March 2, 2009
Volume XXV, Issue 7
Inside the Isle of Man's £1/Month Unlimited Music Plan
Excerpted from Ars Technica Report by John Timmer
The Isle of Man is going to try an audacious plan that would charge its citizens a small, flat fee for each connection in return for granting them legitimate access to music files, wherever they may be found. The plan would also see ISPs become the gateway to value-added music services.
Last month, the Isle of Man announced that it was going to try its governmental hand at addressing rampant music piracy. At this week's Digital Music Forum East, Ron Berry, the government's e-Commerce Advisor, detailed how the government came to be a pioneer in a field where many larger nations are struggling, and provided some details about how they expect the system to work.
Two things became clear during the conversation. The first is that, for Berry and the government of Man, the dive into digital music is simply part of a larger plan to carve a niche into the global digital economy. For its citizens, however, it will mean that they will be facing an extra fee in their bills for everything from high-speed Internet to basic cell-phone service - whether they're interested in music or not.
The Isle of Man is a crown protectorate, a position that keeps it separate from both the UK and the EU, even though the British Queen is technically the head of state. For many years, the country used this position to act as a tax shelter but, a decade ago, its government decided it needed to get off the international banking community's blacklist and diversify its economy. Its position as a banking center had already left it blessed with lots of high-speed network infrastructure - Berry says that it "punches well above its weight" - which led to a decision to focus on electronic business. The first big win has been in electronic betting, where Man has become a hub for a number of international operations; these pay no corporate income tax, but agree to maintain a fraction of their earnings in the Manx banking system.
Berry started serving the government several years ago, tasked with expanding Man's digital businesses beyond this industry. One of the markets he's chosen to target is the music business, in part because he recognized that because of rampant piracy throughout Europe, Man found itself "already in the middle of a war." Since Man writes its own copyright law, he felt it was in an unusual position to experiment with potential solutions to rampant copyright violations. In return, it hoped the music industry would view it as a test bed for innovative business approaches - with a fee structure in place, the music business could experiment in Man with things that might cause them to take a bath in other markets.
When it comes to the actual plan, Berry was clear that lawsuits and proposed three-strikes plans simply weren't working, a perspective shared by the Distributed Computing Industry Association (DCIA), which is helping line up all the interested parties. There wasn't a significant drop in piracy in response to suits, and three-strikes laws were likely to be extremely difficult to implement.
The alternative, it was decided, was to find a way to legitimize what people were doing anyway, and start developing a revenue stream based on file sharing. For Berry, the common factor for piracy is the Internet connection, leaving the ISP or MSP (mobile service provider) the place to act. Again, Man's situation - there are only three ISPs, and most subscribers use Manx Telecom - made working through the ISPs/MSPs a relatively uncomplicated matter.
There were lots of potential models for extracting fees through the ISPs, and Berry said that various opt-in and opt-out schemes were considered, but, ultimately, it was decided that the only thing that would realistically work was a flat fee on every ISP account. That means that everyone who accesses the Internet, even if it's done through a prepaid mobile phone plan, will be facing an additional fee.
Clearly, that's something that might provoke a bit of public outcry, but Berry mentioned a number of reasons why he didn't expect there would be a significant public pushback. By targeting everyone, the fee would be small - about £1 a month - that would easily disappear into the fine print of a service plan. As for complaints from those who don't use digital music, Berry compared it to situations where people pay for things like public pools as part of their town taxes, even if they don't swim. He also noted that Man's population is familiar with the UK model, where fees are attached to specific services, such as the license fees on television sets that go to support the BBC.
ISPs will be required to install hardware that scans network traffic for fingerprints of shared music files - representatives from noankmedia and Audible Magic, which offer these services, were present at the roundtable. That will allow the appropriate artists to be compensated from the fee pool based on the percentage of their music that was flowing over the Manx network; ISPs will also get a cut to maintain the hardware. Berry was adamant that the system will be set-up to accept any compatible hardware, though, so that the government wasn't favoring any specific solution.
That lack of favoritism, at least when the program starts, will have its limits. At its basic level, legitimizing P2P file sharing leaves lots of space for companies like Apple, which already operates in Man. These companies can compete by offering a good experience in finding content with guaranteed quality. But Berry says the plan is to go beyond legitimizing existing P2P traffic; ISPs will be given the opportunity to sign-up their customers to specific value-added plans.
At launch, customers will have the option of paying extra for a subscription service at £10 a month, which will simply show up on their Internet service bill. There are also plans to provide a third level of service, in which the subscription would come with a portable media player capable of handling the content. Although there are plans to open up these value-added providers to all comers, at launch, each level of service will only be provided by a single company. When more services are added, customers will have the option of managing their service plans through their ISPs - in essence, Internet connections will be treated like cable TV, but with music.
As far as the government is concerned, it doesn't matter who occupies the value-added space, or what service they offer, but it is clearly sanctioning a first-mover advantage. It also has the potential to allow ISPs to cut deals with music service providers, or to enter the business themselves.
