June 22, 2009
Volume XXVI, Issue 11
Solid State Networks Unveils Game Publishing Software
Solid State Networks, the leading peer-to-peer (P2P) technology developer of digital game and patch delivery solutions, this week announced the availability of SOLID PUBLISHER, the company's game publishing software suite, which includes two distinct products that enable game developers and publishers to deliver games directly to gamers through a single interface.
The first product, SOLID PUBLISHER: CURRENT, was developed to minimize game delivery and setup time for gamers by offering a single, seamless interface through which gamers can download, install, update, and launch a game.
The second product, SOLID PUBLISHER: DIRECT, enables a variety of interactive and promotional capabilities that help developers and publishers to brand, promote, and monetize games in new and more profitable ways.
"SOLID PUBLISHER evolved from our original game update software known as CURRENT. By offering a complete game publishing package, we are able to offer substantially more value to developers and publishers, but, more importantly, they are able to offer greater value to their gamers," said Skylar Kreisher, Solid State's Vice President of Game Services.
"The value for game makers is a direct and more profitable way to distribute titles to their audiences. The value for gamers is that they get an easy way to get the games and get into playing them much faster than ever before."
Evolved from previous versions of the company's patching solutions, SOLID PUBLISHER is a complete game publishing software suite designed specifically for game developers and publishers to implement quickly while using minimal developer resources.
The software also utilizes Solid State's proven, reliable delivery technology, which has delivered games to millions of players since 2006. The advanced feature set includes "patch while you play" capabilities, optimizations for speeding download and installation times and a hybrid HTTP/P2P delivery option.
Solid State Networks has steadily gained recognition within the gaming industry as a highly innovative company with reliable technology and versatile game delivery and patching solutions for companies such as Funcom, Wizards of the Coast, Abandon Interactive, Riot Games, and others.
DinerTown Detective Agency
Excerpted from Gamezebo Report by Ryan Sindledecker
There are many interesting facets of PlayFirst's forthcoming game, DinerTown Detective Agency, the fun spoof on the traditional Hidden Object genre that combines a virtual world of intrigue and mystery with a uniquely tongue-in-cheek spin.
Today, we take a look at Bernie the Bookworm - a DinerTown character that series fans will recognize from Diner Dash Hometown Hero and Diner Dash 2: Restaurant Rescue.
Bernie plays a lead role in DinerTown Detective Agency as he leads the charge to get to the bottom of a series of mysteries that plague the DinerTown community.
Players will see a new twist on his character in DinerTown Detective Agency. Formerly a dreamer who fantasized about being a real detective, Bernie now seizes the chance of a lifetime when he sees an ad on how to become a real detective.
However, poor Bernie quickly needs your help as he struggles through the challenging mystery scenarios at the zoo, the gym, the school, the laundromat, and many other locales.
The relationship between Bernie and Flo is evident throughout the game in several scenes as they discuss probable scenarios, delve deep into each mystery with their detective tools, and help players along the way with suggestions. Although Flo does act as more of a maternal influence than an investigative partner, this dynamic duo sticks together until the final case is solved.
Bernie's character in DinerTown Detective Agency was brought to life through a joint effort between the creative team at PlayFirst and Absolutist, the Ukrainian partner developer on the title.
The goal was to flesh out Bernie the bookworm's character in a visual sense so more detail was added to this face and clothes, making him stand out more. With the use of vibrant colors and design and the unique comic styling prevalent in the game, Bernie came alive.
Report from CEO Marty Lafferty
 As we noted during the 2009 Electronic Entertainment Expo (E3), 68% of US households now play computer games or videogames, according to a report released there by Ipsos MediaCT, spending more than $25 billion annually.
Breakout games publishers like Activision Blizzard are poised to become billion dollar businesses by 2012, and industry leading Electronic Arts (EA) projects that more than a billion people will soon comprise the global digital game market - thanks to its rapid expansion to women, older people, and others new to the industry.
The average US game player is 35 years old; and adult gamers have been playing for 12 years on average, which is an indicator that more Americans are now playing games for the first time.
Adoption of P2P and other distributed computing technologies by games publishers for online distribution of games and delivery of updates already outpaces other genres, and in part is attributable to the relatively high degree of technical sophistication and know-how among games developers.
Diverse gaming business models now span offerings delivered not only to consoles, but also to a full range of networked and mobile devices, and represent an enormous opportunity for P2P software developers. In addition, innovations in the areas of content protection and file-sharing traffic monetization represent significant additional upside potential.
For these reasons, which have now been validated with high levels of interest expressed by industry participants, the DCIA is launching a new initiative focused on advancing and accelerating commercial development of P2P for games.
Our P2P-for-games initiative will be led by representatives of the P2P and games industries, and will feature strategies and tactical components that will be proven workable and attractive to games developers, publishers, and aggregators on one hand, and delivery software investors, distributors, and marketers on the other.
