November 6, 2006
Volume 15, Issue 6
GFR Surpasses File Verification Milestone
DCIA Member Altnet announced this week that it is well ahead of its timetable for incorporating unauthorized digital files into its Global File Registry (GFR) database, a major accomplishment in advancing its worldwide anti-piracy initiative.
The GFR database now holds over 2.6 million file hashes, each identifying an infringing version of a popular sound recording currently being distributed online. Going forward, the database will be capable of routinely completing in excess of 20 million file verifications per day and that number will continue to increase.
"Given the current performance and commitment from stakeholders, we expect to reach a real-time addition of 10 new infringing file hash identifiers to the GFR database every second. This will make GFR the industry’s most comprehensive database of copyrighted files," said Kevin Bermeister, CEO of Altnet, which developed GFR.
GFR incorporates methods for rapidly identifying the content of digital files, filtering out unlicensed results, identifying newly created infringing files, and substituting legitimate content, advertising, or copyright warnings for unauthorized results.
What makes GFR unique is its superior capacity to identify and filter infringing digital content, defeat infringer anti–enforcement activities, and substitute legitimate transactions for each attempt to infringe. This creates a powerful incentive for establishing legitimate business models.
Kevin Bermeister concluded, "Establishing a level playing field on the Internet by converting the illegitimate market into legitimate opportunities is the next challenge for content owners. Global File Registry now makes this goal a reality."
Ad-Supported Music Business Inevitable
Excerpted from MediaPost Report
Peer-to-peer (P2P) music file-sharing services are undertaking major transitions of their technologies and business models after the US Supreme Court ruled that companies enabling users to swap copyrighted files without permission could be sued. But the practice of swapping unlicensed music still thrives.
This year, between 300 million and 500 million unauthorized files were downloaded each day, according to measurement firm ArtistDirect – a fact that dwarfs authorized transactions from online download stores such as Apple’s iTunes, which, for the most part, remain unprofitable.
Enter the ad-supported music services, which are beginning to secure deals with the big record labels. QTRAX, distributed by DCIA Member LTDnetwork, for example, has secured such licensing agreements. SpiralFrog is also being created precisely with that idea in mind.
"It seems to us that it might be difficult for the music industry to carve itself out as the one area that isn’t advertiser-supported," said QTRAX Founder Allan Klepfisz, who thinks the transformation of the music business to an ad model is inevitable. Please click here for the full Business Week report.
Abacast Real-Time & On-Demand Streaming
DCIA Member Abacast, a leader in real-time streaming solutions, and Tukati, a leader in on-demand file delivery solutions, this week announced the unified DualGrid™ 1.0 Delivery Service, which enables content publishers to deliver live events and after-event archives as well as any other on-demand content using a single, low-cost, content delivery solution.
"We’re excited to launch the first unified P2P solution covering the spectrum of real-time and on-demand distribution," said Michael King, President of Abacast. "Combining these two proven platforms enables content publishers to make a single choice for reliable content distribution and obtain huge reductions in cost and improvements in performance."
DualGrid™ 1.0 enables customers to securely and reliably deliver higher volume, higher quality movie, music, and game content for up to 98% less than traditional content distribution networks (CDNs). Content publishers have multiple delivery options including real-time streaming, on-demand file distribution, progressive video delivery, and push delivery. Content demand and end-user performance metrics are offered in real-time, allowing marketing campaigns to be adjusted based on consumer usage patterns.
"Abacast and Tukati clearly understand the needs of content publishers for reliable, secure, large-scale content distribution that drives marketing and monetization," said Jim Kott, CEO of Tukati. "With DualGrid™ 1.0 we have leveraged our cumulative 10 years experience running large-scale, secure P2P networks to offer a single vendor solution with breakthrough capabilities in both real-time and on-demand content distribution."
DualGrid™ 1.0 will be available beginning November 15th. For more information, please visit www.dualgrid.com or e-mail sales@dualgrid.com.
