June 15, 2009
Volume XXVI, Issue 10
Ad-Supported Internet Contributes $300 Billion to GDP
Interactive advertising is responsible for $300 billion of economic activity in the US, according to a new study released this week by the Interactive Advertising Bureau (IAB).
The advertising-supported Internet represents 2.1% of the total US gross domestic product (GDP). It directly employs more than 1.2 million Americans with above-average wages in jobs that did not exist two decades ago, and another 1.9 million people work to support those with directly Internet-related jobs.
A total of 3.1 million Americans are employed thanks to the interactive ecosystem. These are the key findings of the first-ever research to analyze the economic importance, as well as the social benefits, of the Internet.
The study, commissioned by the IAB was produced by Harvard Business School professors John Deighton and John Quelch, along with Cambridge, MA based Hamilton Consultants. The study was designed to provide an impartial and comprehensive review of the entire Internet economy and answer questions about its size, what comprises it, and the economic and social benefits Americans derive from it.
There are more than 20,000 Internet-related small businesses in the US that provide a variety of services such as web hosting, ISP services, web design, publishing, and Internet-based software consulting. Many of these businesses have 10 or fewer employees.
Internet-related employment is particularly important to certain areas of the country, but exists in every one of the 435 US Congressional Districts. Some Congressional Districts have more than 6,000 Internet-related employees.
Interactive advertising has substantially reduced what consumers have to pay for access to the Internet and for e-commerce products and services. In addition to its financial contribution to the US economy, the Internet has produced large social consequences as an infrastructure and platform, providing American society comprehensive qualitative benefits.
Internet Traffic Growth Exploding, Study Reveals
Excerpted from Switched Report by Leila Brillson
The Internet is a seemingly endless resource for our watching, listening, and chatting needs. Bandwidth, however, is not. Cisco Systems released a report earlier this week suggesting that global Internet traffic is growing exponentially.
Scientific American said that Cisco needed a newer term - zettabyte, or one trillion gigabytes - to measure both the amount of uploading and downloading traffic on the web and the bandwidth required to accommodate it. The release has a lot of interesting statistics, including the prediction that the web will nearly quadruple in size over the next four years.
Cisco claims that, by 2013, what amounts to 10 billion DVDs will cross the Internet each month. In other words, it will take over a million years to watch just one month's worth of web video traffic. The findings point to "consumer hyperactivity" - that with web-enabled phones and mobile devices, more powerful computers, and multitasking, growth will only increase. For such a surge in volume, networks must be able to accommodate the growth.
Also reporting on the need for speed (and space) is the New York Times, which provides an interesting way for users to track their own network "footprint." With the Cisco-created PC Pulse, you can clearly determine how much bandwidth you use and for what types of traffic. Not a bad way to become aware of the way we surf.
Take a look at the study here.
LimeWire Store Adds New Partners and 10,000's of Tracks
Excerpted from Music Industry News Network Report
LimeWire this week announced deals for the LimeWire Store with new partners: Skint/Loaded; Alpha Pup; CAM; and Mbop Digital. Their combined digital music catalogs add tens of thousands of titles to the LimeWire Store.
These deals provide access to tracks from artists such as Funkadelic, !!! (Alpha Pup / Los Angeles); Fatboy Slim, Lo Fidelity Allstars (Skint/Loaded / London); Miles Davis, Stan Getz, Muddy Waters, Bob Marley, Dr. John, James Brown, Hall and Oates, the Carter Family, Shangri-las, (Mbop Digital / London); film scores from legendary composers Ennio Morricone, Nino Rota (CAM / Rome), as well as many other notable names.
"We're proud to expand and diversify our catalog by adding these new partners. We're simultaneously growing our catalog and our customer base, which is very exciting. LimeWire Store is fast becoming an important outlet for artists, labels, and consumers," said Tom Monday, Director, Partner Relations for LimeWire.
LimeWire Store, launched in the spring of 2008, sells 256kbps, DRM-free MP3s provided by partners including The Orchard, IODA, Redeye Distribution, Nettwerk Music Group, IRIS, Comedy Central, and others.
Its digital music offering has grown to include more than two million recordings by today's top indie artists as well as classics from music legends. LimeWire's music team is committed to providing participating artists and labels unique promotional opportunities with events, exclusive releases, and targeted marketing.
Game Demo On iPhone Features P2P
Excerpted from UberGizmo Report
"Asphalt 5" from Gameloft is the new title to hit the streets, where Apple touts "console quality" graphics - yeah, from the 2000 era when Dreamcast and Gamecube were players back then.
Initially, it looked as though the title was running at 30fps, but eventually it seemed to settle down to 25fps levels the moment more stuff appeared on the screen. A nice touch of this game is choosing your own sound-tracks, since you can access your iTunes music library in-game.
Well, from the naked eye, it definitely beats the DS Lite's graphics when it comes to racers - but people should realize by now that value is in the software, and in this case, the game.
Other features include local P2P multiplayer over Bluetooth, worldwide P2P via Wi-Fi, as well as car upgrades - which will require you to fork out some cash, of course.