A critical feature will be the enablement of provisioning and integration of user-generated content (UGC) with professionally produced game formats in a wide variety of ways that reflects today's technical capabilities for multiplayer games.
This initiative will be able to accommodate and incentivize delivery platforms including the most promising content delivery network (CDN) solutions that take advantage of P2P technologies, including live P2P streaming and on-demand P2P download technologies to minimize costs and maximize quality and reliability.
It will be focused on developing and disseminating a standardized set of voluntary practices for using P2P technologies to deliver online games and updates that are optimized to provide transparency, control, and value to consumers.
The first area of work will center on developing a written work-product acceptable to key constituencies setting forth a regimen of such optimal procedures for implementing P2P technologies for the delivery of games and updates to end users.
There will be a consumer-centric focus to this effort addressing such critical issues as user resources (e.g., device memory and bandwidth) and customer communications (e.g., clear-and-conspicuous notice and informed consent), among others.
We are very confident that acceptance of and adherence to a well-developed program of best practices by industry participants will foster acceptance, usage, satisfaction, and trust among games users. Consumer confidence with respect to the use and deployment of P2P technologies for games will be advanced by demonstrating consideration for users through this initiative's principal directives.
We strongly encourage interested qualified parties from the games and P2P industries to join with us in this historic effort. Please call +1-410-476-7965 or e-mail me simply by replying to this DCINFO newsletter for more information or to sign-up.
I hope to see you this week at the Digital Media Conference in Tysons Corner, VA. This is the summer's premiere technology and media event in the Washington, DC region featuring top speakers from major entertainment and media companies, social networks, venture capitalists, technology innovators, advertising and marketing firms, and mobile companies. Share wisely, and take care.
Game Consoles Preeminent Device for Web Video on TV
The range of connected consumer electronics devices delivering web video into the living room is growing. Device types include digital media adapters (DMAs), pay TV set-top boxes (STBs), Blu-ray player/recorders, HDTVs, and media-center PCs.
However, networked videogame consoles are currently the most utilized devices for bringing web video to the TV and will remain so through 2013. By 2013, 10.7 million consoles will be used as web-to-TV mediation devices in the US, reports In-Stat .
While still at the early adoption stages, the impact of bringing web video to the TV will bring both opportunity and threats to a range of companies in the electronics and TV markets. By 2013, the revenue from web-to-TV streaming services will grow to $2.9 billion.
Currently web video is largely additive to traditional TV revenue streams. However, ultimately web video to the TV will force a complete restructuring of today's video distribution ecosystem.
Two separate in-home content delivery networks (CDNs) are evolving in the digital home - one for broadcast media services (e.g., cable TV), the other for Internet-based broadband services.
Within five years, the number of US broadband households viewing web-to-TV content will grow to 24 million. Already, 29% of US 25-to-34 year olds with game consoles use the devices to watch streaming video off the Internet. Video content will be optimized for broadcast or web-to-TV based on content type.
The research, Web-to-TV Video Changes Everything, covers the US market for web-to-TV video and is part of In-Stat's Consumer Media & Content (CMC) service. Consumers have preferences about the value of content and services, as well as what devices they use. Technology advances in digital rights management (DRM), Internet TV, and cross-media programming offer content producers' new channels for distribution, but pose major disruptions to existing pay TV and mobile service provider business models.
CMC provides critical insights into how cutting edge technology, combined with new content delivery methods and consumer preferences, will influence the market for digital entertainment.
Buffalo Introduces NAS for High-Def Users
Excerpted from HEXUS Report
Buffalo Technology, a global leader in the design, development, and manufacturing of storage, wireless networking, and memory solutions, this week announced the launch of the latest version of its LinkStation Pro, the company's flagship home and small-business network-attached storage (NAS) drive.
The LinkStation Pro is a high performance, shared network device that lets you store and share music, photos, and movie files in your home as well as online. Available in 1TB, 1.5TB, or 2TB capacities, the device is ideal for users who download large high-definition (HD) media files.
With a built-in DLNA media server and WebAccess, the LinkStation Pro let's you stream your favorite music and films directly to your PC, Mac, PlayStation 3, Xbox 360, DLNA television, or iPhone from anywhere.
The LinkStation Pro's WebAccess and Direct Copy features allow users to share all their digital content with friends and family at the touch of a button.
Paul Hudson, Northern European Sales Director, Buffalo Technology, said, "The LinkStation Pro is designed to work with all the latest technologies available to consumers. We've listened to our customer feedback and provided a solution that incorporates support for popular media players, includes WebAccess, the Buffalo feature which allows you to access your content remotely, and a BitTorrent server. What makes the LinkStation Pro different is its high-speed data transfer rates, automated backups and large storage capacity."
