August 14, 2006
Volume 14, Issue 6
Altnet Tries on White Hat
Excerpted from Australian IT Report by Simon Hayes
He has long been an international man of mystery, but Altnet chief executive Kevin Bermeister looks like he has pulled off the greatest coup of his career after turning around his peer-to-peer (P2P) vessel, DCIA Member Altnet, changing course for the land of anti-piracy, and hauling aboard two of his biggest critics.
Motion Picture Association of America (MPAA) chief executive Dan Glickman and the luminaries behind the International Federation of Phonographic Industries (IFPI) have endorsed Mr. Bermeister’s plans to sell anti-piracy software.
It’s a huge step forward for the one-time Sega OziSoft founder, who left Sydney in 1999 for Los Angeles.
Just a week after Kazaa operator, Altnet business partner, and fellow DCIA Member Sharman Networks reached a $115 million settlement with the big record labels, the world has changed.
Sharman and Altnet are now the good guys, with Altnet having hired former Music Industry Piracy Investigations (MIPI) head Michael Speck as its enforcement head. The music industry’s former head pirate hunter said Altnet’s technology is just what the industry needs.
"Altnet didn’t sit around and wait for the Kazaa case to finish, it set about developing a technical solution to the problem," he said.
The technology that everyone’s getting so excited about is known as the Global File Registry (GFR). It is essentially a massive database of known infringing music contributed by copyright owners.
Altnet plans to ink deals with P2P networks and online content hosts, allowing them to run user requests against the database. Using hash file identifier technology patented by Altnet, GFR then substitutes an offer to buy a licensed copy for each request for an infringing file.
"It’s a powerful way of creating opportunities for the beneficiaries of unauthorized traffic to create legitimate business models," Mr. Speck said.
It has been a long time coming. "We believe GFR will usher in a new era of cooperation for online content and distribution industries, with artists and consumers standing to be the greatest beneficiaries," Mr. Bermeister said.
Mr. Speck said a technology fix was the only way forward. "No matter how clear the legal position was, there wasn’t a technical solution," he said. "The alternative was for the music industry to go from one site to another forever."
IFPI has published an article by Mr. Bermeister calling on the "silent beneficiaries of online piracy" to change their tune.
The "know nothing, control nothing" approach, adopted by file-sharing networks and Internet Service Providers (ISPs) in courts around the world, is no longer good enough, he said.
MPAA chief executive Dan Glickman welcomed the technology. "The MPAA applauds the work Sharman and Altnet have done to develop and deploy new filtering technology," he said.
Report from CEO Marty Lafferty
 We urge an increased emphasis on technology-based solutions from the private sector to address fundamental issues raised by the ongoing "Net Neutrality" debate.
DCIA Members, P2P MEDIA SUMMIT (P2PMS) participants, and related companies now offer tools that make arguments about this issue moot.
Examples include Altnet's new Global File Registry (GFR), which not only reduces copyright infringement, but also alleviates network load (caused mostly by unauthorized redistribution of multiple versions of movies and TV shows), content accelerators such as Pando Networks with a highly innovative implementation of swarming technology, efficiency improvements such as CacheLogic's new P2P plus caching solution, VelociX, and live P2P streaming from RawFlow.
These promise to enable much more efficient redistribution of both licensed copyrighted content and the growing amount of legitimate consumer generated content.
As previously noted, defining a role (with responsibilities and remuneration) for Internet Service Providers (ISPs) in various P2P distribution business models is the next step.
We are pleased to participate this week in Building Blocks 2006 in San Jose, CA from August 15th through 17th and the Bandwidth Conference in San Francisco, CA from August 17th through 19th.
Moderating the Building Blocks Mobile Music panel on Tuesday will be MediaPass Networks' CEO Daniel Harris. MediaPass reaches millions of online visitors annually and has routinely been entrusted with the video assets of the four major music labels.