Long term, however, it's clear that the Manx government views this space as the primary location of music-industry innovation, and may take steps to ensure a fair playing field. Berry clearly intends that anyone can compete to find the best way to add value to the otherwise chaotic world of P2P, and both Berry and the DCIA representative emphasized that they hope that successful models could emerge from Man and wind up applied to markets in other nations. Just as clearly, Berry hopes that the companies behind those models would retain a presence in Man once they hit the big time.
It's obviously not a perfect system, and the issues are likely to be even larger when it first launches this summer if all goes to plan. Still, it's at least an attempt to come to terms with music piracy, and you can bet that a lot of people, including many in the film industry, will be anxiously awaiting some indication of how this grand experiment works out.
Report from CEO Marty Lafferty
 Congratulations to Ned and Tinzar Sherman and the entire Digital Media Wire team for their highly stimulating ninth annual Digital Music Forum East conference this week in New York, NY, which attracted more than 400 attendees.
We are especially grateful to the Isle of Man's e-Commerce Advisor, Ron Berry, for conducting Wednesday's digital roundtable, as summarized above and in the article following this report, and to LimeWire's CEO, George Searle, for his keynote interview on Thursday.
George described LimeWire as a company - a tax-paying entity and team of 60 technologists based in New York along with 3 of the 4 major record labels; as a software product - a communication program that lets users connect to one another, independently, to form a user network, and then search for and share any kind of computer file with other computer users connected to the network; and as a network - one of the largest and most engaged user bases in the world.
All of those things go by the name LimeWire: the company, the program and the network.
Prior to LimeWire Store, and still now, LimeWire's core business is selling software. The company develops and distributes a free version of its P2P file-sharing software, and offers users the opportunity to purchase an upgraded version (LimeWire PRO) with more features, enhanced connectivity, and customer support. Right now, the company's business is principally supported by sales of LimeWire PRO.
LimeWire is the most popular file-sharing client in the world. It's downloaded about 350,000 times every day, and installed on 1-in-5 of all the PCs in the world. Each month, more than 70 million unique users access LimeWire, and there are about 5 million active users at any moment.
LimeWire users come from virtually every country on earth, with about half of them in the US. According to comScore, users average 17 sessions per month. This combination of size and activity makes LimeWire one of the most visited destinations on the Internet - one of the "Top 10" most visited websites - just behind Facebook.
And LimeWire users are highly engaged, spending over 12 in-focus minutes per session. This combination of activity and focus translates to more than 200 minutes of engagement per user per month - more than Facebook. According to NPD, the average user age skews young: 12-to-34 years old; gender neutral: 50-50 male-to-female; more likely to buy music and spend more on music than their peers; and over-indexing on nearly every digital retail channel and in social media.
LimeWire users initiate over 5 billion searches every month. That's not as many as Google, but it's more than Yahoo and Microsoft combined. That's 5 billion opportunities for content owners, retailers, and advertisers to reach consumers with the right message, the right product, and the right price.
Although LimeWire's user base, and more generally P2P, represents enormous traffic, queries, and engagement, it currently lacks the business models of the web. As a result, the web is far more commercialized than P2P. LimeWire encourages music rights holders to license and experiment: forget about control, and focus on revenues. It's all about participation not prevention.
To be clear, the music industry is going to have to make some very tough choices regarding their revenue models, and the intersection of those models with P2P. But we know what doesn't work. The current order won't give way by doing the same thing. Because of the utter impossibility of controlling distribution, it's absolutely crucial to find ways to participate in any and all forms of commerce that use music.
George tends to favor market forces rather than litigation and government regulation, especially in this dynamic, highly-technical marketplace. Litigation does not make a good digital business model. The music industry must find a way to reach and embrace music consumers. With each passing year, a new crop of consumers set their consumption habits. Changing consumer behavior is hard and will require a more sensitive, respectful approach to consumers. In the end, it's the users - not the music industry and not LimeWire - who will determine what works and what doesn't.
LimeWire would like to help the music industry test and introduce a full range of commercial services to monetize file sharing, and embrace - rather than alienate - music consumers. LimeWire has had several promising meetings with major labels to develop models that will compensate both the labels and their artists. What's happening in P2P and at LimeWire right now represents a unique opportunity for the record industry, and some people in their organizations are starting to see this. A whole host of services and relationships have not yet been introduced to the online consumer.
George looks forward to the day they can work together with the entire music industry and help expand their reach and deliver more to the consumer. With cooperation from the music industry, P2P has the potential to simultaneously support a number of services, including promotion, sponsored, ad supported, subscription, and a la carte paid downloads of music.
Target and organize fans and consumers through search activity. Connect fans with artists, sellers with buyers, and buyers with products. Combine discovery, promotion, purchase, and ad models for maximum exposure and revenue. Collect and share revenue at every point of access. Compensate content owners and rights holders. Experiment to optimize the mix of these approaches.
