October 8, 2007
Volume 19, Issue 6
P2P ADVERTISING UPFRONT LA
Don’t miss the P2P ADVERTISING UPFRONT LA Marketing Conference coming October 29th. P2P now accounts for fifty-to-ninety percent (50-90%) of all Internet traffic and, along with social-networking services, delivers over a billion content files daily. And we have not yet felt the impact of new peer-to-peer television (P2PTV) services that are set to exponentially increase the number of viewer impressions created using P2P.
The entertainment and telecommunications sectors are increasingly turning to P2P for its enormous cost savings, greatly increased efficiencies, and potentially higher security than competing online distribution technologies. In short, P2P now represents the largest unexploited revenue generation opportunity in the world. And advertising is the best way to monetize P2P. Plan now to attend this first-ever market event focused totally on developing advertising revenue in the emerging P2P and social-networking environment.
The P2P ADVERTISING UPFRONT LA is a must-attend event for advertising agencies, online ad networks, sponsor companies, content providers, P2P application distributors, solutions providers, and service-and-support companies – and all other parties interested in profiting from the realization of the file-sharing marketplace to its fullest potential.
The Marketing Conference will be held on Monday October 29th in conjunction with Digital Hollywood Fall. Your pre-registration for our combined special offering of both events represents a $339 savings over regular rates for these events individually.
The 10/29 P2P ADVERTISING UPFRONT LA – at the Renaissance Hollywood Hotel – presents leaders of this rapidly emerging high-growth industry from around the world.
Please visit http://www.dcia.info/activities/p2p_advertising_upfront/register.html to register. Or please visit http://www.dcia.info/activities/p2p_advertising_upfront for more information.
Industry Group Aims to Improve P2P Sharing
Excerpted from Venture Beat Report by Chris Morrison
The P4P Working Group (P4PWG) wants to improve the way P2P web sharing works, thus helping the entire Internet to grow. The group is composed of major tech industry players including Verizon, Pando Networks, and Yale University, in whose labs the idea originated.
P4P refers to a network management technology that will help Internet service providers (ISPs) route P2P traffic. P2P applications work by sharing files directly among users’ computers. They generally allow traffic to route randomly, meaning you’re as likely to be connected to a peer in Beijing as to one in Birmingham. However, distance matters, even on the Internet.
A more intelligent system could reduce costs, speed traffic, and make it easier for P2P-based applications to thrive. Joost, one of the most well-known Web 2.0 services to use P2P sharing, has joined the testing, and the group plans to propose its system as an international standard in late November.
A potential solution couldn’t come at a better time. The popularity of P2P sharing has seen it rise to account for more than half of all Internet traffic. The P4P solution centers around those ISPs that have to limit the transfer rates of peer sharers. Traffic shaping, which is similar in that it assigns importance levels to different types of traffic, is also used at times.
ISPs that adopt P4P’s standards will be able to install software to route traffic more efficiently, connecting people who are geographically closer, and improving how all P2P traffic is routed across the Internet. In preliminary tests, download speeds for users have as much as doubled, and link utilization has similarly improved, which could help reduce the traffic load on ISPs.
The tracking servers that P2P sharing applications use would also adopt the standards, which will be free of any license and open for anyone to use. Such servers can be owned by a company like Pando, or operated by a sharing site.
Laird Popkin, Chief Technology Officer (CTO) at Pando, told us that files with a large audience will benefit the most.
The P4PWG, which is sponsored by the Distributed Computing Industry Association (DCIA), will present the new standard to an industry audience on November 27th, at the European Peering Forum in Barcelona, Spain.
Report from CEO Marty Lafferty
 Congratulations to event producers Ned and Tinzar Sherman for an upbeat, informative, and well-attended Digital Music Forum West this week in Los Angeles.
Up-and-coming ad-supported P2P music distributor QTRAX was represented by Milt Olin on the “Advertising and Music” panel. Nettwerk Music Group CEO Terry McBride presented a refreshing and thought-provoking keynote address; and Nettwerk’s Brent Muhle added many insights on the “Indie Roundtable.”
Manatt Phelps & Phillips’ Aydin Caginalp hosted the VIP Dinner and moderated the timely panel on “Digital Copyrights: The Battles Wage On.” Javien Digital Payment Solutions also co-sponsored the conference, and BigChampagne CEO Eric Garland moderated “The Next Generation of Music Discovery.”
We are especially grateful to the speakers participating in our DCIA-moderated closing session, “The Evolution of P2P and Music:” INTENT MediaWorks VP of Business Development Joey Patuleia, BUYDRM CEO Christopher Levy, FTI Consulting Managing Director Roger Scadron, Javien CEO Leslie Poole, PeerApp Director of Marketing Mark Strangio, and VeriSign VP of Worldwide Marketing, Media & Entertainment, Stephen Condon.