Report from CEO Marty Lafferty
 Congratulations to the International Confederation of Societies of Authors and Composers (CISAC) on their second World Copyright Summit, subtitled "New Frontiers for Creators in the Marketplace."
As a partner organization, the DCIA was proud to participate in this thought-provoking and strategically important international conference.
Our session, "Internet Service Providers (ISPs): Part of the Problem or the Solution?" immediately followed the fascinating keynote, "Driving the Digital Future: South Korea Leading the Way?" by Dr. Yong-Kyung Lee, currently ranking member of South Korea's National Assembly Committee that focuses on telecom issues, and formerly CEO of Korea Telecom.
In just a few decades, the Republic of Korea has gone from a country with the lowest telephone penetration rate in the world to become a leader in Information and Communication Technology (ICT). Its broadband network is the most developed in the world with more than 76% of the population active Internet users, while its mobile services now have an estimated penetration rate exceeding 93%.
Yong-Kyung was one of the chief architects of this "Korea miracle" while at the helm of Korea Telecom and now is a respected legislator. Of particular interest were his insights on the social implications of Internet usage and his case studies of online infringement.
A related Streaming Media East panel, reflecting current views of leading US telco and cable ISPs, can now be viewed here.
CISAC introduced our panel by noting that, "Voices in many countries are asking for ISPs to be more proactive, alongside rights-holders, to find solutions to the vast amounts of uncontrolled and unlicensed material available through the Net."
Our moderator was Bill Werde, Editorial Editor, Billboard; and speakers included Jim Griffin, Founder, Choruss; Yvonne Looye, CEO, Cedar BV - LIRA; Nicholas Motsatse, CEO, SAMRO; Shira Perlmutter, Executive Vice-President, Global Legal Policy, IFPI; and Paul Sanders, Co-Founder/Strategic Director, PlayLouder.
Our panel took place just after news broke that France had overturned its "three-strikes" legislation on the grounds that it was unconstitutional. However, Shira responded by noting that the French government was already at work making necessary changes so that the measure could be reinstated in a more effective, less draconian form.
Jim articulated the argument of music rights-holders who seek to derive compensation from ISPs, but also acknowledged that music industry participants need to stop arguing among themselves and develop a unified external message. For example, members of the sound recording business need to learn to behave like publishers, who have seen revenues steadily increase by recognizing that music in the digital era is a service, rather than clinging to the analog view that music is embodied in tangible products. Control needs to be traded for compensation.
Jim also announced that Choruss expects to launch at several universities in the fall with a variety of terms-and-conditions alternatives, which should provide real-world experience to help perfect Choruss' offerings. He is optimistic that students are very interested in a better file-sharing experience, featuring higher quality, greater reliability, and more efficiency than unlicensed applications.
Yvonne noted that her work involves the structuring of six collecting societies in the Netherlands. She wondered whether other forms of content than music, such as e-books, could take advantage of an approach like Choruss.
Nicholas, who represents the leading South African music rights organization, complained that ISPs seem not to recognize the value offered by the creative community and that legislation may be required to force licensing to take place. Asking permission before using something that another party owns is a tenet that must be enforced; and music arguably represents the greatest potential value-add to be broken out from Net access in what ISPs offer.
Shira expressed the need for limiting unfair competition of unlicensed content redistribution against new business models being pursued by authorized services. She disagreed that there is a dichotomy between control and compensation - one does not need to be traded for the other. ISPs should help labels not to be at a competitive disadvantage with infringing online music.
Paul's work for the past six years has focused on finding common ground for a bundling of music with ISP subscriptions by means of a robust new platform that will facilitate backend data processing requirements. He noted that one of the more complex hurdles that still need to be overcome is getting rights-holders to establish pricing. One of the obstacles to progress has been the position taken by some music rights-holders who insist on unrealistically large commitments.
In response to Bill's line of questions about "the carrot vs. the stick," we opined that in the fullness of time, broadband offerings will reflect the fact that not all bits are created equal - those that constitute a top hit song are more valuable, for example, than the comparable number of bits that comprise an out-of-tune garage-band rehearsal; and, in their own self interests, ISPs will migrate towards value-added services beyond simply provisioning undifferentiated bandwidth.
However, the issue at hand for this panel discussion is what to do right now about unauthorized file sharing. Our view is that there needs to be a much greater emphasis on the carrot than the stick, with much more experimentation involving alternative solutions to monetize the voluminous traffic represented by this activity.
In this country, we have seen that after legal actions against thirty-thousand consumers and the shuttering of half-a-dozen major brands of open file-sharing services, unlicensed music redistribution has continued steadily to grow, for all intents and purposes unabated despite such enforcement efforts.
Today we have a bifurcated situation: while more than 90% of companies that use P2P technologies distribute authorized content, more than 90% of consumer behavior continues to involve infringing content. Licensed P2P offerings now span the spectrum of traditional media business models: we have ad-supported music from QTRAX, subscription music from iMesh, and paid downloads from several - including the LimeWire Store - plus all three as well as live P2P streaming from Spotify.
