January 9, 2006
Volume 11, Issue 11
2006 International CES Comes to Vegas
Excerpted from UPI Report by Michelle Alexandria
According to the Consumer Electronics Association's (CEA) Leah Arnold, "The show began nearly 40 years ago in 1967 when consumer electronics manufacturers decided to create their own show, instead of exhibiting at appliance shows. The first show had only 200 exhibitors, 100,000 square feet, and 17,500 attendees. Since then we have grown tenfold, with 1.6 million square feet of space, 2,500 exhibitors, and more than 130,000 attendees.
CES has continually been the launch pad for new technologies; some of the new products announced at CES include the VCR (1970), the CD Player (1981), DVD (1996), HDTV (1998), Satellite Radio (2000), Microsoft Xbox (2001), and IPTV (2005)."
Skype Unveils New Partners at CES
DCIA Member Skype, the global Internet communications company, announced seven deals at CES that will make Internet calling even easier for consumers. With these announcements, Skype continues to enrich the ecosystem of products that make Skype simple to use.
The new Skype products include: Creative Skype Internet PhonePLUS - a standalone phone that enables anyone to make free Skype calls over the Internet without a PC connection; D-Link Skype USB Phone Adapter (DPH-50U) - a Skype phone adapter that enables the use of Skype on a traditional phone; IPEVO Fly-1 Cordless Handset and Xing Speakerphone - PC and Mac compatible IPEVO Fly-1 cordless Skype USB handset and an IPEVO Xing Skype USB speakerphone; and KODAK Photo Voice - a beta version of the first Skype certified online photo sharing service, available as a free download here.
Others include NETGEAR – a Wi-Fi phone designed to work wherever a consumer is connected to a wireless Internet access point; Panasonic - a cordless telephone product that interfaces directly with Skype, allowing users to make and receive Skype calls and traditional calls using the same device; and VTech USB7100 Phone - availability of the previously announced VTech USB phone, expandable with up to four handsets and allows users to view their online contacts.
With these new products, consumers will be able to use cordless phones away from the desktop to make Skype calls, easily switch between free Skype calls and ordinary landline calls, and enjoy Skype's simplicity on regular phones via a desktop USB connection. Skype consumers and small business owners now have more choices when using the Skype service.
MediaPass Announces Mobility at CES
DCIA Member MediaPass Network, one of the largest content provider networks in North America, announced at CES that the latest version of the MediaPass Music high-quality audio and video music download service for Windows Mobile is now available. The service offers listeners the flexibility of choosing the download optimized for their personal portable device and computer setup.
Available at MediaPass Downloads and Windows Mobile, the mobile download service will allow MediaPass Music subscribers access to thousands of music audio and video downloads, via a 30-day license, where they can select formats – based on whether or not they have a Smartphone, Pocket PC, or Windows Mobile-based Media Center – and load what they like onto their own portable devices.
"Music lovers want access to the highest quality content they can get their hands on," said Daniel Harris, Founder & CEO of MediaPass. "Our service and Windows Mobile technology enable listeners to enjoy their favorite music on-the-go with the best experience possible."
Report from CEO Marty Lafferty
 Congratulations to Gary Shapiro and the CEA for a phenomenally stimulating 2006 International CES featuring numerous advances of relevance to the distributed computing industry, and to Victor Harwood for mounting a highly successful Digital Hollywood at CES.
We are very grateful to "Next Generation P2P" panelists Dmitry Shapiro, CEO of Veoh Networks; Mike Weiss, President & CEO of StreamCast Networks; Les Ottolenghi, Founder & CEO of DCIA Member INTENT MediaWorks; Randall Crockett, Senior Vice President of DRM Networks; Jan Marc K ü lper, Business Development Director of Arvato Mobile GmbH; and Janet Snowdon, Business Development Manager of IBM Digital Media Group.
Dmitry Shapiro described Veoh as an Internet TV peercasting network that facilitates downloads from a website with BitTorrent-type P2P in the background. Veoh enables finding and scheduling video content. It allows anyone to "publish" video to the network. Veoh uses P2P with a proprietary caching system to ensure that content always has a backup. DRM is important as an abstraction layer. Veoh is a long-tail content provider.