Stephen outlined VeriSign’s interest in P2P and music distribution as a global supplier of backend infrastructure and owner of leading commercial P2P solution Kontiki. He underscored the difference between non-commercial P2P, where monetization has not yet caught up with usage, and commercial P2P, where controls are at least as effective as in traditional content delivery networks (CDNs), if not more so, while efficiency is much greater. Stephen’s view of the major labels’ consumer litigation campaign is that more education is needed and, much more importantly, the delivery of compelling consumer experiences must be expanded in order to compete with easily accessible unlicensed content. Labels need to explore the concept of representing consumers instead of artists, meaning that they should dedicate their resources to better understanding consumer behavior and new types of market segmentation, and how to monetize audience consumption patterns in new ways.
Mark explained PeerApp’s involvement in this space as a service provider to carriers with offerings to solve bandwidth problems. He said that consumer adoption trends for P2P are compelling, suggesting that it has become the technology of choice for music distribution. He noted that copyright infringement lawsuits would be hard to sustain internationally, and would need to be prosecuted globally in order to be effective given the Internet’s reach. What would be preferable would be expanded licensing of P2P solutions: a lot of people do want to pay for content and need to have more options for doing so made available. Mark encourages record labels to develop and support more opportunities for artists to produce in a wider variety of ways as a strategy to accelerate learning about how to monetize music in the digital realm.
Joey described the pending merger of Beyond Media and INTENT MediaWorks as a combination of powerful capabilities and best-of-class solutions for socialization-based media distribution. P2P has aggregated demand for music to an unprecedented level, and the question now is how to monetize the enormous worldwide fan base this represents, particularly with innovative advertising formats and subscription offerings. Joey strongly supports the rights of content providers to enforce copyright protection, including through litigation targeting infringers. Going forward, he sees enormous potential in commercially developing the P2P and social networking channel for authorized content distribution. This consumer-based marketplace holds great promise to be highly profitable for both discovery and delivery of licensed music.
Christopher stated that BUYDRM’s mission is to support the “marketing, monetizing, and moving” of content using digital rights management (DRM) effectively, including in the P2P environment. He gave as a current example ESPN Video’s decision to go with Pando. Christopher decried the now outdated practice in the music industry of deploying spoof and decoy files to degrade P2P user experience. He spoke for all panelists when he said that consuming content without authorization is wrong, but that answers lie in investigating technologies and business models that will generate revenue, not attempting to escalate enforcement actions. Christopher suggested that labels reinvent themselves for the future, reaching out to technology suppliers to develop tools to supply their artists with the means to self-distribute competitively. Without such forward-thinking approaches and updating the value-add for labels in the digital realm, artists won’t opt to re-up with them.
Leslie briefed attendees on Javien’s suite of e-commerce management offerings and its industry leadership position in providing payment services for leading P2P distributors such as Azureus, BearShare, iMesh, and others. He said that conversion rates to subscriptions and paid downloads in P2P are very healthy and reflect an approximately even balance in consumer preference between these two models at this juncture. Leslie indicated that while bands may not agree with the majors’ consumer litigation campaign, they fear backlash for speaking out against it. He suggested that labels expand their view of P2P revenue opportunities to include merchandising, advertising, and other ways to leverage new high-volume music consumption patterns.
Roger noted that FTI Consulting is a global multi-functional consultancy with deep involvement in the media sector, and recently supported the capital raise for ad-supported music distributor SpiralFrog. He observed that while P2P music downloads may be flourishing, paying for them hasn’t. He said that copyright enforcement is not working per se because the majors aren’t suing enough people to create a real deterrent; however, that would be prohibitively expensive. In addition, a great deal of money has been invested in this area, and the question is whether it has been spent wisely, versus a greater emphasis on education and experimenting with new business models, for example. The major labels need to stop bemoaning the problems that have been unleashed with the advent of new technologies; they need to change their ways of doing business and adopt more creative strategies that match the expansive capabilities of digital media distribution.
In audience Q&A, questions related to P2P monitoring were discussed, with panelists expressing confidence that the file-sharing distribution channel can be used very effectively for this important marketing function. With P2P, each property in essence can become its own store-front, fully enabled to track-and-report on its usage. We are grateful to Digital Music Forum West attendees, speakers, and sponsors for a very worthwhile experience. Share wisely, and take care.
How to Save the Internet
Excerpted from MediaPost Report
The long-running debate over whether the over-extended Internet will one day slow to a crawl continues. Some experts say a crisis is looming and that the Worldwide Web is even in need of replacing, while others, like networking giant Cisco Systems, believe their networking technology will help Internet service providers (ISPs) and others cope.
Among those who believe in doom is ABI Research’s Stan Schatt, who says that increasing bandwidth demands will inevitably lead to a traffic crash. “The Internet wasn’t designed for people to watch television,” says web pioneer Larry Roberts. “I know because I designed it.” But Cisco says the way to avoid this problem is to buy software that either accelerates Internet traffic or increases its capacity. The buyers, of course, are ISPs and companies that want to create separate networks that better manage web traffic.
However, web traffic technology, like other technology, goes down in price over time as more competitors enter the market. This is already happening to companies building proprietary networks, and many firms have since gone bust. But Cisco Co-Founder Len Bosman sees the stability of the networking industry as being key to the future of information exchange. Please click here for the full Wall Street Journal Report.
