March 19, 2007
Volume 17, Issue 1
Oversi Most Promising Internet Start-Up
Excerpted from Blog Spirit Report
Oversi was selected as one of three most promising Internet start-up companies in Israel for 2007 in a competition hosted by TheMarker and Microsoft.
Oversi offers innovative solutions for peer-to-peer (P2P) networks in today’s fast-growing Internet TV and video age. Oversi’s solutions enable ISPs to optimize their network performance, ease P2P traffic pressure, and save on bandwidth.
The other two companies selected were Sportingo and Infogin.
Pando Shares Developer Toolkit
Pando Networks, a leading P2P technology company, has launched the Pando Developer Toolkit to enable developers to easily integrate Pando media sharing functionality into virtually any content management system.
The toolkit allows developers, bloggers, podcasters or any producer or distributor of original content to facilitate sending and receiving digital media files, sharing large videos, enjoying other rich media, or subscribing to RSS feeds.
"Four million people have chosen Pando to share their personal digital media files," explained Pando’s CEO, Robert Levitan. "Now, we’re also embracing a one-to-many approach that gives content providers and developers the ability to deliver and share their material more easily and efficiently with the maximum number of people."
The Pando Developer Toolkit includes: Pando Protocol URLs, RSS Feed Converter, Pando Web Services, Pando Automation Toolkit, Pando Client Integration Toolkit, and Pando Server Integration Toolkit.
Several partners have already integrated Pando’s media distribution technology including CamFrog, one of the most popular video chat services, and Musicrypt, which provides a leading secure digital delivery solution for the music and advertising industries.
Pando’s Developer Toolkit will accelerate the usage of the company’s P2P platform which is currently delivering more than 200,000 pieces of content and more than 60 TBs of data daily.
Joost Programming Boost
Excerpted from Report by Alexander Phoinix
Viacom has partnered with Joost to provide free content to users of the upcoming peer-to-peer television (P2PTV) service. Joost aims to be the first Internet service to provide broadcast quality television to a worldwide audience.
The technology behind the service is based on a secure, P2P streaming system. The new partnership will provide television and theatrical content from Viacom divisions including MTV Networks, Paramount Pictures, and BET Networks.
"Joost is powered by a secure, efficient, piracy-proof Internet platform that enables premium interactive video experiences while guaranteeing copyright protection for content owners and creators," Viacom said.
The service will offer free-of-charge access to programming and channels that are not easily accessed through other Internet sources. Joost is currently in beta testing, the final stage of tests before it is released on the market.
It provides a customizable platform, which contains enhanced features such as links to websites and additional content information. The service will also incorporate plug-in applications such as message boards, news tickers, and instant messaging.
Delivery of the platform will be similar to regular television viewing, while also utilizing the flexibility, control, and range of choices offered by web 2.0 applications. The Joost launch will be the first combination of content providers, advertisers, and viewers, to deliver Internet television programming worldwide, utilizing an interactive and community-driven experience.
"We’re extremely pleased to be working with Joost, and couldn’t be prouder to be a key partner in the launch of the next generation in broadband video technology," said Philippe Dauman, Viacom President & CEO.
Report from CEO Marty Lafferty
 Viacom announced on Tuesday that it is suing Google’s YouTube for $1 billion, claiming 160,000 unlicensed clips of MTV Networks and Comedy Central content, valued to the rights holder at an average $0.65 per view, have been streamed 1.5 billion times.
Goggle’s defense is that its operation complies with relevant provisions of the Digital Millennium Copyright Act (DMCA), which provide a safe harbor for services with significant non-infringing uses, provided that they are responsive to takedown notices from rights holders, which YouTube says it has been.
Industry observers have opined that, in part, Viacom was emboldened to litigate having recently entered into a licensing agreement with peer-to-peer television (P2PTV) distributor, Joost.
"I think that if Viacom didn’t have a financial interest in Joost, it would not be so aggressive," said Greenberg Traurig attorney Ian Ballon, a copyright law expert who represented content owners in the MGM v. Grokster case.
There is certainly an irony here. In MGM v. Grokster, the last epic showdown between copyright interests and users of digital distribution technologies, decentralized P2P was on the defensive and centralized download stores, which the music industry had begun to license, permitted the content side, according to pundits at the time, to be more aggressive than otherwise in going after the P2P file-sharing concerns.
What is so different now that would make P2P the technology of choice for a global media company, which has interests in hundreds of thousands of valuable copyrighted works, for distributing its video content online?
Without fanfare, and certainly far outpacing the ability of the press to change its tune from the tiresome refrain that P2P is synonymous with piracy, Viacom and other major Hollywood interests, are in fact changing their view to one that P2P is much more synonymous with positive potential and the promise of profits.
Not only are various P2PTV and peer-assisted solutions dramatically more efficient than old centralized server-client distribution systems, they are actually – and here is the ultimate irony – much more secure.
That is the turnaround concept that our industry’s proponents now need to trumpet. Technologists and copyright owners across the board will finally be able to come together around the fact that P2P can protect content more effectively than can centralized download architecture.
P2P, coupled with productivity enhancing swarming, caching, and content-acceleration technologies, along with currently available digital media management solutions optimized for decentralized distribution, is inherently more secure and less prone to hacks. These are the facts.
