August 13, 2007
Volume 18, Issue 10
P2P ADVERTISING UPFRONT Announced
Peer-to-peer (P2P) and social networks continue to experience tremendous annual growth in usage – 47% for P2P music and 171% for the top-two social networks alone – creating a huge new market for advertising that is predicted to exceed $1 billion in the US for the first time this year. Meanwhile, video file sharing has become the fastest growing phenomenon online with some 80% of early adopters now partaking monthly.
Near-term revenue could increase enormously, with content still by-and-large free to consumers, if major and independent motion picture studios and music labels would take an important step: license a critical mass of popular and emerging entertainment content for ad-supported P2P and social networking distribution industry-wide. To further increase revenue, premium subscription offerings and paid downloads as tiered services could then be layered on top of the ad-supported offerings, which would satisfy consumer demand and expectation for choice and convenience of a broad selection of free digital content options.
In an effort to jump-start such a monetization initiative for P2P and social networking traffic and a conversion of this consumer-based distribution channel into a mainstream ad-supported medium, the DCIA plans to sponsor a first-ever bicoastal P2P ADVERTISING UPFRONT,featuring day-long marketing conferences in New York on October 26th and Los Angeles on October 29th in partnership with Digital Hollywood Fall.
INTENT & SlamJamz Lead Ad-Supported P2P
INTENT MediaWorks, a digital media distribution company, and SlamJamz Records, one of the most innovative record labels in the music industry, are now releasing Public Enemy’s (PE) new 20th anniversary album, “How to Sell Your Soul To A Soulless People Who Sold Their Soul,” to P2P file-sharing networks, immediately following the physical release of the album earlier this week. Internet users can now download any of the tracks from the album free of charge using their choice of P2P software programs, in exchange for viewing brief ads associated with the files.
INTENT MediaWorks’ ad-supported model enables consumers to get high-quality, licensed copies of music tracks at no cost, while creating new revenue streams for artists and labels. SlamJamz Records has partnered with INTENT MediaWorks since 2006.
“Public Enemy consistently leads the music industry with our innovation and by embracing new technologies,” said Chuck D, front man for PE and founder of SlamJamz Records. “We continue to look for new ways to satisfy our fans, and P2P is the largest international fan base on the Internet. Providing free authorized tracks for our fans is great for everyone.”
INTENT MediaWorks will help PE distribute high-quality digital media files via P2P networks, using its proprietary technology for distribution management. In addition, INTENT will deliver downloads and serve advertising content for users not only across P2P platforms, but also through social networks, mobile, websites, and other channels as consumers share their downloaded files with friends and other Internet users.
“There are over 300 million P2P users in the world, and we know that PE’s new album will be uploaded onto countless file-sharing systems by consumers as soon as it goes on sale, said SlamJamz President/General Manager Dan Lugo. “Rather than creating a model to get out in front of this widely adopted technology, for far too long the entertainment industry has chosen to react against the P2P phenomenon. At SlamJamz, we believe that it is smart business to satisfy the needs of our P2P fans while creating a responsible revenue model to benefit our artists and composers.”
INTENT enables clients like SlamJamz to manage the integrity and consistency of their brand across multiple Internet channels, rather than being limited or restricted within a specific online environment. Using INTENT’s service offerings, rights holders are able to determine how their content is presented, what keywords are associated with their files, and what advertising and promotions are served with the content.
“There is no question that Public Enemy is one of the most significant groups to come out of the music industry during the past 20 years,” said Les Ottolenghi, Co-Founder and President, INTENT MediaWorks. “What’s most impressive about PE is its ability to recognize emerging trends, and capitalize on new innovations to remain at the forefront decade after decade. We’re excited to help mark this chapter in the group’s history by supporting the launch of its 20th anniversary album, which is sure to be another huge hit.”
Report from CEO Marty Lafferty
 We invite you to visit the new and improved DCIA website, www.dcia.info, which has a number of significant revisions and updates thanks to the initiative of DCIA’s Technology Advisor, Adam Marcus.
Our Home page continues to feature the current issue of DCINFO in the main section, and in the left-hand column are links to major breaking stories, the top one-hundred “Industry News” articles, plus the top fifty reports in each of the following categories: “Data Bank” – featuring P2P-related research and new studies of interest; “Techno Features” – featuring news of cutting-edge innovation using distributed computing technologies; and “Anti-Piracy” – featuring items about solutions to combat copyright infringement and ongoing enforcement activities.
Scrolling further down the left column, in addition to our “Sponsors” section, we are proud to feature a brand new section presenting DCIA Member companies by means of their logos with hyperlinks to their primary websites. The list will be rotated each week so that every company receives equal treatment. These firms lead the industry in their development and deployment of innovative technological solutions and business models.
The new Activities page offers two main sections: “Events” and “Working Groups.” Within the Events section, there are descriptions and links for upcoming DCIA-sponsored events, such as the P2P ADVERTISING UPFRONT and P2P MEDIA SUMMIT LV – our Conference within CES. And there are headings and links for past events which contain archives of presentations and photos.
Within the Working Groups section, there are mission statements and work products of DCIA-sponsored working groups, such as the P4P Working Group (P4PWG), P2P Digital Watermark Working Group (PDWG), Consumer Disclosures Working Group (CDWG), Peer-to-Peer Parents And Teens React On Line (P2P PATROL), P2P Revenue Engine (P2PRE), and P2P Music Models (P2PMM).
The News page now includes the twenty-five top DCIA press releases in reverse chronological order, as well as the popular “DCINFO Newsletter Archive,” which now contains more than two-hundred DCIA weekly newsletters, uniquely chronicling progress in commercial development of the distributed computing industry since mid-2003.