First and foremost, of course, licensed P2P music offerings need and deserve our full support. And part of that should involve work in two areas: monetizing unauthorized file sharing, hopefully as a stop-gap measure; and drastically streamlining the licensing process for technology start-ups. Success in the latter endeavor should in fact diminish the need for the former.
A pair of the most promising approaches for monetizing non-commercial file sharing were represented on this panel: Choruss and PlayLouder; and the Isle of Man's upcoming trial and the proposal of the Songwriters Association of Canada (SAC) also merit serious attention and strong encouragement.
Based on the concept of a modified compulsory license suggested five years ago by Electronic Frontier Foundation (EFF), these efforts have now developed into very sophisticated programs, addressing opt-outs for both rights holders and consumers, preserving rights to litigate commercial infringement, and designed to serve as the floor and not the ceiling for digital music revenue generation.
Approaches like these, when rolled-out globally, will easily produce more income for music rights holders than the music industry attributes to losses from infringement, and will level the playing field for licensed music offerings, both P2P and otherwise.
Reinvesting some of this money in automating the licensing process for new digital music distributors would serve the music industry well.
As we have previously expressed, thanks to the Internet, there are exponentially more potentially viable and qualified music distributors than in any previous era. And this has created an enormous need for a licensing migration path for new digital distribution platforms from their early developmental phases through technology and market trials to launch and commercial release.
The basic idea would be to make it possible for literally thousands of independent developers and small distribution technology firms to obtain acceptance swiftly, efficiently, and equitably; and to migrate from their pre-licensed state to fully authorized status relatively early in their life-cycles.
We believe the necessary building blocks for this envisioned solution already exist, but must be assembled, integrated, and tested. In the short-term, this will provide new income, and long-term it will also help show the way to the most viable online music distribution models, substantially overtaking the unauthorized file-sharing monthly fees line with much higher levels of profitable revenue generation. Share wisely, and take care.
Tens of Thousands of US Students Sign Up for Legal P2P
Excerpted from The Register Report by Andrew Orlowski
Tens of thousands of students have signed up to pay for a legal P2P music program in US universities, set to start later this year in experimental form. It's Choruss, the incubator hatched by Jim Griffin - a long-time advocate of licensing P2P sharing on networks.
Choruss won't ultimately be in the retail or service business, Griffin told us in Washington, DC this week - but it may provide an umbrella for managed service companies such as PlayLouder, the technology partner for the suspended Virgin unlimited music service. "We're not in the business of distribution," he said.
Griffin says this year's phase of Choruss is designed to experiment with pricing. Different colleges will get different pricing schemes. "The plan is to use the next school year to run tests and experiments," he said. Only after the scheme has been running will an assessment be possible - but Griffin told World Copyright Summit (WCS) delegates that, "We've had students tell us it's worth $20 a month - to share what they want to share."
The fact that such large numbers have volunteered to pay for a P2P service defies the conventional music industry wisdom that the only way to compete with infringers is with free offerings. It also shows how much Choruss has evolved since it first broke the surface last April, when talk was of opting students in automatically, in return for a covenant not to sue.
The most significant aspect of a voluntary, pay-for service is that it spikes the argument that licensing networks needs to involve a "music tax." Griffin said the project should be regarded as an experiment to help gauge pricing. "As an industry, we don't do much testing, or experimenting, and learn at what price point someone would choose to participate in this system."
Phase Two of Choruss involves rolling out legal P2P to ISPs across the land. "We can soon approach ISPs with metrics in hand, not speculation. We're not arriving to Hoover information off the student networks - that would violate their privacy. We need to ensure academic self-administration is respected."
It's hard to classify Choruss, and Griffin declined our invitation to stick a label on it. It's a clearing house, of sorts. But Griffin's sponsor Warner Music plans to spin it out with joint ownership by stakeholders - something that would need to cross anti-trust hurdles.
PlayLouder boss Paul Sanders said attitudes had moved forward radically in the last 18 months. "The rights-holding community is now willing to engage with the ISP community. Only two years ago, we'd approach a major label and explain the unlimited model. They'd go, 'fine but our wholesale price is 55 pence per track.' No one's ever going to start to have a sensible commercial conversation if that's the premise."
He predicted the debate would become more sophisticated as paid-for services were better understood. "ISPs want a proper, professionally managed service that they can hold accountable. That's not the same as a free-for-all. They want the gray area content (e.g., mash-ups, live recordings, and bootlegs), but in a managed environment. A lot of these questions recede as the managed and invested-in services emerge."
French Court Savages "Three-Strikes" - Tosses It Out
Excerpted from Ars Technica Report by Nate Anderson
The French Constitutional Council has ripped into the new Creation et Internet law, which would disconnect repeat online copyright infringers, calling the basic premise unconstitutional. "Innocent until proven guilty" remains a central principle of French law, and it cannot be bypassed simply by creating a new non-judicial authority.