And various extraordinarily attractive P2PTV solutions are now offered, not only by Joost, but by other DCIA Members such as Abacast, Altnet, arvato mobile, Babel Networks, BUYDRM, CacheLogic, Digital Containers, INTENT MediaWorks, Javien, Oversi, Pando Networks, PeerApp, Perenety, Raketu Communications, RawFlow, SafeNet, Ultramercial, and VeriSign.
Major media companies are now investing considerable senior executive attention and expending significant legal resources in determining whether and how to join Viacom in its litigation against Google, a conflict that may take years of time and require many millions of dollars to resolve.
Respectfully, we ask that a proportionate effort be made by these major content rights holders, in matching Viacom’s less attention-getting but ultimately more business-expanding initiative, to explore the relative benefits of P2PTV, and place a bet on this much more efficient and much more secure way to distribute video online.
Major motion picture studios, broadcast television networks, and cable programmers are each driven by a need to protect their historical position in a media hierarchy that is now being redefined by rapidly expanding online distribution.And it is extremely challenging for management to tolerate, in full view of shareholders, the requisite loss-incurring initiatives in their pursuit of optimal solutions for this new environment. P2PTV can help with that because it represents one of the lowest-risk with highest-reward scenarios available.
Experience should teach that if posting clips to YouTube is thwarted, this won’t drive Internet users to websites of the rights owners. They’ll head to their next destinations of choice, which increasingly will use P2P technologies, based on the relative sense of ownership, belonging, and enjoyment such alternatives provide.The best ways to successfully compete are to embrace P2P technologies and empower the marketing and creative people with support at least equivalent to that given the lawyers. Share wisely, and take care.
ISPs Should Embrace P2PTV
Excerpted from Interfax Report
Peer-to-peer television (P2PTV) has more potential than classic client-server Internet protocol TV (IPTV) and can generate higher revenues for telecom operators, Hou Ziqiang, Chief Technology Advisor and Independent Non-Executive Director of China Netcom (HK) told Interfax in an interview.
"The IPTV business in China has yet to become profitable. Our telecom operators have to have at least several million subscribers to make a profit from IPTV. But there are only half a million IPTV subscribers in China today," Hou said.
China’s fixed-line operators, China Telecom and China Netcom, have both launched classic client-server-based IPTV services in partnership with broadcasting companies. Heilongjiang, Shanghai and Hangzhou are their major IPTV trial sites where most subscribers are located.
"Currently it costs more for a network operator to offer IPTV service compared to any other broadband service, but the return is much lower. For any other broadband service, the telecom operator just provides access to the network, but with IPTV, the operator has to provide content as well and share its revenues with the broadcasting companies, such as Shanghai Media Group (SMG)," Hou said.
Chinese telecom operators are currently offering IPTV at a lower price than regular broadband access. Broadband access service is priced at approximately RMB 100 ($12.90) per month, while IPTV monthly subscription is only RMB 60 ($7.75).
Hou pointed out that there are approximately 100 million broadband users in China and approximately 5 million registered users of peer-to-peer (P2P) services.
"Currently 50 percent to 70 percent of each operator’s Internet traffic comes from the P2P service. P2P technology really has good prospects. The network operators can obtain copyrights for TV programming and for films, and offer the video content via the Internet using the P2P overlaying applications. For newly released movies, the operators charge RMB 6 ($0.77) per view or download. Consumers are willing to pay that because it is about the same price for a pirate DVD," Hou said.
"On the other hand, P2P technology has a direct impact on systems management and operation patterns, as it is harder to manage from a network administration point of view. If the P2P industry hopes to achieve faster growth, providers have to be very disciplined in their operations and management of resources and follow the guidelines suggested by competent industry authorities," Hou added.
P2P network applications allow computer hardware and software to function without the need for special server devices as opposed to the more traditional client and server architecture. P2P is a popular technology for file-sharing software applications like Kazaa, BitTorrent, and eMule.
Peering into Video’s Future
Excerpted from MIT Technology Review Report by Wade Roush
Ted Stevens, the 83-year-old senior senator from Alaska, was widely ridiculed last year for a speech in which he described the Internet as "a series of tubes." Yet clumsy as his metaphor may have been, Stevens was struggling to make a reasonable point: the tubes can get clogged. And that may happen sooner than expected, thanks to the exploding popularity of digital video.
TV shows, YouTube clips, animations, and other video applications already account for more than 60 percent of Internet traffic, says CacheLogic, a Cambridge, England, company that sells media delivery systems to content owners and ISPs. "I imagine that within two years it will be 98 percent," adds Hui Zhang, a computer scientist at Carnegie Mellon University. And that will mean slower downloads for everyone.
Zhang believes help could come from an unexpected quarter: P2P file distribution technology. Of course, there’s no better playground for infringement, and millions have used P2P networks such as Gnutella, Kazaa, and BitTorrent to help themselves to copyrighted content. But Zhang thinks this black-sheep technology can be reformed and put to work helping legitimate content owners and Internet-backbone operators deliver more video without overloading the network.
For Zhang and other P2P proponents, it’s all a question of architecture. Conventionally, video and other web content gets to consumers along paths that resemble trees, with the content owners’ central servers as the trunks, multiple "content distribution servers" as the branches, and consumers’ PCs as the leaves. Tree architectures work well enough, but they have three key weaknesses: If one branch is cut off, all its leaves go with it. Data flows in only one direction, so the leaves’ – the PCs’ – capacity to upload data goes untapped. And perhaps most important, adding new PCs to the network merely increases its congestion – and the demands placed on the servers.
