February 13, 2006
Volume 12, Issue 4
P2P Usage Reaches Record High
Following the trend-line established during the last two months of 2005, steady expansion of the online file-sharing universe now continues in 2006. For January, peer-to-peer (P2P) software usage set an all-time high, according to DCIA industry data resource BigChampagne.
January realized 9.67 million average simultaneous P2P users globally; the previous global high having been 9.62 million in August. In the US, there were 6.99 million average simultaneous P2P users in January; the previous high having been 6.97 million in December.
Year-over-year, P2P growth from January 2005 to January 2006 has been 1.28 million average simultaneous users, or 14% for the US and 15% globally. Over the past two years, US growth in P2P users was 98% while global growth was 60%.
Please click here for Slyck.com's graph of global P2P user numbers and here for US figures. A detailed chart from Digital Music News can be viewed here. These numbers do not include the BitTorrent protocol, which now significantly exceeds traditional P2P usage (please see "NTL Signs BitTorrent" below).
Way Ahead of Other Media
Excerpted from Media Life Report by Heidi Dawley
Internet users now spend as much time online as they do watching TV, and far more time than they spend with other media, says a new study from JupiterResearch. The Internet is becoming the most important medium for a large segment of the American public.
"The impact of online is bigger than we realized," said Barry Parr, a San Francisco-based media analyst at JupiterResearch. "The Internet is tremendously influential. It has the kind of influence that we would have attributed to TV in the past."
The report was based on a survey of 3,000 regular users, defined as people who go online at least once a month. It found that on average users are now spending 14 hours a week on the Internet, which is equal to the amount of time that they spend watching TV.
By comparison, on average each week they spend one hour reading magazines, two hours perusing newspapers, and five hours tuning into the radio. In fact, they spend more time online than they do with all those other media combined.
What's more, the report finds that even the most avid readers of newspapers and magazines clock less time reading these publications than they do online.
French Court Rules for P2P
Excerpted from Digital Media Wire Report
The District Court of Paris has ruled that downloading content from and uploading content to P2P file-sharing networks is legal, as long as it is for personal use.
The French record label trade group Société Civile des Producteurs Phonographiques (SCPP) sued a Frenchman in late 2004 for allegedly offering 1,212 music tracks for download on file-sharing networks.
The District Court of Paris found that the acts of downloading and uploading on P2P networks constituted private non-commercial copying.
The SCPP is appealing the ruling. Meanwhile, the French Parliament is also weighing a proposal to charge file swappers a $6 per month voluntary surcharge for accessing P2P networks.
Report from CEO Marty Lafferty
 Congratulations to Digital Hollywood's Victor Harwood for this year's highly stimulating Media Summit New York (MSNY) attended by more than 1,200 delegates. We are very grateful to INTENT MediaWorks for sponsoring our MSNY networking event and to Scooter Scudieri, the Internet's First Rock Star, for performing live.
The session in which we participated, The Piracy Freight Train: As Entertainment, The Law & Technology Collide, was moderated by David Leibowitz, Managing Partner, CH Potomac.
David introduced our panel noting, "While there may be no short term fix when it comes to evolving digital technologies and their impact on music, film, and information content distribution, it is becoming a more sophisticated and complex relationship. As broadband grows, with it come not only threats to rights holders, but also potential solutions and new attitudes in public behavior. We bring together a group of the primary players in the field, looking to exchange ideas and give us a roadmap for the future."
Participants included Fritz Attaway, EVP & Washington General Counsel, Motion Picture Association of America (MPAA); Randall Crockett, SVP, DRM Networks; Michael Petricone, VP Government Relations, Consumer Electronics Association (CEA); and Mike Weiss, President & CEO, StreamCast Networks, developer and distributor of Morpheus.
Fritz began his remarks by observing that digital copyright infringement has not yet affected the bottom lines of major motion picture studios and that there has been a dramatic shift in momentum since the Supreme Court's MGM v. Grokster decision.
Prior to that ruling, there was a sense that the technology sector was sometimes trying to help consumers "beat the system;" whereas, post-Grokster, there is more of a sense of "how do we all work together." Fritz complimented the DCIA's efforts in that regard.
Randall outlined DRM Networks' role in online payment processing services for enabling subscriptions and paid downloads across many digital platforms.
Michael described the increasingly symbiotic relationship between the consumer electronics and motion picture industries, but also noted that there are still differences – as in the case of digital rights management (DRM) – where, on the business-side, constructive progress is being made; but on the legislative side, serious conflicts remain.