Participating in our Next Generation P2P panel on Thursday will be three DCIA Member senior executives:
INTENT MediaWorks’ Founder & CEO Les Ottolenghi. INTENT is forging the way for profitable rights-managed digital media distribution. Its technology suite combines the easy access of P2P file-sharing networks, the power of search optimization, and the magnetic nature of online social networks.
INTENT MediaWorks is the recipient of the 2006 DCIA Innovator’s Award, presented annually to that company which epitomizes the overall advancement of distributed computing technologies for commercial purposes.
Shared Media Licensing’s President John Beezer. Shared Media Licensing, founded by a group of musicians and software developers, created its Weed technology to facilitate a unique business model for file sharing on the Internet.
Digital Containers’ CEO Chip Venters. Digital Containers owns patented solutions that support secure file and media delivery, tracking, authorization, certification, and communication of transactional data to trusted third parties across the Internet as the foundation for super-distribution.
Speaking on the Micro-payments & Micro-economies panel Thursday will be two DCIA Members:
Javien Digital Payment Solutions’ CEO Leslie Poole. On the forefront of the online payment industry, Javien is an experienced leader in the paid digital content arena. Javien’s Software as a Service (SaaS) approach has become popular because of its ease-of-use and because it puts the responsibility of maintaining and supporting the software on the experts who developed it.
P2P Cash’s President Tom Meredith. P2P Cash is an emerging financial services firm specializing in online and electronic cash-equivalent payments. P2P Cash’s network leverages the existing financial infrastructure of customers’ bank accounts, credit cards, and debit cards to create a highly secure, real-time payment solution with worldwide applications.
Speaking on the Music Industry Morphs panel also on Thursday will be DCIA Member 33rd Street Records' President Morty Wiggins. 33rd Street is a boutique label with a strong emphasis on artist development in the retail marketplace. It offers artists more focused attention, greater creative control, and the opportunity to earn royalties at a lower sales point.
Bob Way and Clay Price of our newest DCIA Member, HackBack Media, will also be present at Building Blocks 2006.
Terry McBride, CEO of DCIA Member Nettwerk Music Group will be the featured keynote speaker on Friday at the Bandwidth Conference. Nettwerk Management exclusive clients include such multi-million selling artists as Avril Lavigne, Barenaked Ladies, Billy Talent, Dido, Sarah McLachlan, Stereophonics, and Sum 41. Nettwerk Productions has been responsible for the release of over 400 albums that have amassed worldwide sales in excess of 100 million.
33rd Street Records’ Morty Wiggins will speak on the Fast Forward: Future Label panel Friday. And finally, we will also participate in the That's Entertainment panel on Saturday.
Please call or e-mail DCIA Member Services leader Karen Kaplowitz at 888-890-4240 or karen@dcia.info or me at 410-476-7965 or marty@dcia.info if you would like to meet with one or more DCIA Members at these conferences. Share wisely, and take care.
CacheLogic Builds P2P Content Network
Excerpted from Light Reading Report by Ray Le Maistre
Caching technology specialist and P2PMS participant CacheLogic is making an ambitious bid to position itself as a video distribution player for content owners and service providers alike by partnering with P2P firm BitTorrent and building a global network of content storage points.
CacheLogic has always approached P2P differently from other companies. While rivals built systems that could identify and block P2P traffic, helping network operators reduce network congestion, CacheLogic developed technology that could store the P2P files and so make them more easily and readily available to end users.
Now the company is using that approach to help content owners and service providers distribute paid-for content to broadband customers.
CacheLogic has developed what it calls VelociX, a media delivery platform that combines P2P technology with a global network of content caches built using the vendor’s P2P Management Solution.
These caches are managed by a distribution control technology, developed with BitTorrent, called Cache Discovery Protocol (CDP), an open standards-based protocol that enables P2P clients to locate the nearest VelociX cache.
From these caches, large media files – such as movies, TV programs, and games – can be downloaded over a broadband connection in minutes instead of hours using P2P clients from BitTorrent, fellow P2PMS participant RawFlow, and others.