In P2P networks, by contrast, there are no central servers: each user’s PC exchanges data with many others in an ever-shifting mesh. This means that servers and their overtaxed network connections bear less of a burden; data is instead provided by peers, saving bandwidth in the Internet’s core. If one user leaves the mesh, others can easily fill the gap. And adding users actually increases a P2P network’s power.
There are just two big snags keeping content distributors and their ISPs from warming to mesh architectures. First, to balance the load on individual PCs, the most advanced P2P networks, such as BitTorrent, break big files into blocks, which are scattered across many machines. To reassemble those blocks, a computer on the network must use precious bandwidth to broadcast "metadata" describing which blocks it needs and which it already has.
Second, ISPs are loath to carry P2P traffic, because it’s a big money-loser. For conventional one-way transfers, ISPs can charge content owners such as Google or NBC.com according to the amount of bandwidth they consume. But P2P traffic is generated by subscribers themselves, who usually pay a flat monthly fee regardless of how much data they download or upload.
Zhang and others believe they’re close to solving both problems. At Cornell University, computer scientist Paul Francis is testing a P2P system called Chunkyspread that combines the best features of trees and meshes. Members’ PCs are arranged in a classic tree, but they can also connect to one another, reducing the burden on the branches.
Just as important, Chunkyspread reassembles files in "slices" rather than blocks. A slice consists of the nth bit of every block – for example, the fifth bit in every block of 20 bits. Alice’s PC might obtain a commitment from Bob’s PC to send bit five from every block it possesses, from Carol’s PC to send bit six, and so forth. Once these commitments are made, no more metadata need change hands, saving bandwidth. In simulations, Francis says, Chunkyspread far outperforms simple tree-based multicast methods.
Zhang thinks new technology can also make carrying P2P traffic more palatable for ISPs. Right now, operators have little idea what kind of data flows through their networks. At his Pittsburgh-based stealth startup, Rinera Networks, Zhang is developing software that will identify P2P data, let ISPs decide how much of it they’re willing to carry, at what volume and price, and then deliver it as reliably as server-based content distribution systems do – all while tracking everything for accounting purposes. "We want to build an ecosystem such that service providers will actually benefit from P2P traffic," Zhang explains. Heavy P2P users might end up paying extra fees--but in the end, content owners and consumers won’t gripe, he argues, since better accounting should make the Internet function more effectively for everyone.
If this smells like a violation of the Internet’s tradition of network neutrality – the principle that ISPs should treat all bits equally, regardless of their origin – then it’s because the tradition needs to be updated for an era of very large file transfers, Zhang believes. "It’s all about volume," he says. "Of course, we don’t want the service providers to dictate what they will carry on their infrastructure. On the other hand, if P2P users benefit from transmitting and receiving more bits, the guys who are actually transporting those bits should be able to share in that."
Networking and hardware companies have their eyes on technologies emerging from places like Rinera and Francis’s Cornell lab, even as they build devices designed to help consumers download video and other files over P2P networks. Manufacturers Asus, Planex, and QNAP, for example, are working with BitTorrent to embed the company’s P2P software in their home routers, media servers, and storage devices. With luck, Senator Stevens’ tubes may stay unblocked a little longer.
P2PTV Promises Viewing Revolution
Excerpted from Times Online Report by Murad Ahmed
Bored because there’s nothing on the box? That could be a thing of the past if Joost, a new peer-to-peer television (P2PTV) service succeeds in shaking up the television establishment. From big-budget dramas to niche documentaries, the people behind Joost say they will provide a huge array of TV programs straight to your computer, wherever you are and whenever you want, at full screen, and at broadcast quality. Best of all, this will all be free to the viewer.
TV bosses are taking the threat of Joost particularly seriously because the Scandinavians behind the project have form. Niklas Zennström, a Swede, and Janus Friis, a Dane, have made a habit of scaring established industries with their web revolutions. Their file-sharing software Kazaa, did serious damage to the music industry. Then Skype, which lets people make free telephone calls using their computers, began to eat into the business of traditional telecom companies. After selling Skype for $2.6 billion, they’re now taking on the broadcasters, and yet again, that can only be good news for you and your wallet.
With Joost, though, they say they don’t want to destroy TV as we know it, merely give it a boost. They want to mesh the best aspects of watching TV at home with the best of what the Internet can provide. "TV is mainly about leaning back and being entertained," says Fredrik de Wahl, chief executive of Joost, rather than "leaning forwards" and having a sneaky peek at a YouTube video at work when you think the boss won’t be watching. "With Joost you’re not forced to interact, but if you want to, you can."
So Joost will have "channels" just like normal TV, huge play-lists of videos that you can flick through in case you don’t know what you want to watch. "When I come back to my room and switch on a TV," Mr. de Wahl says, "I don’t want to get a web browser, I want to start watching a show. We want to replicate that".
Excited by this prospect, 400,000 people around the world have signed up just to test the product. Joost aim to unleash it globally. "You never really ‘release’ software, you unleash it" de Wahl says, ominously by the end of June this year. The likes of Viacom – which owns MTV, Nickelodeon, and Paramount Pictures – and Endemol, the makers of "Big Brother" have already signed up to show their programs on Joost. The BBC says that it’s holding informal talks with Joost, and the company has reportedly spoken to ITV and Channel 4 about screening their programs.