Radiohead Takes Aim at the Record Industry
Excerpted from Online Spin Report by Cory Treffiletti
If you blinked, you might have missed it, but Radiohead announced this week that their new release, “In Rainbows,” would be made available for purchase online for whatever you wanted to pay for it.
Yes – Radiohead is accepting donations for the release of their new album. If you want to pay $20 or you want to pay $2, it’s up to you! This name-your-price model is a new one and one that not everyone can agree with, least of which the record labels that still try to mandate the way the systems will work. A number of artists regularly make music available online for free and a number of artists use multiple digital distribution models to sell records, but this one is very new. It is the exact polar opposite of how The Eagles released their newest album only through Wal-Mart. Wal-Mart had exclusive rights and they could mandate the price they would charge. In the model being adopted by Radiohead, the consumer has truly achieved the power in the relationship and completely devalued the record labels.
Radiohead is unique. They are a mainstream act that is widely praised by critics and still manages to sell millions of albums. The industry looks forward to a new release from Radiohead, but not this time. This time they are looking for any reason that this new method will fail. Of course, people could decide not to pay at all for the download and just steal the music and not pay Radiohead, but the fans of the band will certainly pay something since they know all the money goes directly to the band.
It is widely believed that releasing albums is becoming the least profitable part of the record industry, at least for the artists themselves. Many artists aren’t lucky enough to own their publishing rights and some artists make very little revenue from their albums. Their money comes from touring and merchandise sales and appearances as well as from corporate sponsorship. Most artists can’t rely on the last two and they focus their efforts on touring and playing live for the fans, where their percentage is much higher than that in album sales. Radiohead’s model is interesting because it completely devalues the promotion and packaging that the labels offer artists in exchange for the lion’s share of revenue from album sales and shifts all attention to playing live, which will undoubtedly be the next announcement – that of a Fall/Winter tour.
Of course, being the world’s most popular critical darling works in Radiohead’s favor. People will write about this announcement and promote the album, and Radiohead will get the type of coverage that a standard album release would get, without the costs from the labels. People will still buy the album, for whatever they feel is appropriate and the band won’t need to share costs with a label, probably thereby increasing their margins on the release. By having a built in fan-base, Radiohead can pull this off – but most other artists can’t. Will this model become one that is widely adopted by the industry? Probably not. Is it another nail in the coffin of the current model? Definitely.
As more and more artists find ways to supplement their “day-job” income, these new revenue models will become more interesting. If you cut out the middleman, you can afford to charge less. Then you can focus your revenue efforts on your clothing line and your own artist development, such as most of rap and now the rockers are doing like Pete Wentz from Fall Out Boy.
The model is going to change 180 degrees in the next 10 years, so start placing your bets now on how this will work out.
DCINFO Editor’s Note: Cory Treffiletti will be a Conference Luncheon Speaker at the P2P ADVERTISING UPFRONT LA.
Internet Advertising to Grow 30% in 2007
Excerpted from Online Media Report by Laurie Peterson
Online video and local search will help drive a 30% growth in worldwide Internet ad spending to $33.72 billion this year, according to the latest forecast from ZenithOptimedia, which was released on Monday.
“We have revised our forecasts for Internet advertising upwards yet again,” the Publicis-owned global media agency reported. “We now forecast 29.9% growth this year (up from 28.6% three months ago) and 85% growth between 2006 and 2009 (up from 82%). Online video and local search are the new, fast-growing segments, but display, classified and the rest of search are still growing rapidly as well.
The forecast is just the latest in a series predicting continued robust growth of interactive ad spending.
P2PTV: Next-Gen Television
Excerpted from Sramanamitra Report by Mitch Berman
P2PTV industry leaders now include Azureus, Babelgum, BitTorrent, Joost, and Veoh. According to the San Jose Mercury, there are 247 such Internet TV companies. All of them deliver video online to the PC or to mobile devices. Some focus on user-generated content (UGC). Some focus on delivering on-demand movies and television programs on a delayed basis. Some offer a combination of all three formats. Funny thing is that none of these companies have anything to do with the TV set. Yet, they call themselves Internet “TV.”
Are these companies a fore-runner of the next generation of television? Do they represent the promise of next-gen TV that include things like: compelling search capability, unlimited choice when I want, recommend and share play-lists, watch video based on my interests and viewing history, choose my channels, create my own playlists, view relevant ads and offers, and more?
In some cases, yes. However, since all of these companies are currently just PC-based, the jury is out as to whether they can ultimately transfer to a television audience. However, the DNA of each of these providers is not well suited for television anyway. In fact, some of these companies have no intention of going to TV at all.
A September 19th brief from the Center for Media Research stated that over 134 million Americans watched online video in July. According to a comScore recent release, “Nearly 75 percent of US Internet users watched an average of three hours of online video during the month of July, with Americans viewing more than 9 billion videos online.”
