January 7, 2008
Volume XX, Issue 7
Obama Wins in Iowa and on Web
Excerpted from Media Life Report
Anyone who's been tracking the numbers online wasn't surprised by Democratic presidential candidate Barack Obama's Iowa caucus victory Thursday night.
The Illinois Senator's website saw 31% more hits from Iowans in the past four weeks compared with his closest competitor, Hillary Clinton, according to Internet monitor Hitwise.
Obama's site also led second-runner up Clinton in New Hampshire by 18% more visitors. Both candidates' online sites saw more visitors than any GOP candidates in the early primary states.
However, that's not the case nationwide, with Republican candidate Ron Paul building a significant Internet lead over all the other candidates vying for the White House.
Paul had 1.91% of the market share of all US Internet visits to websites for presidential candidates. He was followed by Thursday night's Republican winner, former Arkansas Governor Mike Huckabee, who has 1.04%.
QTRAX Gets Behind MidemNet Forum
Excerpted from MIDEM Online Newsletter Report
This year's MidemNet is sponsored by QTRAX, a new peer-to-peer (P2P) music service to be launched at the 2008 Forum.
QTRAX is an ad-supported solution which will offer users unlimited free downloads in its own MPQ format, while paying royalties to artists, in agreement with their labels.
More on QTRAX and the Forum here!
BitTorrent Takes Aim at CDNs
Excerpted from GigaOM Report
"We will make businesses profitable with P2P architecture," said Ashwin Navin, President & Co-Founder of BitTorrent, at a recent NewTeeVee Conference.
Moving big video files around the net is an expensive proposition for online video publishers. Some giants like Google and Microsoft have their own network of servers around the globe. Most publishers of online video buy services from companies called content delivery networks (CDNs) including Akamai and Limelight.
BitTorrent, the San Francisco-based software and video services company, launched a few weeks back a new offering to publishers that will allow them to use their existing CDN system along with the BitTorrent P2P platform.
Ashwin Navin said that this hybrid mix will bring profitability to publishers who until now have been stuck with very large bandwidth bills. The new program is called DNA.
Whether this blend from BitTorrent will be widely accepted is still too early to predict, but surely P2P will be a big part of the delivery of online video in 2008.
Report from CEO Marty Lafferty
 The P2P MEDIA SUMMIT LV was a very valuable and stimulating conference and we are grateful to all who participated in making this our most successful event to date.
Presentations will be posted online during the week at our archival website and information about the P2P webcast of the event by Abacast will be shared with DCINFO readers shortly.
Meanwhile, don't miss the live P2PTV-cast of 59th Annual Technology & Engineering Emmy Awards by Abacast on Monday night.
From the primary upsets in Iowa to ongoing expressions of a desire for change in New Hampshire, at the consumer level, there is a new spirit in the air.
For our part, as DCINFO readers already know, we are supportive of Senator Barack Obama's (D-IL) compelling technology platform, Barack Obama on Technology ad Innovation, and increasingly inquisitive as to the real positions of the other candidates, particularly the Republicans, on these important issues, which are fundamental to our industry's growth.
We are the generation that is reshaping the economy to compete in the digital age. We offer living testimony to the immense transformative power of technology and innovation and how it can improve the lives of consumers.
Distributed computing technologies above all offer the tools to create real change, to connect citizens with each other, to enable sharing data of every variety, and to engage participants fully and directly in solving problems of all kinds.
It is imperative that we take an active role in the political process to ensure that whoever is elected to the new US administration balances protecting intellectual property (IP) rights with fostering and encouraging innovation and collaboration. And frankly, the support of our industry, with its hundreds of millions of software users and billions of monthly transactions, can make a real difference in this election.
DCIA Member companies offer a panoply of solutions to help content providers, ISPs, software developers, and other participants succeed in the emerging digital marketplace. By harnessing P2P technologies - movies, games, software, and music will all be able to be delivered at lower than ever costs and with higher than ever quality of service (QoS) - and communications of all kinds will dramatically advance.
Candidate Obama has called upon us to use all available technologies and methods to create a new level of transparency and to give Americans the chance to participate in government deliberations and decision-making in ways that were not possible only a few years ago. To achieve this vision, he notes, we must deploy the most modern communications infrastructure in the world.
Firms like Abacast, AHT International, AT&T, Audiovox, Beat9.com, BitTorrent, Brand Asset Digital, BuyDRM, CacheLogic, Cisco Systems, DeviantART, DigitalContainers, FTI Consulting, GridNetworks, Javien, Joost, MediaDefender, MediaPass Network, Microsoft, Motorola, Nettwerk Music Group, Oversi, Pando, Paramount Pictures, PeerApp, Peer Innovations, QTRAX, Rebel Digital, Rightscom, ROK Entertainment, Ultramercial, VeriSign, Verizon, Vuze, YuMe Networks, and Zattoo are already in the forefront of that transformative change within their respective categories and are making a huge difference in such advancement.
We especially commend the P4P Working Group for bringing carriers and P2P companies together to collaborate on more efficient network utilization rather than engaging in divisive actions that were in no one's best long-term interests, and represented old barriers that were impediments to positive change.
But we must not rest on our laurels, as impressive, and at times breathtaking, as the work of DCIA Member companies has been. We need to redouble our efforts to ensure the full and free exchange of information among consumers through an open Internet and diverse media outlets. We must move ahead to upgrade broadband plant and expand wireless capacity and innovate with the software solutions, business models, and industry practices that will realize the full potential of the enormous opportunity before us.