Joost isn’t the only one trying to make this idea work. Babelgum is trying to use exactly the same P2P technology to establish a rival to Joost. Its TV service will also be free, and they’re also already snapping up deals with program makers from around the world. So if you don’t find what you want on Joost, you might just find it on Babelgum.
The thing missing from this new way of watching television is the TV set itself. But even here, the technology is gaining ground. Apple is, as ever, at the forefront. It is launching Apple TV this month, a set top box that will hook up your computer to your television. Using a remote control, you’ll be able to sit back and watch films and shows downloaded through Apple’s iTunes software on your normal TV, although the geeks testing Joost have already hacked into Apple TV so you can watch Joost through it as well.
Proponents of P2PTV say that the problems with hardware will be resolved once the system is up and running. "Look at Skype," says Erik Lumer co-founder and chief executive of Babelgum. "Once you have a service that is easy to use and that you don’t have to pay for, all of a sudden manufacturers start creating cordless phones you can use with Skype. The same thing will happen with TV."
So the trend seems clear. Soon the likes of Joost and Babelgum won’t just be for computer nerds who are more comfortable clicking a mouse than jabbing at their remotes. If this succeeds, it will be a big step forwards in the evolution of television.
Viacom Rivals Support YouTube Suit
Excerpted from Bloomberg News Report
Viacom’s media rivals support the company’s lawsuit against Google and YouTube, executives told Bloomberg News. "This is a key issue for our industry, it is time for YouTube to remove unauthorized material from its site," a TimeWarner spokesman said. Rupert Murdoch’s News Corp. has also asked Google to take down unauthorized content, while last week announcing plans to create its own video rival. Disney continues to negotiate with YouTube; a company spokesman says the parties are confident of an agreement. CBS, NBC Universal, and the BBC all have content agreements with the video site, subject to their behest.
Google, which purchased YouTube for $1.65 billion in November, isn’t fazed by its inability to strike content deals with these companies, partly because, as the company’s general counsel Kent Walker said, "YouTube has become even more popular since we took down Viacom’s material. We think that’s a testament to the draw of the user-generated content on YouTube." Google is also confident of the company’s legal position; its lawyers say "lawsuits are generally not a very good negotiating tactic with us."
The big losers here are consumers, said Annette Hurst, a copyright attorney who represented Napster in its landmark copyright suit.
Prime Time to Woo Content Partners
Excerpted from MediaPost Report by Shankar Gupta
It’s prime time for smaller video players to step in and make content partnerships, as relations between Google and traditional media companies grow increasingly frosty. That was the assessment of industry watchers in the wake of the $1 billion copyright infringement lawsuit filed Tuesday by Viacom against the search giant and its subsidiary YouTube.
Viacom is likely to seek out other partners who are more responsive in developing strategies to pay media companies whose content appears on their sites, said Forrester Research analyst James McQuivey. "They think they’ve waited long enough for Google and YouTube," he said. "What they’re going to do is work aggressively to get distribution everywhere else."
Citing a major deal with YouTube rival Joost and smaller initiatives that allow small distributors to create custom clips of Viacom content and syndicate them on their websites and P2PTV services, McQuivey said that major media companies’ dissatisfaction with Google-YouTube is an opportunity for up-and-coming players.
"Viacom does want that content out there – make no mistake, they just feel like they didn’t get enough cash for the value they’re providing for YouTube," he said.
"There’s an opportunity for smaller players to run to companies and say, ‘We’re your friends, we’ll protect your interests, come do a deal with us.’"
Showbiz’s Site Fright
Excerpted from Variety Report by Ben Fritz and Michael Learmonth
Hollywood veterans are used to the ground shifting quickly, but the case of YouTube is rather extreme.
Just one year ago, studios and networks were bragging that the once-scrappy video website was handy for branding, by helping mint hit shows or injecting movies into the youth consciousness.
"To make this kind of promotion work, you have to be able to lose control of the media," VH-1 programming chief Michael Hirschorn told Variety then. "We got millions of impressions with those clips" of the network’s "Flavor of Love."
The love affair abruptly ended last month, when Hirschorn’s bosses at Viacom demanded that YouTube take down every one of its roughly 100,000 clips.
"We cannot continue to let them profit from our programming," CEO Philippe Dauman said, after the two companies failed to seal a content distribution and revenue sharing deal.
Every conglom has been affected in one way or another. Soon after "Ghost Rider" bowed, Sony found virtually the entire film on YouTube, chopped into segments of various lengths. The studio demanded their removal, but was unsure if another webbie would simply post them later. It’s a scenario that every other studio has experienced.
The battles over the future of content online now represent arguably the most rancorous and disruptive issue to confront Hollywood in decades.
Merely mention the words "viral video" to any player in Hollywood and you will get an earful. At stake, they say, are hundreds of millions, if not billions of dollars being digitally picked from their pockets.
But while Hollywood’s public virulence toward YouTube continues to grow, it’s a more complicated story. Many studios, labels and diskeries are busy taking full advantage of the ever-growing promotional power of YouTube, particularly among the younger 18-24 demo, and are actually pushing the Netco to offer them more advertising options.
That has opened up internal schisms. On one side are marketing teams aggressively exploiting websites like YouTube, while the other features teams of lawyers fighting to protect their companies’ intellectual property.
Hollywood’s internal conflict is particularly pronounced at NBC U, where the marketing arm operates a channel on the site YouTube with 200 authorized videos at the same time the legal arm is sending more than 1,000 letters a month threatening legal action over unauthorized posts.