CacheLogic CTO Andrew Parker says P2P, long associated in the video world with copyright-infringing file sharing, is now being embraced as a legitimate distribution mechanism, and both content owners and service providers are interested in the approach.
There’s certainly evidence that P2P is being taken seriously by some of the world’s largest entertainment and TV/video services companies. The British Broadcasting Corporation (BBC) has been trialing P2P-based services for some time; AOL has embraced the concept for its online TV services; and UK cable giant NTL engaged in a trial earlier this year with CacheLogic and BitTorrent as its technology partners.
And in recent weeks there has been a welter of P2P video news, including news that DCIA Member Skype founders Niklas Zennstrom and Janus Friis are developing P2P-based video distribution technology under the codename "Project Venice."
So what exactly has CacheLogic done? Parker says the company is currently building out its physical network of caches in the metro locations of very large global network providers, none of which he can name at present. By the end of this year 17 of these nodes will be in operation, with six in Europe, five in the US, one in Latin America, and five in Asia/Pacific (including Australia).
This process is costing millions of dollars, and is funded by the company’s recent $20 million round of backing.
In addition, Cache Discovery Protocol (CDP) has been integrated into BitTorrent’s and RawFlow’s latest P2P clients, enabling them to interact with the VelociX network. CacheLogic says other P2P client companies are set to follow suit.
Then, all CacheLogic needs are media owners prepared to feed their content into the VelociX caching points and service providers, such as ISPs and telecom operators, prepared to use the network as a way of distributing content to their broadband subscribers.
But why would these companies sign up to CacheLogic’s approach? For media companies, it’s a way of distributing their entire content catalogs to consumers without having to physically package and distribute disks such as DVDs. CacheLogic guarantees the security of the content and keeps records of storage and usage.
For service providers it’s a bandwidth-efficient way of offering revenue-generating and legal content downloads without having to build their own distribution architecture and store content.
CacheLogic plans to charge content owners a small storage charge for hosting their products and then generate revenues from each gigabyte of content delivered from VelociX to an end user.
The company’s recently appointed CEO, Pat Chapman-Pincher, says the company has had positive feedback from both media companies and service providers, but "now we have to show proof-of-concept and show the platform running in anger."
Clearly, persuading companies to sign up to the concept will be the toughest part of the process, especially as there are already alternative content distribution platforms in existence, and many service providers are building their own content delivery platforms with the likes of Microsoft.
But Parker says Chapman-Pincher’s name and experience – she was previously president of global ISP UUNet, which was part of WorldCom – is helping to open doors, and says the company will be announcing customers and partners during the rest of 2006.
In a separate piece of news, CacheLogic has added Thailand’s top ISP True Internet as a new customer for its P2P Management Solution and CDP technology. True Internet will use the platform to manage P2P traffic on its network and to distribute content to its subscribers.
So while CacheLogic says it can’t name any names at present, True Internet looks like a prime candidate to hook up to the VelociX network, while NTL also looks to be a strong prospect.
YouTube Partners with Ad Networks
Excerpted from Online Media Daily Report by Erik Sass
YouTube, the popular online file-sharing site, has quietly started accepting rich media banner ads from networks including AOL’s Advertising.com and behavioral targeting company Tacoda.
Curt Viebranz, CEO of Tacoda, said the relationship with YouTube is very recent; the company has only served ads on the site for about one week, he said. The Advertising.com relationship also appeared to be new.
As of late Wednesday, the site displayed horizontal banner ads at the top of some view pages, and vertical ads to the right – all apparently placed by ad networks; the site also continued to display text ads by Google.
YouTube’s deals with ad networks appear to signal that the video site is beefing up efforts to sell ad inventory. Until recently, the site was monetized solely via Google pay-per-click links and a few partnerships with movie studios.