However, when one looks at actual online/PC viewing statistics, two things really stand out. According to comScore’s report, “The average online video duration was 2.7 minutes. The average online video viewer consumed a total of 68 videos during the month, or more than two a day.” Note that eMarketer’s study in March showed that film, sports, and TV trailers, news clips, amateur and homemade videos tend to be the most popular online viewing. These statistics are radically different from the current 283 million Americans who watch television in the US for an average of over 7 hours a day, according to Nielsen.
The business model for P2PTV has still not been solidified. Standard TV subscription and advertising models have not worked online to the PC. Just ask YouTube/Google. Three weeks ago, they launched a new ad model that nearly caused a riot within the YouTube community. Advertising and subscription models have not done well online via PC viewers. Not acceptable in that community. Yet they continue to be the foundation for revenue on the television set with TV viewers.
Content? Consumer experience? Note the type of content popular online to the PC. Short form. Human beings are not programmed to watch long form video (movies or their favorite TV shows) by themselves on a small screen (PC).
One thing online video has done is prove that UGC is no fad and that it will change the video landscape, over time. It has already begun to change how TV networks and Hollywood studios do business. According to a Bear Stearns report from June, “Digital technology and economics are loosening barriers to entry in video production. This augurs a material increase in video content supply from many sources, which could lead to slowing growth for incumbents and a shift in value from content creators to aggregators/packagers.”
The Bear Stearns survey reported, “UGC is the No.1 and No.2 most popular content category among men aged 18-34 and all respondents, respectively.” The question will now be, how will P2PTV companies relegated to the PC be able to monetize UGC? And, how can short form, disconnected videos play on TV in a compelling way to spur TV viewers to watch?
We stand on the threshold of a new era in television. P2PTV is opening new doors for production, new business models, and changes in consumer viewing behavior. The experience needs to be cool and at the same time, simple. It will be everything on demand, priced fairly with enabling services for search and personalization that enable the content. Those that understand this premise, will win big. The next generation of television is about putting the consumer in control.
Babelgum Co-Founder Becomes RawFlow CEO
Excerpted from NewTeeVee Report by Liz Gannes
Babelgum Co-Founder Erik Lumer has left the company and taken on the chief executive role at RawFlow, another P2PTV platform. Lumer had also previously held the CEO title at Babelgum, but he passed that torch to Valerio Zingarelli in July so he could focus on strategic product development.
Zingarelli was previously with Vodafone (VOD) and Omnitel. Silvio Scaglia, who had been CEO at Omnitel when Zingarelli was there, co-founded Babelgum with Lumer. Scaglia funded the company with $13.2 million of his own money, and told Business Week he plans to spend $130 million more over the next few years.
RawFlow, by comparison, is an older and smaller start-up. Founded in 2003, the company came early to the space, developing P2P streaming technology that is now seeing viable applications with the nascent adoption of live streaming video over the Internet.
RawFlow recently launched Selfcast, a personal Internet broadcasting tool, and is looking to redefine itself as “a disruptive-free web TV platform that lets anybody create and share a live broadcast everywhere in the world,” according to the press release announcing Lumer’s appointment.
RawFlow has raised at least $4 million from investors including Balderton Capital, the European arm of Benchmark capital. Founding CEO Mikkel Dissing will now serve as company President.
South Park Uncensored on BitTorrent
For all you “South Park” fans out there, Comedy Central announced that starting Friday all new Season 11 episodes are now available “uncensored” on BitTorrent.
Launched in 1997, “South Park,” now in its 11th season, remains the highest-rated series on Comedy Central. “South Park” repeats Wednesdays at 12:00 AM, Thursdays at 10:00 PM and 12:00 AM and Sundays at 10:00 PM, 11:30 PM and 3:00 AM on the cable television channel. The new season officially premiered Wednesday, October 3rd, with episode downloads available beginning Friday, October 5th.
In the premiere episode, Cartman discovers the joys of having Tourette’s syndrome. Drunk with the power of saying whatever he wants without getting in trouble for it, Cartman lines up national TV coverage to take advantage of his new life with no filters.
P2PTV Review: Joost 1.0 Public Beta
Excerpted from Report by Kevin Eagan
Popular P2PTV software program Joost turned one this week, and it’s finally available as a free download for the masses.
For those not lucky enough to get on Joost during its invite-only period this year, Joost is the darling of the new wave of Internet television. >From the same software mavericks that brought us Skype and Kazaa, Joost has quickly become one of the best streaming television programs out there, with over 150,000 TV shows on over 250 channels. Even though it has operated as an invite-only service until now, it managed to bring in over one million users and provides an extensive library of programs with a slick user interface.
Before you get started with Joost, make sure your computer meets the system requirements. Even by modern standards, Joost’s requirements are quite stringent: you’ll need a modern graphics card with at least 32 MB of Video RAM, 512 MB of RAM, DirectX 9 (for Windows users), Windows XP SP 1 or higher, or Mac OS X 10.4 or higher. Sorry, no Linux version yet, although Joost fans are rallying for a Linux version in the Joost forums.
Another caveat: Joost streams its content over the internet, so a broadband internet connection is required. It uses up a lot of data as well.