Report from CEO Marty Lafferty
 Please read the Digital Watermarking Alliance’s (DWA) introductory white paper on prospective uses of digital watermarking in P2P and social network environments.
Members of the DWA include Cinea, Digimarc, GCS Research, Jura, MediaGrid, Media Sciences International, Philips Electronics, Signum, Teletrax, Thomson, Verance, and Verimatrix.
Their document provides a strong foundation for the current work of the P2P Digital Watermark Working Group (PDWG), chaired by DCIA Member INTENT MediaWorks CEO Les Ottolenghi.
Interested and qualified DFINFO readers are also invited to contribute your thoughts and suggestions to the PDWG by calling 410-476-7965 or e-mailing PDWG@dcia.info.
CDs and DVDs can be recorded and digitized from analog outputs or captured within digital buffers of sound/video cards, and turned into unprotected audio and video files that are easy to share. This makes it very difficult for P2P and social network operators to determine which files are copyrighted and require licenses in order to be shared, and which files are non-copyrighted and allowed to be shared freely.
Digital watermarking offers a way for rights holders both to enforce their rights and to serve consumer demand. Content owners can embed content identifiers and digital media serial numbers into audio and video material that can communicate ownership and usage rights in P2P and related social network communities, even after such content has been re-recorded and ripped.
Digital watermarks (DWMs) can also enable P2P software distributors to distinguish copyrighted from non-copyrighted content files within the existing distributed system architecture and enable licensed distribution of copyrighted songs, movies, TV programs, games and related items.
DWMs may be embedded into, and read from, video, audio and still images. For video content, watermarks in the audio, video or both the audio and video tracks may be used. DWM data is not perceptible to the human ear (or eye), but can be read by computers. The digital data is secured through secret keys similar to encryption keys.
DWM data can include copyright control information, content classification flags for filtering, content identification (content ID) and digital media serial numbers, which can enable downstream forensic identification. This data can enable numerous applications, including copyright communication, content filtering, copy protection, broadcast monitoring, Internet monitoring, forensic tracking, authentication, digital asset management, digital rights management (DRM), and enhanced e-commerce.
Copyright communication, content filtering, DRM, and enhanced e-commerce are most applicable to P2P and social networks.
Digital watermarking enables the re-association of basic metadata (e.g., artist, song, or movie copyright) that is lost during the ripping process. It also opens the door to enhanced consumer experiences by providing additional related content in a connected-media fashion that enhances the entertainment experience and links users to additional information or commerce opportunities.
DWM systems have an embedder that adds digital data into the content, and a detector that reads the data. The DWM detector can be securely integrated with P2P software. The detector would be used to look for a DWM on each audio or video file that the user has enabled the software to share when it indexes these assets to identify them for sharing.
Adding DWM detection to the system would have negligible effects to users, especially given that it fits with the existing distributed and run-in-the-background architecture of current P2P and social network software.
The copyright DWM with the content ID can be used by the P2P or online provider to determine rights information, as well as other information about that file and related information, via a remote and potentially distributed database (i.e., to secure and enhance the content), such as that currently being developed by the Global File Registry (GFR)
This architecture enables three usage models: (1) copyright communication, (2) licensed content, and (3) enhanced content.
The copyright communication usage model would enable P2P and social network providers to identify content where a copyright DWM has been detected during the indexing process.
The licensed content usage model would enable P2P and social network providers to detect copyright DWMs during the indexing process, look for content IDs, and use such IDs to look-up rights information about that content and secure a copy (possibly a higher quality version) in a licensed form or DRM secured package to offer consumers.
The enhanced content usage model would enable P2P and social network providers to detect the copyright DWM during the indexing process and use the content ID to link that user and others searching for that content to related content and information. This enhanced content usage model could work synergistically with the licensed content usage model, thus only linking users to more information for songs, movies, TV programs, or games that the P2P or social network provider has the legal right to offer.
Given the distributed architecture of the P2P or social network system, DWMs are synergistic and complementary with other methods of identifying and securing files, such as audio and video fingerprinting, hash-code identification, and metadata header flags, including those used by the GFR.