More immediately for 2008, we invite leaders of the entertainment sector to catch this new spirit and join with our Member companies to reshape the digital distribution marketplace.
The music industry in particular had a horrible year in 2007, as total album sales plunged more than 15% to 501 million units. Online album sales barely rose at all, up only 2.4% to 30 million units (down from 19% in 2006). These figures represent the lowest total and steepest decline since Nielsen began measuring music sales in 1993.
Experts predictably blame online copyright infringement. The timing could not be better, therefore, for the music industry to get behind P2P music service QTRAX, launching later this month at MIDEM, and offering the best possible antidote to piracy since the advent of Napster.
QTRAX invites fans to continue freely discovering, sampling, and listening to new music - some thirty million tracks at launch - while monetizing every search, download, and play with ad revenue shared with rights holders. A brilliant aspect of this part of QTRAX's strategy is the wholesale conversion of infringing behavior to profitable activity on a massive scale.
Moreover, in 2007 overall music sales, which include single and digital track sales, rose 14% to 1.4 billion units, driven mostly by digital tracks, which rose 45% to 844.2 million units (again, however, down from 65% in 2006).
Once more, QTRAX, thanks to another benefit of its multifaceted strategy, will directly drive digital track sales through a promotion-rich environment that will fuel rather than fight this most promising trend in the music industry today.
With QTRAX, not only could the 15 million units delivered by top sellers Josh Groban, Hannah Montana, The Eagles, and Carrie Underwood have doubled, but also digital track sales by artists from the moderately popular to the least recognizable would have dramatically increased as a result of favorable exposure on QTRAX.
In response to music executive Kenneth Kraus, who represents Kid Rock and Carrie Underwood, but who sees things only getting worse over the next four-to-five years, because "a whole generation of kids" have grown up downloading music for free and cannot fathom paying for it, we say, stop such self-fulfilling negative prophecy - start working with QTRAX and turn things around beginning this month! Share wisely, and take care.
Labels Should Embrace Ad-Supported Music
Excerpted from Red Herring Report by Cassimir Medford
Music studios by year's end dug a deeper hole to place their tombstones, but an analyst suggested putting in place advertising models to claw back.
"The major labels must embrace an ad-supported model for downloadable music - albeit we sense they have no desire to do this," Pali Research analyst Rich Greenfield wrote Friday in a report.
Sales of CDs and digital music taken together slipped 12 percent in the fourth quarter of 2007, Pali Research reported. CD sales were down 20 percent while paid digital downloads surged 42 percent higher.
Ad-supported music is being explored by the likes of music startups SpiralFrog, QTRAX, and Imeem, among others. SpiralFrog last Friday said it scored $2 million in funding, bringing its total to $13 million.
Still, digital downloads, which don't come close to compensating for CD declines, actually grew at a much slower clip relative to 2006. Worse yet, retail CD sales were down 15.5% in 2007, according to Nielsen SoundScan, which tracks music sales data.
"It's bad news all around for the music labels, and sadly there is very little left that they can do to reverse the trend," Yankee Group analyst Michael Goodman said.
"The shift in power from the labels to the artists is well underway now."
And the signs of rapid decline for the major labels don't end with the financial scorecards, Mr. Goodman said.
Warner Music Group (WMG) did an about-face on digital rights management (DRM) a week ago with its announcement of a DRM-free deal with Amazon.
WMG and Sony BMG were by far the staunchest supporters of DRM despite the market's complete disdain for the technology that restricts the use of digital music purchased online.
"It took the industry three years to finally say 'no mas' to something that was clearly a hindrance," Mr. Goodman said. "That does not say much for the people making the decisions at these companies."
Entertainment from Collaborative Peer Groups
Excerpted from Research Brief Report
"Circular Entertainment," identified by Nokia as the result of a global study into the future of entertainment, predicts that up to a quarter of the entertainment consumed by people by 2012 will have been created, edited, and shared within their peer circle rather than coming out of traditional media groups.
The study, "A Glimpse of the Next Episode" by The Future Laboratory, combines views from industry leading figures with Nokia's research from a sample of consumers around the world to construct a global picture of what it believes entertainment will look like over the next five years.
Mark Selby, Vice President, Multimedia, Nokia, said, "The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up, and pass it on within their peer groups - a form of collaborative social media."
This circular sharing is described in the report as follows: Someone shares video footage they shot on their mobile device from a night out with a friend...That friend adds an MP3 file soundtrack of the evening - then passes it to another friend... This friend edits the footage by adding some photographs and passes it on to another friend... The content keeps circulating among friends, and becomes part of the group's entertainment."
Tom Savigar, Trends Director at The Future Laboratory, says "Consumers are increasingly demanding their entertainment be truly immersive."
Of the 9,000 consumers surveyed: 46% regularly use instant messaging (IM), 37% on a mobile device; 39% watch TV on the Internet; 35% listen to music on MP3 files; 29% regularly blog; 28% regularly access social networking sites; 25% buy music on mobile devices; 23% buy movies in digital format; 23% watch TV on mobile devices; 22% connect using technologies such as Skype; 17% take part in multiplayer online role-playing games; and 17% upload to the Internet from a mobile device.