The installation process is very straightforward: for Windows users, just open up the file and follow the prompts. Once it’s downloaded, Joost checks your hardware to make sure it meets the requirements. If anything doesn’t work, it will tell you. Once everything is up and running, you’ll have to sign up for Joost and pick a login and password. Right now, Joost is completely free, so you won’t have to give over private information such as a credit card.
The first thing you’ll notice is the very slick interface. Joost 1.0 has improved the interface over its previous versions. The controls are self explanatory. On the bottom pane are your video controls, including a power button (when powering off, it will minimize to the taskbar), slider for fast-forwarding through a show, pause, back, and next buttons. On the left is the “Explore” button, which will take you into the channels browser.
You are presented with every channel Joost offers, divided into categories. When clicking on a category, a list of channels shows up as small thumbnails with a description of the channel. You’ll see some familiar faces, such as Comedy Central, CNN, and MTV. On the right panel is a social networking feature where you can chat with other users about a show or add widgets and RSS feeds. Joost 1.0 is much better organized than its predecessors, and has a lot of extra features.
Even with all of the familiar channels, not everything is offered. For example, the Comedy Central channel has an extensive collection of popular shows including “Strangers With Candy” and “Dog Bites Man,” but some of its most highly popular shows, such as “The Daily Show with Jon Stewart,” are not yet available. On MTV, shows like “Laguna Beach” and “The Andy Milonakis Show” are available, but newer shows are not. However, Joost continues to improve, and new shows pop up on the site daily.
Joost is a great start for those wanting to get started with P2PTV. And even though it’s now available to the public, it’s still a beta release, and the company is still working out some kinks. But overall, Joost is an excellent program that will have you addicted from the start.
Pixsy to Power Search on Veoh
Excerpted from TechCrunch Report by Duncan Riley
Media search platform provider Pixsy has announced a strategic partnership with video-sharing service Veoh Networks that will see Veoh adopting Pixsy’s media search platform to offer enhanced video and image search functionality on Veoh.com.
Pixsy’s appeal to Veoh is the ability to deliver near real-time search results, allowing Veoh users to search videos and images with content updating to the minute.
Dmitry Shapiro, Founder and Chief Innovation Officer (CIO) of Veoh Networks said, “Pixsy’s vast index and ability to organize its breadth of video and image content in a way that maps to our users’ interests will meaningfully enhance the viewing experience on Veoh.”
Since taking an additional $26 million in funding in June, Veoh has seen an increase in traffic. According to Alexa , Veoh has now broken into the Top 100 sites online, and is edging towards the Top 50.
On the other hand, its popularity has come at a price, with Veoh being sued by Universal Music Group, Viacom, and NBC. Veoh filed a countersuit against Universal in August.
For Pixsy, the deal will see its technology being used by Veoh’s more than 18 million monthly viewers, validation that its search capabilities not only work, but can scale as well.
Azureus CEO on Growing P2PTV’s Audience
Excerpted from Wired News Report by Terrence Russell
It seems like we can hardly throw a stick without hitting a P2PTV service that seemingly sprouted up from nowhere. But with the Baby Boomers tied to their televisions and TiVos, who’s driving all this growth? To answer this, we chatted with Azureus CEO Gilles BianRosa about the BitTorrent-based client’s new P2PTV platform Vuze, and some of the trends the market is seeing in viewership.
Wired News: What’s the skinny on Vuze?
Gilles BianRosa: We like to think of it as an open entertainment platform allowing users to download, stream, and soon upload DVD-quality high-res content. Both our streaming and download experiences are supported by our P2P network which saves us a great deal on the bandwidth side, so we’re able to show that properly licensed, high-res content does have a place on the web. From a product standpoint, we’re very horizontal like eBay, in that you can find anything from a helicopter to an iPod on the site. We work with media companies to ensure that our platform is scalable in the same way, but with high-res content.
Wired News: From your experience, what type of viewer is the most responsive to P2PTV services like Vuze?
Gilles BianRosa: We’ve attracted the typical P2P user base consisting mostly of 18-34 year old males, and a notable amount of women. From a content standpoint, we’ve tried to provide what the user base is looking for, and so far that has been in the action and sci-fi genres. But you have to provide everything. The boom in user-generated content has made it so that people are looking for both mainstream and lesser known content.
But for us, like most sites, the idea is to provide as much mainstream content as we can. By having a lot of room within our horizontal platform we want to create an environment where users can upload and be exposed to new things, too. For instance, we’ve seen great success featuring the exclusive Sci-Fi Network series “Sanctuary,” which attracts a viral audience that wants to see similar shows in high-def. It’s a perfect fit for that demographic in many ways, but we try to avoid limiting ourselves as well.
Wired News: Why do you think 18-34 year olds are the ‘sweet spot’ for P2PTV?