The all new Documents page features three sections: “White Papers,” “Testimony,” and “Background.”
In White Papers, there are links to our recent white paper “The Coming Exaflood,” as well as “Part I - Titanic Forces” and “Part II - Network Effects” of FTI Consulting’s in-process series “Couch Potato Famine: Prospering Through an Era of Disruptive Change in Media.”
There is also a link to the PDWG’s “DIGITAL WATERMARK TECHNOLOGIES: Applications in P2P Networks” co-sponsored by the Motion Picture Association of America (MPAA) and the Digital Watermarking Alliance (DWA).
Bennett Lincoff’s “Fixing What’s Badly Broken: A Proposal to Maximize the Licensed Availability of Recorded Music for Digital Transmissions and to Make the Music Industry Whole Again as the Digital Music Marketplace Develops,” as well as the DCIA’s seminal white papers from Fall 2005, Winter 2004, and Summer 2003, are also featured.
The Testimony section contains more than twenty statements and related correspondence from the DCIA and DCIA Member companies to US Congressional leadership and the Federal Trade Commission (FTC) associated with hearings, public workshops, and briefings regarding various aspects of the development and deployment of P2P technologies.
The Background section contains “Origins,” which describes the DCIA-predecessor organization, the Distributed Computing Standards Coalition (DCSC) founded by Derek Broes, as well as “Remarks of Senator Coleman at the DCIA Winter 2004 Meeting,” and the “October 2003 Letter from Senator Hatch.”
The brand new Awards page memorializes DCIA Award winners in our four annual award categories of Innovator’s Award – granted in 2007 to BitTorrent and in 2006 to INTENT MediaWorks; Pioneer’s Award – granted in 2007 to iMesh and in 2006 to MetaMachine, developer and distributor of eDonkey; Trendsetter’s Award – granted in 2006 to LTDnetwork, developer and distributor of QTRAX; and Groundbreaker’s Award – granted in 2006 to arvato mobile, developer and distributor of GNAB. We also commemorate our Founder’s Award granted in 2007 to Derek Broes, Senior Vice President of Digital Entertainment at Paramount Pictures.
As noted above, our Technology Advisor, Adam Marcus, deserves full credit for this work. Adam has just finished law school and is about to return to the Washington, DC area. If you are in need of the kind of services Adam is qualified to provide on a per-project basis – from computer technical support to legal/policy research – please contact him directly at adam@dcia.info.
Adam has over ten years of experience writing online and printed material for corporate, non-profit, and government clients. He has a J.D. from Santa Clara University and a M.A. in Communication, Culture & Technology from Georgetown University. His article on the FCC’s media deregulation policies was published in Volume 3, Issue 1 of I/S: A Journal of Law and Policy for the Information Society.
His Masters thesis, which focuses on digital music copyright policy issues, received an award of distinction from his department, and was presented by Adam at the Telecommunications Policy Research Conference. Share wisely, and take care.
Social Networks Are Here to Stay
Excerpted from Adotas Report
A new report put out by comScore reveals that social networking sites have grown exponentially within the past year yielding as much as a 774% increase.
The analysis firm looked at popular sites Bebo, Facebook, Friendster, Hi5, MySpace, Orkut, and Tagged. The numbers of users daily and unique users to the sites were compared to last year’s numbers.
MySpace still holds the lead with over 114 million unique users in June up 72% over last June’s 66 million. However, Tagged gets the prize for fastest growing site with a 774% growth rate. Facebook may take second in both of the aforementioned categories with 52 million users, but leads MySpace with a 270% growth rate up from 14 million visitors last summer.
ComScore EVP Jack Flanagan stated that these measurements should be an indicator to advertisers that social networks are now part of the normative online world. “In terms of the size of audiences, certainly social networking has hit the mainstream,” said Flanagan. “Typically we see that, whenever that happens, advertisers will follow the eyeballs.”
He continued, “Certainly, while it started off with the younger demographic, we have seen in the past year that people of all age groups are using social networking sites. It’s not a genre restricted to a demographic as much as an overall function that is now being used across the Internet.”
The firm plans to continue its research on these sites focusing on the global reach as each of them have a corner on the market in different countries.
Internet Ad Spending to Dominate by 2011
Excerpted from MediaPost Report by Laurie Petersen
Spending on Internet advertising will reach $61.98 billion to become the nation’s leading ad medium in 2011, projects private equity firm Veronis Suhler Stevenson (VSS) in its 21st Communications Industry Forecast released this week.
“We are in the midst of a major shift in the media landscape that is being fueled by changes in technology, end-user behaviors, and the response by brand marketers and communications companies,” said James Rutherford, Executive Vice President and Managing Director at VSS.
At the same time, the consumer migration to digital media – which require less time investment than traditional media counterparts (e.g., 3-minute YouTube clips versus 30-minute TV shows) – has spawned a year-over-year decline in the amount of time consumers spend with media, VSS researchers said. The tally came in at 3,530 hours in 2006, a per-capita decrease of 0.5%. It’s the first time since 1997 that such a behavior has occurred.
Consumers are also migrating away from ad-supported media and spending more time with media they support, according to the VSS Forecast.
Consumers spent an average of 1,631 hours in 2006 with consumer-supported media, such as the Internet and video games – a gain of 19.8% compared to 2001. Time spent with ad-supported media, such as broadcast television and newspapers, has fallen 6.3% since 2001 to 1,899 hours per person.