DWMs are in extensive use around the world, with billions of digitally watermarked objects and hundreds of millions of detectors in use for copy protection, copyright notification, authentication, and forensic tracking applications.
Digital watermarking can enhance P2P and social networks, helping to enable P2P providers to interoperate productively with existing value-chain entities, such as record labels and motion picture studios, to market legitimate copyrighted content and related materials. Share wisely, and take care.
RawFlow Adds BT Entertainment CEO to Board
DCIA Member RawFlow, a leading provider of live P2P streaming technology, announced the addition of former BT Entertainment CEO Andrew Burke to its corporate board. BT PLC is one of Europe’s leading telecommunications companies serving more than 20 million business and residential customers with more than 29 million exchange lines in the UK. BT Entertainment is the part of BT that drives its broadband activities within the entertainment and education industries.
RawFlow’s Founder & CEO, Mikkel Dissing, said, "We are delighted to bring someone of Andrew Burke’s caliber to the board. Andrew brings highly relevant, substantial experience from the media and entertainment sector, combined with a strong background and understanding of telecoms, Internet networks, and technology."
Andrew Burke commented on his appointment, "The RawFlow P2P streaming technology is the perfect solution to power the increasing move to live broadcast video over the Internet. Having worked extensively in the IPTV space for the last three years, I am very much impressed by the capabilities offered to media owners by RawFlow’s innovative capabilities, and I’m delighted now to be part of the talented team that is powering this exciting video revolution forward."
Big Labels Wake up to Online Music Reality
Excerpted from Ottawa Citizen Report by Carly Weeks
For years, major music labels have waged a doomed war against file sharing in the hope lawsuits and secretly corrupted files would convince millions who download infringing music to return to the record store.
But new relationships among music companies, advertisers, and file-sharing networks are signaling a major change in the corporate attitude toward unauthorized downloads. Instead of trying in vain to stop a trend that has spread like wildfire, record giants have finally figured out that when it comes to music piracy, "If you can’t beat ‘em, join ‘em."
"What you’re seeing is a shift in the business model of how music gets paid for," said Kaan Yigit, President of Solutions Research Group Consultants, a Toronto-based market research firm. "When an industry sees its fortunes sagging for whatever reason, it will look for other avenues to bolster its revenue streams. It’s as simple as that."
That means many record labels are planning to let users download their content for free in exchange for putting advertisements, sponsorships, or promotional offers in audio and video files and on P2P networks.
Instead of watching as file sharing and unlicensed downloads continue to eat up their profits, many labels have decided to focus on the tremendous advertising opportunities that exist on P2P networks, which are visited by millions of people a day. It’s a phenomenon many experts agree will be the new landscape of music in the next few years.
"In the last six months to a year, we’ve seen a lot more aggressive plays by various record labels to become part of what is obviously a digital revolution," said Yigit.
For instance, a video clip from a recent Jay-Z concert that pops up on P2P networks is peppered with promotions for Coca-Cola. When users download the clip, they receive the content for free – but they’re also marketed to by one of the world’s most recognized corporations.
"The idea is, literally, the record company makes it available for free to download, but the site is completely ad-supported," Yigit said.
This summer, EMI Music – which represents popular artists including Coldplay, Kanye West, and James Blunt – announced it would become the first major music company to make its entire catalog available on QTRAX, a file-sharing network operated by DCIA Member LTDnetwork, supported entirely by ads.
Although QTRAX hasn’t launched yet, it has formed similar deals with Warner Music Group, TVT Records, and The Orchard, which markets independent music.
Kazaa Reportedly Settles with Music Publishers
Excerpted from Digital Media Wire Report
The NY Times reported this week that DCIA Member Sharman Networks, operator of the Kazaa file-sharing network, agreed to pay $10 million to music publishers to settle a copyright infringement lawsuit.