LimeWire has invested millions of dollars creating the LimeWire Store to help rights-holders monetize users at the point of acquisition. LimeWire Store currently sells licensed, DRM-free MP3s from top-flight indie partners. Recent distribution deals bring the total number of sound recordings to over 2 million, from over 200,000 artists. LimeWire is working with some of the best here: The Orchard, IODA, Redeye, Nettwerk, IRIS, and Comedy Central.
Through the LimeWire Store, the company has also created several marketing support arms that both labels and artists have embraced. The "Featured Artist Page," which launched this month, lives on the client and store's home-page and links to tour dates, free downloads, and exclusive video and photography. The "Ear to the Ground" series takes a regional approach to promotion by partnering with local alternative weeklies for a firsthand glimpse into their music scene. And the "Live at Lime" series offers artists the opportunity to newly record and present a fresh take on old favorites. LimeWire recently worked with Lisa Loeb in-studio where she recorded a beautiful new acoustic version of her song "Stay."
Music is available on an a la carte and subscription basis. A la carte at 99 cents per song. Subscription plans at $9.99 for 25 songs; $14.99 for 50 songs; and $19.99 for 75 songs.
George is very encouraged by LimeWire's first steps and early results with each. Thousands of new accounts are being established each week, with the growth rate accelerating. LimeWire will outperform all of 2008 in the first quarter of 2009, double that in the second quarter, and double that again by the end of year. Most accounts are subscriptions, and most of those are for its largest subscription package. So, on average, LimeWire is generating a much higher average revenue per user (ARPU) than iTunes.
LimeWire would also like to test an all-you-can eat subscription. Such a user experience, in the company's opinion, would feel native within P2P and maximize revenue for labels, artists, and publishers.
Users can access the LimeWire Store from the newest version of LimeWire, LimeWire 5. The primary ingredient for social networks is people, and P2P has plenty. P2P has always been inherently social, and with 5.0 LimeWire is bringing social to the forefront. The current generation of web users is finding what they want more-and-more through their social network rather than search. After all, your friends should know you better than a mathematical equation.
Searching LimeWire is good; having your friends help you find what you're looking for will be even better. With LimeWire 5, users can set-up personal networks based on existing contacts; reshape search results based on what friends are sharing; share their files with others in their network; and discover new files from other members.
LimeWire is not trying to become MySpace or Facebook or any other social network. There's already a massive, latent social network within LimeWire. The company just wants to bring it to the surface; let users view LimeWire through a relevant social lens.
One exciting feature of 5.0 is that it allows the user to easily set-up personal sharing networks on a file-by-file, friend-by-friend basis. For example, you can share vacation photos with a limited circle of friends, work documents with your colleagues, and discover new files from other members of your social circle. All of this is built off your existing, trusted social contacts through Jabber-compatible services like Gmail.
The monetization of P2P content searches is in its infancy - comparable to 1992 in the traditional web search market. Proven business practices from web search engines can be applied to LimeWire's 5 billion monthly user searches to unlock an enormous advertising opportunity. Looking at the success of Google and others in terms of product acceptance, revenue, and market cap creation, it's easy to see that advertising in general, and search-driven ads in particular, are the economic engine behind the web.
Google is a distribution platform based on organic and sponsored links. To users, it's a place to find things. To advertisers, it's the greatest customer acquisition tool in the world. Advertisers compete for attention around each keyword. So it's a marketplace - the largest auction in the world, where advertisers bid on their willingness to pay for ads next to search results. LimeWire proposes a plan that will make P2P the first search engines to compensate rights holders directly from search advertising revenues.
LimeWire has formed a new company, Lime Engine, which is in the process of building a keyword ad system targeted to P2P networks, social networks, and websites that are oriented around entertainment. So, it will be a vertical ad network that will target entertainment consumers. Ad placements will be priced and sold in an online keyword bidding system. Advertisers will buy pay-per-click ads on Lime Engine that are responsive to users' demographics, interests, and expressed title/artist searches.
Just like Google, Lime Engine will make money every time a consumer clicks on an ad. Like Google, Lime Engine will share revenues with the publisher. Unlike Google, however, Lime Engine will also share the money with participating record labels, when one of their associated properties is searched for.
So, Lime Engine will be the first network in history to pay participating rights holders for the display of ads in response to user queries that include trademark terms. At launch, Lime Engine will be the largest vertical ad network in existence and one of the largest Internet ad networks, because of its exclusive right to place ads on LimeWire.
LimeWire thinks that Lime Engine can produce more profits for labels than the rest of their operations within a few years. After a 20% allocation to Lime Engine for administration (selling ads to advertisers, serving ads to publishers, tracking click-throughs, billing advertisers, and paying partners), participating rights holders will get the lion's share (2/3) of revenue.
The answer to the problems facing digital media right now lies squarely with providing the right offering to the right consumer. Ask a bunch of 15 year-old kids. Then listen to them; really listen to them. And then offer business models that will serve them in the way they want to be served - not as the industry would prefer to serve them.