Dmitry believes that major studios are not yet in favor of P2P because they are afraid of losing control over their content and are fearful of the power of P2P. We will therefore see a slow adoption of P2P by traditional broadcasters. He believes that DRM has developed sufficiently and that the right business models need to be created for the P2P environment. P2P will have made it when we stop talking about it and will be used for many applications, not just file sharing.
Mike Weiss explained that, in the wake of the Grokster decision, StreamCast made the decision to move Morpheus forward by settling differences with the entertainment industry rather than perpetuating legal proceedings in the lower courts for four more years. There have been 148 million downloads of Morpheus to date, and Mike pledged to do his best to create expanded and increasingly innovative communications, content, community, and commerce applications using continually improving Morpheus software.
There is a great deal of authorized content on Morpheus. Consumers in large numbers sample promotional content on Morpheus and then go to iTunes to purchase it. A key question now is how to expand the choices available for consumers to be able to purchase content without having to leave the P2P environment. Mike believes that by the end of 2006 only two or three of the traditional open-P2P brands will continue to be in operation.
Les Ottolenghi announced that INTENT is in the process of launching myPeer, its closed P2P application, and will be a channel on Google TV. INTENT is adding P2P travel searches and VoIP to file sharing. He acknowledged that many industry leaders believe that publishing original user-generated content out to the web will be the next greatest thing, but he believes it will be even more important for new licensing models to be established for high-value professionally-produced content. People will no longer pay multiple times for the same content on different platforms. "Reachability" will be an increasingly critical consideration.
Les added that open-P2P has been very successful in introducing independent artists. Independent producers can scale quickly and adapt. In closed-P2P environments, a major challenge will be how to ensure the discovery of artists. Closed-P2Ps are now expanding rapidly, and the creation of communities will be very important to their sustained growth. Open-P2Ps also continue to have enormous traffic levels.
Randall Crockett said DRM Networks' focus is increasingly on billing systems for its numerous DRM customers. An issue in the forefront today is content rights vs. fair use. Randall sees two directions – sharing files for free based on having rights to the content; and selling better quality files via P2P.
He is watching DRM Networks' customer Peer Impact grow, but isn't seeing commensurate growth in the availability of authorized content. The question continues to be how to monetize content. For free content, P2P is especially useful as a marketing tool. Randall also reminded attendees that consumers didn't start out wanting to steal music; they just wanted to download it. It is essential that we have a revenue-share model for the end user.
Jan Marc Külper reviewed Bertelsmann's planning that began eighteen months ago to develop a B2B service exploiting the advantages of P2P, and its subsequent creation of GNAB, a white-label digital download platform for all types of content that premiered at CES on INTEL's new Viiv platform. What they have invented is a combination of a centralized download platform and decentralized P2P redistribution system. GNAB supports different devices to download content, and facilitates peer communities.
Jan Marc believes that this is just the beginning of legalized P2P, which has a big future as an efficient distribution method for full files with DVD quality. P2P enables the ability for lots of clients to download the same file simultaneously and begin watching it before the whole file downloads. Most promising, Hollywood studios are beginning to license this platform.
Janet Snowdon noted that IBM offers no P2P platform nor does it intend to offer one. IBM does want to help address copyright infringement issues, work with licensing entities, deal with interoperability, enable the marketplace, and protect IP holders. Janet made the point that many large companies still don't allow P2P on their networks because of security concerns.
Companies are actively working on the interoperability issues with digital content. P2P with instant chat can create a community, for example, if only the security issues can be addressed. She also noted that intense dialogue is taking place on fair-use questions, such as how many copies for personal use an entertainment content file purchaser should expect to have, but that it remains a very complex question as to what defines a personal network.
Share wisely, and take care.
CES Session of Interest
In-depth and informative conference sessions highlighting the breadth and depth of the consumer electronics industry, as well as the public policy issues affecting it, defined the 2006 International CES.
A policy-related session, "Taking Sides - Music Industry vs. File Sharing Consumers," moderated by the San Francisco Chronicle's Benny Evangelista, delved into the issue of the legal liability of file sharing in light of the MGM v. Grokster Supreme Court ruling. The panel included Hummer Winblad Venture Partners' Hank Barry, Mitchell Silberburg & Knupp's Russ Frackman, NARAS' Daryl Friedman, Wiley Rein & Fielding's Bruce Joseph, and Microsoft's Andy Moss.
