scooter Scudieri, Indie911, and Nettwerk Music Group.
Scooter Scudieri, the "Internet's First Rock Star" and most-searched-for independent musician on the web, said, "With licensing, P2P software distributors will not only demonstrate the promise of legitimate P2P music businesses for major artists, but also make it much more attractive for my fans to support my work."
"It has been difficult for independents to market our music when the only copies of major label artists' tracks were unauthorized versions. It looks as though the underground digital music revolution has finally surfaced. Let's rock 'n roll," added Scudieri.
Justin Goldberg, Founder & CEO of Indie911, an alternative support system for artists, handling various marketing functions including music sales, ring-tones, online marketing, and film & TV licensing, said, "Congratulations to IFPI Chairman John Kennedy for acknowledging the importance of licensing P2P distribution of music."
"The only thing missing from P2P business models has been the licenses IFPI now seems prepared to support. This is an important milestone," added Goldberg.
Brent Muhle, General Manager of Nettwerk Music Group, said, "Licensing P2P software providers to offer authorized business models will herald a new dawn in music distribution."
"We look forward at last to the licensing of legitimate P2P businesses. We salute IFPI Chairman John Kennedy for recognizing the important role P2P businesses can play in the digital music industry," added Muhle.
That industry is now at a crossroads in its development, where it is critical to the success of those trying to build a digital music business the correct and legal way, including through sanctioned P2P business models, to complete the conversion of major established P2Ps as expeditiously as possible.
The Operations Group, comprised of more than twenty software developers and distributors, was represented by INTENT MediaWorks, Shared Media Licensing, and MetaMachine.
Les Ottolenghi, Founder & CEO of INTENT MediaWorks, said, "We accept the invitation of John Kennedy, Chairman of IFPI, to license P2P software developers for authorized music distribution. The time is finally right for this major step forward. Licensing will allow us to launch and develop legal P2P businesses that can take digital music sales to the next level."
"It is critical to the success of new music-industry sanctioned P2P offerings that we complete the conversion of all major open-P2Ps to licensed status as quickly as possible. We will do everything in our power to ensure that our colleagues join us in taking-up licenses," added Ottolenghi.
John Beezer, President of Shared Media Licensing, said, "Technologies and business models to monetize P2P are already well-established. In addition, all sectors of the industry have come to recognize that file sharing will always be with us. Despite the difficulties of recent years, I'm convinced that we've finally come through to a good place."
"With all parties working together, new technology will mean that more music will be enjoyed by more people to the benefit of the industry and fans alike. Throughout the history of the music business, every advance in technology has introduced a brief period of strife, followed by a new golden age. I think we're just getting to the fun part now," added Beezer.
Sam Yagan, CEO of MetaMachine, said, "It is time for the major entertainment companies to recognize that P2P can be a very valuable and productive channel for distributing copyrighted works; and solutions for monetizing and securing content in P2P distribution now abound."
"It is time to take digital music sales to the next level; the only missing element is the licenses," added Yagan.
The DCIA is reaching out to IFPI, the ARIA, and the Recording Industry Association of America (RIAA) to step-up the pace of music licensing negotiations associated with the ongoing conversion process for open P2Ps.
The Platform Group, comprised of more than twenty service-and-support companies, was represented by P2P Cash, Clickshare, and Digital Containers.
Tom Meredith, CEO of P2P Cash, said, "One of the impediments of conducting P2P commerce has been the lack of a payment system that was designed for the P2P networks. P2P Cash has done just that with a very decentralized patent-pending architecture called Intelligent Cash Units (ICUs)."
"The P2P Cash system guarantees the transfers of DRM rights and cash between individuals who don't know each other. With a free eWallet integrated with the new legitimate P2P clients, the P2P Cash payment system solves the P2P payment issue and turns P2P networks into instant, immense low cost channels of distribution for content holders," added Meredith.
Gregory Smith, Director of Business Development at Clickshare said, "Clickshare has long awaited the green light from the major music rights holders to offer our secure and private payment solution to millions of file sharers worldwide allowing them to legally download music tracks and other digital media."
"We look forward to begin enabling rights holders with the means to monetize their digital assets within the P2P network. Show us the licenses and we'll show you the money," added Smith.
Chip Venters, CEO of Digital Containers, said, "P2P technologies enable an entirely new content distribution and sales system where all media and intellectual property have a profitable business model. With P2P, the creators of media, documents, software, games, and other intellectual property can quickly and easily monetize these properties by creating, packaging, registering, and releasing content into the market in just a few easy steps."
"P2P will allow content that would have never seen the light of day to become part of the world of intellectual property. With a bottom up, decentralized flow of this valuable information and a profitable business model, the Internet will begin to truly meet its potential as a global repository of knowledge and entertainment where there are no gatekeepers, and the market truly tells us what people want."
"Communities of practice and ad hoc collaboration with large files can be enabled with no centralized costs. Corporations can, for the first time, utilize all of their IT assets. The only thing missing from P2P business models has been the licenses IFPI now offers. This is an important milestone. Congratulations to IFPI Chairman John Kennedy on recognizing the important role P2P businesses have in the digital music industry," added Venters.