All too often, marketers desperately assume consumers are just like them, or different from the way they really are. When that happens, the wrong course of action is chosen. Because the 15 year-old kids are our future customers, we need to stop acting like we can control them or tell them what to do. They're waiting for the best experience to be brought to them. They're waiting for convenience, access, ownership, compatibility, portability, and discovery. Don't make it intrusive. Don't load it up with restrictions. Don't make it incompatible with iPods.
The company began programming LimeWire with the belief that P2P would become one of the core distribution tools of the Internet.
What's happening in P2P and at LimeWire right now represents a unique opportunity for content rights-holders. Together, they have a historic opportunity to build a new future with file sharing that compensates rights-holders while maintaining the aspects of technology and community that make P2P attractive. It is possible to both compensate and innovate.
A whole host of services and relationships have not yet been introduced to the online consumer. But without real world experience, the final state of P2P monetization is impossible to determine. Share wisely, and take care.
Playlouder and Isle of Man in P2P Discussions
Excerpted from Billboard Business News Report by Andre Paine
Media technology company Playlouder MSP has confirmed it has had discussions with the Isle of Man's e-business division, which is currently working on a proposal to license ISPs on the Island to enable customers to access unlimited music for a monthly blanket fee.
The all-you-can-eat offering, to be unveiled at the end of March and tested in the summer, is set to incorporate music files from P2P sites, with downloads tracked and rights-holders compensated.
The Isle of Man is a self-governing British crown dependency in the Irish Sea with a population of 80,000; it boasts a superior telecoms infrastructure, including 100% broadband coverage.
London-based Playlouder was reportedly working with UK cable ISP Virgin Media on an unlimited service that included access to P2P downloads for a blanket fee, but it emerged recently that the proposition had stalled. Virgin Media and Playlouder declined to comment on the venture.
But Playlouder CEO Paul Hitchman confirms to Billboard that the company is looking for partner ISPs on an offering that would combine access to P2P for licensed music and "value added services and applications around the music" that could compete with unlicensed P2P.
Hitchman confirmed that he has had discussions with the Isle of Man's e-Commerce Advisor Ron Berry, who announced the proposal at the MidemNet digital music conference in Cannes on January 18th. Berry has since had dozens of meetings with the music and tech industry. The Island's main telecoms provider, Manx Telecom, owned by O2, is set to be the lead ISP partner.
"The announcement really put us on the map and opened a lot of doors for us," Berry tells Billboard. He adds that he is "very, very aware" of the stalled Playlouder and Virgin Media proposal.
Asked if the Isle of Man's radical proposal could lead the way in a new digital music licensing model, Hitchman comments, "I think it has that potential; I think there's a danger with any project like that, which is that something gets parked in a non-threatening space for two years while, in the meantime, the business gets destroyed.
"But I think the Isle of Man is genuine about wanting to help move the process along and I think it could certainly play a role. It's going to require all parties - Manx Telecom, the Isle of Man, a service provider like us, and the music rights owners - to come together and make it work. And so long as there's good will on the part of all of those players, there's no reason while the Isle of Man couldn't lead the way in this area."
For more on the Isle of Man's licensing proposal see the current edition of Billboard Magazine.
Inadvertent File-Sharing Protection Implementations
Excerpted from Internet Daily Report by Greg Piper
Two members of the Distributed Computing Industry Association (DCIA) released their implementations of the group's inadvertent file-sharing protection principles Monday, and others are considering whether to make public their submissions to the DCIA, CEO Marty Lafferty told us.
The group worked with P2P companies and federal regulators, largely at Congress' request, to develop best practices to prevent accidental sharing of sensitive data, such as financial records or government secrets. The DCIA will analyze submissions to identify common features for protecting sensitive data and release the analysis in the next few days, Lafferty said.
The DCIA increasingly includes commercial providers of P2P-enhanced distribution services for licensed content, such as Abacast, which made available its submission to us. The group said it received last week submissions from "top brands" that use P2P for downloading, live streaming, open-environment sharing, and corporate intranet deployments, and to distribute both user-generated and professionally produced content.
But Congress and the FTC probably will stay focused on open platforms for user-to-user sharing such as LimeWire. Its DCIA submission highlights the protective features in its latest software client, LimeWire 5.0, which left beta two weeks ago.
Installing LimeWire 5.0 won't share anything on a user's hard drive that hasn't been shared in previous client installations. Users can see how many and which files they're sharing through a status bar and "P2P Network" icon. The "My Library" screen in set-up prevents users from sharing entire folders, and gets rid of the all-in-one "shared folder" designation.
"Recursive" sharing of subfolders in a larger directory, a prime vehicle for accidental sharing, has also been disabled. All files downloaded through LimeWire will remain shared by default, though the submission emphasizes users can right-click files on any screen to turn off sharing. They can do the same to turn off sharing to individual users as well.
Version 5.0 adds several social-networking features that let users swap files with friends instead of strangers on the network. After installation, "user-originated files" will be shared only if users mark them for sharing. Users must drag an entire folder to the "P2P Network" to share its contents. Root drives and programs can't be shared at all.