“We expect these shifts to continue over the next five years,” Rutherford added, “as time and place-shifting accelerate while consumers and businesses utilize more digital media alternatives, strengthening the new media pull model at the expense of the traditional media push model.”
Total communications spending for 2006 increased 6.8% to a record $885.2 billion and the compound annual growth rate (CAGR) of 5.9% from 2001 to 2006 outpaced the nominal GDP, the VSS Forecast reports.
According to the VSS Forecast, ad spending on pure-play Internet sites reached $15.1 billion for 2006, and is projected to hit $34.78 billion in 2011, for a CAGR of 18.2%; growth of 25.79% is projected for ad spending on traditional media-based Internet sites, which hit $8.585 billion in 2006, and is projected to reach $27.2 billion in 2011; national Internet advertising, which includes search, display, sponsorships, etc., is projected to remain the dominant dollar-generator with $38.9 billion forecast for 2011, representing an 18.2% CAGR from 2006-2011.
Blog, podcast, and RSS advertising is projected to reach $1.14 billion by 2011, registering the fastest growth rate at a 70.9% CAGR forecast from 2006-2011.
P2PTV to Grab Ad Revenue
Excerpted from eMarketer Report
Peer-to-peer television (P2PTV) and less predominant forms of Internet television advertising revenue will hit $10 billion worldwide by 2011, according to an August 2007 Understanding & Solutions report.
That would equal 18% of all Internet advertising that year. Understanding & Solutions also stated that the amount of video on the Internet is doubling each year.
“Globally, we estimate there are more than 20 billion videos being streamed across the web each and every month,” John Bird, Principal Consultant with Understanding & Solutions, said. “In the US alone, active Internet video users are streaming an average of 55 videos per month – and this is just the beginning.”
Alison Casey, Business Director for Understanding & Solutions, noted that problems will accompany the growth. “The national boundaries which govern broadcasting today will be challenged by the global nature of the Internet, as has been the case with e-commerce,” she said.
Most Internet TV content will be free to users over the next one or two years. Viewing will take place mainly on PCs and handheld devices. Early adopters are already networking Internet TV to their main TV screens.
Internet protocol TV (IPTV), led by P2PTV, has only just emerged in the US and is unlikely to challenge other TV distribution platforms, according to Kagan Research.
For an in-depth look at social network ad spending, please read the eMarketer US TV Trends: The Impact of DVRs, VOD and the Web report.
It’s an Ad, Ad, Ad, Ad World
Excerpted from MediaPost Report by Ross Fadner
David Kenny, chief executive of Digitas, the interactive unit of Publicis Groupe that was acquired by the firm for $1.3 billion late last year, said it’s only a matter of time before all advertising is digital.
Kenny is in charge of the most dramatic overhaul in the history of the ad holding giant, whose agencies include Saatchi & Saatchi, Leo Burnett, and Starcom MediaVest Group. Global clients collectively include, P&G, Amex, HP, GM and more. The ad giant’s plan is to create thousands of versions of ads using offshore labor and then, using a complex set of algorithms, let its internal network decide what ads should run where and when on a given networked device. In other words, the goal is transform its strategy from advertising to the masses to personalized messaging.
“There is a massive transformation happening in the way consumers live and the data we have about them, but very few companies have stepped up to it yet,” Kenny said. Last Tuesday, Publicis announced an important acquisition in that direction, in adding the Chinese agency Communications Central Group (CCG) to its arsenal, giving the firm a foothold in one of the fast-growing advertising markets.
The shift towards more personalized advertising has led to an unprecedented demand for production capacity, Kenny added, estimating that in the US alone, some companies already run about 4,000 versions of an ad for a single brand-and growing. Ten years ago, they might have run three to five. That’s why the offshoring – look for it to drive growth in emerging economies. Please click here to read the full NY Times report by Louise Story.
Rise of P2PTV & Streaming Video
Excerpted from Media Life Magazine Report
P2PTV and less efficient forms of streaming video are on the rise as a replacement for niche programming, appealing to viewers who can’t find what they want on traditional television. More networks and services are finding ways to take advantage of the appeal of instant streaming video, working to make it faster and higher-resolution, reports the NY Times.
The Independent Film Channel is streaming a series of short films by R&B recording artist R. Kelly while The Jewish Television Network is streaming Jewish artists’ music videos and cooking shows. Netflix has also jumped on board with streaming video, offering a subscription service that streams full movies and television episodes with access times under 30 seconds.
New P2PTV companies like Joost are entirely based on the increasing popularity of streaming video. And with No. 1 streaming video site YouTube on the top-10 list of most popular Internet brands, according to Nielsen/NetRatings, streaming video is consistently rising in demand.
Cisco Systems Profit Rises 25%
Excerpted from Associated Press Report
Profit at Cisco Systems jumped twenty-five percent in its fiscal fourth quarter as the company, which makes network equipment, continued to have strong sales of the routers and switches that direct traffic over the Internet. Cisco shares jumped more than five percent on an improved financial forecast.
Net income for the period that ended July 28th was $1.93 billion, or 31 cents a share, compared with $1.54 billion, or 25 cents a share, during the quarter a year ago. Excluding one-time charges, Cisco earned 36 cents a share, a penny above the estimate of analysts surveyed by Thomson Financial.
Revenue for the period was $9.43 billion, an 18 percent increase from the $7.98 billion in sales Cisco rang up last year. The revenue also beat Wall Street’s estimate, which was for $9.29 billion in sales.