The research identified four key driving trends: 1) "immersive living," which is the rise of lifestyles that blur the reality of being on and offline and in which entertainment is no longer segmented - people can access and create it wherever they are; 2) "geek culture," which marks a shift as consumers become hungry for more sophisticated entertainment - blurring the boundaries between being commercial and creative; 3) a social force in Asia called "g tech," which is the feminization of technology, suggesting that entertainment will be more collaborative, democratic, emotional and customized; and 4) "localism," which is a locally-minded sprit emerging in entertainment consumption that will manifest itself as a key theme whereby consumers will take pride in seeking out the local and home-grown.
For more information about the study, please click here.
Setting the Stage for a People-Powered Web in 2008
Excerpted from Media Channel Report by Timothy Karr
Below you'll find ten hopeful moments from 2007. Each in its own way has set the stage for the year ahead.
1. Presidential Candidates Back Net Neutrality
For the first time in recent memory, communications policy became an issue on the campaign trail as presidential hopefuls came to realize that a people-powered Internet was good for everyone. Candidate after candidate (at least on the Democratic side) came out in support of an open Internet.
Hillary Clinton pledged her support for Net Neutrality in January. In May, John Edwards called for true open access while standing alongside millions of activists who support Net Neutrality.
Barack Obama unveiled a comprehensive open technology plan during a November event.
Other candidates, including Mike Gravel, Christopher Dodd, Dennis Kucinich, and Bill Richardson expressed support for Net Neutrality, as did Mike Huckabee (albeit obliquely).
Expect to hear more from all of those left in the race as new legislation is introduced in the House later this month.
2. iPhone Gives World a Glimpse of the Mobile Web
The geek idol of 2007 remains the iPhone, which despite all its faults (see last week's No. 7) foretells a not-so-distant future where Internet access is constant for those on the go.
The mobile web - a promise made very real by the iPhone's growing popularity - raised real questions about the policies that allowed carriers to control our mobile experience.
Why should access to the free flowing Internet be limited by our choice of device? According to Farhad Manjoo, the iPhone "forced us, for the first time, to confront the thorny public policy issues that the mobile web will raise, issues sure to consume Silicon Valley, Hollywood, and regulators in Washington for the foreseeable future."
We took issue when wired line ISPs played gatekeeper to the web in our homes. We now will take issue with attempts by cellular carriers to wall off Internet access over wireless networks.
In November, Google introduced "Android," an open-source mobile phone operating platform. The iPhone and Android opened our eyes to the future and helped us make the case that the Internet - on any device - should be free and open.
3. Telcos Declare New Love for Open Access
A shift in spectrum policy forced the wireless carriers to declare a newfound love for openness.
Wireless network giant Verizon announced that it believed opening its networks to any device was a good idea.
AT&T's wireless division followed suit declaring itself "the most open wireless company in the world," where people were free to use any cell phone.
4. We Told You So: Carriers Can Be the Problem
In 2007, the discriminatory tendencies of the would-be gatekeepers were dragged from beneath a rock for all to see. Comcast was found secretly blocking P2P file-sharing programs like BitTorrent and Gnutella.
While these violations made our list of the "Ten Worst Telco Moments of 2007," they also demonstrate a pressing need for basic Internet protections.
Net Neutrality is not "a solution in search of a problem." Such actions made it patently clear that the danger is very real.
5. Congress Wakes Up, Holds Hearings, Pledges Action in '08
In 2007 the new Congress treated the Internet as more than just a "series of tubes" holding hearings in both chambers on a range of critical issues - from better data collection to cell-phone freedom and Universal Service Fund reforms - designed to rescue America from its second-class broadband status.
This was a sea change from the previous Congress. All told, there were nearly a dozen hearings in 2007, including rigorous debate on how public policy could foster free-market innovation, universal access, and global competitiveness.
In the House, Congressmen Ed Markey (D-MA) and Chip Pickering (R-MS) championed calls for true open access. Across the hall, Senators Byron Dorgan (D-ND), Olympia Snowe (R-ME) and John Kerry (D-MA) led the charge for Net Neutrality. Senator Dick Durbin of Illinois experimented with legislation 2.0 when he opened the lines to public feedback to help him draft a much needed national broadband plan.
As the United States continues to fall in international broadband rankings, policymakers trying to reverse the slide are a welcome change.
6. White Spaces Facts Beat Lobbyist Fictions
Last year, the FCC finally came to recognize the value of unlicensed spectrum, but it was not without a fight. The battle lines were drawn over the use of "white spaces" - vast tracts of unused airwaves that sit between television channels.
New technologies will allow us to use these idle frequencies to connect millions of Americans to high-speed Internet services, especially people living in rural areas.
The only hurdle is to convince the FCC to unshackle white spaces. A number of new technology providers have lined up to offer mobile devices that could deliver high-speed Internet services over these airwaves.
But, true to form, big media companies and their lobbyists at the National Association of Broadcasters (NAB) erected a facade of misinformation to stifle innovation and prevent Americans from using our airwaves for our own good.
In press release after press release the NAB claimed that these new technologies were interfering with adjacent channels, despite mounting evidence that showed their claims to be untrue.
2008 will bring decisive action on white spaces. It's increasingly hopeful that the truth will prevail over industry spin, and we will see this new technology emerge as an innovative alternative to the current broadband cartel.
7. Strange Bedfellows Join against Net Censorship
Pro-Choice and the Christian Coalition, seeing a threat to free speech, co-wrote an op-ed for the Washington Post, calling on Congress to address censorship and "guarantee the free flow of information."