Mike Weiss quipped that at times he has felt as though Morpheus' principal contribution has been as a "litigation aggregator" and, more seriously, that StreamCast's focus increasingly centers on the conversion of downloaders into consumers who will help monetize digital media.
We outlined the three "Fs" of secure file sharing: file protection, filtering, and forensics, which have been detailed recently in DCINFO.
Mike referenced research that shows P2P users can become the best of entertainment consumers, provided that DRM is used to manage rather than restrict rights. Randall added that a key question with respect to content for which a user has acquired a license is, "At what point does fair-use end and infringement begin?"
Fritz concluded that the purpose of DRM should not be to limit what consumers can do, but rather to ensure that consumers "keep the deal that they have struck" in acquiring a given file. To date, an acknowledged problem has been that some DRM implementations have been "too blunt an instrument." Michael cited the SonyBMG root-kit fiasco.
We noted that if current P2P traffic were monetized using advertising-supported models, so that basic non-DRM licensed content continued to be free to users, at a $10 cost-per-thousand (CPM) for interactive ads – tips, tails, banners, and tiles integrated-within and wrapped-around files of copyrighted entertainment works – the P2P distribution channel could in theory generate $288 million per day.
Like a foreshortened history of the TV industry, building upon this free-to-user core business, DRM-supported P2P subscription models and P2P paid download models could then be layered onto the free P2P ad-supported licensed content offerings when ready, much the way premium channels like HBO and pay-per-view (PPV) and later video-on-demand (VOD) were added as cable and satellite subscription television evolved after free over-the-air broadcasting had been well established.
Michael noted that more than 200 million PCs globally have P2P software and that it is very important to develop compelling business models to serve that enormous user base.
During audience questions, Steve Gordon, author of The Future of the Music Business, asked whether panelists would support compulsory licensing for P2P, such as that being considered in France; panelists generally agreed that there are potentially more promising solutions than this approach.
DCIA Best Practices leader Elaine Reiss asked whether, given difficulties the private sector has experienced in defining fair-use for the digital realm, would panelists be in favor of Congress determining such parameters; there was likewise a general consensus against that approach. Share wisely, and take care.
MP3 Developer Explores Watermarks
The Fraunhofer Integrated Publication and Information Systems Institute (IPSI), which originally developed the MP3 codec, plans to present a software prototype for tracking digitally watermarked MP3 files on P2P networks at CeBIT 2006 from March 9th-15th in Hannover, Germany.
One of the greatest challenges in the use of digital watermarks has been to trace redistributed content when it has been used in ways that infringe copyrights. IPSI's new system automatically examines files on P2P networks according to predefined criteria such as file type or file name.
Fraunhofer researchers see their watermarking technology and the associated developments currently emerging as an alternative to more restrictive DRM systems, which require special players and frequent connections to the Internet to validate content with online music providers.
"Our customers are all too aware that private users only have a limited budget for consumer electronics and would rather sell their watermark-protected files than promote the purchase of new hardware," explained Fraunhofer researcher Sascha Zmudzinski.
IPSI's digital media watermarks are also available for image and video data.
The DCIA has invited Fraunhofer IPSI to participate in the P2P Digital Watermark Working Group (PDWG) to further explore practical applications of this approach. Qualified interested parties can sign-up to participate or obtain more information by e-mailing pdwg@dcia.info.
Taking Aim at the Napster Armies
Excerpted from ATW Travel Technology Update by Michele McDonald
When 18-year-old Shawn "Napster" Fanning invented the software that turned the music industry on its head, he also engendered a vast community of young file swappers. There are 250 million registered users of P2P computing networks worldwide.
According to DCIA industry data resource BigChampagne, a market research company that measures consumption of digital media, more music is now acquired online than on CD. The phenomenon is spreading to other forms of entertainment as well.
DCIA Member INTENT MediaWorks is a distributor of licensed content: music, film, video, and written works, among users of P2P software applications. Many of its clients are independent artists seeking to promote their works directly to the Internet, but INTENT also works with businesses that want to distribute corporate information at the lowest possible cost.
Its own networks reach 20 million people, mostly of college age and evenly split between the genders. INTENT's executives view them as "an audience to whom no one is delivering travel products or services," said Richard Keefhaver, VP of e-Commerce for INTENT's Travel Division.
That INTENT has turned its sights on travel is no surprise: its founders are Les Ottolenghi and Glenn Martin, both graduates of AgentWare and Carlson Wagonlit Travel.
Next month, INTENT will roll out mytravelnetwork.com, where users can find travel information in "a social networking environment in which people are encouraged to share," Keefhaver said.