In a conference call with analysts, Cisco’s chief executive, John Chambers, said the company was raising its revenue forecast from 13 to 16 percent growth for 2008 over 2007. For the current quarter, the company expects revenue of $9.45 billion to $9.55 billion, above the average analyst estimate of $9.39 billion.
Mr. Chambers also announced that Chief Financial Officer Dennis Powell would retire at the end of the second quarter of the current fiscal year. His successor will be Frank Calderoni, currently a Cisco Senior Vice President.
Cisco, based in San Jose, CA, is profiting from widespread network upgrades as Internet service providers (ISPs) and other companies increase capacity to handle increasingly bandwidth-heavy downloads, particularly video.
Cisco is also growing by moving beyond its roots as purely a maker of networking gear. During the fourth quarter, the company completed its $3.2 billion acquisition of an online meeting company, WebEx Communications, and the $830 million takeover of IronPort Systems, a maker of security products.
CacheLogic Names Robinson New CEO
Phill Robinson, the former Chief Marketing Officer (CMO) of Salesforce.com, has joined CacheLogic as its Chief Executive Officer (CEO). CacheLogic is a fast-moving global provider of peer-assisted online distribution services for large digital assets including software, gaming, and video.
Spanning 20 years, Phill Robinson’s experience demonstrates an ability to identify new technology trends and winning companies. He has worked for some of the most successful technology companies during their developmental stages in Europe, as well as at a strategic level in the US, serving on the management teams of Oracle, Sybase, and Siebel, prior to Salesforce.com.
CacheLogic Chairman Tony Illsley said, “Phill has an impressive track record in sales and marketing leadership. CacheLogic will benefit substantially from his commercial approach to developing European software businesses. We are delighted to welcome Phill to the board in light of his opening up new technology markets and helping transform early stage companies into world class businesses.”
Mr. Robinson outlined his vision for CacheLogic and for the online content delivery industry as a whole as follows. “Consumer expectations of the Internet have risen sharply with the proliferation of broadband and Web 2.0. Delivery of rich-media enabled services represents the next major evolution including video-on-demand (VOD), P2PTV, and online movies, games, and software distribution.”
“However, the Internet alone cannot cope with the distribution of large digital assets required to support these services with quality-of-service (QoS). Traditional content delivery network (CDN) providers also fall short of the mark with economic models and technology designed for when website response time was the problem rather than delivery of large media assets,” he continued.
Phill concluded, “The management team at CacheLogic has done an outstanding job of developing VelociX. Now for the first time, high performance delivery of large media assets is available with compelling economics and technology that puts the customer in the driver’s seat. It’s just what this sector needs to achieve escape velocity, and I am looking forward to leading the team that makes this happen.”
BitTorrent Digital Entertainer HD Wins Award
Excerpted from Slyck.com Report by Thomas Mennecke
One of BitTorrent’s more interesting ventures is its cooperative effort with NETGEAR, which manufactures the BitTorrent enabled Digital Entertainer HD that serves as an interface between a high-definition display and media on a home network. It looks a bit like a DVR, and in many ways functions like one. However, instead of dealing with the cable company, it interacts with networked media content.
The Digital Entertainer HD’s relationship with BitTorrent isn’t bound by a technological arrangement, as are NETGEAR’s network storage devices; rather it’s more of a marketing arrangement. The Digital Entertainer HD can stream content from any source. Regardless of the content’s source however, the Digital Entertainer HD is an important endorsement of the BitTorrent technology.
Maximum PC has found the Digital Entertainer HD and BitTorrent worthy of its endorsement. In a press release issued this week, Maximum PC awarded the Digital Entertainer HD with its “Kickass” product designation and will feature it in a full-length article in September.
“The recognition of the Digital Entertainer HD as a ‘Kickass’ product by Maximum PC is exciting to NETGEAR as it validates the extensive efforts of our development team to create a ‘must-have’ HD audio/video component for every HDTV owner,” explained Jamison Ching, Product Line Manager, Digital Media at NETGEAR.
“To differentiate the EVA8000 from other A/V streaming products in the market, we knew that we had to make it easy to install, give it an attractive, easy-to-navigate interface, enable it to stream the widest variety of photo, video, and audio formats, and display brilliant high-definition video at up to 1080p resolution. The Maximum PC award recognizes the strength of the EVA8000 in all of these areas and more.”
PeerApp Improves Network Availability
PeerApp, a leading innovator in P2P acceleration and caching solutions for ISPs, this week offered dramatic proof of how its solution helps maintain consistently high service levels for broadband media content.
In late June, a damaged sub-marine fiber-optic cable in Latin America resulted in significantly degraded Internet service for several million subscribers. The notable exception was the media traffic cached by PeerApp’s UltraBand 2000 product. Throughout the network failure, the UltraBand 2000 continued to deliver P2P content to subscribers.
“ISPs go to great lengths to ensure the performance and reliability of their network infrastructures, because their brands and reputations depend on these things,” said Frank Childs, Vice President of Business Development for PeerApp. “They carefully plan and implement redundant network elements and circuits to ensure subscriber connectivity in the event of network failure. But this isn’t enough: they also need to proactively manage the bandwidth associated with key applications such as broadband media content – or risk losing business.”
PeerApp’s UltraBand solutions complement ISPs’ existing international transit links with caching technology for improving content-delivery service levels under normal and adverse conditions. PeerApp’s patented Smart Bandwidth technology provides flexible, application-aware traffic engineering, giving ISPs the ability to manage and generate bandwidth based on network requirements. As network requirements change due to time-of-day or adverse conditions, ISPs can adjust the amount of bandwidth accordingly. Smart Bandwidth clears points of congestion, improves network response times, and increases redundancy in the event of a network failure.