"It’s fair to characterize it as schizophrenic, and I think that’s OK," says NBC U digital prexy George Kliavkoff. "We need a compelling business model that recognizes the value of the content and partners that respect intellectual property."
When Hirschorn was using YouTube to pump VH-1 viewership a year ago, few in Hollywood saw YouTube as a threat or a major player, even though infringing clips were rampant.
But two things have changed that. One is the site’s ever growing traffic, which dwarfs anything big media has on the web, save for News Corp. owned MySpace.
The other is money. When Google paid an astonishing $1.7 billion to buy YouTube last fall, nobody in the traditional media business could afford to ignore the implications.
"One day we woke up and found out this little website was sold to Google for over $1 billion and we realized they just built a business off of our content," says one senior TV exec.
"Our worst nightmare in the world is that we put our content out to our partners online and they build communities around it and we don’t get anything from it," says CBS Digital chief Quincy Smith.
While lawyers are demanding filtering technology, many Hollywood execs actually enjoy the fact that YouTube only takes down clips when they request it.
"If I found part of a successful show up on YouTube today, I’d probably pull it down immediately," the TV exec admits. "If I had a show that wasn’t doing so well in the ratings and could use the promotion, I wouldn’t be in a rush to do that."
Big media’s relationship with Hollywood only gets more complicated as congloms increasingly invest in their own web ventures. Viacom, for instance, has been upping the amount of content it puts on sites like iFilm and MTV.com as it takes down clips from YouTube. It’s also making deals with such start-ups as Joost.
MTV’s New Web Strategy
Excerpted from Media 3.0 Report by Shelly Palmer
According to Reuters, "MTV Networks, owner of the MTV and Comedy Central channels, is pushing a risky new web strategy to win back young viewers from the likes of YouTube and MySpace.
The network, which already has 150 websites in 162 countries, plans to build literally thousands more, hoping to draw viewers by letting them watch, contribute and even re-edit its television shows."
The article goes on to say, "The move is a risky one for Viacom as it could breed confusion and dilute corporate branding, especially for a company whose Web strategy has been difficult to discern."
You should Google and read about this topic for yourself, but with all due respect to Reuters, there is only one risk – the risk that MTV will not go far enough.
MTV’s biggest problem is that their audience thinks that MTV also "has" a website. As opposed to MySpace’s audience which does not care if MySpace has a TV Network. MTV’s biggest competitors are not using television distribution to attract their audiences. Practically the entire constituency spends a significant amount of time gaming and online. Unfortunately for MTV, it is not a meaningful brand in the pure-play online environment.
Could MTV (the arbiter of taste for the previous generation) use the power of cable and satellite network distribution to drive significant traffic to a series of websites? Sure. Can they rework their web offerings convincingly enough to incentivize MySpace and YouTube users to come back?
Wrong question. The digital natives have never viewed MTV as a "place" to spend time online. The right question is, does MTV have consumer permission to evolve into a media experience that combines the power of online (social networks, if you like), traditional network television and the myriad other live event, wireless, and broadband consumer touch-point opportunities?
It’s a multi-million dollar question. So, just for fun, let’s do a thought experiment. For the sake of argument, pretend that MySpace was MTVSpace. Would MTV be any better off than it is now? Take it a step further and pretend that YouTube was MTVTube. Does that help or hurt?
Assuming that you had this generation coming and going, TV, Internet, Internet Video – would it help MTV?
There’s no right answer to this question because the hypothetical case is not something that could ever exist. But it is instructive to think about how the business model for MTV Networks might change if they were able to conglomerate two of the biggest aggregators of youthful eyeballs.
I submit that there is no way for MTV (the television channel) to evolve into an online play without a complete commitment to that medium. In reality, MTVTube with a strong social network component, fully backed by the promotional power of the TV network is all they can ever hope to achieve. Can it be done?
There is one little sticking point with this plan. No matter how much credit you give this generation for multi-tasking, there is a limit to how effectively you can divide narrative television viewing and time online. Everyone knows that people IM constantly during TV shows and spend quality time ignoring commercials during breaks. With an average TV hour being between 40-44 minutes long, there is plenty of time to act like you are multi-tasking without really having to do anything of the sort. How twisted does your mind have to be to even consider a world where a 14 year old would have MTV playing on their television monitor and be simultaneously emotionally invested in some aspect of mtv.com? It is beyond the bounds of sanity to think that one brand, no matter who they are, could enjoy such a stranglehold on this very fickle, cool hunting demographic – but it is surely fun to think about.
According to Mika Salmi, Digital President of MTV Networks, "People tend to find content on the Internet through thousands of front doors as opposed to one … in some ways we’re in a better position than most media companies are – we’re where people want to be." This is all well and good. But let us not forget that MTV enjoys revenue from licensing fees as well as advertiser sales. And, with very few exceptions, neither of those revenue streams has proven meaningful (at scale) in the world of online video.
Am I being too harsh, too old-fashioned, too "this is the way it has always been done," too 20th Century? You could read it that way. But you’d be missing the point. MTV is a cable/satellite network with a virtual monopoly on its demographic. Because it had achieved a certain size (call it critical mass), no other demographically similar music television network could hope to achieve the same scale. This is true today as it was then.
MySpace and YouTube have the high ground here. Neither company was designed, they both evolved to scale. To think about it another way, what would it take to unseat Google today? Could you build a substantially better product and promote it hard enough to win?