Better known as the "three-strikes" law, Creation et Internet set up a High Authority (HADOPI) in France that would oversee a graduated response program designed to curb online infringement. Rights-holders would investigate and submit complaints to HADOPI, which would take action. Warnings would be passed to ISPs, who would forward them to customers; after two such warnings, the subscriber could be disconnected and placed on a nationwide "no Internet" blacklist.
The law passed on its second attempt - the first was foiled by a few Socialists who staged a bit of parliamentary theater to vote down the bill. But the Sarkozy government got its way a few weeks later.
The law still had to pass muster before the Constitutional Council, however, and this was a potential problem. The graduated response program was non-judicial, setting up a separate "administrative" authority, but it performed an essentially judicial function (not just warning and monitoring, but sanctioning). And the sanction proceedings had a presupposition of guilt; sure, there was an appeal mechanism, but the burden of proof was on the Internet user to show that he or she had not been uploading tracks.
In its ruling, this was precisely the issue that the Council zeroed in upon, going all the way back to the French Revolution to stress the wrongheadedness of the HADOPI approach.
"Moreover, whereas under section nine of the Declaration of 1789, every man is presumed innocent until he has been proven guilty, it follows that in principle the legislature does not establish a presumption of guilt in criminal matters," wrote the Council. This basic principle applies "to any sanction in the nature of punishment, even if the legislature has left the decision to an authority that is non-judicial in nature."
The court also made a strong statement about freedom of speech: "Freedom of expression and communication is so valuable that its exercise is a prerequisite for democracy and one of the guarantees of respect for other rights and freedoms; and attacks on the exercise of this freedom must be necessary, appropriate, and proportionate to the aim pursued."
Disconnection would appear to be a disproportionate penalty - a claim often made by MEPs at the European Parliament who have repeatedly voted to make such sanctions illegal unless overseen by a judge.
Travelguru: "Watch Where You're Going" Using Velocix
Excerpted from Computing News Report
Velocix announced that Travelguru.tv is using its digital delivery services for high-quality video streaming from the Travelguru website. Travelguru is a web-based UK travel company offering high-quality video reports and promotional offers on holiday destinations globally.
Travelguru offers a rapidly expanding portfolio of product and destination videos designed to give viewers a genuine insight into each holiday experience. In addition to backing from the tourist boards and leading tour operator partners, Travelguru offers independent advice and comment from its team of "gurus" that includes respected travel writers, broadcasters, and former presenters of the BBC Holiday Program.
Travelguru is currently using Velocix for a combination of Adobe Flash on-demand streaming and Video Progressive Download services.
The Velocix Network is designed to enable content owners, studios, and broadcasters to deliver video and other large digital assets, such as software, games, and audio over the web, with unprecedented performance, breakthrough economics and an asset delivery life-cycle management system that gives content owners the control, analytics, and reporting they need to manage their asset libraries through the digital distribution chain.
Australasian Societies Sign with RightsFlow
Excerpted from Billboard Business News Report by Lars Brandle
Australasian Performing Rights Association (APRA) and sister organization the Australasian Mechanical Copyright Owners Society (AMCOS) have struck a digital royalty collecting accord with RightsFlow, the New York, NY based bulk mechanical licensing, royalty services, and accounting provider.
The breakthrough agreement means digital royalties owed to Australasian songwriters for transactions in the United States will be accounted for and paid through to the Australasian rights holders.
With immediate effect, RightsFlow has access to the Sydney-based APRA/AMCOS database to search Australia and New Zealand works and identify specific songwriters and publishers. RightsFlow will be able to identify the relevant US administrative body and seek licenses through the Harry Fox Agency or directly with US publisher entities.
The benefits will be felt particularly by those Australian and New Zealand writers who don't have sub-publishing deals in the States, Richard Mallett, APRA/AMCOS Director, Recorded Music Services tells Billboard.
"It's aimed at the long tail," he says, "rather than being aimed at the head." Matt Irvin, Director of Licensing and Royalties at RightsFlow, says the pact shows that the Australian societies are "taking positive steps towards simplifying the process of international licensing, which will greatly improve royalty accounting and payment for Australasian songwriters."
RightsFlow's outsourced licensing service utilizes the bulk licensing system of the Harry Fox Agency to ensure publishers and songwriters are properly compensated under US law. In addition to helping its new clients obtain US mechanical licenses for physical releases and digital phonorecord delivery licenses,
Rightsflow also provides clients - which include E1 Entertainment, iMeem, the Independent Online Distribution Alliance, Audible Magic, and Disc Makers - with royalty accounting and other services.
Tweet Your Favorite Torrents With TorrentTwitter
Excerpted from TorrentFreak Report
The micro-blogging service Twitter continues to increase in popularity; but while it's great to hear about what that B-grade celebrity had for breakfast or where your best friend woke up this morning, readers of TorrentFreak will probably prefer hearing about torrents. That's where TorrentTwitter steps in.