“As more business and consumer applications use commercial P2P networks for distributing content, PeerApp’s solutions will become essential for ISPs worldwide who want to protect and expand their subscriber bases,” said Childs.
PeerApp’s carrier-grade UltraBand solutions include reliability and fault-tolerance features mandatory in today’s service provider environments. The UltraBand 2000 has a blade architecture with dual backplane and redundant power supplies, and shared network access/storage, to ensure high service availability.
Abacast Creates Tool to Help Broadcasters
With the Copyright Royalty Board (CRB) decision still in limbo, there are many outstanding questions about the future of streaming radio online. One of these relates to new reporting requirements that will cause content producers, webcasters, and radio stations a significant amount of work just to meet compliance. This increased workload will add a huge burden to these groups in addition to the controversial proposed rate changes.
Abacast, a specialist in peer-assisted streaming online radio for seven years, has a history of creating innovative products to help online radio reduce costs, increase revenues, and improve quality. Abacast is once again anticipating the needs of the future of radio online by creating a new tool for broadcasters to automate performance reporting.
Abacast’s Performance Reporting Tool (PRT) combines now-playing information with real-time statistics and additional performance details to create reports that will meet and exceed SoundExchange guidelines with almost no additional work for the broadcaster. The reports are accessed through a web portal and can be easily run for any date range. Report data is ready in real-time so there is no need to wait for results. Further, these reports can be used for instant analysis of liabilities, forecasting, and budgeting. Alerts can also be sent to the broadcaster based on certain thresholds to keep it informed of audience changes.
The reporting is all done automatically, providing a labor-saving alternative to any other performance reporting option. The tool can be used by any webcaster or broadcaster regardless of the CDN used. Reports are exclusively accessible to the webcasters or broadcasters for their own use.
Abacast invites webcasters and broadcasters to sign-up now for this new service so they can be informed about how many performances they are currently playing and how the CRB decision will impact their future. Abacast is offering an introductory special for customers who sign-up before the end of September.
Selfcast Advances Service Offering
There’s a new version of RawFlow’s exciting Selfcast application available for download today. Selfcast Beta V0.8.0.4 includes a smoother running playlist making it easier to broadcast pre-recorded files. Please click here to uninstall the old version of Selfcast and download the new version.
Additional improvements include better visibility of live chat and no longer needing to be logged-in to view chat; a search feature on all pages; and placement of the broadcast title above the audio/video player. Please click here to sample these enhancements.
What else is in progress? Some very cool widgets will be ready soon that will allow users to embed their streams into social communities or web pages. The Selfcast Team says, “Stay tuned!”
Skype Adds Video Functionality
Excerpted from World Screen News Report
Users of the online P2P telephony service Skype can now share videos with each other, via the company’s new partnerships with Dailymotion and Metacafe.
Skype 3.5 for Windows lets users download videos from these sites and add them to their online profiles or share them in online Skype chats.
“People thrive on sharing stuff with one another,” said Carter Adamson, the General Manager of Desktop Products for Skype. “A little over a year ago, we had 100 million registered users worldwide and we’ve more than doubled in size in the space of twelve months. This is because we continue to develop Skype and come up with amusing things to do. User-generated and licensed video content are incredibly popular. Working with Dailymotion and Metacafe means everyone can try-out downloading their favorite clip and putting it in their online profile. Video content is a great conversation starter because people love talking about video clips and especially the ones that are personal to them.”
Skype, today owned by eBay, was founded by Joost inventors Janus Friis and Niklas Zennstrom.
Vuze Reaches 7 Million Users in 6 Months
Azureus, a global leader in distributing long-form, high-quality video via P2P, is thrilled to announce that Vuze, its high-resolution video portal, has reached over seven million users in its first six months of availability.
In addition, the complete two seasons of BBC’s version of The Office, plus its specials, have been made available for download and high-resolution streaming on Vuze for the first time in the United States, the first episode of which is free. “The Office” joins Vuze’s existing HD and standard definition BBC programming that includes “Coupling,” “Little Britain,” “Fawlty Towers,” “Doctor Who” and many others.
Vuze, currently the world’s largest P2PTV service is experiencing unprecedented growth from the heart of an organically developed community that appreciates high-resolution and HD video content. Millions of videos are being downloaded from Vuze every month, and July saw content downloads grow well over 100% compared to June.
“Vuze continues to see adoption from unique users at an unprecedented rate,” said Gilles BianRosa, CEO, Azureus. “Our active community has been following Azureus for a very long time, and is now embracing Vuze and its unique features. This community is what sets Vuze apart from other Internet video and entertainment sites and we strive to give users everything they need and nothing they don’t.”
As an open platform, Vuze encourages all content creators big and small around the world to publish their content to the platform at no cost. On Vuze, content owners may also monetize their videos, music, and games through advertising, rental, or electronic sell-through. Coming this Fall, Vuze will be adding exciting new “game changing” features to further embrace content creators and digital media fans worldwide.
Interview with Zattoo Co-Founders
Excerpted from Last 100 Report by Steve O’Hear
Zattoo is one of only a few P2PTV applications that I use on an almost daily basis. It enables me to watch live television – which includes all of the BBC’s offerings along with a few other European channels – in a window in the corner of my laptop, while I remain productive: blogging, replying to or writing e-mail and chatting over IM. In this way, Zattoo is very different from competitors such as Joost and Babelgum, both of which in part re-create the “lean-back” experience of traditional TV.