The DCIA has pledged to do all that we can to encourage the process of accelerating a conversion of current major P2P software programs to music-industry-acceptable business models. Share wisely, and take care.
TLA & Trymedia Offer Game Disks
DCIA Member Trymedia Systems, acquired recently by Macrovision, last week launched the Gold Disk Promotion service for games, together with The Licensing Agency (TLA). The program, created by TLA, uses Trymedia technology to offer hardware and software manufacturers and product goods companies a selection of PC software that can be used as a premium. Consumers can try out each game and instantly select titles they want to own as their free premium.
"Games are a popular and fun premium item, but it's tough for vendors to pick just one game that will appeal to customers across the board," said Fred Amoroso, CEO of Macrovision. "Now OEMs can give consumers a wide choice to select a game that suits their individual preferences."
The premium bundle options offered are presented to the consumer on a CD, DVD, or as an on-line promotion filled with a selection of full-version game trials.
Trymedia's technology allows full-version game trials to be instantly unlocked with an activation code. TLA, as Trymedia's exclusive OEM representation agency, is licensing all content, as well as developing and creating the marketing programs on behalf of the OEM and product goods companies. Manufacturers can allow the other content on the disk to be purchased instantly at a discounted price using Trymedia's technology, offering even more value to the end user.
Sapphire Technology is the first to take advantage of the service with 500,000 units of graphics cards and accessories being distributed worldwide.
Telcordia Schedules Earnings Call
DCIA Member Telcordia Technologies, a global provider of telecommunications software and services, will host an earnings conference call for investors, prospective investors, and financial analysts on December 14th at 4:30 PM ET to discuss financial results for the fiscal quarter ended October 31st.
Access to the call and secured website will be available to qualified holders, authorized prospective investors, and security analysts.
Telcordia is a leading global provider of telecommunications network software and services for IP, wireline, wireless, and cable. As the industry continuously evolves, Telcordia is focused on being the undisputed transformation partner for its customers.
Grouper Unveils Video Sharing Service
Grouper Networks last week unveiled its P2P video sharing service. Grouper is a free service that gives users the platform and the tools to easily package and redistribute user-created videos.
The new Grouper video sharing service offers a feature-rich website for viewing, syndicating, and downloading user-created videos and an application to import, edit, and share user-created videos.
Grouper's service is the first to offer a hybrid technology approach, which combines a rich web-based video library that can be streamed or downloaded with sophisticated distributed backend technology.
This approach also enables Grouper to offer a free streaming and download service with personal media portability to the Apple video iPod, the Sony PSP, and other video playback devices.
Grouper does not impose any limits or constraints on the quantity, size, or duration of user-created videos being shared. Additionally, the company announced that it has secured a strategic investment from T-Ventures, a subsidiary of Deutsche Telekom AG, to bring the Grouper video sharing service to European households.
"We have made it simple and exciting for anyone to share their lives through video," said Josh Felser, CEO of Grouper Networks. "Not only have we created a great user experience, we've found the secret sauce of the video business model. Our hybrid distribution technology lets visitors view and share an unlimited number of personal videos on our website or download them with Grouper's software, using our low-cost scalable P2P platform."
Movie Industry Every "Bit" Excited
Excerpted from Online Spin by Cory Treffiletti
BitTorrent is P2P software that allows you to share files, especially larger ones such as movies and TV shows, by gathering pieces of the file from hundreds of other hard drives and reassembling them on your computer. It allows you to download these larger files in a much faster manner than previously, it doesn't bog down your computer, and it is fast becoming the preferred partner of the MPAA and the source for legal downloading of movies online.
The BitTorrent phenomenon has very strong implications for digital media. If BitTorrent becomes a mainstream tool in the same way as iTunes, we could see the movie industry embrace the Internet as a distribution tool for new movies! On-demand content delivery would become very exciting, as first-run and new release movies could become available in the privacy of your own home direct from the studios, and the movie industry would avoid the pitfalls and errors that the record industry went through by waiting too long to embrace the Web.
There are many implications of BitTorrent. For example:
1. Long-form content can be developed and distributed in a much easier fashion through BitTorrent than any other method short of streaming. The difference is that streaming does not provide users with a permanent copy, and they need to be online to access it. BitTorrent would allow you to retain a copy of the content and watch it even when you're offline.
2. If long-form content becomes more pervasive, it's inevitable that advertisers will start to embrace the model, too. Infomercials are a proven tool for influencing consumer perception and driving sales, as are product placement and branded entertainment. As distribution of these formats becomes easier, more advertisers are likely to embrace it and look to the Web as the primary distribution tool.
3. Theatre owners would lose revenue, so they will certainly fight this, because customers could download a movie at home and play it on their home theatres, integrated within their digital homes. Theatre owners are already feeling the pinch of digital media and they are finding new ways to lure customers by building other activities to surround content, and finding new revenue streams such as holding corporate events in theatre spaces. As they fight the model, will customers demand increased distribution models?
4. What type of security measures will studios take to ensure that their movies will not be distributed to other users? Will they embrace the key technologies that some of the record companies have put in place that limit copying between one and four times?