Spotify Could Become the Best P2P Music Service Ever
Excerpted from CNET News Report by Matt Rosoff
I've been reading good buzz about P2P service Spotify for several months now, but the noise seems to have reached a fever pitch with recent coverage by music industry blogger Bob Lefsetz and Sunday's announcement that the new U2 album, No Line on the Horizon, was available on Spotify in several European countries a week before its official worldwide release date of March 2nd.
Some quick background: the promise of Spotify is music, on-demand, from any computer with an Internet connection. Which sounds a lot like Rhapsody, Napster, Microsoft's Zune Pass, or any other of the countless subscription-based services that have come and gone, except that there's a free ad-supported version. Like what QTRAX is promising, only with streams instead of downloads. Or perhaps like imeem.
Or like all the dearly departed P2P services of yesteryear, only licensed with partners including the four major labels plus independent digital distributors CD Baby and The Orchard. Songs are encoded in the Ogg Vorbis codec, which offers higher quality-per-bit-rate than MP3, and distributed on-demand using the BitTorrent protocol.
But of course there's a catch: Spotify is only available in some European countries, and the free version is invite-only.
Apart from finally delivering the promise of on-demand music, the Spotify designers must be praised for designing a beautifully simple and functional piece of software that combines the best of online and offline so you don't know (or care) which is which.
Playlists and searches are saved, so you don't have to retrace your steps.
Most amazingly, there's no lag time. You click on a song and it starts playing immediately. It launches much faster than iTunes and songs play quickly.
The only flaw is song selection. Apparently, Spotify had to take some songs down because of the licensing deals it signed with the majors, and consequently there are some big gaps. No Zeppelin, no Beatles, the only Pink Floyd album available is the live "Pulse," and Radiohead is limited to "Kid A" and a greatest-hits record from the band's EMI days.
Once Spotify gets its licensing on par with iTunes and the other online streaming services, and as long as the audio ads aren't too frequent or annoying, I don't see how Spotify can lose.
So why is it not available in the US, and when's it coming?
GridNetworks and Widevine Partner for Content Delivery
Video delivery platform provider GridNetworks has partnered with Widevine Technologies, the only provider of multiplatform, multiformat DRM and video optimization solutions, to secure content delivered via the GridCast TV service.
"As we work to make GridCast TV the industry standard for viewing Internet video directly on TVs, DRM has become increasingly critical," said GridNetworks CEO Tony Naughtin. "Widevine's multiplatform DRM allows us to add more value to our solution - and it allows GridNetworks to serve the largest media companies with the most popular titles."
Widevine's studio-accepted DRM solution secures content delivered to multiple consumer platforms in multiple formats, including H.264, Adobe Flash, Microsoft Windows Media, and Microsoft Silverlight. The partnership combines Widevine's DRM solution with GridNetworks' GridCast TV service, which has a reach of over 40 million viewers through the Microsoft Xbox 360 and Sony PlayStation 3.
"Video producers and distributors are looking for additional channels to monetize Internet video, and GridCast TV provides this by extending service delivery to the living room," said Matt Cannard, Vice President, Marketing of Widevine Technologies. "This multiplatform DRM and service delivery solution is what customers have asked for in order to target a highly prized consumer demographic."
Widevine's DRM solution securely distributes, stores, and controls playback of monetized digital media to any Internet-enabled consumer device. Over 140 service providers and 160 web properties use Widevine to secure digital video.
TorrentRelay Lets You Download through Your Browser
Excerpted from Inventorspot Report by Austin Keenan
Torrents have emerged as the biggest large-file transfer protocol on the Internet. In fact, ipoque, a German company that manages bandwith solutions for schools and ISPs, recently released its 2008/2009 study showing that 45-to-78% of all P2P traffic is under the BitTorrent protocol. TorrentRelay is a site that is helping people take advantage of the swarm of traffic by making the use of torrents just as easy as using your web browser.
If you've used torrents before, you know there can be a certain degree of difficulty in getting your client set-up to accomplish the transfer, particularly in the port-forwarding department. This is TorrentRelay's main advantage over normal clients. You can get around firewalls and router port-forwarding by using TorrentRelay, which gets the same access that your browser gets.
The site features two versions of its in-browser torrent client: one for desktop web browsers and one for mobile browsers. With each, you have the option of using a basic account, or purchasing a Prime account, which will enable you to open a torrent, close you browser, and log-in from another location to get your files once the client has fully processed the torrent. The feature list on each is pretty extensive, and advanced settings can only be changed with a Prime account, which makes the service pretty attractive. For this article, we just used the basic account, and still found the online client to be quite useful.
You can load a torrent a number of different ways, which is another distinct advantage of TorrentRelay. Ordinarily, you would download a torrent, and load it up in your client to start the download. But, in some networks, you'll have trouble downloading a torrent - or any file, for that matter. With TorrentRelay, you can enter in ID numbers from a few popular trackers, and even provide a direct link to the client to get the torrent. Using the "Web Importer" feature, you can even give the URL of a search-results page to find out what torrents are available from that page.