I caught up with two of Zattoo’s co-founders, Sugih Jamin and Beat Knecht, to find out more about the company’s mission and its Silicon Valley-esque roots in academia. Sugih is the Chairman, CTO, and Co-Founder of Zattoo. Beat is Zattoo’s President, CEO, and Co-Founder.
Q: Please tell us a bit about your background and position in the company.
Sugih: Beat and I met in college about 20 years ago. I went on to get my graduate degree and then became a professor at the University of Michigan, Ann Arbor. Prior to Zattoo, Beat worked at UBS, then got his MBA, and joined McKinsey and then Levanta.
Q: Tell us about the roots of Zattoo. Am I correct that it grew out of an academic research project?
Sugih: That’s right. It started out as a PhD thesis of Wenjie Wang, whom I was supervising at the time. It was first used to broadcast several technical conferences live on the Internet. From that success, we decided to commercialize the technology. I recruited my long-time friend, Beat Knecht, to help us build the company. The three of us founded the company in the US, in Ann Arbor, in 2005. It was initially funded with our own money and funds from friends and families – as most startups are, I suppose.
Q: How does Zattoo compare with other P2PTV applications such as Joost?
Sugih: Zattoo delivers live TV in an authorized fashion, just like a cable network. Presently Zattoo doesn’t create its own channel from archival content, nor do we yet carry user-generated content. Instead, we work with broadcasters to redistribute their content simultaneous, unaltered, and unabridged. Compared to Joost, we provide live TV viewing instead of archival content delivered on-demand.
Beat: We focus on carrying high-quality production video. TV broadcasters spent billions in producing good content; by working closely with them, we don’t have to invest so heavily in production facilities and talent.
Q: Zattoo appears to be less about emulating the “lean back” experience of TV but is more designed for use while multitasking. Is that true? Who is Zattoo aimed at, and how are people using the app?
Beat: We designed Zattoo for people who would like to multitask, watching TV while doing e-mails and web browsing. Zattoo can comfortably run in a window in the background while you’re web browsing, without taking over your whole screen or computing power.
Sugih: For each country we’re available in, we try to carry all the mainstream local TV channels. Our viewing statistics show that people are mostly interested in watching the top three or four most popular channels. If you look at the viewing distribution, we focus on the tall head of the distribution graph instead of the skinny long tail.
Q: What kind of video compression does Zattoo use?
Sugih: We use H.264 for video compression. The stream is sent at 400 Kbps, for a video resolution of 352×288 (or 480×288 for the wide aspect ratio). Unlike other P2P applications, Zattoo was designed and optimized from the start for live streaming, not file sharing. This means that after you’re done watching Zattoo, you won’t find files littering and cluttering your hard drive. P2P sharing under Zattoo happens only when you’re watching a live channel, after you quit Zattoo, your computer is not used to serve other peers. Our design for live streaming also allows us to switch channels in 5 seconds, on average.
Q: There are lots of standalone P2PTV apps coming out, as well as TV networks’ own catch-up services. How many Internet TV apps do you think users will welcome onto their desktop, and is this a problem?
Sugih: The Internet video market is still in its infancy. Zattoo is offering live TV, others are offering on-demand, archival content. Zattoo offers professionally produced video, others carry user-generated video. Each will have its own market and following. Different distribution technologies may well be more suited for the different types of content and interaction. Whether users will prefer a single front-end for all these types of content, or whether users will naturally use a different front-end for each content type, remains to be seen. For example, it may be the case that a search engine is the most natural front-end for archival, on-demand content, while a channel list the most natural one for live channels.
Beat: What seems clear is users’ preference to have all content of the same type aggregated. To have to go to a different website to watch a channel is quite painful. At the minimum, you’d have to get used to a different UI for each channel. Whereas with Zattoo, you can watch all the channels with a single UI.
Q: Right now Zattoo is only available in a few European countries, and with a limited channel lineup. How do you “sell” Zattoo to traditional TV networks? (Give us your elevator pitch!)
Beat: We now have altogether about 650,000 registered users in the countries where we’ve launched. This clearly shows that people do find the Zattoo offering of live TV on the computer compelling.
Sugih: The computer is now the information and entertainment center. It is also the medium through which people socialize with their friends. TV viewing is as much a social experience: people watch sports together and they talk about the last episode of “Lost” they’ve watched on TV the night before. Zattoo brings the social experience of live TV watching to the new social medium of the computer. People can now watch live TV while IM-ing their friends. People can watch TV together separately.
Q: Lastly, do you plan to integrate any social features into Zattoo, such as real-time chat, etc?
Sugih: Users already have their favorite chat apps, they’ve built up their own buddy lists and communities. Zattoo has been designed from the beginning to play nicely with your existing apps. We don’t take over your computer and we don’t assume you’d want to do all your social networking within Zattoo. We would like to integrate better with existing chat apps and other social networking apps or sites, where it makes sense, so that Zattoo extends the users’ existing social networking experience instead of forcing them to re-construct from scratch their social networks.
Trispen’s New P2P VPN Product
Excerpted from ISP-Planet Report by Alex Goldman
Gauteng, South Africa-based virtual private network (VPN) software provider Trispen is named after a fictional plant. In the book by Douglas Adams and John Lloyd, “The Meaning of Liff,” trispen is defined as “a form of intelligent grass. It grows a single, tough stalk and makes its home on lawns. When it sees the lawnmower coming it lies down and pops up again after it has gone by.”