We can all learn some valuable lessons from Mika and MTV’s approach to these issues in the coming months. Assuming that they can execute what they have articulated, their success or, lack thereof, will tell us a great deal about consumer permissions, the power of the MTV brand and the nature of media consumption for digital natives.
Sharecroppers
Excerpted from Sydney Morning Herald Report by Adam Turner
Swapping files over the Internet has long been a popular way to exchange music, movies and television shows. Most of today’s file-sharing software is known as peer-to-peer, or P2P, because you’re downloading files from other users rather than from a central site.
While Kazaa was popular several years ago, BitTorrent is the new P2P king. Both let you download a file from hundreds of users at the same time, while simultaneously uploading that file to other users. But BitTorrent is more efficient because it starts sharing the parts of a file you’ve downloaded before you’ve downloaded the entire file.
To use BitTorrent, you need to download software that lets your computer find other computers on the Internet holding the files you want. Next, go to a BitTorrent search engine such as mininova.org or torrentspy.com and search for the file you want.
The file isn’t stored at these websites, only a "torrent" file telling your computer where to find copies of the file. Download the torrent file, open it in your BitTorrent software and it will start downloading the file from other computers on the Internet also running BitTorrent software. The more people sharing that file, the faster it will download.
The BitTorrent software presents you with a list of files you’re downloading and uploading, along with the number of people you’re connected to, at what speeds and how long the download should take.
Using BitTorrent for video files requires a broadband connection with a download limit of at least 1GB a month, as one episode of "Lost" is a 350MB file.
Big business has come to recognize that BitTorrent is one of the easiest ways to distribute files across the internet.
BitTorrent.com has just launched an online video store and YouTube competitor Joost intends to use BitTorrent technology behind the scenes. The BBC also plans to make shows such as "Red Dwarf" and "Doctor Who" available via the high-definition Zudeo BitTorrent site.
Azureus is the Swiss army knife of BitTorrent software thanks to the ability to download extra features. It’s a 9.5MB file, plus you’ll need another 7.1MB to download Java. Set-up offers the choice of beginner, intermediate and advanced, along with an option to test your firewall settings. Azureus has the most user-friendly interface of the lot, with color-coding to tell you how a download is going and pop-up comments to explain various features. It can automatically adjust your upload speeds so your connection doesn’t choke.
uTorrent is slimmed-down BitTorrent and is only a tiny 173KB to download. The set-up includes a link to a speed-test site if you don’t know your connect speed, as well as the option to test your firewall settings. It’s easy to set your maximum upload speed to stop your connection choking, but uTorrent also features a bandwidth scheduler. You can set it to download only at night, which is perfect for people with internet plans that offer extra download limits after hours.
BitComet is a 5.3MB download, but it doesn’t have a set-up wizard like the others. Like uTorrent, BitComet also lacks a little of Azureus’s color-coded user-friendliness, but makes up for it with extra features such as the ability to preview videos files while they’re still downloading and a built-in chat tool. It’s easy to set your maximum upload speed, plus it lets you open web pages within the BitComet interface, making it easy to search for torrent files.
There are no duds here. Azureus has the most user-friendly interface and is well suited to beginners and experts, but it does chew up more processing power than the others.
uTorrent is a good set-and-forget solution, especially for those wanting to take advantage of higher off-peak download limits.
BitComet takes a little longer to get the hang of but its extra features make it a good choice for BitTorrent users who are ready to shed their training wheels.
Notice, Takedown, Fingerprints, Filtering
Excerpted from DRM Watch Report by Bill Rosenblatt
Viacom’s litigation against Google over alleged copyright infringement on YouTube, which the company filed this week seeking over US $1 billion in damages, takes to a new level the importance of two types of technologies for monitoring copyrighted works on online services that let users contribute content. The technologies are automation of notice and takedown, and fingerprint filtering.
Under US copyright law (17 U.S.C. § 512, or "512" for short), a content owner can send a message to the operator of a network service like YouTube if it finds an item of its content on the network, and the network operator is required to take the content down; this is called notice and takedown. YouTube’s position is that it complies with the law by responding to takedown notices and by offering tools to content owners that automate this process – presumably such things as web forms or email message templates for them to fill out.
On the other hand, the position of content owners is that notice-and-takedown is reactive – it only takes place after the work is up on the network and the damage is presumably done – and that it places too much of a burden on them to find works and issue the notifications. In content owners’ ideal world, their works would never make it onto these networks in the first place (without their authorization), and they would not have to lift a finger to make that happen.
Enter fingerprint filtering, the technology that content owners view as enabling that ideal world. The technology identifies content when a user is trying to upload it, and if it’s a work in the technology vendor’s database, it blocks the file from being uploaded (or takes some other action according to the content owner’s wishes). A handful of vendors have implemented this technique for music, including Audible Magic, Philips, and Gracenote. Analogous techniques for video are being developed.
The major music companies generally endorse fingerprint filtering and have licensed their content to services that use it, such as iMesh. MySpace uses it to block music uploads. At the same time, the question of how well the technology works in large-scale production applications is still somewhat open.
The key difference between notice-and-takedown automation and fingerprint filtering, of course, is that the former is reactive while the latter is proactive. But the other key difference is in the burden that each technology places on content owners and network operators. Viacom has complained about the cost and time it takes to search services like YouTube for its own content in order to give notice under 512, whether through automation or not.