The détente recalled 2006 when the Gun Owners of America joined with MoveOn.org to support Net Neutrality.
"Without statutory Net Neutrality, there is nothing to prevent big telecom companies from injecting political bias into modern communications," the Gun Owners' Craig Fields said during a press conference with MoveOn.org.
"If the telecoms believe they can frame opposition to their power grab as a liberal or anti-free-market attack, they are sadly mistaken."
Indeed, the fight for an open Internet involves supporters from every quarter with one glaring exception. Those opposing a neutral and accessible Internet seem limited to telco and cableco lobbyists and their paid allies.
That open Internet protections are still disputed in Washington is a sad reflection of the degree to which these special interests still dictate public policy in America.
8. Beyond the Beltway, Growing Grassroots Support
For too long spectrum and Internet policy has been the byproduct of backroom meetings between powerful industry lobbyists and government officials.
In 2007, however, people discovered that Washington alone couldn't be relied upon alone to protect their online freedom.
Whenever members of Congress returned to their districts, there was a good chance they were met by constituents speaking out for an open Internet.All told last year, the Save the Internet Coalition convened 70 meetings among citizens and their elected representatives.
In June, more than a quarter-million people wrote Washington in support of open access to wireless spectrum.
A public outcry overwhelmed the FCC in July when tens of thousands told the agency why Net Neutrality mattered to them.
Well over 95% of the comments received by the agency called for Net Neutrality protections.
We saw user revolts on social networking sites after people discovered that their privacy was under attack. After a carefully orchestrated member protest, Facebook's CEO was forced to publicly apologize for Beacon, a company "service" that let others in on what users were buying online.
9. Public and Private Sector Unite Behind an Open Internet
The public and private sector realized that working together we could get Washington to take notice. Modeled after the SavetheInternet.com and Open Internet Coalitions of 2006, public advocates and businesses interests forged new alliances such as the Wireless Innovation Alliance (which is fighting for unlicensed use of "White Spaces"), the Wireless Founders Coalition (opening access to the airwaves), and the Open Handset Alliance (greater openness in the "mobile ecosystem").
As these and other coalitions focus on 2008, the unity of the public and private interests shows that openness is not only good for users but a boon for business.
10. The Dawning of Participatory Politics
While "Internet 2.0" jargon may have grown tired in 2007, a truly decentralized and participatory Internet became more real. Users took to available tools (and created some widgets of their own) on social networks - such as Facebook, MySpace, LinkedIn, YouTube, and others - to organize others and make the web experience their own.
More than a million Internet users fought the telcos to a stand still over Net Neutrality; campaigns rallied the youth vote and raised money on Facebook communities; bloggers were no longer treated as a political sideshow but help shape many main events; people formed online social networks and fan sites around political ideas, sharing potent YouTube videos, music and games that had the potential to be seen, heard or played by millions.
The tools needed to organize and act on our beliefs are becoming more accessible online. With them, we can have a public conversation about what the future of the Internet and our country should look like - and finally gain an upper hand against the special interests that have dominated our democracy for generations.
Zattoo & BBC iPlayer Score Over Holidays
Excerpted from Last100.com Report by Steve O'Hear
The holiday period saw UK Internet TV users being given more viewing options than ever before. Zattoo opened its beta to the British public and the BBC with its controversial iPlayer - now updated to offer a Flash video-based Mac, Windows, and Linux compatible streaming version - did the same.
We first reviewed Zattoo, a P2P-based desktop application that offers live streaming of existing over-the-air and cable channels in July - noting that in comparison to the likes of Joost and Babelgum, both of which attempt to recreate the "lean back" experience of television, Zattoo is more at home being used "in a multi-tasking environment, where users watch television in one window on their computer, while accomplishing other tasks in another such as chatting to friends over IM, surfing the web, or writing e-mail."
Then in closed beta, the UK version of Zattoo had a channel lineup which notably included all of the BBC's digital channels: BBC One, Two, Three, Four, along with BBC Parliament, News 24, and the BBC's two children's channel.
Rather curiously, BBC One and BBC Two have now been dropped from Zattoo's UK channel lineup. Apparently the problem is due to the Beeb's various regional versions of its two flagship channels.
A Zattoo spokesperson explained, "The reason for removing BBC 1 and 2 is the following. Zattoo is currently running an open beta in the UK and is only retransmitting programs that are delivered nationwide without any regionalization. As BBC 1 and 2 are channels with heavily regionalized content, we would have had to black out so many programs that it would have diminished our users' viewing experience too much. We're planning to increase our UK channel lineup by summer 2008 to include channels with regionalization, including BBC 1 and BBC 2."
While national restrictions imposed on Internet TV offerings is all too commonplace in order to enforce international territorial rights, this may be the first time domestic regionalization has gotten in the way. However, of some compensation to UK users, the splendid Channel 4 has now been added to Zattoo's lineup.
December - Christmas day to be precise - also saw the BBC's iPlayer leave its limited beta as part of a major marketing push. And rolled out with less fanfare than the iPlayer's original launch, was a streaming version offered in partnership with Adobe giving access to Mac, Linux, as well as Windows users.
PUCC, Skype Demo P2P at CES
Excerpted from CNS Magazine Report
The Peer-to-Peer Universal Computing Consortium (PUCC) will be demonstrating its P2P networking technology on various electronic devices and health sensors during CES International 2008 this week in Las Vegas.