Once you load your torrent, you'll want to leave the window open as it processes. At the moment, a progress bar isn't available without a Prime account, but you can enable it to auto-download your files as they become ready. TorrentRelay will remember your IP as you navigate around the site's options and get familiar with the service, and when you go back to "My Library," your torrents should still be there.
As a client, TorrentRelay is full featured, and will work great for those who are just starting to use BitTorrent, and also experienced users who want more control over the specifics of the file transfer. If you try the service without buying a Prime account, you will definitely notice that the system bounces you back many times when trying to download a torrent, saying "Sorry, the system is too busy." Since this is their approach to getting you to pay for an account at TorrentRelay, there really isn't a way around it, unfortunately. Still, the added convenience of not having to install a client and configure port-forwarding makes TorrentRelay a real winner.
OneSwarm F-to-F P2P Likely to Irk Content Biz & ISPs
Excerpted from Ars Technica Report by John Timmer
University of Washington computer science researchers are developing a Friend-to-Friend file-sharing app that provides fine-grained control over what users see which files. In the process, they're likely to seriously annoy both the content business and Internet service providers (ISPs).
Over the last few years, the popularity of P2P file sharing has exploded, leaving widespread file-sharing lawsuits and traffic management policies in its wake. But the same features that allow P2P applications to provide lots of bandwidth also make these clients less-than-ideal for maintaining a degree of anonymity and limiting the sharing of documents to a specific set of users. Computer scientists at the University of Washington think they've overcome that in their new software, called OneSwarm, but they may have opened up a can of worms in the process.
The basics of OneSwarm are pretty simple. The software consists of a server app that appears to be written in Java, allowing it to run on Linux, the Mac, and Windows. All interactions with the OneSwarm system beyond that, however, take place in a browser - the app's authors say all the major players other than IE are capable of handling the system. The software is back-compatible with BitTorrent, meaning it functions fine as a generic P2P client.
But the software's specialty is adding a layer of social networking on top of P2P sharing. When first starting up on a user's machine, OneSwarm creates a unique cryptographic key, which it uses to encrypt its IP address information. Other users can only find you, and thus the files you share, if you've established a relationship with them. Although you can create these relations manually, OneSwarm will also piggyback on the GTalk network: provide it your credentials, and it will check to see if your friends there are already using OneSwarm. These two features - backwards compatibility and the leveraging of an existing social network - should go a long way towards solving the early-adopter problems that plague social networks.
The social network aspects allow fine-grained control over the sharing of files. Users can pick any combination of friends, groups of friends, etc. to share a specific file with, or can offer it up to the entire OneSwarm network. Because it's running in a browser, the browser's plug-ins allow content like music and video to stream while partially downloaded.
Even if a file is being shared with the entire network, however, it doesn't mean that anyone on the network can tell what you're up to, a feature of P2P software that had landed no end of college students on the wrong end of RIAA discovery motions. Instead, searches for content go out only to a user's immediate friends on the OneSwarm network. If they don't have matching content, they forward the requests on to their friends, and it spreads out into the social network.
Please click here for the rest of the report.
Fun Little Movies Wins Grand Prize at 2009 MWC
Fun Little Movies, a Los Angeles, CA based production company that is a pioneer in the creation and distribution of original content for global distribution on mobile phones, via P2P, and on the Internet, captured GSMA's grand prize at the 2009 Mobile World Congress in Barcelona, Spain.
"English as a Second Language," an episode of Fun Little Movies' comedic web series, "Turbo Dates," directed by Jocelyn Stamat and co-written by Terry Rossio, produced by Frank Chindamo, was selected from a roster of films that had been submitted from more than 100 countries.
Rossio served as the writer and/or producer of several Hollywood hit film franchises, including "Shrek," "Aladdin," "Pirates of the Caribbean," and "National Treasure." Stamat worked with Chicago's Second City and the Harvard Lampoon and is a Harvard MD.
Kevin Spacey, (actor/director, and co-founder of Triggerstreet), host and keynote speaker for the MoFilm Festival, presented the award to winning producer, Frank Chindamo.
Spacey said, "I am excited about the opportunities for MoFilm as a platform for the discovery of new talent and a catalyst for short films on the latest global mass medium of mobile."
"Thank you MoFilm for finally putting mobile movies on the map," Chindamo said. Giving a comedic nod to Spacey, he added, "When it comes to big awards like this, we're not one of the Usual Suspects. I just hope we can Pay it Forward. I feel like a real American Beauty!"
VUDU First to Sell On-Demand P2P Movies in Hi-Def
VUDU, a leading provider of peer-to-peer television (P2PTV) products and services, this week announced it has achieved another industry milestone by becoming the first on-demand service to offer high-definition (HD) movies for download-to-own on its popular 1080p Internet Movie Player. HD movies are now available for purchase to all VUDU owners.