The company, Trispen Technologies, is not at all fictional. The company’s new P2P VPN product, “@TheOffice Wherever!,” is now available to ISPs. A P2P VPN product sounds new and trendy, but the company’s been offering the service to government customers since 1998, and was incorporated in 1999. Initially, the company specialized in ultra-secure VPN appliances.
The company also works with the satellite industry, through a partnership with XipLink, to provide VPNs that can handle the latency of satellite Internet technology.
The core of the product is a public key infrastructure (PKI) that the company says is easy to install and configure. If it works as advertised, it could allow ISPs to serve small business customers a big business service at a per-user price. Per-user pricing works for business services because business customers, unlike residential customers, are willing to pay for services offered by the ISP.
ISPs retain the customer information. Trispen assigns a contract ID number to each customer, and the ISP handles the details.
Asked whether the P2P technology would work if there are few Trispen customers in an area or in the entire country, the company’s CEO, Jaco Botha, said, “Our software does not rely on any other P2P clients to forward traffic. Our software always tries to build a connection between the client and the gateway directly. This works in about 95 percent of cases. In some situations (the other 5 percent of cases) the software will relay traffic via our look-up servers. Depending on location of the gateway and client, this may introduce additional latency and performance degradation. Since we are not in control of the underlying Internet, we cannot guarantee QoS though, and our solution may not work in all scenarios. In some cases customers can change their firewall settings to avoid relaying, thereby improving throughput.”
For businesses behind a firewall, the software uses methods invented by a VoIP provider, Botha added. The software uses the open source STUN protocol. It assigns each client a virtual IP address for the purpose of the VPN. This virtual address is used only by the @TheOffice Wherever! software.
AT&T Effort Cheers Entertainment Industry
Excerpted from Business Investors Daily Report by Brian Deagon
Cable and telecom giants used to shrug at Hollywood moguls’ complaints that they did little or nothing to thwart unauthorized movie and music downloads over their Internet networks.
But that changed in a big way recently. In June, AT&T said it would work with the entertainment industry to develop technology that, if implemented, might filter, identify, and zap the lines of Internet copyright infringers.
“If we can find a reliable way to spot the infringing traffic, then it becomes a legal question,” said Jim Cicconi, AT&T’s Senior Executive Vice President for External and Legislative Affairs. “Is the information reliable enough that we could get a legal sanction or a court order to take down or block those particular unauthorized transmissions?”
Internet copyright infringement is hogging bandwidth, placing new demands on the Internet’s access and backbone networks, and costing AT&T billions of dollars for infrastructure to keep pace with overall demand.
Various analysts estimate that about 5% of Internet users account for 50% of traffic. It’s also estimated that these users are largely engaging in the free exchange of copyrighted content – movies, music videos, albums, popular TV shows and more – without copyright holders’ permission.
More content is moving to the Internet. Knocking out copyright infringement would help ease Internet congestion.
AT&T is beginning to deploy an Internet-based TV service, called U-Verse, and will need Hollywood’s content to build a compelling offering. It wants what Hollywood has, and Hollywood wants AT&T’s help in solving the piracy problem.
Still, AT&T is heading into precarious waters going down the path of filtering content. It could face legal showdowns, and it would likely be savaged in the blogosphere by the millions of people accustomed to free content. The filters might also disrupt the traffic of people surfing the web in a perfectly legal manner.
“Clearly we have to get it done,” Cicconi said. “It’s a much more effective means of dealing with the problem. Then we’ll have to confront the questions about how we could use and deploy it.”
As to whether other ISPs – including Time Warner, Comcast, Cox Communications, Verizon Communications, Qwest Communications, and EarthLink – will follow AT&T’s lead is not yet evident. But there are signals that some are already engaged, based on what Bob Wright, Vice Chairman of General Electric, said in a June speech.
GE owns NBC Universal (NBCU), a TV network and movie studio. The studio later this year will launch an online video website with News Corp., AOL, Yahoo, and MSN as its partners.
Wright, in his speech at a Chicago convention of tech and telecom executives, said the entertainment industry and telecom providers are now “in the same boat. That is, we are all in the video business, the distribution business, and the advertising business.”
AT&T and Verizon, for example, are rolling out video services and deploying a triple-play bundle of phone, Internet, and TV services.
“Now that the ISPs are moving into content distribution and facing competition from infringement,” said Wright, “they are recognizing that facilitating the unauthorized viewing of the same video offerings we are seeking to sell together makes no sense.”
He described a two-pronged approach to thwarting infringement. The first step is for ISPs to increase efforts to identify and notify alleged violators to stop the practice.
ISPs do forward notices delivered by production companies to the alleged abusers. In the first six months of 2007, for example, NBCU said it sent more than 1 million notices of alleged abusers to US-based ISPs, asking them to forward the message.
Wright said ISPs can do more than just forward notices. They can keep track of how many notices a subscriber has received and they can establish consequences for continuing infringement after receiving a warning, which might include termination of service.
“By the end of this year, I am pleased to say that six of the eight largest ISPs will have this type of program in place,” Wright said.
The second prong is filtering content and blocking unlicensed transmissions, which AT&T is looking into. Analysts caution that this approach entails a lot of technical challenges and risks.
Public Knowledge, a Washington, DC advocacy group that opposes filtering techniques, said in a statement that such tools “are ineffective at best, harmful at worst, and always undesirable as a matter of public policy.”
Filtering isn’t new, said Fred Von Lohmann, an attorney for the Electronic Frontier Foundation (EFF).
“We’ve seen attempts at doing this over and again, like on university campuses,” he said. “They think if they install some widget it will make infringing activity disappear and also not have an impact on the rest of us. I think it’s a pipe dream.”