Disney Online recently ran rich media banner ads on every view page to promote the "Pirates of the Caribbean" sequel, marking the first time a major brand advertised on the site. Currently, the YouTube "home page" is giving an exclusive position to an ad for a new movie "Pulse" from Dimension Films.
EMI Music Publishing Licenses Qtrax
EMI Music Publishing, the world’s largest music publishing organization, and LTDnetwork, recipient of the 2006 DCIA Trendsetter’s Award, announced that EMI has licensed its music publishing properties for listening and downloading on LTDnetwork’s Qtrax P2P music network.
Qtrax is a groundbreaking ad-supported P2P digital content distribution system designed to provide for authorized sharing, distribution, and intellectual-property protection of content while driving new revenue streams for licensed P2P distribution of EMI’s prestigious catalog of recorded music.
"We are delighted to support Qtrax’s innovative approach; it fits perfectly into the EMI Music Publishing strategy of embracing new, precedent setting business models that have the potential to expand the market for music. Qtrax presents a legitimate way to deliver the music of our roster of songwriters to more music fans in a P2P distribution model designed to ensure both rights protection and writer/publisher compensation from the substantial pool of internet advertising dollars. The Qtrax ad-supported model gives us yet another important vehicle from which we can continue to maximize the earning potential and expand the reach of the world’s largest publishing company," said Roger Faxon, Co-CEO of EMI Music Publishing.
"We are very pleased to have EMI Music Publishing as our partner in pioneering new ways to enhance and create new royalty streams for writers and music publishers," said Allan Klepfisz, President & CEO of Brilliant Technologies Corporation, LTDnetworks’ parent company.
"EMI understands the sometimes competing requirements of fans, artists, and copyright owners and the leadership role and responsibility they have to expand catalog exposure while protecting the rights of their writer and publisher partners. We are proud to work with EMI to pioneer new revenue streams and believe that Qtrax will represent a long-overdue ‘common ground’ meeting the disparate needs of creators and consumers in the profound marketplace that is P2P."
Hold the Arrogance Please
Excerpted from Online Spin Report by Dave Morgan
The online ad industry is booming. Revenues are way up. Salaries are way up. Traditional media is in disarray. Traditional media executives are scurrying to develop "digital strategies" to save their companies and their jobs. Venture capitalists – and their money – are everywhere, and the valuations that they are paying are skyrocketing. Top business magazines are turning our entrepreneurs into poster boys and girls. Good feelings are flowing.
We’ve seen this movie before... in 1999. Back then, we didn’t like how the movie ended. The bursting of the dot-com bubble caused an awful lot of pain.
Of course, there’s a lot that’s different this time around. Online advertising actually works now! It’s delivering results and ROI that have never been seen in this industry before. Our advertisers are traditional marketers, not dot-com start-ups. We have real audiences and, in many cases, bigger audiences than broadcast and print. We have seasoned executives. Many have been in online advertising for 10 years now, and some of us for 15 (yes, back before the web, when we were selling ads on proprietary online services, bulletin boards, and information voice response systems, aka, audiotext).
It’s great being the belle of the ball, but we should take to heart some lessons from the last time around.
We have a long way to go yet. It’s great that our industry is doing well. It’s great that we’ve had some recent success, but the game is far from over. This is no time to be celebrating victory. It’s too premature.
We have a lot to learn. Ten and fifteen-year track records in advertising make us babies compared to the leaders in other media. We have so much to learn yet about how clients operate, how to deliver great results year in and year out, how to provide consistently great customer service, and how to build long-term sustainable businesses. We can’t forget that we really know so little yet of what we will need to know to be truly successful.
Our market positions are tenuous. Many still wonder if online advertising is just the newest flavor of the month. It’s hard to believe when you are a $12 billion annual industry about to be a $16 billion one, but it’s true. And, unfortunately, many that are uncertain of our continued success are the same ones that fund our industry – agencies, investors, and even the marketers themselves. Many of them are still wondering if something better might come along next month or next year. Many of them will abandon us in a second if they find something better or if we’re hit with another ad recession. Traditional advertising and media companies may be slow and cumbersome, but they’ve all weathered their share of recessions and survived the fickle attentions of clients and investors.