A "person with knowledge of the agreement" provided the figure, following the National Music Publishers’ Association’s (NMPA) announcement that a "substantial sum" would be paid by Kazaa to settle the 2001 lawsuit.
In July, Kazaa agreed to pay at least $115 million to settle similar copyright suits with record labels, and alter its service to filter copyrighted works.
DCINFO Editor’s Note: Sharman Networks has not yet commented on NMPA’s announcement.
YouTube Finds Rights Deals Frustrating
Excerpted from Wall Street Journal Report by Kevin J. Delaney, Ethan Smith, and Brooks Barnes
Videos of the hit rap song "Smack That" have been viewed more than half a million times on the popular website YouTube. That doesn’t include the countless amateur videos of young people lip-syncing to its infectious beat or ones where the song is used as a soundtrack for everything from pro soccer matches to original animation.
Most, if not all, of this has been done without the permission of the rappers, their record company, or the songwriter’s publishers. It is a common scenario on YouTube, one that the Internet’s hottest video-sharing site, concerned about lawsuits and loss of content that could derail it, has been working to resolve. The company is negotiating licensing agreements with TV and music companies, such as Universal Music Group (UMG), which owns the label that released "Smack That."
But, even with those deals in place, YouTube executives are finding it a slog to get all of the necessary permissions to license the songs and shows users are putting on its site. Most of YouTube’s agreements with record labels don’t address royalties for music publishers, who control the copyrights to the words and music underlying the recordings.
YouTube or its partners must locate parties ranging from studios to actors, and from music composers to the owners of venues, and get them to sign off. Where they don’t succeed, YouTube risks being hit with lawsuits or having to take popular content down.
"It’s such a mess because the entertainment companies have all of these valuable assets that are just locked up with so many people who need to sign off on them," says YouTube Chief Executive Chad Hurley. "I don’t know what it requires, if the government needs to be involved," Mr. Hurley laughs. "I don’t know."
YouTube officials say it takes down copyrighted material when owners inform them that it is posted on the site, which they believe protects them from liability. Earlier this week, Viacom asked that YouTube take down some of the company’s clips, including those featuring Comedy Central’s Jon Stewart and Stephen Colbert.
Viacom Clips Remain on YouTube
Excerpted from MediaPost Report
Late last week, Viacom pulled the plug on letting users view clips from Comedy Central shows on YouTube. Now, it looks like the media conglomerate has reneged. One can still find thousands of clips from "South Park," "The Daily Show," and "The Colbert Report" by doing a simple search on YouTube. This means Viacom and YouTube are probably working out a revenue share deal as we speak. On Monday, one business day after Viacom said it would pull the plug, Viacom sent Red Herring the following cryptic statement: "We want our audiences to be able to access our programming on every platform, and we’re interested in having it live on all forms of distribution in ways that protect our talented artists, our loyal customers, and our passionate audiences."
The statement says nothing about removing Comedy Central and other Viacom clips from YouTube. "I think we’ll see a lot of this kind of activity where companies may threaten to sue one day and end up happy partners the next," says Jupiter Research analyst Joe Laszlo. "All of the major media companies are still feeling their way."
Metacafe Launches Producer Rewards
Metacafe, the world’s largest independent video site, this week launched Producer Rewards, a new program that helps video creators gain recognition and earn money for their best work. Creators can collect $5 for every 1,000 views of their video clip on Metacafe in exchange for the non-exclusive right to distribute their work on any platform.
Any Producer Rewards video can skyrocket to the Metacafe front page based solely on content quality as determined by Metacafe’s proprietary VideoRank technology. Metacafe attracts a global audience of nearly 17 million viewers every month, and the top 200 videos on Metacafe receive more views than the top 200 videos on video-sharing site YouTube.
"Anyone can upload a clip to the web, but it remains extremely difficult to attract viewers and make money," said Arik Czerniak, Co-founder and CEO of Metacafe. "Metacafe’s Producer Rewards introduces a straightforward payment program and a fast path to a global audience that relies solely on the quality of your work."