The group will demonstrate how its networking technology can be used in homes and offices by utilizing and bridging existing networking standards, thereby connecting devices such as health sensors, home gateway, mobile phones and small robots to form a unified network.
The common core protocol is able to bridge existing networks like Ethernet, Wi-Fi, IEEE 1394, Bluetooth, ZigBee, and IrDA with minimum changes.
PUCC, a non-profit organization made up of corporate members from 25 Japanese tech companies and universities, has been developing and manufacturing an open source P2P networking standard with a goal of a P2P communication technology that allows all electronic devices and appliances to seamlessly communicate.
Located in Tokyo, members include NTT DoCoMo, Epson, Toshiba, TransVirtual, and Keio University.
Separately, Skype will be offering a sneak peek at the 2008 International CES of the newest devices and accessories on which the mobile P2P Skype experience will be available to the more than 246 million registered Skype users worldwide. A wide variety of new and innovative wireless devices and accessories will be on display.
Marketer of the Year: AT&T
Excerpted from Marketing Daily Report by Laurie Sullivan
Our marketer of the year went from Bakelite to broadband in a single bound. Once regarded as a stodgy, if reliable, behemoth, American Telephone & Telegraph (AT&T) zipped from that old moniker to the slightly more serviceable SBC to the more current Cingular and back to AT&T, all in one nearly seamless year.
The company set for itself a daunting task: Make Internet protocol television (IPTV) and wireless services as dependable and reliable as a hard-wired dial tone. No easy feat.
AT&T burst forth with advertising and marketing campaigns that had a younger and edgier style, punched up with bright hues and catchy tunes.
The hipper look borrowed orange for the primary color from AT&T Wireless, formally Cingular, though the corporate logo remained blue. The bright color was like the stamp of ambition, signaling the carrier's intention to stand out as a strong global wireless and broadband content provider, delivering not only voice, but also music, movies, and television content.
That promise, along with some smart strategic executions, paid off in 2007. Buoyed largely by the December 2006 acquisition of BellSouth, third-quarter profit climbed 41%, to $3.1 billion. Total mobile subscribers rose by 2 million, to 65.7 million. Quarterly reported revenue increased to $30.1 billion, up from $15.6 billion in the year-earlier third quarter, AT&T reported on October 23rd. AT&T also reaped the benefits of exclusive deals to sell Apple's iPhone, Samsung's Juke, Research In Motion's Blackberry and Blackberry II, and others.
Subscriber growth held steady in 2007, buttressed by exclusive deals with handset makers. By December 23rd, the company had activated 1.1 million iPhones and was supporting 65.7 million mobile subscribers, as well as 126,000 U-Verse TV customers. AT&T's total subscribers reached 2.1 million in the third quarter, up from 1.9 million in the second quarter and 1.6 million in the first.
The company needs its intense commitment to cellular to offset the industry's 7% annual loss of hardwired residential telephone services, as more and more college students migrate to wireless after moving out of their parents' homes, cable companies poach more customers by launching phone services, and consumers shut off landlines when switching to broadband.
Equity research firm Sanford C. Bernstein & Co. describes AT&T as having remade itself as a wireless-first telecom, after a series of transformative mergers over the past four years. Wireless now makes up a full third - and growing - of the company's portfolio, while business from traditional landlines in the home, once the heart and soul of SBC, now accounts for a mere 22 percent of revenue.
"It's a digital world," said Wendy Clark, AT&T SVP Advertising, playing off a recent online campaign. "'Digital World' is an example of how we identified our challenge to communicate AT&T's transition."
Yet ask AT&T's Clark the biggest challenge the telecom faced last year, and she shrugs off losses in hardwired subscribers and points instead to the process of trimming a long list of marketing and ad agencies after the BellSouth and Cingular merger. "We had to make sure the best ideas didn't get left behind, and keep those that could help us work through the transition," she says.
There are plans to cut more from the 50-agency list, now whittled to 20, by examining credentials and meeting with representatives from each.
None of the decisions so far have been across the board; the chosen reflect a combined list. For example, New York-based Mediaedge:cia won the business of the five agencies that supported media buys.
The company made some lower profile acquisitions, as well. One of the most strategic came in November, when it purchased Ingenio, the San Francisco-based developer of an advertising platform that combines Internet and phone technologies to track calls to businesses generated by specific ads. While financial terms were not disclosed, the deal closed in December.
AT&T expects to integrate Ingenio's technology into its directory service and local search advertising sites, including YellowPages.com, AT&T Real Yellow Pages and 1-800-Yellow Pages.
An eagerness to remain No. 1 in the United States is complemented by AT&T's plans to build out its network infrastructure internationally, a strategy spearheaded by CEO Randall Stephenson. The company spent between $700 million and $1 billion last year to expand its global IP network, launching a couple hundred initiatives to expand its overseas operations, from building on its landline phone network in Vietnam to chasing a share of India's mobile phone market.
That sort of globetrotter ambition shone through in AT&T's advertising and marketing campaigns. Take, for example, the ad campaign "Your Seamless World," which uses a mash-up of city names around the globe to illustrate that consumers live, work and play in many locations worldwide. The ad campaign aims to appeal to a variety of consumers, such as actors, architects, businesspeople, moms and students.