Until now, consumers have been restricted to renting HD movies from on-demand services, including VUDU's library of over 1,400 HD movies, the largest HD library in the world. This week, VUDU unveiled a collection of over 50 HD movies from top independent studios that are available for both rental and download-to-own.
Movies offered in this collection will be available for purchase in both instant HD and VUDU's industry-leading HDX format at the same price. HDX is the highest quality on-demand format available anywhere on cable, satellite, broadcast, or the Internet.
"Consumers are clamoring for the ability to own digitally-delivered titles in HD, especially in our HDX format, and we are excited to be the first in the industry to meet this consumer need," said Edward Lichty, VUDU's EVP of Strategy and Content. "This is a watershed event for the industry as well, signaling the studios' recognition of and confidence in digital delivery as an increasingly important part of their business. We expect to see a continuing expansion of digital rights in the coming months."
UK Survey: 54% of File Sharers Buy Music on iTunes
Excerpted from ZeroPaid Report
UK Internet service provider (ISP) Tiscali has released the results of an anonymous study into UK consumers' attitudes towards music and unauthorized music downloading. The Tiscali Music Research study was hosted on the Tiscali music channel during December and January and, with support from other media sites including Drowned in Sound (DiS), asked the audience to share their real attitudes about unauthorized downloading as well as their relationship with music, both recorded and live.
The study suggests that people are more familiar with P2P than expected and generally understand that unauthorized downloading is wrong - just not that wrong, and they haven't been convinced that it is actually damaging to artists and the music industry.
Many believe they are already contributing to the music industry by spending money regularly anyway, but they do have a limit to what they will buy. The more music savvy the consumer, the more likely they are to be participating in unauthorized downloading, but also they are more likely to be spending more both on recorded music and live gigs, posing a major conundrum for the music biz.
46% said they had used one or more file-sharing programs - BitTorrent, LimeWire, Gnutella, eMule, Ares, or DirectConnect - with Limewire (34%) and BitTorrent (25%) by far the most popular. However 53% have never knowingly downloaded unauthorized material.
This percentage using P2P sites increases slightly to 54% for those in the survey using iTunes and significantly to 78% for the DiS audience. Only 7% of the DiS audience has "never knowingly downloaded unlicensed music" (40% for iTunes users).
At least three-out-of-four people know what is lawful and not in relation to their music use, but at least half don't think the music industry does enough to persuade them that unauthorized downloading is damaging (66% Tiscali, 63% iTunes, and 47% DiS).
83% of the survey respondents said that they still pay for music in some form, whether on a CD or via download. In fact, 78% said that they still spend money on CDs rising to 85% for DiS replies. Most surprisingly, 76% of iTunes users are still buying CDs.
Even the unauthorized downloading communities are still spending money on CDs - 51% for Tiscali, 54% for iTunes, and 69% for DiS.
This bolsters the conclusions of a file-sharing study done a few years ago by Industry Canada, a ministry of the Canadian federal government, which found that "P2P file sharing tends to increase rather than decrease music purchasing," and contradicts John Kennedy, Chairman & CEO of the International Federation of the Phonographic Industry (IFPI), who testified this week that file sharing "deters people from buying music online."
34% of respondents spend at least £10 a month, 44% for iTunes subset, and 69% for DiS users. Only 17% of respondents say they spend nothing a month, 9% for iTunes, and 6% for DiS. In addition, when it comes to gigs, 13% of Tiscali respondents go to at least one gig a month and this rises to 25% in the unauthorized download subset. For those using iTunes, this represents 29%, and 77% of DiS readers consistently go to at least one gig a week, whether they download unlicensed music or not.
Of those who have admitted to unauthorized downloading in the past, many are doing it to supplement the music they buy - 60% of Tiscali respondents and 62% of DiS said they only downloaded free because of a limited budget or to supplement their spend on their favorite music/artists. Approximately one-in-ten say they do it because they like to "try before they buy." A similar one-in-ten say they rarely buy music now that they can get it for free.
Moreover, what the study truly illustrates is that music consumption is a far more complex animal than the music industry wishes to admit. It continues to believe that a single unauthorized download translates into a single lost sale, and that's simply not the case. Many download an album they wouldn't have bought otherwise or simply to sample prior to purchase. Unauthorized downloads also help drive revenue in other areas like merchandise and concert tickets.
TPB Not Directly Linked to Industry Damage
Excerpted from VNUNet Report by Rosalie Marshall
Lawyers acting for BitTorrent-tracker The Pirate Bay (TPB) have argued that there is no connection between unauthorized downloads and lost sales to the music industry.
The assertion was made during the ninth day of the court case in Sweden, in which TPB stands accused of profiting from the distribution of copyrighted music, games, and software. The argument led Peter Sunde, co-founder of TPB, to refer to the proceedings as "a good day" on Twitter.
TPB allows Internet users to find and exchange files. The site offers a search engine that allows visitors to look for specific content or browse lists of content.