In a four-week trial, Producer Rewards videos were viewed more than 10 million times. Thirty video creators earned more than a combined $60,000 from their work, and Metacafe gained rights to hundreds of great user-generated clips with proven appeal.
Brandon McConnell, an artist and zoo groundskeeper in San Diego, CA, made over $5,300 during the beta test of the Producer Rewards program. His "Amazing Spray Painting and Amazing Sprayer" videos have been viewed over one million times on Metacafe. "Metacafe is amazing," said McConnell. "I’ve made thousands of dollars through Producer Rewards. And sales of my paintings and videos at my www.spacepainting.com site have tripled in the last four months. I get e-mails from people around the world saying things like ‘you inspire me’."
UGC Network eSnips Raises $2 Million
eSnips, the first one-stop user-generated content (UGC) network where like-minded members can share any digital content in one place, announced that the company has closed $2 million in a Series A funding round with Greylock Partners and Gemini Israel Funds. Funds will be used to accelerate product development and market expansion. The company further announced the election of Erez Ofer, a partner at Greylock Partners, to its board of directors.
eSnips enables people to share, socialize, sell, and promote their tastes, hobbies, interests, creative work, and other aspects of their professional and personal lives online. The service has been gaining more recognition as a key player in the social networking space, particularly for allowing users to share every file type, not just photos, videos, audio, PDFs, or links. Users can create their own web space with personalized content that they can either share or keep private.
"eSnips provides a simplicity and comprehensiveness that can capture a mainstream Internet audience well beyond teens," said Erez Ofer, Partner at Greylock Partners. "As social sharing site use expands, the winning players will be those which provide a central location with broad appeal and strong e-commerce capabilities. eSnips is well-positioned to deliver upon on the promise of this sector," Ofer said.
"The demand for the kind of service and community that eSnips is providing is evident by the significantly high user base of its product," said Daniel Cohen, Partner at Gemini Israel Funds. "eSnips appeals to a more mainstream audience, which is a growing need as social sharing sites start to become as ubiquitous as e-mail. We are excited to continue our investment in eSnips’ vision and be a part of accelerating the growth of their business globally."
"With nearly one million registered users worldwide, we are thrilled to be working with both Greylock and Gemini to further advance eSnips development and marketing efforts," said Yael Elish, CEO of eSnips. "The additional funds will enable us to expand faster than we could otherwise, accelerate our product development, and provide new offerings to customers in our existing communities, as well as attract new ones to the eSnips network."
Zango Settles with FTC for $3 Million
Excerpted from Online Minute Report
Adware firm Zango, while not admitting any wrongdoing, has agreed to pay $3 million and follow a set of procedures designed to prevent non-consensual installations of adware. For instance, the company will maintain detailed information about any affiliates that install ad-serving software on its behalf. Zango also said it doesn’t use "third-party" distributors – by which it means distributors with whom it has no direct relationship.
Consumer advocates have long complained about Zango’s ad-serving software, which sends users pop-up ads based on the web pages they visit. The Center for Democracy & Technology (CDT) filed a complaint with the FTC in January. In its complaint, the CDT alleged that Zango turned a blind eye to bad distribution practices by affiliates.
Now that the FTC and Zango have reached a tentative settlement, both the adware company and the CDT are declaring victory. "With this action, the FTC has again made clear that it is prepared to go after companies, regardless of size or market position, that engage in unfair and deceptive practices to distribute their products," Ari Schwartz, Deputy Director of the CDT, said in a statement.
Zango also released a statement saying that it has "met or exceeded the key notice and consent standards detailed in the FTC consent order," since at least the beginning of this year. Zango also said that, as of January 1st, it retired past products and began using software that enables quicker detection of unauthorized installs.
Regardless, while the FTC has filed adware complaints before, this agreement appears to mark the first time it has publicly targeted one of the biggest players in the space. It certainly sends a message that companies need to at least monitor their affiliates if they’re going to install software on consumers’ desktops.