Gilles BianRosa: We obviously want to grow beyond that as a site, but I think it’s the best place to start. They are a demographic of evangelists who are very vocal and very connected through social networking. Even if you think back to TiVo or Netflix, a lot of the new ways to take in media have been proven from this user base. First off, it’s a very large group, and they consume tons of media. Second, they make a great user base for advertisers. And finally, they’re willing to experiment with new interfaces and models. It also helps that they’re more forgiving of early barriers and willing to give feedback on small mistakes.
Wired News: So, what’s the best way to capitalize on the age group’s viewing habits?
Gilles BianRosa: It’s going to take a long time for it to emerge fully, but the trend we’re seeing is that these are people who are either in, or have recently finished college and are laptop users. So they’re comfortable with that 2 ft. UI you get from a PC, and with watching content in unconventional environments like dorm rooms. That makes them receptive to P2P services like ours, but there’s still a big problem in bridging the PC-to-TV gap. Gaming consoles have really changed the game for the industry, which is why we view them as the best way to get the most seamless experience. Having the ability to download content from Vuze and then stream it to the big screen through an Xbox 360 has definitely helped us bridge that gap. Plus, consoles are already entrenched in that demographic.
Wired News: Since your target group is comfortable with both laptop and TV viewing, in your experience, what is the best way for P2P content to scale between the two?
Gilles BianRosa: You have to think about what users are willing to do with a given UI. Just because they want to use a 10 ft. UI, doesn’t mean they want the search-and-discovery aspect of PC viewing. The only thing you’re really doing with a 10 ft. UI is watching. For that type of viewing you need a device that is able to stream content coming from the PC or download it from the internet. We’ve been seeing this with set-top boxes and on-demand programming from cable, but we expect to see a lot of experimentation with new devices. It takes a lot of effort to embed a service into a platform, which is why we make our content compatible with gaming consoles – the age group is familiar with them and they already have a large footprint within the demographic.
Streaming Video Becoming a Habit at All Age Levels
Advertising.com, in its Bi-Annual Online Video Study, comparing the first half of 2007 with the last half of 2006, reports that 62 percent of survey respondents are viewing video online and are comprised mostly of those ages 35 and older viewing news clips. Analyzed by age-group, 31 percent of 18-to-34 year olds watch streaming video, while 69 percent of consumers ages 35 and older view streaming video online.
Approximately 83 percent of consumers surveyed indicated that their online video usage in 2007 has either stayed the same or increased since 2006. More specifically, 36 percent of consumers have increased their consumption of online video, with an even breakdown between men (36 percent) and women (37 percent).
The majority of consumers are streaming online video at home rather than work or school, with 45 percent of streaming activity taking place in the evening. 95% stream at home; 4% at work; 1% at school or university.
More than 62 percent of consumers said they are most likely to stream news clips, with movie trailers and music videos next in line. Compared to the second half of 2006, consumers are streaming fewer music videos and streaming more news clips, user-generated videos and sports clips. However, these consumption behaviors vary dramatically by age.
Overall, 42 percent of consumers have forwarded a video clip to a friend. Consumers who view content more than once a week also forward more clips, with 55 percent forwarding clips vs. 34 percent and 20 percent for those who view content once a week and once a month. Women (47 percent) forward more clips than men (36 percent).
Other highlights of the study include: 80% of consumers say that online video usage does not cut into their TV time; 29% of men say online video usage cuts into TV; 16% of women say online video usage cuts into TV; 12% of those who view content once a month claim that video usage cuts into their TV time; 94% of consumers indicate that they would prefer to view ads than pay a fee to watch video content online; 63% of consumers would prefer online video ads that are shorter than TV ads; 65% of consumers say they watch online video ads through to completion; 72% of consumers who view streaming content more than once a week view video ads through to completion; of those who view content only once a month, 49% view advertising through to completion; consumers are 8% more likely to view 15-second spots to completion than 30-second spots; and the 30-second pre-roll format slightly outperforms the 5- and 15-second ads when measured in terms of click-through rate.
In conclusion, the report summarizes by noting that consumers continue to incorporate streaming video into the online experience, but there remains a difference, however, among older and younger consumers.
Older consumers are using streaming video in order to gain more information, which can be seen by their preference for online news clips, while younger consumers are streaming content for entertainment purposes, such as viewing movies, TV shows and user-generated videos online.
Consumers between the ages of 18 and 34, says the report, continue to assimilate streaming content more into their everyday media consumption habits. Sixty-nine percent of their online video streaming occurs more than once a week, while 47 percent of those ages 35 and older view streaming video multiple times a week
Please click here to access the complete report and charts of the Bi-Annual Video Study from Advertising.com.
Microsoft Pushes Social Music Revolution
Excerpted from Silicon Republic Report by Marie Boran
Microsoft must have been working all hours to get this package together. It’s not just another update of its Zune MP3 player; this is an entirely new approach to music based on what consumers really want: convenience and the ability to share.
As well as developing an iTunes-like interface on which Zune users can purchase music downloads, this is integrated into a social network based on sharing music tastes and experiences.
The sharing goes beyond swapping top-ten lists. The new Zune, which will be released some time this autumn, has a feature called “Extended Wireless Sharing.”
