December 26, 2005
Volume 11, Issue 9
P2P File-Sharing Volume Increases
Excerpted from Digital Music News Report
Peer-to-peer (P2P) file-sharing levels continued to climb in November, both on a month-to-month and year-over-year basis. According to data supplied by tracking firm BigChampagne, the average number of simultaneous P2P users reached 6.86 million in the US, and 9.47 million globally.
In the US, that represents a 4.78 percent increase over October figures, and a 20.6 percent jump over the same period in 2004. Globally, the numbers represent a 3.14 percent increase month-over-month, and a 21.3 percent increase year-over-year. Both totals are close to recorded highs for BigChampagne.
The increases are rather pronounced, and are part of a growing P2P population. BigChampagne tracks average simultaneous users, instead of total files, to help normalize against network debris like spoofed and incomplete files. But most P2P users grab a fair amount of tracks per session, generating billions of monthly swaps.
Meanwhile, the BigChampagne data does not track non-P2P, direct person-to-person swapping, which occurs over protocols like instant messenger, e-mail, or simply by trading removable hard drives or burned CDs. That may be the biggest area of new growth, though it remains incredibly difficult to measure.
A chart can be viewed here.
MusicDish Network Music Videos to P2P
Excerpted from MusicDish Network Report
DCIA Member MusicDish Network announced the upcoming addition of new music videos from R&B singer Kieran and Pop artist Jann Klose to its P2P viral distribution campaign.
The videos, encoded with fellow DCIA Member's INTENT MediaWorks' proprietary technology, will be pushed through search placements in major file-sharing applications such as Kazaa and eDonkey, which are also distributed by DCIA Members Sharman Networks and MetaMachine, respectively.
The campaign will be supported by an online marketing campaign conducted by the MusicDish Network, which has already garnered over 1 million downloads for Ms. Cherry's music video, "It's Whatever."
Sultry, exotic eye candy describes the debut music video from hot R&B up and comer Kieran for his Scott Storch-produced single, "Let's Get Away".
Skype & EMI Partner on Marketing Campaign
DCIA Member Skype, the global Internet telecom leader, and music label EMI have joined forces in a new promotion targeting the audience for British band Coldplay.
Skype and EMI invited Coldplay fans who register at the group's website to download Skype and create a standout voice message to Coldplay. At the culmination of the campaign in March, Coldplay will choose the best response, and then use Skype to call the winner for an Internet phone chat.
"Simply click on the Skype Coldplay button to leave a message and your Skype Name," the Skype website explains. "The band will have a listen and whoever leaves them the best or most interesting message will win a call with Coldplay over Skype."
Skype VP of Global Marketing Saul Klein said the initiative aims to focus attention on Skype's personalization features that launched this month as part of Skype 2.0. "This highlights our personalization tool that lets users buy ring-tones and pictures, which is an area that's getting more and more interest from entertainment companies," said Klein.
Pictures that accompany user messages – also known as "avatars" – and ring-tones currently sell for $1.20 each on the company's "Personalize Skype" store site.
With Skype 2.0, the company added free one-to-one video calling to its offerings. It also added the Skype toolbar for Microsoft Outlook, allowing one-click calling to Outlook address book contacts.
Report from CEO Marty Lafferty
 As reported in the December 12th DCINFO, the Association of Audionautes (ADA) and its allied Artist-Public Alliance have been working to give voice to peer-to-peer (P2P) file sharers in opposition to powerful opponents in France.
The French Parliament meanwhile has been debating whether to adopt a 2001 European Union (EU) directive on intellectual property rights (IPR).
The government had introduced articles into a draft bill that would make unauthorized online file redistribution punishable by prison sentences of up to three years and fines of up to $355,000.
Last week, consumer-interest groups delivered a 110,000-signature petition to the culture ministry protesting these provisions. The rights of individuals to make copies of entertainment content for private use are well-established in European law, and media companies have faced legal action in France, Norway, and Sweden for selling copy-protected CDs and DVDs.
The provisions were reversed in a 30-to-28 vote taken at the 577-member France National Assembly Wednesday night. A last-minute government proposal to compromise by issuing two warnings to file sharers prior to prosecution was insufficient to turn the tide.
Instead, the consumer-based movement succeeded in passing its own two amendments, introduced by Alain Suguenot, a deputy from the ruling Union for a Popular Movement (UPM), allowing P2P users to share an unlimited number of files on the Internet for a flat "global license fee" of $8.40 per month.
Suguenot said, "Young users especially should have access to the freedom the Internet offers. Strict application of the law would mean restricting access to information which I believe is essential."
"We are trying to bring the law up to date with reality," said Patrick Bloche, a Socialist representing the Paris district who co-authored the amendments. "It is wrong to describe the eight million French people who have downloaded music from the Internet as delinquents."