John Kennedy, chief executive of IFPI, the organization prosecuting TPB for making available copyrighted works, outlined yesterday how the site had caused "significant damage to the music industry as a whole."
Kennedy argued that TPB had eroded music sales, and damaged the marketing plans of music companies. He pointed out that CD sales fell 38% between 2001 and 2007, a period which saw a sharp rise in the levels of unauthorized file sharing.
However, Roger Willis, a media professor and Chairman of the Swedish Composers of Popular Music, argued in TPB's defense that people who download music tend to buy more CDs than people who do not.
He also made the point that other factors can affect the growth of music industry sales, such as the increase in time people spend using computer games.
Additionally, Kristoffer Schollin, a professor from Gothenburg University who lectures on copyright in the digital age, said that the technology TPB uses is not illegal in any way. The site is simply an "open database" of torrent files, according to Schollin, which he described as more sophisticated types of Internet link.
The defense case has been reported on and translated by TorrentFreak, a blog that focuses on file sharing, which has representatives attending the trial.
Schollin was also reported to have suggested that TPB had a role in Internet communications, but that it was up to the court to decide whether the site should be called a "service provider." He denied the prosecution's argument that 40% of Internet traffic was attributable to TPB, or that 50% of the world's torrent files reside on the site.
Irish ISP: We Won't Block The Pirate Bay
Excerpted from IDG News Report by Jeremy Kirk
Ireland's largest ISP won't block The Pirate Bay (TPB) - the embattled BitTorrent search engine and tracker - absent a court order, a spokesman said Tuesday.
Eircom is aware of copyright infringement issues but will not block TPB unless major record labels can obtain a court order requiring it and other Internet service providers (ISPs) to do so, the spokesman said.
Eircom recently avoided a trial with record labels EMI, Sony, Universal Music Group, and Warner Music Group. The labels took Eircom to court to try to force the ISP to install traffic-monitoring equipment that would have examined content of its subscribers in an attempt to clamp down on unauthorized file sharing.
After eight days in court in January, Eircom opted to settle with the labels. Eircom said it would not install content monitoring equipment, but instead agree to investigate subscribers suspected of file sharing and disconnect them if their activity continued, the spokesman said.
Content monitoring is "not our business," the spokesman said. "We have no interest in it."
Eircom will accept Internet protocol (IP) addresses and other information supplied by companies working for record labels that track unlicensed traded content, the spokesman said. However, Eircom will not turn over subscriber information to record labels.
The details of the agreement with the record labels are still being worked out, such as the level of proof Eircom would find acceptable in order to justify disconnecting a subscriber. Implementation of a warning and disconnection system is a couple of months away, he said.
Eircom's terms-and-conditions for its subscribers will not change, as the ISP has always had the right to cut off customers engaged in unlawful activity, he said.
The situation in Ireland mirrors other efforts the entertainment industry has undertaken to try and shut down TPB, which is one of the most popular sites to obtain torrents, or small information files, that coordinate the download of material via the BitTorrent protocol.
Coming Events of Interest
P2P MARKET CONFERENCE - March 17th in New York, NY. Strategies to fulfill the multi-billion dollar revenue potential of the P2P and social network channel for the distribution of entertainment content. Case studies of sponsorships, cross-promotion, interactive advertising, and exciting new hybrid business models.
Media Summit New York - March 18th-19th in New York, NY. Sponsored by McGraw-Hill and Digital Hollywood, the 2009 MSNY is the premier international conference on media, broadband, advertising, television, cable & satellite, mobile, publishing, radio, magazines, news & print media, and marketing.
Future of Television West - March 24th-25th in Los Angeles, CA. A cutting-edge community of content creators, technology innovators, advertising representatives, and distributors forge relationships and share ideas about the future of television. The event is interactive.
LA Games Conference - April 28th-29th in Los Angeles, CA. Focused on business, finance and creative developments in the games industry, including mobile, online and console markets and the increasing intersection of Madison Avenue and Hollywood with the industry.
P2P MEDIA SUMMIT LA - May 4th in Santa Monica, CA. The fourth annual P2PMSLA, the DCIA's flagship event, featuring keynotes from industry-leading P2P and social network operators; tracks on policy, technology and marketing; panel discussions covering content distribution and solutions development; valuable workshops; networking opportunities; and more.
Digital Hollywood Spring - May 5th-7th in Santa Monica, CA. With many new sessions and feature events, DHS has become the premiere digital entertainment conference and exposition. DCIA Member companies will exhibit and speak on a number of panels.
Streaming Media East - May 12th-13th in New York, NY. The number-one place to see, learn, and discuss what is taking place with all forms of online video business models and technology. Content owners, viral video creators, online marketers, enterprise corporations, broadcast professionals, ad agencies, and educators.
World Copyright Summit - June 9th-10th in Washington, DC. The international forum that brings together all those directly involved in creative industries to openly debate the future of copyright and the distribution of creative works in the digital era. WCS is organized by CISAC, the International Confederation of Societies of Authors and Composers.
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