Verizon also forwards notices to its subscribers, said company spokesman Eric Rabe. As to AT&T’s efforts, he said, “We’re watching to see what they come up with, but aren’t directly involved.”
While each ISP’s approach is different, there’s been a “positive movement” to do more, said Dean Garfield, Chief Strategic Officer for the Motion Picture Association of America (MPAA).
“The work we’re doing with ISPs is an important first step, but the finer details of how this will work haven’t been worked out.”
“At each stage you do something more aggressive,” Garfield said. “We won’t solve the piracy problem next year, but with a multifaceted approach we can have a real impact.”
NBCU and Hiro-Powered P2P
Excerpted from NewTeeVee Report
NBC Universal (NBCU) e-mailed a press release this week touting DotComedy’s use of Hiro Media‘s dynamic ad insertion technology for downloads, but results to date do not yet indicate that NBCU is embracing the power of Hiro to distribute high-resolution, ad-supported video content over P2P networks.
A search on torrent meta-search site Torrentz on variations of “Dot Comedy,” “Comedy to Go,” and episode titles like “Playback: Mexicohabitation” didn’t turn up any torrents. Nor did searching the eDonkey and eMule networks with Figator.com or individual torrent sites like Mininova or The Pirate Bay. A BitTorrent.com search provided a link to the main DotComedy site, while nothing turned up searching Azureus’ Vuze either.
This means that viewers don’t seem to be reposting the videos, and NBCU doesn’t seem to be seeding popular torrent networks with the content. As for the downloads themselves, they are direct links from NBCU’s web host – so that rather than offering a torrent of the video and potentially saving on distribution costs through peer sharing, NBCU is paying full freight to its CDN for every bit.
With NBCU’s hyperbolic anti-piracy statements of late, the company likely doesn’t want to associate its content with sites or networks where unauthorized file sharing is going on. But from a business standpoint, the beauty of Hiro is that it doesn’t matter how or where viewers get the files from – NBCU moves ad units no matter what, and doesn’t have to pay a dime for distribution beyond the bandwidth as a seeder!
So while NBCU is to be applauded for its choice of a new revenue and distribution model, the company is leaving money on the table by not promoting its content on file-sharing networks.
Veoh Pre-Emptively Sues UMG
Excerpted from Associated Press Report
Veoh Networks, a P2PTV service, has pre-emptively sued the Universal Music Group (UMG), asking a federal judge to prevent the giant music company from filing its own copyright infringement action.
Veoh Networks, based in San Diego, CA filed the federal lawsuit this week, asking a judge to declare that the company has no liability to Universal even if individuals upload videos to the Veoh site that may contain music, used without permission, from Universal artists.
Veoh argued that it was entitled to protection under the safe harbor provision of United States copyright law because it does not encourage its users to infringe copyrights and goes beyond current legal requirements to investigate and remove infringing material when notified to do so.
The company said it was notified in July by Universal that the music label was considering suing Veoh because it was “massively infringing” its copyrights. The lawsuit claims Universal did not provide any details about the alleged infringement that would allow the company to investigate.
“It is unfortunate that UMG prefers to take actions that are designed to stifle innovation, shut down new markets and maintain the status quo instead of working to change and evolve models for today and the future,” Veoh’s chief executive, Steve Mitgang, said.
Universal had previously threatened to sue the video-sharing site YouTube, which is owned by Google, but the two sides struck a licensing deal before any legal action was taken.
“Universal Music Group is enthusiastic about using technology to build communities, as evidenced by our deal with YouTube,” the company said.
Coming Events of Interest
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Edinburgh Television Festival – August 24th-26th in Edinburgh, Scotland. Janus Friis, Co-Founder of P2PTV service Joost, will deliver the inaugural Futureview Lecture at this year’s festival. The aim of this year’s event is to assemble a cast list from the hottest shows, the most exciting new technologies, and the biggest TV controversies of the year.
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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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Broadcasting 2017 – September 27th in London, England. What do the leading players in television and new media across Europe predict for the future of broadcasting? Find out during “Broadcasting 2017” at BAFTA. Join industry giants such as Silvio Scaglia, Founder & Chairman of Babelgum for a day of stimulating sessions.
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Digital Music Forum West – October 3rd–4th in Los Angeles, CA. The seventh annual Digital Music Forum event now at the newly renovated Hollywood Roosevelt Hotel. Several DCIA Member company executives will be featured speakers and the DCIA will present a special session on “The Evolution of P2P and Music.”
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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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P2P ADVERTISING UPFRONT– Sponsored by the DCIA October 26th in New York, NY and October 29th in Los Angeles, CA in conjunction with Digital Hollywood Fall. The industry’s first bicoastal marketplace focused on the unique global advertising, sponsorship, and cross-promotional opportunities available in the steadily growing universe of open and closed P2P, file-sharing, P2PTV, and social networks, as well as peer-assisted content delivery networks (CDNs).
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Streaming Media West – November 6th–8th in San Jose, CA. Streaming Media conferences have become the premier online video events in the world. Streaming Media West is totally focused on the business and technology of online video. The DCIA will participate featuring industry leading P2PTV providers and support services.
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P2P MEDIA SUMMIT LV – January 6th in Las Vegas, NV. This is the DCIA’s must-attend event for everyone interested in monetizing content using P2P and related technologies. Keynotes, panels, and workshops on the latest breakthroughs. The Conference will take place in N260 in the North Hall of the Las Vegas Convention Center and the Conference Luncheon in N262-264. This DCIA flagship event is a Conference within CES – the Consumer Electronics Show.
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