Seamless World and other campaigns were highly integrated, consisting of in-store, interactive and television pieces all working together to get consumers thinking in a new direction. AT&T launched an online store in October that lets customers create the names of their own connected worlds by typing in the names of cities where they work, live or play.
In recognition of the convergence between entertainment and communications, AT&T formed tighter ties with Hollywood. Last summer, the carrier revealed ongoing work with studios to help track pirated content. So, the decision later in the year to join Walt Disney Co.'s subsidiary Steamboat Ventures as an investor in Vobile, which specializes in identifying pirated movies on the Internet, didn't come as a surprise. It did, however, indicate the company had become more serious about helping to clean up piracy as AT&T continues to roll out U-verse, its digital TV and high-speed Internet service.
AT&T also inked several deals with Napster. One gave customers free, unlimited access to more than 3 million songs via Napster To Go, valid for one year. Another let consumers purchase individual songs for $2 each or buy a five-pack of tracks for $7.50.
The partnerships with Hollywood studios, eMusic, Napster, and Yahoo are part of AT&T's 100-plus year transformation, says Jan Dawson, Vice President at research firm Ovum.
"Music and TV services are AT&T's first push to provide the content on mobile devices," he says. "Campaigns like Digital World, along with the Blue Room website, are ways to get people thinking about AT&T as an online destination, rather than a means to get there."
Cisco Charts New Course
Excerpted from eWeek Report by Paula Musich
As Cisco Systems continues to push further into the data center, CEO John Chambers is looking to make Cisco a strategic partner to large IT customers there. At Cisco's annual C-Scape industry analyst conference in December, Chambers went so far as to declare Cisco's intent to be a leader not just in the networking and communications industry but also in the computer industry itself. Senior Editor Paula Musich spoke with Chambers about Cisco's next-generation data center initiative and how Cisco intends to achieve it.
PM: Cisco's role in the data center today is as a supplier of storage area network (SAN) switches, network switches, and some security hardware. How do you see that role evolving over time with your Data Center 2.0 vision?
JC: What we see is that the data center vision is changing rapidly: It's changing around a concept of any device to any content - processors, storage, applications, with proper authorization anytime anywhere. And it's moving from the idea of a person to a machine, to many to many. It's what we call the second phase of the Internet.
PM: How would you characterize the first phase of the Internet, compared with the second phase?
JC: In the first phase, you had a person to a content - entering orders online, employee self-service, customer self-service, and the business model change around core versus context, where you have a contract manufacturer do the manufacturing heavy work for you. Our expertise was not how to manufacture, but how to get the quality. That set the direction for the industry for a decade, and Cisco led in the implementation of that by listening to our customers but also catching the market transition. It wasn't about huge, complex data architectures. It was about really capturing the power of the Internet to allow people to do their jobs one to one or one to machine.
This next wave is about many to many, and it's around collaboration. It will result in a replay of the productivity gains we saw and predicted in the mid-'90s.
So the vision of the data center is that we want to be able from any device to get access to any combination of servers, storage, and apps and make it completely transparent and secure to the user. For that to work - especially if you think about it as many to many and not one to machine - it is all about networking.
The network will become the platform not just within the data center but all the way to the home, to where you will not care if the Duke basketball game or my wife's "Desperate Housewives" is stored on the set-top box, on the PC, the TV behind that or one of multiple DVRs in the home. I don't care whether it's in the point of presence (POP) with the service provider, whether it's in the content generator down in Hollywood or somewhere out in the World Wide Web - I just want it to work. And I don't want to have 15 copies just to find that I made a mistake and overrode my wife's favorite program or vice versa.
And it has to start in the data center where, at least in theory, bandwidth is free and, at least in theory, you can touch any of the servers or storage devices or any of the apps.
If you can't do that in the data center, how do you take it all the way out into the environment where, basically, it will be driven not by personalization but by multiple people working toward a common goal?
So the complexity goes up. It was a lot easier when it was a person to a device or one person to one other person sharing multiple pieces of information.
Video will be the killer app in the Internet. And it obviously will be in different forms of unified communications - Web 2.0, video blogging. I do no text blogging because I'm slow and I can talk 200 words a minute and really get my message across. So my blogs are video, and Cisco's TelePresence virtual meeting system in and of itself puts loads on our networks - probably incremental 200% growth per year.
So you're about to see what we believe will be the next wave of productivity growth. There's something we would like to call the "Cisco TelePresence network effect" or "Cisco's TelePresence law" that's the classic: The power of the network is the number of nodes squared, where 10 units is the power of 100, and 100 units is the power of 10,000. You'll see us lead, but you'll probably see some of our customers like a Procter & Gamble scale the number of units they'll use, and they'll change how they interface not just among themselves on this collaboration - where access to anything in the data center can be shared with any user - but they'll take it all the way to their suppliers.
PM: When I think of TelePresence, I think of it as an expensive product that will be sold as onesie-twosies in the executive suite of Global 2000 companies.
JC: It's the reverse. I would never have developed it if it were primarily for CEO-to-CEO communications. The CEOs grasp the change, and they grasp the ease of use. It's as simple as a phone - actually, simpler. Now think of how the data center is core to delivering that - especially as video becomes more and more a key part of storage and apps. Think of the security implications. It's an architecture, not a product. People who approach it on a product basis and who are trying to integrate products that were not designed to work together are going to have trouble - especially if you're trying to inspect every packet on the network over any combination of networks.