"We are only leading in a direction that is inevitable for the law everywhere," added Christian Paul, another Socialist deputy who co-authored the amendments. "You will see other European nations adopting such laws in the future because they just make sense."
The amendments would revise the French Code of Intellectual Property with a new Article L-122-5 stating that online dissemination of copyrighted works in any format is legal provided that downloads are intended for private use only without direct or indirect commercial exploitation.
"If the amendments survive, France would be the first country to legalize P2P downloading," said Jean-Baptiste Soufron, ADA's legal counsel.
Aziz Ridouan, the 17-year old high-school student who has fought for Internet rights as ADA President, said, "If the government and industry attack downloaders aggressively, we will just go underground with encryption and all chance of revenue will be lost. They cannot use the law to stop people sharing music just because the music industry missed out on the digital revolution."
Under the amendments, Internet service providers (ISPs) would make payments to SACEM, which has handled artists' royalties since 1851. Soufron noted that this system for unlimited downloading includes a royalty tax similar to the one that exists for blank compact disks and DVDs.
The amendments must be approved by the Senate of the Republic and, according to Agence France Presse, French Culture Minister Renaud Donnedieu de Vabres asked Parliament to re-open debate on the proposal.
Bernard Accoyer, the governing UMP conservative party leader, however, rejected government demands for a fresh vote Thursday, saying lawmakers will first take time to listen to all sides.
The law would make it nearly impossible for media companies to sue French file sharers for uploading and downloading files for private use. Laws against public use of copyrighted material would still stand.
UFC-Que Choisir, France's largest consumer group, said the plan would create a "new area of freedom allowing Internet users access to cultural diversity and fair payment for creators."
The final lower-house vote is expected on or about January 17th. The bill then requires one further vote in the Senate to become law. In a related measure in the US, Congressman Rick Boucher (D-VA) has previously introduced a bill that would ban or regulate the sale of copy-protected CDs.
The DCIA welcomes new discussion of collective licensing, while continuing our support for content rights holders and digital rights management (DRM) solutions providers who are now deploying other P2P business models – including subscription, paid-download, and most promising, ad-supported – to optimize consumer choice and revenue generation.
We also welcome the voice of file sharers themselves, whose presence ironically has been missing from the debate about what is, at the end of the day, a consumer-based distribution system. Share wisely, and take care.
Digital River Signs AtomicPark & ParetoLogica
DCIA Member Digital River, a global leader in e-commerce outsourcing, announced last week that it signed an online retail agreement with AtomicPark, an e-retailer of software products, and separately, that it will provide international e-commerce support for ParetoLogic, a developer of anti-spyware software and other security software products.
Working through Digital River's oneNetwork online sales channel, AtomicPark is reselling a selection of products from Digital River's catalog of downloadable software alongside its existing product line.
AtomicPark offers its customers a seamless, one-stop online shopping experience for their software needs. At www.atomicpark.com customers can purchase software titles from a range of leading publishers. Catering primarily to small- to mid-sized businesses, the site features software solutions for accounting, desktop publishing, photo presentation, security, tax preparation, Web development and more.
Digital River is managing the online sale of ParetoLogic's XoftSpy software purchased at www.paretologic.com. In addition, Digital River is promoting XoftSpy through its established online network of software affiliates. Digital River is managing ParetoLogic's affiliate program as part of its oneNetwork online sales channel.
In addition to hosting ParetoLogic's online store, Digital River is providing downloads of the company's software as well as fraud screening services. To support ParetoLogic's global e-commerce strategy, Digital River designed the site to display in regionally-preferred languages and currencies, and process orders using locally-preferred payment methods.
PlayFirst & gameLabs' Eggs vs. Chicken
It's the age-old question: which came first, the chicken or the egg? Game players everywhere can find out the answer with Egg vs. Chicken, the new downloadable game from DCIA Member PlayFirst and gameLab, the team that brought you the runaway hit, Diner Dash. Now available on PlayFirst.com, this "eggciting" game is free to try for 60 minutes or purchase for $19.95.
"PlayFirst is a publishing house dedicated to turning creative ideas into great games," said Kenny Dinkin, Vice President & Executive Producer, PlayFirst. "With its plucky cast of characters and rip-roaring storyline, Egg vs. Chicken serves up one of the freshest dishes in the casual games market to date. This game is startlingly inventive, but like all PlayFirst titles, is designed so anyone can play."
It's "three-in-a-row" meets "protect the castle" in this hilariously clever, cracked-up combination of strategy and action puzzle. In Egg vs. Chicken a small team of runaway eggs takes on a mighty army of marauding chickens as it travels through time to resolve the ultimate riddle: "which came first?" Like a traditional slider puzzle, players must deftly slip their eggs into position, and then launch attacks against ruthless roosters and harrowing hens.