A network service provider can cut its costs of responding to 512 notices by offering automation – though that begs questions of whom to trust if someone gives notice on content that they don’t own, and what happens if that occurs and a work is inappropriately taken down (as the EFF has suggested in Viacom’s case).
With fingerprint filtering, most of the burden shifts to the network service provider and the fingerprinting vendor it uses. The content owner needs to feed its content to the fingerprinting vendor for fingerprint registration, but it only needs to do that once for each content item – a task that can become part of the process of product release.
So, as usual with DRM-related technologies, the issue becomes one of who is going to pay: content owners or downstream links in the value chain.
We could suggest a couple of ways to partially bridge the gap between notice-and-takedown automation and fingerprint filtering. One is to standardize a way to automate notice-and-takedown, so that content owners can send the same types of messages to many network service providers instead of having to deal with each one differently.
Content owners’ trade associations, such as the RIAA, could define a standard protocol for conveying 512 notices; this would be perfectly acceptable under antitrust law. This would make it more efficient for each content owner to send 512 notices to multiple service providers (e.g., via RSS feeds) and thereby reduce their burden a bit, making notice-and-takedown slightly more acceptable to content owners.
Another idea might be to standardize on a single fingerprinting technology and make fingerprinting a part of copyright registration. Although US law does not require copyrights to be registered in general, it does require registration as a prelude to infringement litigation. A neutral entity such as the US Copyright Office could maintain a database of fingerprints, and content owners could submit their content for fingerprinting when they register for copyrights.
There are several issues with this scheme, though. First, what would motivate network service providers to use the standard fingerprint database to block unauthorized uploads? From a technology standpoint, the answer would be the confidence that the media industry backs a standard solution and the lack of need to go around to multiple content companies to get their blessing on a nonstandard one.
Presumably the technology would be designed with robust and convenient interfaces, so that network service providers could integrate with it as easily as possible. From a legal standpoint, content owners are hoping to argue that not implementing filtering could be tantamount to inducement of copyright infringement, which the Supreme Court’s 2005 Grokster ruling defined as criminal.
Another major issue with fingerprint standardization is how it could be done in a way that satisfies antitrust concerns and ensures that the technology could be developed over time to be as robust, accurate, secure, and scalable as possible, given the inevitability of hacks and workarounds.
The final issue is who will pay for it. The simple answer to that one seems to be that content owners pay a surcharge for fingerprinting when they register their copyrights. But this is not so obvious, given that even if network operators were to share the cost, it would save them money compared with each implementing their own fingerprinting schemes.
Deliberation between notice-and-takedown automation and filtering is certainly not the only bone of contention between the media industry and content service providers these days, but it’s an important one. How it gets solved – and to what degree the legal system mandates those solutions – is an important barometer of progress (or lack thereof) in the online content arena.
File-Sharing Lawsuit Worries Techies
Excerpted from Investor’s Business Daily Report by Brian Deagon
Two years after winning the landmark US Supreme Court case MGM v. Grokster, the entertainment industry is back in court to settle a fight some fear could handcuff technology innovation.
The Supreme Court ruled in June 2005 that the makers of Internet-based file sharing software services could be sued under copyright laws for users’ rampant unlicensed music swapping.
But the Court did not resolve the issue of what file-sharing companies must do to comply with copyright laws. They punted the issue back to US District Court Judge Stephen Wilson, whose original ruling in the Grokster case launched a long trek to the Supreme Court.
In a hearing set for March 26th over the issue, the entertainment industry will once again face StreamCast Networks, maker of the popular file sharing software Morpheus and a co-defendant in the Grokster case.
Barring a settlement, Wilson is poised to mandate what kind of filtering technology companies must use to stop copyright breaches on file-sharing services. Some tech groups call that a nightmare scenario, contending it will let judges rather than the market decide how software is developed.
"Putting courts in the business of redesigning software is a dangerous precedent to set," said Fred von Lohmann, senior attorney at Electronic Frontier Foundation. "Do we want a world where every new technology gets it own federal judge to sit in judgment over the next software update?" The digital rights watchdog group represented StreamCast in the Supreme Court case but is not involved in the latest hearings.
A spokesman for the RIAA, which represents music labels, said "filtering technologies are highly effective in a variety of online settings, including P2P," but wouldn’t comment further. The issue is another twist in a long saga over file-copying technology.
Even before the Supreme Court ruled in its landmark 2005 case, Grokster shut down and later settled with the plaintiffs. Most other popular file-sharing services either folded or added filtering systems designed to stop copyrighted content from being shared without permission.
But StreamCast put up a fight. The company wants Judge Wilson to spell out how it must alter its Morpheus software to avoid liability.
"StreamCast stands ready to be part of finding solutions that benefit the consumer, the creative artists, and the marketers and distributors of those works," said StreamCast CEO Michael Weiss.
The latest skirmish, which first went before Wilson last month, stems from a ruling the judge made last September. He declared StreamCast a tool "used overwhelmingly for infringement" and granted plaintiffs requests that the file-sharing service either shut down or change its software to block copyright breaches.
Wilson based his ruling on the High Court’s Grokster decision, which established a copyright liability standard now known as the "inducement doctrine."
It ruled that anyone who offers a product purposely designed to infringe copyright — evident in how it’s designed or advertised — is liable for such breaches committed by its users.