Although panelists did not agree on interpretation and impact on the music industry, CE industry, and consumers, they agreed that the ruling was unclear. The ruling, said Joseph, is a "word salad, where the words are tossed together and we're left to figure out what it all means."
For a complete line-up of CES conference sessions, please click here.
Not Ready for Digital Prime Time
Excerpted from MediaPost Report by Jonathan Blum
If corridor talk and cab-line schmoozes at CES are any indication, Hollywood remains stuck in its analog past, even as digital technologies and trends take center stage. This could be bad news for advertisers and media strategists who are attempting to divine the digital future and determine how to re-deploy media dollars.
Executives speaking on panels at the show point to ominous trends. Despite major announcements, like Disney's deal with Apple for downloads to portable devices, or Starz Encore Group's creation of an on-demand Internet movie service, tensions with cable operators, satellite providers, and other networks continue to impede deals.
Also, distrust of consumers has slowed alliances. Lawsuits against illegal downloading were brisk last year; the pall of mistrust continues to hover over digital rights management (DRM), nearly a full decade after the transition from traditional movies and television became clear.
Most major film libraries aren't digitally available, and fresh turf battles continue to surface as new features debut with content. For example, a benign service found on some Time Warner Cable networks called "Start Over" is causing a lot of controversy, according to Chris Marlowe, editorial director, Digital Media at the Hollywood Reporter.
Marlowe suggested that copyright holders felt the service counted as another presentation of their program, while Time Warner considered it a video-on-demand function covered under existing agreements. Either way, this rather harmless service is causing some content providers to re-examine their digital content distribution deals to include this provision.
Hollywood Urged to Use Internet Downloads
Excerpted from Scotsman Report by Fergus Sheppard
Hollywood is losing the battle against Internet piracy and should sell big box-office films online as a way of fighting the escalating trade in bootleg downloads, a British expert on digital counterfeiting has argued.
David Price, head of the anti-piracy firm Envisional, spoke after it emerged that "Narnia," the film version of CS Lewis's classic book "The Lion, The Witch, and the Wardrobe," was available on the internet for illegal download just 48 hours after appearing in the cinemas last month.
The anti-piracy expert said, "What the movie studios and the record industry really have to do is make it as easy as possible for the generally law-abiding mass of Internet users to get the content they want online."
Michael Arrieta, Chairman of Sony Pictures, told a conference in Hollywood last March that the company wanted to create a legal system for downloading films, which he described as "an iTunes for movies." But Mr. Price said the studios had not done enough to keep one step ahead of the pirates.
He said, "I think the tide will really begin to change when they start to offer relatively low-cost, good-quality downloads on a widespread basis. Once they do that, people will turn to those instead of spending six or seven hours trying to find and download a file."
The advent of mass-market broadband connections has made the piracy of films and television programs as much of a problem as the illicit trade in music in the MP3 format.
Once a full-length feature film has been compressed, it has a file size of about 700 MBs, which can be downloaded in one hour on a standard broadband connection at full speed. Services such as eDonkey and BitTorrent are now used by many who want to download films or TV programs.
For File Sharers, It's a Legal Future
Excerpted from International Herald Tribune Report
Weeks before the original Napster shut down in 2001, Internet users were flocking to alternative song-swapping programs. Nearly 20 million people used Morpheus in its first four months, for example, to trade music and other files free of charge online.
But the man behind Morpheus, Michael Weiss, was worried. He figured popularity could bring its own perils.
As he feared, the notoriety led Hollywood studios and recording companies to sue Weiss's StreamCast for copyright infringement. It was part of the entertainment industry's wider effort to contain Morpheus and other Napster clones like Kazaa and Grokster from taking up where Napster left off.
Over the past four months, several Napster heirs have shut down and others are contemplating what they once could not abide - doing business by the entertainment industry's rules to survive.
"We can take a look at another four years of legal battles and spending millions of dollars on both sides," Weiss said, adding, "Is that where I want to spend the next four years of my life? It's better to focus the company's energy on creating new technologies."