In the unlikely event you're unfamiliar with the basics of Twitter, here is a twenty-second crash course: Twitter is a free micro-blogging platform where users can send each other short messages. Known as "tweets," these messages consist of no more than 140 characters and are sent to other Twitter users who previously subscribed to the sending user's profile. These people are known as "followers." The message will also be available for all to see on the web.
Now, clearly inspired by Twitter, comes a new micro-blogging service called TorrentTwitter. After a brief registration process, users can post short messages of a maximum 140 characters. It's possible to send any information you choose using the original Twitter and the same is possible on the TorrentTwitter service, but it seems to have been designed with the sharing of BitTorrent links in mind.
Most updates on this niche Twitter seem to contain the the location of .torrent files on the web via a short URL, along with related details. These messages are sent to the user's followers via the web, instant message (IM), RSS feeds, or SMS, and also appear on the public timeline on the main-page.
Of course, as a user of TorrentTwitter it's also possible to follow other users of the service, too. Maybe you know of someone who likes downloading the same kind of music as you - subscribe to his or her feed and get informed the second they share that information. Alternatively, with enough users, TorrentTwitter will become a user-generated meta-search engine for torrent files.
The other possibility for users on TorrentTwitter is the creation of a group which other users can join. In a torrent context, a group can be focused on a particular subject, say the latest TV shows. Any member of that group could send an update of where to find the latest torrent for a particular show, and instantaneously everyone in the group would be notified. Groups can be as specific or as diverse as the user chooses.
Right now, since the site only launched on June 2nd, there are only a handful of groups listed, leaving plenty of scope and opportunity for those wishing to start a new group. Joining a group is easy: just click "join" on the group's page.
TorrentTwitter also has a cloud displaying the most popular tags on the site, along with most popular and featured TorrentTweets, if that's the correct term. We're expecting news from the site owner and will update this post when that arrives.
Transmission 1.7 Updates Fix Memory Leaks
Excerpted from Lifehacker Report by Adam Pash
The popular BitTorrent application Transmission updated to version 1.70 a couple of days ago, then quickly released 1.71. The 1.70 release introduced several small but worthwhile fixes and updates, including large speed improvements with its web-based remote control interface, along with bug fixes and plugged memory leaks.
The subsequent 1.71 release fixed some high CPU usage problems introduced with the 1.70 release.
If you regularly use Transmission, now seems like a good time to update. For the full low-down, hit up the 1.70 and 1.71 change-logs.
If you want to learn more about remote controlling your BitTorrent downloads with Transmission, check out our guide to doing that.
Octoshape at the Top of its Game in eSports Coverage
Live in-game video streaming for eSports demands the highest quality Internet video. The Octoshape infinite-edge P2P streaming technology can deliver this quality level while also enabling eSports broadcasters to reach globally dispersed audiences without regional infrastructure.
With the gaming industry on the rise, the production of premium gaming related content is growing daily. And as a technology driven industry, the major content producers and broadcasters have turned to large-scale live streaming to distribute their content.
Live gaming video broadcasts require a high resolution and a high frame-rate. These components are essential to capture the detail of the fast-paced game action driving up the streaming bit-rate needed to ensure a high quality viewing experience.
The challenges for high bit-rate streams are twofold: getting sustainable high bit-rate output from the remote venue; and delivering the content to the global audiences that follow these events while preserving high quality.
Octoshape overcomes both of these challenges using its patented P2P throughput optimization technology that opens and stabilizes outbound venue connectivity as well as blasting through congested, latent last mile networks - taking distance out of the equation.
"We're very pleased to be working with Octoshape," said Lee Chen, SVP of Technology, Major League Gaming. "Its technology precisely addresses our needs: low cost, high availability, and high capacity."
"Octoshape has proven to be a very stable high quality solution for IPTV no matter where you are streaming from or where your audience is located. Streaming via Octoshape has set a new standard, which is why this P2P brand and technology has such a good name in the worldwide gaming community," said Michael Haenisch of Gamesports.
BitBlinder: Free Anonymous P2P
Excerpted from Pocket-Lint Report by Duncan Geere
Until now, it was difficult to completely anonymize your browsing and file-sharing habits. Virtual Private Network (VPN) services were available for a small fee each month, but most people rely on the sheer volume of file-sharing traffic to keep themselves relatively anonymous in the swarm.
Of course, that's not terribly effective so file sharers have been crying out for an alternative, but free, system to protect themselves from the prying eyes of anti-P2P companies. Enter BitBlinder.
BitBlinder is a free, cross-platform BitTorrent client and Internet browser. It claims to offer completely anonymous BitTorrent transfers, as well as hiding IP addresses of users browsing the web, and bypassing some web filters.
It achieves that by a sophisticated P2P network of its own. Instead of connecting directly to the host, all traffic is passed through other users of BitBlinder.
The data is encrypted and goes through multiple peers before reaching its recipient. Each peer only sees the IP address of the peer before it, and the host of the file only sees the peer at the end of the list.
How can it be offered for free? Because for every chunk of data users download, they have to ferry someone else's. A ratio system is in place. Users start with 2GB of credit, and earn more by leaving the program running.