But Wilson also agreed to StreamCast’s request for a hearing to define what constitutes a violation and what it must do to avoid future lawsuits. The new round of legal action has focused on what kind of software filtering technology StreamCast should deploy to block copyrighted content from its network.
Lawyers representing 28 of the world’s largest entertainment companies contend that StreamCast can use industry standard software filters made by firms such as Audible Magic and Snocap.
Two file-sharing services firms, Kazaa and iMesh, both use such filtering technology.
Attorneys for StreamCast balked at the filtering proposal, arguing that the firm might still be sued if the technology did not "exhaustively" stop illicit copying.
StreamCast has proposed developing its own filtering technology, but wants detailed information from the recording industry on the artists and songs it must filter. The recording industry says such information is commercially valuable and that it shouldn’t have to hand it over for free. Unless the two sides settle, Judge Wilson will make the choice himself – a scenario that worries some analysts and bloggers.
"It’s important not to let copyright owners dictate the future of technology," said the EFF’s von Lohmann. A final ruling could take months, and whoever loses will probably appeal the decision. The legal ambiguity in the meantime hurts innovation, von Lohmann contends.
"The problem is the rules are still very uncertain," he said. "If you are Apple or Microsoft and are trying to put together an expensive product launch, that uncertainty is not something you enjoy."
Another issue is what to do about the tens of millions of people who have downloaded earlier versions of the Morpheus software, which doesn’t block copyrighted files. That software resides on millions of personal computers and can’t be erased or updated unless a user chooses to do so.
Nor can the system be shut down, as was the case with Napster years ago. Morpheus is a P2P network, so the music or movies do not reside in a central location. The digital bits and bytes flow freely from one computer to the next.
StreamCast continues to make money off this legacy software through advertisements that appear on the software’s main panel. Judge Wilson could, as the entertainment industry has asked, force StreamCast to stop all advertising on this older software.
That would give the company a financial incentive to push the upgrades onto users. But it’s still not clear how many users would willingly download a version that blocked most copyrighted music.
Zero-Sum Digital Music Game
Excerpted from Digital Music News Report
As free MP3s continue to float around the internet, the value of pre-recorded music may be steadily sliding towards zero.Economists have been analyzing the possibility for years, and applying basic principles of supply and demand to a highly disruptive transformation.
Economic theory dictates that infinite supply and a complete lack of scarcity spells zero price points, and reality is beginning to support that assertion. "It is true to say that you can already see this happening," opined Will Page, Executive Director of Research at the MCPS-PRS Alliance, in a recent research finding.
"Simply look at the deflation in the price of a CD at your average big box retailer. The cost of an album today is roughly the same as it was 20 years ago." Moreover, a continued and accelerating decline in CD sales also supports the theory, as less consumer dollars are being poured into higher-priced, physical assets. Other theorists have echoed the Page assertion.In a recent discussion at MidemNet in Cannes, France this year, leading French economist Jacques Attali pointed to a pre-recorded market that will be very difficult to assign and impose valuations around.
"The only thing that is rare is the time you share with the artist," the thinker noted. That points to the capitalization of unique experiences like live concert appearances, a shift that pulls the emphasis away from major label revenues.
In that light, Page pointed to the possibility of crafting successful bundling strategies, something the industry is losing as consumers shift away from the pre-recorded CD. "For a unit of recorded music to retain an element of excludability, bundling might become the optimal strategy, as this increases revenues because the willingness to pay for the bundle is less dispersed than the willingness to pay for the components," Page stated in the report.
Coming Events of Interest
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National Association of Broadcasters (NAB) – April 14th–19th in Las Vegas, NV. Whether you’re making the transition to HD; looking to invest in new technologies like P2PTV; seeking new tools to create content and build revenue streams; or just trying to stay ahead of the competition, NAB 2007 is your essential destination. The DCIA is participating.
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MUSEXPO – An unprecedented group of global entertainment executives will congregate in West Hollywood, CA April 29th - May 2nd for A&R WORLDWIDE’s international music and media forum. Designated "a united nations of the music industry," top tier music, media and technology global executives unite to participate in a series of timely industry forums kicked-off by a round-table keynote event moderated by Emmy Award-winning CNN host Larry King.
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Streaming Media East - The Business & Technology of Online Video - May 15th-16th at the Hilton New York, NY. Streaming Media East is the only trade show dedicated to coverage of both the business of video on the net and the technology of streaming, downloading, IPTV and mobile video delivery. The DCIA is a show sponsor, and DCIA Member BUYDRM’s Christopher Levy will speak on the P2P for Large Scale Video Delivery panel.
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P2P MEDIA SUMMIT LA – June 11th in Santa Monica, CA. This is the DCIA’s must-attend event for everyone interested in P2P. Keynotes, panels, and workshops on the latest breakthroughs. Held in conjunction with the new Digital Hollywood Spring conference and exposition.
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International Broadcasting Convention (IBC) – September 6th-11th in Amsterdam, Holland. IBC is committed to providing the world’s best event for everyone involved in the creation, management, and delivery of content for the entertainment industry, including DCIA Members. Run by the industry for the industry, convention organizers are drawn from participating companies.
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PT/EXPO COMM – October 23rd-27th at the China International Exhibition Center in Beijing, China. The largest telecommunications/IT industry event in the world’s fastest growing telecom sector. PT/EXPO COMM offers DCIA participants from all over the world a high profile promotional platform in a sales environment that is rich in capital investment.
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