Arrogance is destructive. There is nothing wrong with being confident. There is nothing wrong with being a bit cocky. There is nothing wrong with showing some swagger. However, nothing good comes from arrogance. Last time around, many in the online advertising industry were arrogant idiots. They did some stupid, unforgivable things. They did some dishonest and illegal things, for which we’re still paying the price. Many people were alienated. We cannot afford to do that again.
We’ve seen this movie before. It’s going to turn out much, much better this time, particularly if we stay focused, work for the long term, and keep our egos in check.
PlayFirst Releases Two More Mac Games
Excerpted from MacNN Report
DCIA Member PlayFirst has released two new Mac games, adding to its expanding library of Mac-compatible games.
The first, Diner Dash 2: Restaurant Rescue ($20) was developed internally by PlayFirst and follows returning character, Flo, trying to save four friends from the Mr. Big Corp. Players must manage several new customer types including the Family, Bookworm, Fitness Fanatic, and Cell-Phone Addict. Diner Dash 2 also introduces new obstacles on the restaurant floor and options to customize the decor of each restaurant.
The second game, Egg vs. Chicken ($20) developed by Gamelab is a combination strategy and action puzzle game focused on a small team of runaway eggs taking on a mighty army of "marauding" chickens as it travels through time to resolve the riddle, "Which came first?" With a traditional slide puzzle layout, players must slip their eggs into position, and then launch attacks against "ruthless roosters" and "harrowing hens."
Both games require a G4/G5/Intel processor running at 850MHz or faster and Mac OS X 10.3.9 or later. A free download allowing 60 minutes of gameplay is available online.
Digital River Extends Deal with Uniblue
DCIA Member Digital River, a global leader in e-commerce outsourcing, has extended its e-commerce agreement with Uniblue Systems, a leading provider of utility and backup-and-recovery management software for the SoHo and SMB markets.
Based on the agreement, Digital River will add new global e-commerce capabilities to Uniblue’s e-commerce site to further support the online marketing, sale and delivery of Uniblue’s software programs, including WinBackup, WinTasks, Registry Booster and SpeedUpMyPC. The enhanced site, which is scheduled to launch this fall, will be located at www.uniblue.com.
"We are pleased to expand our relationship with Uniblue, a company that has become one of our key clients," said Don Peterson, Digital River’s Senior Vice President of Global Client Development. "We will continue to leverage our global e-commerce and marketing expertise to help Uniblue create localized buying experiences for its worldwide customer base and further expand its online sales opportunities."
By implementing Digital River’s global e-commerce capabilities and tools, Uniblue can create a global footprint and enable online shoppers to view its upcoming site in multiple European and Asia Pacific languages. In addition, customers will be able to make their software purchases using local currencies and regionally-preferred payment methods. To help Uniblue create multiple online sales channels for its software, Digital River also will launch an affiliate program for Uniblue through the Digital River oneNetwork online marketplace.
Sony’s "mylo" Features Skype
Sony is launching its first Wi-Fi broadband communication and entertainment device to capitalize on the growth of wireless Internet access. The new mylo personal communicator is capable of operating in any open 802.11b wireless network, often found on college campuses, in public spaces, and within private homes around the country.
The product is designed for people who use instant messaging as a primary form of communication and networking for their social life. The name mylo stands for "my life online" and the communicator lets users access instant messaging, browse the Internet, listen to music, send e-mails, and view photos concurrently.
The device, available in black or white, comes embedded with DCIA Member Skype's Internet-based phone-calling software and does not require initial computer setup or a monthly service contract.
Small enough for a pocket or purse, the slim, oblong-shaped device features a 2.4 inch color LCD (measured diagonally) with a slide out QWERTY keyboard for comfortable and quick thumb typing.