All of these models are very interesting, but the bottom line is that, once again, the customer is in control. As the customers demand that content be made available to them in this format, we'll see them launch. The movie industry is already listening, realizing they already suffer from digital piracy, so we should applaud them for reacting by looking to embrace a technology rather than fight it.
Now – if the BitTorrent model just worked with the iTunes interface, Steve Jobs would have the primary tool for distribution of movies online as well. I give it three months.
ADA Rejects P2P Report
The Association of Audionautes (ADA) last week rejected a report on P2P from the French Intellectual Property Council (CSPLA).
According to the ADA, the report does not take into account recent French court decisions on P2P downloads and the legitimacy of private copying, and its writing process involved no hearings of Internet users.
The French Privacy Authority (CNIL) decided in October that the monitoring of P2P users should be banned on the basis that private copying is a public liberty. For more than a year, the ADA has helped over 80 people organize their defenses and win their cases.
Organizations, such as the Artist-Public Alliance, have proposed alternate solutions to the report, and are supported by more than 50 Parliament members.
Overpeer Ceases Operation
Excerpted from Beta News Report by Nate Mook
It's well known that the RIAA and MPAA contract third parties to employ a number of methods to inhibit illicit file sharing, including denial-of-service attacks and hiding spyware as music. But these tactics have become less effective, forcing one such company to cease operations.
Following the shutdown of Napster, Gnutella and other decentralized services sprang to life and P2P file trading became a seemingly unstoppable phenomenon. But even though legal action couldn't stop P2P, the record industry decided to do the next best thing: disrupt it.
The RIAA and MPAA inked deals with companies such as MediaDefender, MediaSentry, and Overpeer. Using massive numbers of servers, these "content protection" firms attempted to clog up file-sharing networks by flooding them with fake files and stalling out users' computers.
Earlier this year, Overpeer was even found to have been planting adware that caused pop-ups within files named as popular music downloads. But with users migrating to new technologies such as BitTorrent, such actions aren't working.
On Friday, Overpeer owner Loudeye announced it was shutting down the subsidiary's content protection business just a-year-and-a-half after acquiring it. Loudeye said the closure would cut $1.6 million from its quarterly costs.
MediaDefender and MediaSentry, on the other hand, opted recently to find suitors in order to stay afloat. MediaDefender, which does not publicly advertise its services, was acquired in August by ARTISTdirect for $42.5 million in cash. MediaSentry, meanwhile, was purchased by SafeNet in June for $20 million in cash and stock.
Only 2% of Consumers Care
Excerpted from MP3 Newswire Report by Richard Menta
Only 2% of people who paid a fee to download music from the Internet cited that the contentious legal issues surrounding online music distribution concerned them. This statistic comes from Ipsos-Reid's latest research on the consumption of digital media titled "Cultivating Desire: Investing in Market Insights to Reap Digital Content Profits."
This paper focuses on ways for content providers to tap into the Internet as an evolving distribution mechanism of mass media. The shockingly low number should come as a warning to the RIAA who have so far sued thousands for file sharing in the expectation that they can scare consumers in buying instead of trading. First, this is not a way to tap into this audience and, second, the tactic isn't working.
Of course, the continued growth of activity on the various file sharing networks attest to that. These lawsuits are part of a dubious awareness plan among the major record labels to take control of online music delivery. According to the Ipsos research, either consumers are rejecting that notion or the word is not getting out enough.
But 2%? Even allowing for the normal statistical deviations, this is a tiny response. The fact that this number arrives from interviews with those who buy their music (and thus theoretically should have nothing to fear) doesn't remove the fact that the great majority of those who buy music from iTunes and other services also trade them on eDonkey and Kazaa.
There are 10 millon file traders at any given time on the various P2P networks, which demonstrates the magnitude of file sharing. If the Ipsos research is accurate, the collective response from this group is 'you can't catch me'.
That may be true. Your personal chances of being sued by the RIAA are equal to winning the lottery. Divide 15,000 lawsuits by over 70 million US file sharers and the odds of being selected are pretty remote. That's little solace to the likes of Patricia Santangelo and Brianna Lahara who won this lottery.
So will the record and movie industries sue even more people? Will they create more public relations spots with Madonna to chastise users on the evils of file sharing? If they do, the research suggests that they will only widen the growing disconnect between them and the consumer. It is this disconnect that Ipsos reveals will most derail attempts to "Reap Digital Content Profits."
Coming Events of Interest
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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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Grokster, The Case, The Holding, The Future – The January 11th meeting of the Los Angeles Copyright Society will feature a panel discussion by Robert Schwartz, Russell Frackman and Josh Wattles regarding the recent US Supreme Court decision in the Grokster case, which addressed the issue of secondary liability for copyright infringement by companies that produce and distribute P2P file-sharing technology.
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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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NATPE 2006 – The National Association of Television Program Executives conference January 24th-26th in Las Vegas is the only American market serving the worldwide television industry, whether you're looking to meet with colleagues, find new partners, learn about the burgeoning business opportunities of mobile and digital, or share ideas. Preview NATPE 2006 here
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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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