Essentially, you can share your music collection and photos wirelessly with other Zune users, and they can play the songs you give them up to three times before they expire.
“The time is right to let go of the older business models and recognize that consumers want something different when it comes to music today,” said Terry McBride, CEO of Nettwerk Music Group.
The two new Zune models feature the new Zune Pad: a touch-sensitive navigation pad, as well as a wireless syncing ability.
“By tapping into customers’ passion for music with Zune Social, we’re starting to change the game,” said Microsoft Corporate Vice President J Allard. “This lets us start building a new, more valuable kind of relationship with consumers that, combined with other Zune innovations, will start to drive the entire music industry forward.”
As well as the Zune 4GB ($149.99); and Zune 8GB ($199.99) flash models, Microsoft will also be releasing an 80GB model with a 3.2 inch screen at $249.99.
Grooveshark – Everybody Gets Paid
Excerpted from Zeropaid.com Report
We’ve been covering Grooveshark for quite some time at Zeropaid and many of you have written about how it sounds good on paper, but haven’t quite grasped how it works, how you get compensated for sharing music, etc. To answer these questions and more, here’s an interview with Joshua Bonnain, head of strategic relations at Grooveshark.
Grooveshark, whose slogan is “Everybody Gets Paid,” may actually be every bit as cool and revolutionary as the concept seems. How? Well, as Josh notes, “Grooveshark splits its profit with the users 50/50 after the royalties, fees, and other expenses for a given download have been paid out.”
He also emphasizes that all the “proper arrangements have been made to ensure that we are an authorized service.” This means you don’t have to worry about Grooveshark getting taken down and losing all your hard earned credits as was the case with AllofMP3.com.
Another interesting point is that for audiophiles Grooveshark offers music in .OGG and .FLAC encoded formats, something you’ll never see on iTunes or any other digital music download store. Chew on that for a second - a licensed P2P music service that offers .OGG and .FLAC? Try finding that kind of setup anywhere else.
Josh also makes the point in that Grooveshark could also serve as a defacto music streaming service. For those with several hundred GBs of tunes that can’t very well be toted around entirely on a portable media player, Grooveshark will allow you to stream your music on the go. Unlike say Pandora or Last.fm, music for a party or social event could truly be on-demand.
Plus, in the meantime you’re allowing your music collection to earn credit towards buying cool stuff or to purchase even more music. Think of it as interest-bearing account for your music collection.
Moreover, Grooveshark may just finally be the digital music revolution we’ve all been looking for after all.
Zeropaid: All the tracks are of course DRM-free, but it also states that your system “maximizes the bit-rate,” what is this maximized bit-rate that tracks are encoded in?
Joshua Bonnain: Grooveshark offers varying bit-rates and file types in order to suit a wide range of individual tastes: everything from high-quality MP3s upwards of 512 kb/s—in addition to your typical 128, 192, and 256 kb/s downloads—to open-format OGG and lossless FLAC files. This is extremely important for our audiophile membership, as there aren’t many other places where you can [legally] obtain lossless audio and high quality MP3s.
Zeropaid: Pricing – are all tracks 99 cents?
Joshua Bonnain: Right now, all tracks are 99 cents. We plan on mixing this up a bit in the near future, though.
Zeropaid: How precisely are users reimbursed for sharing their digital music collections with other users? How is it calculated and how and what can users redeem their credits for?
Joshua Bonnain: Grooveshark splits its profit with the users 50/50 after the royalties, fees, and other expenses for a given download have been paid out. If a user downloads a $.99 track, we may, for example, have to pay $.60 in licensing fees and $.03 in transaction fees, leaving $.36 to be split evenly between Grooveshark and the user who is “recompensated” for the download.
Things such as purchase history, community contributions, and number of songs uploaded are all considered in determining which peer with a given file should be recompensated for a download. The amount given back to the user for any given download depends on the individual variables that go into it, such as cost of the song, transaction fees in place, and the individual arrangement we have with that particular record label.
Since the 50% split is simply purchasing credit at this time, members may only put the credit towards other songs. We’ll soon be adding merchandise and other options in near future (shirts, stickers, concert tickets, etc.), though it’s important to keep in mind that the decision is really up to the major labels as far as what types of merchandise are available outside of obligatory Grooveshark shwag.
Zeropaid: How are you able to facilitate the distribution of music from record labels who have not formally agreed to allow their content to be shared or sold, especially DRM-free?
Joshua Bonnain: This is a big secret in regards to the model and our competitive advantage. The nature of the Grooveshark business model ensures that everyone is properly paid for their copyright claims. This includes anyone, whether major or indie label. We’re in talks with all of the major labels, and the proper arrangements have been made to ensure that we are a legal service.
Zeropaid: Current number of active users?
Joshua Bonnain: We currently have nearly 4,500 members in our system. We’re growing at a rate of around 75 to 100 members a day on average, as well.
Zeropaid: Vision for the future of Grooveshark? Plans for improvement/enhancement?