Obviously, that'll use up plenty of bandwidth, so if you're on an ISP that operates a "fair usage policy" then be careful of how much you leave it on. If you don't want to be bound by these rules, then there'll be an option to buy credits that'll give you a chunk of ratio without having to share it. That could be an option for those limited by their ISP.
Of course, as your transfers will be passing through several computers before reaching you, speeds will be impacted slightly. However, the overall impact is low compared to the impact of a poorly seeded torrent. If you're getting slow speeds, then it's likely that something else is the culprit.
The BitBlinder client is a modified variant of BitTornado, and the browser it comes with is based on Firefox. At the time of writing, it's invite-only, and the team behind it is limiting sign-ups due to demand. You can go and put your e-mail address in on their website, and they'll let you know when more become available.
Music Sale Losses Due to Gaming & DVDs - Not P2P
Excerpted from ZeroPaid Report by Drew Wilson
File sharing, for years, has been one of the copyright industry's favorite scapegoats. Lately, British news sources have received a fresh dose of "studies" where the copyright industry through government officials have been saying that file sharing costs British artists billions of pounds thanks to the millions of file sharers in the UK.
While the numbers have since been cast into doubt, one journalist from The Guardian did some research of his own and discovered that while music sales have fallen over the years in Britain, they have likely fallen thanks to growing videogame and DVD sales.
While spending on entertainment has gone up over the years, it plainly looks like music sales are actually being squeezed out by DVD sales and videogames sales.
Charles Arthur, the author of The Guardian piece, commented that, "People - even downloaders - only have a finite amount of money." If money isn't being spent on one thing, it could be spent on another.
Arthur suggests that the real scenario is that consumers have a choice - spend £40 on a full-blown videogame or spend £10 on an album with maybe two good tracks on it and eight duds. He concludes that consumers are probably downloading the two songs and buying the videogame, and that blame should be placed squarely on what deserves it - and it isn't file sharing.
Of course, when it comes to convincing people with numbers, the statistics don't necessarily need to convince the average citizen - they're supposed to convince the people that can change the rules - lawmakers.
Already, the copyright industry is trying to pressure the British government to get ISPs to install a system that would deliver pop-ups to users who surf to an allegedly unauthorized website - perhaps because getting in a three-strikes regime, as seen in France, is proving to be a bit of a challenge for the copyright industry so far.
It remains to be seen for a few months what proposed technical measures ISPs will need to take to satisfy the copyright industry, but it seems evident that faking statistics can make political inroads in Britain at least.
Spotify: Why the Honeymoon Is Already Ending
Excerpted from Digital Music News Report by Paul Resnikoff
When it comes to Spotify, European executives are usually lavishing the praise, heaping the hype, and foreseeing the future of music. The same is true - to an extent - in North America, where the service is technically unavailable based on territorial licensing restrictions. American influencers like Bob Lefsetz and Ted Cohen are totally seduced, though others are less swayed by the movement.
On the consumer side, the groundswell is also immense and growing among European music fans. Of course, American consumers are still out of this one, based on the availability restriction.
But when Spotify does cross the pond, they will certainly be wowed by the elegant interface and superior experience. But ahead of its arrival, American major labels executives are showing a cooler, more measured reaction. At the NARM Conference in San Diego on Tuesday, the reception was rather dispassionate and objective, and focused on revenue issues.
"Unfortunately, nobody is upgrading to the premium models, which is the hope down the road," said Amanda Marks, Executive Vice President and General Manager of Universal Music Distribution (UMD). "There's almost no advertising in the free section so there's no impetus to upgrade. From the Spotify perspective, they can't actually sustain the business without bringing in the revenue."
Those are major concerns - not for free-riding consumers, but definitely for major licensing parties. And even if the advertising picture ramps, majors will still be looking to diversify. "Listen-only on-demand is probably not something we see as a long-term solution," said Mike Jbara, Executive Vice President and Chief Operating Officer (COO) at WEA, a subsidiary of Warner Music Group.
In other words - US-based majors love the service, but they really want a meaningful revenue stream - from advertising, premium subscriptions, or ideally, both. But according to insiders, that is also a major concern among European executives as well, despite the deafening hype. And, a concern for Spotify, a company now facing the end of its honeymoon phase - at least within the industry.
In discussions with Digital Music News, sources close to the company have pointed to a rather sober, hype-free chief executive Daniel Ek, despite the swarm of attention surrounding the company.
"This explosive adoption is almost harming Spotify in the eyes of content owners," one major label executive relayed. "Ek is already starting to see the beginning of a backlash."
That sounds like a bold prediction, until Spotify is compared to the innumerable start-ups that have traveled a similar path. Indeed, the digital music space is littered with heavily-funded, heavily-hyped start-ups that are now mired in their revenue-less reality. Meanwhile, Spotify is stressed to spruce its model before expanding its licensing march.
"The last thing they want to do is go into new territories before they've figured out how to convert people to the better proposition," another executive relayed. Indeed, that is a riddle perplexing the entire industry, even for those blessed with huge consumer engagement and interest.