It's a combination of data, voice, and video together off multiple applications. It isn't anymore about servers, network virtualization, application virtualization, and what do you do about interfacing this between data centers; it's about how you approach this total market. So the market transition to us is that the network will become the platform for enabling all forms of communications in IT. And any person can put on their PC and drive it from there with any database architecture they have.
PM: So you start in the data center because that's where the money is available? And as the economies of scale drive down the cost of technology, then it moves out to a broader audience?
JC: The reason you start in the data center is because broadband is free there. So your bandwidth is relatively free, and all your servers are available without delay and all the storage is there. So if you can't do it in the data center, where you have IT pros pulling it all together, you sure as heck can't do it combining points of presence all the way to the home or to my various business unit offices.
PM: Do you see any potential roadblocks in the communications landscape that could derail that vision of going all the way out to the home with TelePresence and this kind of collaboration? I'm thinking specifically about net neutrality.
JC: For me, the question with net neutrality is: What are we trying to accomplish? We're trying to get broadband to every American at an affordable cost with at least two to three technology options that they can choose from. So the primary goal is how do we get it built, and then later you can ask, well, how do we want to splice it in a way that allows each of us to gain access to a certain amount of broadband as part of a public utility?
But as a service provider, if you have to deliver that free of charge to your competitors, or at a charge below or at cost, and you can't guarantee your response to me as an end-user, then all of a sudden you have a problem. I as a business user will pay a premium to make sure I am able to get my applications. If I have to compete with a kid down the block using a computer game with 1,000 other people and I can't use TelePresence for an $8 million sale, all of a sudden I have a problem. And I'm putting TelePresence into my home this month. So you begin to see these are not separate. They have to combine together.
We tend not to say, "Here's where the industry is going, and jump." We tend to listen to our customers. I wish I could tell you I bought Scientific Atlanta because it was really smart. It was Time Warner and some of the other big service providers saying, "Go buy it." We bought WebEx because of a phone call from my top business person saying, "John, they're about to be bought by one of your competitors, but this is a company that's perfect for you." We thought the competitor was Microsoft, but it turned out not to be Microsoft. We got that phone call on a Thursday night, and we bought WebEx one week later. Everything was done.
We used a lot of these principles of unified communications and collaboration and Web 2.0 to pull that off.
Market transitions often are challenging to the incumbent, and our approach in the data center is to say, "This is inevitable; we're gonna lead."
And so you'll see a series of announcements over the next 12 months, one after the other, on data center switching. But it's really about data center virtualization. You saw us take a minority interest in VMware. That wasn't a subtle message to the market. That says we're going to play there. And we'll partner tighter than anyone else with the leaders in this.
Many of the CIOs will tell you there's been a lack of innovation in high tech for quite a few years. If you think about the innovation that occurred in the '90s, that was about transforming business models, supply chain, transforming the way you interface to your customers, the way you order and deliver online, your ability to communicate with others through e-mail first, then text and now video.
Now you're starting to see the next wave of innovation. Most CIOs are pretty hungry for this. Because, guess what? Their budgets haven't grown very much. And part of the reason they haven't grown is because productivity in the US has been relatively stagnant for three years - in the 1 to 2% range, which is where former Fed Chairman Alan Greenspan believes it will stay.
But in the early '90s, the foundation was laid for the 5% productivity growth that occurred in '96 and '97. We called this one cold. In 2002 and 2004, we got years where productivity stayed at 4%. Now it's been back down again, and you're a CEO trying to make decisions and you're saying, "I can acquire a company, I can buy back my stock, I can move into adjacent markets or I can spend money on IT. If I can only get productivity of 1 to 2% a year out, I'm not going to spend a lot of money on IT." So what's missing is innovation. And what this data center virtualization enables at first is cost efficiencies, consolidations. But over time, it is innovation for applications, which I think will be built largely around collaboration or Web 2.0 concepts and directions. So that's our vision.
If you think about it, any device to any content - especially to any applications to any processors - that's what Cisco does. And it's about intelligence in the network, not just dumb pipes.
PM: Can we expect to see partnerships between Cisco and other server virtualization providers such as Citrix Systems and Microsoft? If so, how soon?
JC: We don't share our moves prior to making them public. I think you will continue to see us active both from an internal development, a partnering, and acquisition role across the whole data center. We have an expanding relationship with Microsoft, and we have similar views of how the data center might evolve. And so I'd be surprised and disappointed if you didn't see us move with Microsoft on some opportunities, even though we might compete in some areas, like unified communications. That's really the future.
The days of complete friend or foe are long gone. Within that, EMC is the one that is aligned closest with Cisco with very little overlap. But we clearly want to partner with all the players - the IBMs, the HPs, the EMCs, the Microsofts. We are one of the few companies that have traditionally done that, and I don't underestimate that it's hard.
Joost Enters Most Advanced P2PTV Market
Excerpted from NMS Communications Report
Gang Lu reports rather specific rumors that Joost is going to enter the China market on or around the Chinese New Year, February 7th, by partnering with the Chinese portal Tom.com. That's not surprising as Skype partnered with Tom.com when it entered the Chinese market.
Joost will have to play catch up in China, as the Chinese are the world leaders in peer-to-peer television (P2PTV) and P2P streaming media. Well established Chinese firms like PPLive and PPStream pre-date Joost by nearly two years.
And today, in China, the P2P market is clogged with many more players like UUSee, Vakaka and Vatata.