"gameLab is committed to innovation, and working with PlayFirst has allowed us to explore new kinds of gameplay for the downloadable market," said Eric Zimmerman, CEO, gameLab. "Addictive and stylish, Egg vs. Chicken has the makings of a classic casual game."
SVC Financial Partners with Ameracash
Cell-phone users without bank accounts will now be able to pay over 3,000 bills directly from their handsets thanks to a revolutionary new partnership between DCIA Member SVC Financial Services (SVC) and Ameracash Solutions. SVC, a leading provider of secure mobile transaction technologies, announced last week the delivery of Scoot Mobile Money technology for bill paying services provided by Ameracash and its innovative VPAY Electronic Payment Solutions platform.
"Scoot is the most secure technology available for mobile banking, even for those without a bank account," said Chris Haigh, President & CEO of SVC. "Through this unique partnership with Ameracash, hard working members of the cash economy will be able to pay their bills quickly and easily without ever having to stand in line."
SVC's cutting-edge mobile banking technology, Scoot Mobile Money, integrates virtually any cell phone with prepaid ATM cards that offer a wide range of capabilities. Scoot allows anyone with a cell phone to store, send, receive and transact funds anywhere in the world.
"Ameracash is pleased that un-banked and under-banked consumers will now have an additional mechanism with which to safely, securely and easily pay their monthly bills," said Marc Keller, EVP, Ameracash.
Teen Internet Users Are Creative Online
Excerpted from Center for Media Research Brief
About 21 million, or 87% of kids ages 12-17, use the Internet. According to a survey by the Pew Internet & American Life Project, half of all teens and 57% of teens who use the Internet have created a blog or webpage, posted original artwork, photography, stories or videos online or remixed online content into their own new creations. The study considers them "Content Creators."
The results highlight that this is a generation of teens eager to share their thoughts, experiences, and creations with the wider Internet population.
Some key findings of the study include: 33% of online teens share their own creative content online, such as artwork, photos, stories or videos; 32% say that they have created or worked on web pages or blogs for others, including friends or school assignments; 22% report keeping their own personal webpage; 19% of online teens keep a blog, and 38% of online teens read blogs; 19% of Internet-using teens say they remix content they find online into their own artistic creations.
Teens are often much more enthusiastic authors and readers of blogs than their adult counterparts. Teen bloggers, led by older girls, are a major part of this tech-savvy cohort. "For American teens, blogs are about self-expression, building relationships, and carving out a presence online," said Amanda Lenhart, co-author of the report entitled, "Teen Content Creators and Consumers."
51% of online teens report downloading music, compared to just 18% of adults who report similar behavior.
Mary Madden, a Research Specialist at the Project and co-author of the report, said "At a time when social norms around digital content don't always appear to conform with the letter of the law, many teens are aware of the restrictions on copyrighted material, but believe it's still permissible to share some content for free."
75% agree with the statement that, "Music downloading and file-sharing is so easy to do, it's unrealistic to expect people not to do it." To view the entire report, please visit here.
Pricing of Music Downloads Probed
Excerpted from LA Times Report by Charles Duhigg
Eliot Spitzer is taking on the music industry again, this time over the pricing of digital downloads. Spitzer is reviewing whether the companies conspired to set wholesale prices.
Wholesale digital music prices can range from 60 cents to nearly 90 cents a song, according to industry executives. Operations such as iTunes then sell songs to users for 99 cents per download.
"As part of an industry-wide investigation concerning pricing of digital music downloads, we received a subpoena from Atty. Gen. Spitzer's office as disclosed in our public filing," according to a statement released by Warner spokesman Will Tanous.
A source at SonyBMG said the company also received a subpoena. Sources said the two other major music companies – EMI and Universal Music – either had received or soon would receive subpoenas.
Proving price fixing is difficult because it requires not only showing that the music companies charge similar prices, but that they secretly agreed to do so. In 2003, companies settled a price-fixing suit involving CD sales spearheaded by a group of state attorneys general.
The companies paid $67.4 million in cash to consumers and donated $75.7 million worth of CDs to libraries and schools. Critics said the settlement allowed companies to dump CDs they couldn't sell anyway, rather than donate quality music.
Spitzer already has been investigating music companies for allegedly lavishing gifts on radio station employees to influence playlists. Warner Music agreed to pay $5 million to settle charges; Sony BMG agreed to pay $10 million. EMI and Universal are still being investigated.
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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Copy Protection Technical Working Group (CPTWG) Meeting – January 10th 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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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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Digital Commerce Summit 2006 - January 31st in New York. Digital Media Wire invites you to attend this one-day executive forum for content owners, merchants, payments & technology companies, banks & financial services institutions, ISPs, MSOs, P2P vendors, and wireless & mobile companies focused on payment solutions and commerce strategies for digital content, including games, music, film, television and video products.
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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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