Record Labels also Baffled by Social Networks
Excerpted from LA Times Report by Dawn Chmielewski
With Facebook and MySpace accounting for two of the top ten Internet spots in the US, the music industry is grappling with how to make money on social media.
Mike Jbara, COO of WEA, Warner Music Group's domestic sales and marketing company, told those attending the music retailers' annual conference in San Diego, CA that social networks present an opportunity to reintroduce consumers to the habit of buying music.
"It looks like social media is competing with P2P file-sharing networks and we all have an interest in turning that into an appropriate revenue opportunity, given that it's substantial," Jbara said.
So far, that secret formula has proved elusive. Panel after panel addressed the question of how to monetize social networks, but offered little by way of concrete success stories of bands converting Facebook fans to song buyers.
Many digital media experts extolled the power of social networks as powerful marketing platforms. But that's not exactly what the music industry needs - new and innovative ways to give away its music online, in the hope of one day cashing in.
"It remains to be seen if it's going to be successful in that capacity," said Adam LaRue of IndieClick, who consults with major and independent labels in developing online strategies for artists.
The most advanced experiment to date, the MySpace Music service started in a joint venture with the major music labels, has yet to live up to its hype as a one-stop shop for music fans.
Alicia Yaffe, Director of Digital Media at Rocket Science, which provides music label services, put it this way: "MySpace's new music service is taking a lot of time to get off its feet."
A Parliamentary Swing to the Pirate Party
Excerpted from BBC News Report by Rory Cellan-Jones
In the battle between the music and movie industries and the file sharers, have we seen a swing to what you might call the Pirate Party? Well yes we have, quite literally, in the case of Sweden, where one member of that country's Pirate Party was elected to the European Parliament.
Sweden is of course the home of The Pirate Bay (TPB), the file-sharing website which lost an epic court battle a while back. It's also the base of Spotify, the P2P music service some see as the best response yet to unauthorized file sharing, and it's a place where the battle over the rights and wrongs of the whole issue has raged with particular intensity.
So fiercely, that it has even led to the foundation of a political party. The Pirate Party's mission is to reform copyright law and fight for citizens' rights to privacy. Here's an extract from their website explaining their vision:
"All non-commercial copying and use should be completely free. File sharing and P2P networking should be encouraged rather than criminalized. Culture and knowledge are good things, that increase in value the more they are shared. The Internet could become the greatest public library ever created. The monopoly for the copyright holder to exploit an aesthetic work commercially should be limited to five years after publication."
This is the kind of stuff that sends a shiver down the spine of music industry bosses. Now there's the prospect of a party in Strasbourg arguing for what sounds like the abolition of copyright - after all even its five year limit on commercial exploitation may be meaningless in a world where file sharing is legalized.
The music firms will point out that just 7% of Swedish voters backed the Pirate Party - but it's interesting that a single issue party has shown that something as complex as the debate over file sharing can mobilize voters.
We in Britain are gearing up for a similar debate when the government's Digital Britain report is published next week.
We don't have a Pirate Party here - but if we did, would Charles Dunstone be its leader? The boss of Carphone Warehouse has been repeating the warnings he gave us a few weeks ago about the hopelessness of battling online infingement - and has gone as far as to say that the infringers will always win.
There was just a hint last week that the government may be more inclined to listen to Mr. Dunstone than to the media industry bosses who've been demanding action. Last week, the then Culture Secretary Andy Burnham - now replaced by Ben Bradshaw - indicated that Digital Britain would not be about forcing ISPs to cut off file sharers, with the government preferring a consensual approach.
The copyright issue has yet to become as hot a political potato in the UK as it is in Sweden, but politicians here will be wondering who they need to appease most, the media barons or the seven million people who indulge in unauthorized downloading. Don't be surprised if there's a swing to the "pirates" here, too.
Ripped: How the Wired Generation Revolutionized Music
Excerpted from Christian Science Monitor Report by Lorne Entress
Is the wage-earning career musician headed for extinction? Probably not. But with an estimated 95% of music downloads unauthorized, it's getting scary out there. Computers, once thought to be nifty tools for calculating and storing information, have evolved, and they're changing the music profession at light-speed.
Pandora's ibox is irreparably open, and the music industry is scrambling to get a grip on the new reality. And just what is this new reality? P2P? Mash-ups? Pitchfork? IP rights? BitTorrent? Got all that?
If not, music critic/journalist Greg Kot helps decipher the jargon and update us on the state of pop music in his insightful new book Ripped: How the Wired Generation Revolutionized Music.
To the casual observer, the debate surrounding downloaded music appears simple. Do we stand with the record industry's efforts to quash unlicensed downloading, or do we believe that our culture is better served by eliminating copyright restrictions on recorded music? With the recent conviction of the owners of The Pirate Bay (TPB), the debate has been re-energized, and the invective heating up.
Some point to the conviction as evidence that the record companies are winning. Others argue that their "whack-a-mole" approach of shutting down unlicensed sites is futile, and that the industry's heavy hand is turning off consumers.