As envisioned, the site will provide a comprehensive index of information on destinations around the world that is available from other users as well as from destination management companies and other suppliers.
Martin, who is INTENT's Chief Operating Officer, said mytravelnetwork.com will make use of swarming technology similar to BitTorrent. "The software is smart enough to know that the same file is on different computers," he said, "so it will assemble a copy using pieces from each."
Skype & Google Invest in Start-Up
Google and DCIA Member Skype are investing in a Spanish start-up that plans to help hotspot owners charge for Wi-Fi access. FON's idea, floated just three months ago in a Web posting by founder Martin Varsavsky, is to sign up people who have Wi-Fi hotspots in one of two ways.
"Linus members," named after Linus Torvalds, who created the Linux software, would share their hotspot with other Linus members for free. "Bill members," named after Microsoft Corp. founder Bill Gates, would charge for access to their hotspot. FON would get some of that revenue and share it with Internet service providers (ISPs).
The network has gained 3,000 Linus members since going live in November. There is no software for Bill members, but Varsavsky expects it to be ready within four months.
Varsavsky wants to partner with ISPs to get them to allow their subscribers to set up FON hotspots. FON has signed up Glocalnet, a Swedish ISP, and is in talks with US companies.
"FON has a great idea to help people share Wi-Fi with one another to build a global unified broadband network, and we're happy to lend support," Skype Chief Executive Niklas Zennstrom said.
Digital River Supports Prima Games
DCIA Member Digital River, a global leader in e-commerce outsourcing, announced that it is providing e-commerce support for Prima Games, a division of Random House and the world's leading publisher of official game guides for computer and console games.
Digital River is managing the online sale and digital delivery of Prima Games' eGuide products through online retail, content, and portal sites in the Digital River oneNetwork online sales channel. Digital River's oneNetwork offers publishers the opportunity to generate increased visibility and incremental sales for their products through an established indirect sales channel.
Telcordia & Fixed-Mobile Convergence
DCIA Member Telcordia announced the launch of the industry's first commercially available IMS-based Fixed-mobile Convergence (FMC) offering, empowering operators worldwide to maximize the benefits of seamless mobility.
Part of the Telcordia Maestro IMS Portfolio, the newly launched Telcordia Seamless Mobility offering expands the reach and power of an operator's network allowing subscribers to use any device, at any time, over any network. Starting with, and extending well beyond basic Wi-Fi-Cellular roaming, Seamless Mobility helps enable operators to realize the financial and operational benefits of a converged network.
"True fixed-mobile convergence changes the underlying principles of an operator's business – enabling them to extend their reach, expand their profitability, and enhance their customers' experience," said Scott Erickson, EVP, Global Sales and Marketing, Telcordia Technologies. "By taking a leadership role in delivering on the promise of fixed-mobile convergence via IMS, Telcordia is empowering carriers to offer a better combination of coverage, quality, services, and price."
Between Rock and a Hard Place
Excerpted from Globe and Mail Report by Guy Dixon
Terry McBride, who runs the music conglomerate that manages Avril Lavigne, the Barenaked Ladies, and other big acts, came out in January against the whole idea of major labels suing fans who have downloaded songs.
His company, DCIA Member Nettwerk Music Group, will cover the legal costs of the Gruebel family in Arlington, TX, which is accused of having unauthorized copies of songs on the family computer. One of the songs is Lavigne's old hit Sk8er Boi.
"Major artists need to stop being silent and let their views be heard," McBride said. "I can't see any artist, who has all of the information in front of him, saying that it is a good idea to sue a 15-year-old fan."
Elisa Greubel, who is 15, contacted Nettwerk artist MC Lars who has a song called "Download This Song." The e-mail eventually found its way to McBride. "It's stupid to fight it. Embrace it and monetize it," McBride said.
"I don't think that the creative people are happy with their corporations' positions. They realize that suing the fans is not the right approach. But if they go public about it, they're going to lose their jobs. What is needed and what I want to create is a great dialogue," he said.
Go-Kart Records Total Shocker
DCIA Member Go-Kart Records announced that it will release a new album from The Shocker in North America on May 15th. The label's European division recently put out the record, produced by Faith No More's Dean Menta. The song "Body Count" from the EP along with additional songs can be streamed from the band's MySpace page.
The Shocker is fronted by guitarist/vocalist Jennifer Precious Finch of riot grrrl act L7. The band also features bassist Lisa Howe, drummer Quist, rhythm guitarist Ronnie James, and lead guitarist Adam Fuller. Finch formed the Los Angeles based act in 2002.