Early entrants like PPLive focused on live TV in 4:3 ratio with simple user controls, perhaps for those familiar with TV but not with TiVo; however, this is changing rapidly. What's more, friends report performance has been excellent, even back to early 2005.
Joost has not worked so well within China. From one friend and from Google translations of Chinese reviews, it appears there are many places in China where the bandwidth requirements of Joost cause performance problems, even while PPLive works well. Presumably this will be cured by local Joost support within China. In other words, a lack of local peers within China means, for now, too much Joost content must flow over clogged international links. A local presence should cure that.
Meanwhile, Gang Lu describes a hybrid system (streaming servers and P2P bandwidth sharing) from Vatata which "supports most of the video formats, including Microsoft, Real, Flash, Apple, MPEG1/2/4, OGG/MKV etc and H.264. The Vatata system consists of two sub-systems: Vata, the back-end streaming platform and Tata the front-end player. Tata is absolutely fascinating. It supports On Screen Display (OSD) and allows plug-ins, which means you can run multiple modules (e.g., instant-messenger, channel list, etc.) on top of the video screen, which sounds just like what Joost does."
So it's clear Joost is moving into a very advanced market. It will be interesting to see the resulting cross fertilization.
Telecom Argentina Selects BuyDRM's KeyOS Platform
BuyDRM, a media services innovator, helping companies market, monetize, and monitor pay media content has been selected by Telecom Argentina, one of the two main telecommunications operators of Argentina.
The Argentinean company will integrate the KeyOS pay media platform with support for digital rights management (DRM) into the IRIS ONLINE media management service.
This deployment of KeyOS into the Telecom Argentina IRIS ONLINE media management service will be unique in the local media space and will provide Telecom Argentina's customers a fully branded, white-label DRM experience, that is easy to deploy and will provide a virtually seamless pay media services offering.
As a multimedia content delivery service provider, Telecom Argentina's national wholesale division helps Argentinean media and production companies in the Latin American region deliver their own content to the increasing number of global broadband Internet users using the IRIS ONLINE media management service.
Sergio Galban, Telecom Argentina's Director of National Wholesale Division, said, "We have the first, unique and full feature content delivery platform integrated with BuyDRM's KeyOS world class pay media platform and we foresee a growing market for content delivery and DRM Services in the Latin American marketplace."
Christopher Levy, BuyDRM's CEO & Founder, said, "We are excited by the opportunity to provide our pay media services to Telecom Argentina and the exploding Latin American market and together we possess the necessary tools to support the growing demand for online and mobile content."
The new combined offering will allow Telecom Argentina's customers to securely market, monetize and monitor their pay media audio and video files in five distinct business models including, pay-per-view, subscription, token, ad-supported marketing, and silent monitoring. With the launch of the Microsoft PlayReady DRM technology for SilverLight in early 2008, Telecom Argentina's offering will extend to include the secure delivery of games, images, and ring-tones and a wider range of audio and video codecs including, WMA/WMV, AAC and H.264.
Hungama, FMTS Fight Online Piracy
Excerpted from Techtree Report
Hungama Mobile has joined hands with UK-based Friend Media Technology Systems (FMTS) to launch eXposé to e-monitor and provide solutions to keep a check on piracy.
The alliance will offer customized software solutions for the media and entertainment industries that empower them to identify and control the use and misuse of their intellectual properties and brands.
eXposé leverages data analysis algorithms that monitor a vast array of sources on the Internet, from P2P networks to discussion forums and newsgroups. This will help in tracking across the World Wide Web the exact source, be it an individual or a community, from where the intellectual properties (IP) and brands are infringed and distributed.
Hungama Mobile MD and CEO Neeraj Roy said, "The Indian Film and Television industry has been facing a daunting task of growing infringement of intellectual properties as movies, serials, songs, etc. are downloaded without authorization through the internet. With the launch of eXposé software, the digital world will have a more vigilant approach towards this challenge.
Hungama will cover the music and video segment in the online space initially and as we move ahead, we will also target other platforms including the mobile segment, which will be the next target."
FMTS, established in 2000, is a global provider of technology solutions for the media and entertainment industries. It works in partnership with content owners, publishers, broadcasters, software, and gaming companies, offering customized solutions and monitoring services that deliver enforcement and threat management programs.
Coming Events of Interest
IPv6 - Connectivity, Community & Consumer Electronics - Monday January 7th from 3-4 PM at The Venetian, Las Vegas, NV. This CES panel will discuss how the new IPv6 protocol will impact the consumer and enterprise experience of a connected world. Topics will include mobility, interoperability, media content distribution, and what IPv6 means for consumer electronics manufacturers.
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.
MIDEM/MIDEMNET - January 26th-31st at the Palais des Festivals in Cannes, France. Never has there been such demand for music. By putting you in direct contact with nearly 10,000 music and technology professionals from over 90 different countries, MIDEM connects you with the players matching this unprecedented demand. Delegates from the recording, publishing, live, digital, mobile, and branding sectors gather to do deals, network, learn, and check out new talent.
Digital Music Forum East - February 26th-27th in New York, NY. Major and indie music label executives, artists and their representatives, and technology and consumer electronics leaders come together for this "must attend" event. Now in its 8th year, Digital Music Forum East is the leading event focused on the intersection of technology and music. Don't miss the opportunity to be part of the industry's future.
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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