Joshua Bonnain: We have a lot of big plans for tons of new features in the future, but in the short term we’re working on a better way to organize content (splitting up “songs” into separate “songs” and “files” to cut down on redundant data), a new JavaScript-based song information browser, a new corrections system that allows more control over data input, etc. Past that, we’re going to be doing a lot of work with expanding the capabilities of playlists within Grooveshark, as well as adding some cool new community features.
Zeropaid: Is there anything else you’d like to mention?
Joshua Bonnain: We would like to say that it’s very important to build our community as much as possible in order to ensure that Grooveshark works as it’s intended to. The more people in the service, the better it gets as a whole. This is especially pertinent to every day operations, as our members are continuously correcting song tags, rating songs and befriending other members.
Al Smith Rocks Lincoln Center
Excerpted from Special Report By Reed Wolfson
Most people equate environmental events with tree-hugging crowds who only dig on acts like Peter, Paul and Mary. New York’s premiere environmental bash, Ecofest, not only provides a key forum for health and conservation issues, but a pretty rockin’ show.
The bandshell stage at Lincoln Center’s Damrosch Park was home to a variety of exciting entertainment acts. In addition to a highly popular Eco-Fashion show, New York favorites, the Big Apple Lindy Hoppers and George Gee’s Swing Band delighted the crowd. But the highlight of the afternoon had to be Al Smith, a one-man rock-and-soul revue.
Equipped with a Godin synth guitar and Roland synthesizer, Al was able to create the sound of several musicians at once while singing. His performance wasn’t just technically impressive, but moving as well. His poignant interpretations of Bob Dylan’s “Like a Rolling Stone” and Marvin Gaye’s “What’s Goin’ On” were well received by the discerning audience.
However, it was the hand clapping, chorus-rousing rendition of Smith’s “Credit Is Due” that had people dancing. Included with this tune was a tribute performance of Sly Stone’s “Simple Song.” Special guests Lee Perry Gross, Christie Marie, Cathy Lubash, and Mary Shapiro joined him on background vocals.
Al Smith performed live at the P2P MEDIA SUMMIT NY and is a strong proponent of licensed P2P music distribution.
File Sharer’s Huge Fine Slammed
Excerpted from Web User Report by Ben Camm-Jones
A fine of $220,000 handed out by a US court to a woman found guilty of sharing copyrighted content online has been slammed.
Mark Mulligan, an Analyst at Jupiter Research specializing in the digital music industry has questioned the size of the fine and whether it fairly reflects the damage done to the industry.
“I understand why the Recording Industry Association of America (RIAA) pushed for such a large fine: they wanted to establish a deterrent for other defendants who might wish to challenge the fines. But the fine is out of proportion with the act,” he said.
Mulligan questioned whether the actions of the offender, who had made several tracks available to be shared over a P2P network, were as destructive to the recording industry as the size of the fine indicated.
“Unless the defendant had uploaded rare music not available elsewhere or she was the first to upload the tracks, it would be impossible to prove what impact her uploaded tracks had versus the others on the network.”
The case against Jammie Thomas, a 30-year old single mother from Minnesota, was brought by the RIAA. In the past, similar cases have not made it to the courthouse, with those accused of unauthorized file sharing generally opting to settle out of court.
RIAA Victory is a Step Backwards
Excerpted from Digital Media Wire Report
Terry McBride, CEO & Founder of Nettwerk Music Group, which manages artists like Avril Lavigne and Barenaked Ladies, said that the first guilty-verdict in the 30,000-lawsuit strong campaign against unauthorized file sharers is a step backwards for the music industry.
On Thursday, the Recording Industry Association of America (RIAA) won the first lawsuit to go to trial in its litigation campaign against unlicensed file sharers and was awarded $220,000 from a 30-year-old woman (who file-shared 24 songs in question).
“I bet the RIAA is going ‘Yes, yes, yes,’ but I’m like ‘No!’ You can’t sue your fans one day and then ask them to come to a concert the next day. A lot of these copyright lawsuits are done in the name of the artist by the record labels, but the artists don’t want that kind of relationship with their fans,” said McBride.
He also spoke openly about his view that the record labels should drop any DRM-restrictions left on licensed downloads immediately.
“EMI was the first label to understand that you can’t put restrictions on the part of the business that is growing, when there were no restrictions on the part of the business that is failing (the CD). All it takes is for someone to stick a CD into their computer and burn the tracks (from places like iTunes) and the DRM is gone,” he said.
Coming Events of Interest
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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 LA – Sponsored by the DCIA October 29th in Los Angeles, CA in conjunction with Digital Hollywood Fall. The industry’s premiere 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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CCNC 2008 – The Fifth Annual IEEE Consumer Communications & Networking Conference, January 10th-12th at Harrahs, Las Vegas, NV. Now co-promoted by the DCIA. The latest research developments and technical solutions in the areas of home networking, consumer networking, enabling technologies (including middleware), and novel applications and services. See www.ieee-ccnc.org for details.
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P2P ADVERTISING UPFRONT NY – Sponsored by the DCIA March 11th in New York, NY in conjunction with the Media Summit New York (MSNY). The industry’s premiere 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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