Yet amid all the hubbub, "Ripped" reveals a third stream may be emerging. Through illuminating interviews with music's movers and shakers, Kot details the way the entire pop milieu is evolving, with new ways of making, distributing, and profiting from music.
The dust has far from settled, and recording artists are still smarting from the one-two punch of unauthorized downloads and a soft economy. But with "Ripped," Kot broadens the discussion and expands our grasp of the issue, providing hope that the future may yet benefit both listener and musician.
It didn't help that the record industry shot itself in the foot just as the computer revolution was under way. Kot sadly explains how industry consolidation led to an overemphasis of the bottom line, disturbing the delicate balance between art and commerce that a label has to maintain to be successful. Record companies abandoned their practice of patiently nurturing a musician's career, investing instead in pop acts with less talent and even less staying power. Success could be momentarily impressive. But the quick flame-out of artists such as Ricky Martin or the Backstreet Boys made for few lifelong fans and less profit in the long term.
It also had another effect. Fed up with superficial stars and excessive CD prices, young people began to look for music that they could connect with - and they found it on the web. Case in point, Death Cab for Cutie. Kot's take on the band's fan-driven, Internet-up success is an inspired example of how an act can launch itself without the money and machinery of a big record label.
"Ripped" doesn't propose a grand solution to the problems brought on by unauthorized downloading, but it's the best kind of journalism, even-tempered and provocative, factual and soulful. And if you're on the mature side of 40, reading Kot's intriguing tales of newer bands such as Death Cab for Cutie, Arcade Fire, and Bright Eyes may even inspire you to download some new music.
Survey Questions Effectiveness of Anti-P2P Techniques
Excerpted from Music Week Report
People who download unauthorized music would largely ignore warning letters telling them to stop, according to new research from law firm Wiggin.
The research claims that only 33% of those receiving a letter from their ISP would stop downloading unlicensed content. However, 80% would stop if the letter were followed up by action such as cutting their Internet connection.
"A letter would not be enough," Alexander Ross, partner in the media and technology group at Wiggin, told the BBC. "It does take an ultimate sanction."
The survey follows a declaration last week from outgoing Culture Secretary Andy Burnham that the government's intention was not to introduce a draconian approach to file sharing, which would shut off broadband to users.
Burnham said broadband was almost as important to people now as their electricity and water supplies so, "You don't go straight to cutting off people from it. There are ways to provide incentives for people to respect rights".
The Wiggin report questioned more than 1,500 consumers about their digital media habits.
Lawyers Plot Class Action Over P2P Lawsuits
Excerpted from Digital Media Wire Report by Mark Hefflinger
Two attorneys who have represented a number of alleged file swappers in copyright infringement lawsuits brought by the Recording Industry Association of America (RIAA) plan to file a class action suit against the RIAA this summer, "to reclaim the $100 million the RIAA stole from the thousands of people they have sued," Ars Technica reports.
Harvard Law professor Charles Nesson is currently defending a Boston student in a file-sharing case, while former Nesson student Kiwi Camara will represent Jammie Thomas-Rasset in her retrial on charges of copyright infringement on a file-sharing network.
According to Ars, the two plan to argue that MediaSentry, a firm hired by the RIAA to collect evidence on IP addresses and song sharing, is not licensed as a private investigator. They will also dispute the copyrights on the songs in question submitted by the RIAA, as they have not been the "certified copies" required under federal rules of evidence.
Nesson and Camara will also argue that the large sums awarded to the labels as a result of non-commercial copyright infringement are unconstitutional, and, most controversially, that file sharing should be considered a "fair use" of copyrighted content.
Coming Events of Interest
Digital Media Conference - June 25th in Tysons Corner, VA. With 500+ participants, DMC at the Ritz-Carlton attracts the best and brightest from the Washington, DC region and beyond for a packed day of in-depth discussions and networking focused on the the business issues impacting digital media companies.
Structure 09 - June 25th in San Francisco, CA. A world-class roster of speakers break down how to put cloud computing to work. Cloud computing's movers and shakers go beyond theory to discuss how they have leveraged cloud computing in their businesses.
Bandwidth Conference - August 27th-28th in San Francisco, CA. Annual gathering of music/media executives and digital music professionals. Bandwidth explores the evolving musical experience - how people discover, purchase, interact with, and are exposed to new music.
PopKomm - September 16th-18th in Berlin, Germany. With more than 843 exhibitors from 52 countries, PopKomm is one of the leading international conferences and expos for the music and entertainment businesses worldwide.
New York Games Conference - September 30th in New York, NY. Join games industry leaders - including leading video game publishers and developers, carriers, portals, technology companies, advertising execs, venture capitalists, lawyers, analysts, and many more.
Digital Hollywood Fall - October 19th-22nd in Santa Monica, CA. With many new sessions and feature events, DHF has become the premiere digital entertainment conference and exposition. DCIA Member companies will exhibit and speak on a number of panels.
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