Opera Adds BitTorrent to Next-Gen Browser
Excerpted from eWeek Report by Matt Hines
Norwegian browser maker Opera Software has released a new preview version of its desktop software that includes the BitTorrent file-sharing system and the ability for users to build customized interface applications, also known as "widgets."
Widgets, first popularized in Apple's Mac OS X Tiger release, are applications built inside the browser – or in Apple's case a computer's dashboard – that allow users to create a visual interface for viewing specific information stored on their computers.
BitTorrent is an open-source, P2P protocol for distributing files designed to allow people to store and share large files across multiple computers rather than in one place.
Once someone has chosen to download a file using the system, Opera's Transfer Manager feature will handle the download, eliminating the need for someone to host BitTorrent's software on their own machine to access content stored in the system.
"It's one of the most important file transfer protocols out there in terms of how it saves memory on the server side," said company spokesman Thomas Ford.
ASCAP Joins Ad-Supported P2P Platform
Excerpted from Digital Music News Report
Performing rights organization ASCAP has recently jumped on board with an upcoming, ad-supported P2P service. The file-sharing concept is being developed by LTDnetwork, a subsidiary of Advanced Technology Industries. The P2P, called Qtrax, will allow users to freely trade licensed content, while providing filters to prevent the unlawful distribution of unlicensed, copyrighted materials. In recent comments to Digital Music News, a Qtrax representative indicated that BMI and V2 were also on board, and that the service will launch later this month.
Whether major labels will also join Qtrax is an open question, though the experiment falls outside of the models offered by other industry-approved P2Ps. That list includes iMesh and Peer Impact, which feature a-la-carte download charges within a modified peer-to-peer environment.
Meanwhile, Qtrax indicated that it will distribute advertising revenues to various rights holders, a plan that aims to capitalize on a sizeable Internet advertising market. ASCAP handles performances rights for over 230,000 composers, songwriters, lyricists, and music publishers in the US.
NTL Signs BitTorrent Deal
Excerpted from Reuters Report by Adam Pasick
Cable firm NTL is teaming up with BitTorrent Inc., the company behind the popular file-sharing software, to test a new service that will let users purchase movies and music video downloads.
The trial, which will also include technology from CacheLogic, comes as BitTorrent creator Bram Cohen works to establish the software as a legitimate means of distributing content.
The free software is currently one of the most popular ways to share copyright-infringing TV programs and movies. BitTorrent traffic is estimated to account for roughly a third of all Internet bandwidth, and an even higher proportion on NTL's network.
Cohen started BitTorrent Inc. last year – well after the software had become a hit with Internet users – and his company has entered talks with Hollywood and Internet service providers (ISPs) to find ways to use the P2P software to distribute authorized, paid downloads.
"We're working with rights holders and ISPs because we view ourselves at the center of a lot of the activity going on here," said BitTorrent Inc. Chief Operating Officer Ashwin Navin.
"Each country has a different dynamic around P2P, but I'd say Europe is slightly more progressive than the US," he added.
Coming Events of Interest
-
JPMorgan Small Cap Conference – DCIA Member Digital River's VP of Investor Relations, Bob Kleiber, will present at this major financial conference scheduled for February 15th at the Four Seasons Hotel in Philadelphia, PA. In the presentation, he will discuss the company's business strategy.
-
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.
-
Omma West Conference and Expo-Hollywood – March 27th-28th in Los Angeles. The rash of technology innovations and content syndication deals over the past year, coupled with consumer adoption of broadband, DVRs, VOD, and an unwavering insistence on media control, are taking the shape of an infrastructure the media industry's most forward thinking prophets have long heralded. The Internet is now becoming what it was meant to be – the distribution channel for all media.
-
Digital Hollywood Spring – An expanded agenda of events will be featured during the 17th Annual Digital Hollywood Spring at Loews Santa Monica Beach Hotel in Los Angeles, CA March 27th-30th. Digital Hollywood is the leading gathering of entertainment, media and technology executives. Digital Hollywood Spring 2006 will have tracks and panels of special relevance to the DCIA. Plan now to attend.
-
First Annual DCIA Conference & Expo – June 22nd, Tysons Corner, McLean, VA. Panel tracks at this first-ever global "P2P Media Summit" will cover policy, marketing, and technology issues affecting commercial development of the emerging file-sharing industry. Exhibits and demonstrations will feature industry-leading products and services. Plan now to attend. For sponsor packages and speaker information, please contact Karen Kaplowitz at 888-890-4240 or karen@dcia.info.
|