StreamCast has not shut down Morpheus, but the company has approached the entertainment industry to pursue talks about settling a lawsuit against the company, according to court documents.
Ultimately, entertainment companies are banking that new-look file-swapping services that emerge from the ashes of Napster's heirs will draw computer users. To persevere, file-sharing providers that seek to steer clear of copyright lawsuits hope for the same.
Grokster settled its copyright lawsuit for $50 million and is scheduled to re-emerge as a licensed service, while executives at MetaMachine's eDonkey have also opted to transform.
Grokster to Users: "You Are Not Anonymous"
Excerpted from TechWebNews Report by Antone Gonsalves
Grokster has beefed up its site's warning against illegal copying of music and movies, in preparation for launching a legal service. Visitors to Grokster now see their own IP address with the warning that it has been logged.
"Don't think you can't get caught," the site says. "You are not anonymous."
The page also includes links to get more information on copyright law from the MPAA and Music United for Strong Internet Copyright Coalition.
The beefed up warning appeared as Grokster prepares to re-launch as a legal file-sharing service. In shutting down the site in November, Grokster said its new legal service, called Grokster 3G, would be available soon, and offered an e-mail address to anyone who wanted to participate in the upcoming beta.
Website Publishes P2P Photos
Excerpted from IDG News Report by Jeremy Kirk
Fitography.com is an example of how the Internet can be both prying and surprising. Since it started December 30th, reams of searchable photos have been posted, running the gamut from the mundane to the eccentric to the slightly disturbing: an outdoor barbecue, a crowd at a Pearl Jam concert, a group of US Army soldiers posing with actor Denzel Washington, a woman giving birth in an operating room.
In a news release announcing the site's launch, webmaster Brad Gosse of Yourbrain Media warns users of P2P networks such as Kazaa to be careful what photos they place in the shared folders of those applications. P2P programs typically have a folder that allow remote users to access and download that content, but users can turn off the file-sharing feature.
If photos are in the shared folder, "we will probably have them on our site sooner or later," he said in the release, which goes on to say that if someone finds a photo they do not want on fitography.com, it will be removed.
A couple of anonymous postings on the front page of fitography.com have pegged its potential for both trouble and mindless entertainment. Under the title "incriminating," one user wrote, "This stuff could get some people in trouble."
"What a great collection of pics," wrote another user. "I could waste hours every day trolling this web site. Good job. I have bookmarked this for when I get bored."
New Device Grabs Songs from FM Radio
Excerpted from Beta News Report
Time Trax Technologies announced Friday that it was launching a new product called the TraxCatcher, an MP3 player that sits on top of an FM radio dock. From there, it will record songs from the radio into "near perfectly cut" high-quality MP3 files.
The first model announced is the TraxCatcher Classic, retailing for $159.99 and providing basic functionality. According to the company, future higher-end models would include HD radio support, digital inputs and outputs, USB connectivity, versatile MP3 docking capabilities, clock-radio functionality and satellite radio receiver integration.
The company claims its product is legal due to the fair use laws in the United States. In what could be viewed as an effort to prevent piracy, the device will embed product serial numbers within that file to track copies that make it onto P2P networks.
"We want input as we shape our future. We aren't interested in being a rogue trailblazer," CEO Elliott Frutkin said. "Time Trax wants to be a welcome partner to the recording industry."
P2P User Political Party in Sweden
Excerpted from Afterdawn Report
A new political party has been set up in Sweden that plans to participate in the country's upcoming general elections. The party is called Piratpartiet and it aims to remove copyright laws from Sweden.
The party plans to stop Sweden's participation in international copyright organizations, including WIPO and WTO, and to make it illegal to put any restrictions on distribution of digital content (in form of DRM, copy protection, etc.).
The party also states that it plans to uphold and push even further the strict privacy laws currently in place in Sweden and to make it illegal to track or monitor citizens' communications online and offline.
People behind the party have made it very clear that their idea is not a joke. To register an official party in Sweden, a party needs to get 1,500 signatures to support its cause.
The organization already managed to gather over 4,000 signatures in its first 24 hours and now is in process of validating the signatures. Once validated, it aims to register itself as an official party and to participate in the next general elections.
Coming Events of Interest
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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 contact CPTWG as soon as possible so that it can 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. Please click here for more information.
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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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