"The mylo personal communicator puts the fun parts of a computer in the palm of your hand," said John Kodera, Director of Product Marketing for Personal Communication Devices at Sony Electronics. "It’s ideal for people who want to stay connected to their online friends and family, but not be weighed down by a PC or buffeted by charges for IM and texting on cell-phones."
The mylo personal communicator boots up in seconds and can scan for available wireless networks right away. The "What’s Up" screen serves as the hub, storing up to 90 of users’ friends’ avatars so they can quickly see who’s online. Users can store up to nine online identities per person which allows them to first choose who they want to chat with then easily initiate conversations using their preferred application.
The communicator comes with Skype software built into it, allowing registered Skype users to make free Internet calls with the 113 million other Skype users worldwide. For a limited time, Skype is offering free SkypeOut calls from United States and Canada to most phone numbers in the United States or Canada.
The mylo personal communicator will be available in September for about $350 online at www.sonystyle.com and at authorized dealers nationwide. For more information about the product, please visit www.sony.com/mylo.
Wi-Fi User Lawsuit Dropped
Excerpted from Digital Media Wire Report
The Recording Industry Association of America (RIAA) was recently compelled to drop one of its copyright infringement lawsuits after the defendant argued that the RIAA could not definitively prove she was the person who shared unauthorized music files online.
Palm Desert, CA resident Tammie Marson and attorney Seyamack Kouretchian of Coast Law Group made two arguments in Virgin v. Marson: since she was a cheerleading teacher and had many teenagers in her house, it could have been one of them using file-sharing networks for unauthorized file sharing; more interestingly, Marson’s computer was also connected to an unsecured Wi-Fi network, meaning any neighbors or someone else within range could have used the account to share infringing music.
"The best they could ever prove was somebody had used Tammie Marson’s internet account to download the music or make it available," Kouretchian said.
Coming Events of Interest
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Building Blocks 2006 – August 15th–17th in San Jose, CA. The DCIA is pleased to participate in this premier event for transforming entertainment, communication technologies and the global communications network: TV, cable, telco, consumer electronics, mobile, broadband, search, e-mail, VoIP, RSS, blogs and websites: "Disruptive Thinking – Change Agents That Transform the World –Where Content is King and Technology Rules."
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The Bandwidth Conference – August 18th-19th at the Regency Center in San Francisco, CA. The DCIA is pleased to participate in this event for professionals in the music and technology industries. The focus of this conference is an exploration of current issues as well as future trends through panels, speakers, and opportunities to meet one-on-one with others.
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2006 Word of Mouth Marketing Forum – September 21st–22nd in Arlington, VA. Learn the ins and outs of one of the most innovative and efficient marketing techniques. New tools and technology have made Word of Mouth Marketing one of the best strategic tools marketers can use to build brand awareness and customer loyalty.
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OMMA Awards– September 26th at the Marriot Marquis in New York, NY. The OMMA Awards honor the brand marketers, agencies and content providers who continue to push the potential of online advertising creative. The OMMA Awards celebrate the year’s most innovative and brilliant creative work in 27 categories. Submission deadline is July 28th.
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Digital Music Forum West – October 4th-5th in West Hollywood, CA. Don’t miss the opportunity to participate in the premier event for music industry decision-makers focused on business models and legal issues impacting music. For sponsor packages and to submit speaker proposals, please contact Tinzar Than Sherman at 323-822-0936 or by e-mail at tinzar@digitalmediawire.com.
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6th Annual Future of Music Policy Summit – October 5th–7th at McGill University in Montreal, Canada. FMC sees hosting this Summit in Canada as an opportunity to expand its perspective on a range of issues – from copyright, to sampling, to digital royalties, to radio, to how various musical communities are managing change. The music marketplace has become truly global, and some of the biggest challenges are navigating the assortment of legal and licensing schemes that encourage and/or impede the promotion and sale of music.
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