Fighting for Private Right to Copy
Excerpted from BBC Report
A think-tank has called for outdated copyright laws to be rewritten to take account of new ways people listen to music, watch films, and read books. The Institute for Public Policy Research (IPPR) is calling for a "private right to copy."
It would decriminalize millions of Britons who break the law each year by copying their CDs onto music players. Making copies of CDs and DVDs for personal use would have little impact on copyright holders, the IPPR argues. Copyright issues have, in the past, been steered too much by the music industry, the report said.
IPPR Deputy Director Dr. Ian Kearns said, "It is not the music industry’s job to decide what rights consumers have. That is the job of government. When the economic, the political, the cultural, and the moral are closely connected, policy frameworks need to be built to recognize this."
The IPPR is hoping to influence this with its report, entitled Public Innovation: Intellectual Property in a Digital Age. Its key recommendation is that any policy regarding IP should recognize that knowledge is a public resource first and a private asset second.
The so-called knowledge economy is growing fast as the traditional manufacturing of goods is replaced by more intangible assets. With it is a growing paradox in which IP is both a commercial and cultural resource. Knowledge must, therefore, perform the roles of both commodity and social glue, both private property and public domain.
"The Internet offers unprecedented opportunities to share ideas and content," the report says.
Pirate Bay Keeps Growing
Excerpted from Broadband Reports
Some time ago, under pressure from American lawmakers, Swedish police raided the servers of BitTorrent tracker Pirate Bay. While the raid was pitched as a great success for the music industry and the RIAA, the outfit simply changed the location of a few servers and was back up and running in days.
Slyck reports that the site now offers 400,000 torrents and serves more than 5 million broadband peers. Operators of the site point out that they’ve grown 30% in the last few months alone.
Special offer to DCINFO Readers
As a supporter of the DCIA, the Association of Media & Entertainment Counsel (AMEC) is pleased to offer DCINFO readers a free subscription to Media & Entertainment Insights, a news magazine on business and legal developments in the entertainment industry.Please click here to subscribe.
DCINFO Editor’s Note: The DCIA is very grateful to AMEC and Arnold Peter in particular for supporting the recent P2P MEDIA SUMMIT LA.
Coming Events of Interest
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Digital River at Ad:Tech – DCIA Member Digital River, a global leader in e-commerce outsourcing, will exhibit at ad:tech New York 2006, November 6th-8th at the NY Hilton in New York, NY. Digital River will host an exhibit booth located in the Rhinelander Gallery Second Floor, Booth 316. The Digital River Booth will feature its oneNetwork affiliate program.
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Future of Television Forum – This year’s event has been expanded to two days and will take place at NYU’s Stern School of Business, November 16th-17th, in New York, NY.
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VIP Networking Reception – November 29th at a local pub near ExCeL London, The Docklands, England.Sponsored by DCIA Member RawFlow. Please contact Ingjerd Jevnaker at +44 (0)20 7480 4220 for more information.
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Digital Hollywood Europe in London – November 29th - December 1st at ExCeL London, The Docklands, England. The DCIA will moderate two P2P panels featuring Anthony Rose, CTO, Altnet; Chip Venters, CEO, Digital Containers; Jonathan Friend, CTO, Friend Media Technology Systems (FMTS); Bruce Benson, Senior Managing Director, FTI Consulting; Les Ottolenghi, Founder & CEO, INTENT MediaWorks; Daniel Harris, Founder, Kendra Initiative; Daniel Klaus, CEO, Music Nation; Tom Meredith, CEO, P2P Cash; Xavier Casanova, CEO, Perenety; and Ingjerd Jevnaker, Marketing Manager, RawFlow.
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P2P MEDIA SUMMIT NY – February 6th–8th in New York, CA. The Winter DCIA Conference & Exposition will cover policy, marketing, and technology issues affecting commercial development of this emerging high-growth industry. Exhibits and demonstrations will feature industry-leading products and services. For sponsor packages and speaker information, please contact Karen Kaplowitz at 888-890-4240 or karen@dcia.info. Plan now to attend.
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