Opera Browser Becomes File-Sharing Platform
Excerpted from Information Week Report by Thomas Claburn
In an effort to break into the browser big leagues, Opera Software, maker of the innovative Opera browser, on Tuesday introduced a new version of its software called Opera Unite that combines web browsing with file serving.
Opera Unite takes cloud computing and turns it into crowd computing. That is, it removes the need for a web server and allows people to share files and interact directly. "PCs decentralized computing away from large mainframes," Opera CEO Jon von Tetzchner said. "Opera Unite now decentralizes and democratizes the cloud."
"This technology is a radical first step towards addressing what I call 'the Internet's unfulfilled promise,' which is about our ability to connect with each other and participate meaningfully online - on our own terms, and without losing control of our data," said Lawrence Eng, a product analyst with Opera Software.
Opera Unite allows users to share files by generating a direct URL to the hosting computer. It lets users host entire websites, music playlists, and photos. It also supports a chat service and a note-exchange system.
Eng describes Opera Unite as enabling a new class of social web applications. The software, he says, allows users to "connect directly without needing middlemen who control third-party servers."
For all the middlemen and content aggregators out there who profit from the control of third-party servers and the ads delivered there, you've been put on notice.
Initially released in 1996, Opera has never really taken off among consumers, though a mobile version is installed on roughly 40 million mobile phones around the world. Opera for computers has a global market share of 0.72%, according to Net Applications. Google Chrome has more than twice as many users, only nine months after it launched.
Opera Unite could change that dynamic, though it will be a significant challenge to steal market share from Apple, Google, Microsoft, or Mozilla without the backing of a powerful distribution partner or a community of committed open source advocates.
There's another consideration, too: security. Sharing files and running a web server can put the host computer at risk. Michael Sutton, VP of research at Zscaler, worries that attackers will be able to leverage Opera Unite to spread malware, conduct social engineering attacks, and/or steal personal information.
Milw0rm, a site that hosts proof-of-concept exploit code, lists five Opera vulnerabilities identified in 2008 and one identified in 2009. There are likely to be more and such vulnerabilities could become more severe with the built-in file-sharing capabilities of Opera Unite.
There are also reasons not to serve files from one's home computer that are unrelated to security, such as limited upstream bandwidth and resource usage.
At the same time, Opera Unite deserves consideration for challenging the cloud computing orthodoxy. It's interesting technology, to say the least.
Skype's Founders Invest in Armorize Technologies
Excerpted from Baltic Business News Report by Toomas Hobemagi
Ambient Sound Investments (ASI), the investment company for founders of the P2P industry's greatest success story, Skype, is investing in leading web application security provider Armorize Technologies.
ASI is an investment group founded in 2003 with the objective of managing and investing the assets of Skype's four Estonian founding engineers. ASI primarily finances international start-up technology companies from its own funds. The company has financed dozens of technology start-ups worldwide: in Asia, the United States, Western and Eastern Europe, Finland, and Russia. Alongside portfolio investments, ASI is working on its own ideas in ASI Incubator.
"We are delighted to see the confidence that our investors have displayed," said Armorize Founder and CEO Wayne Huang. "We are also very confident. The Web has given rise to a host of security concerns and Armorize provides a suite of technically advanced automated tools to combat them. This additional capital infusion at increased valuation represents a strong endorsement for our technology and vision."
The Armorize team has deep roots in web application security research, winning consecutive awards at the prestigious WWW Conferences. Subsequent recognition includes winning the Red Herring 100 award and being invited to the Dow Jones VentureWire Technology Showcase 2008. Armorize is headquartered in Santa Clara, CA with its R&D center in Taiwan's Nankang Software Park.
Furk: Direct Download BitTorrent Proxy on Steroids
Excerpted from TorrentFreak Report
Furk is not your regular torrent site. Not only does it function as a meta-search engine, but you can also download torrents via Furk's servers using HTTP. And it doesn't stop there. Furk holds these downloads in a searchable database that anyone can use, turning the site into a kind of mash-up between BitTorrent and Rapidshare.
In the regular BitTorrent downloading scenario, we would go to a torrent site such as The Pirate Bay (TPB) or Mininova, select a torrent and download it. Once that torrent starts running in our client, connections are made to other people using the same technique and the content is downloaded and shared with and via those peers.
While Furk can simply be used as a torrent meta-search engine to trawl other sites for .torrent files, Furk bills part of its service as a "BitTorrent Proxy." This means that instead of searching for a torrent file and downloading in the usual manner via the BitTorrent protocol, Furk itself joins the swarm in question and downloads the material directly to its own servers.
Once completed, users can simply download that material directly from Furk's super-fast network using the HTTP protocol in their regular web browser.
"By default all links are HTTPs," Furk's admin told TorrentFreak. "It helps to avoid content filtering systems and increase the level of anonymity. Also, for every link, the user can choose an alternative link with a non-standard port." This element of the service is only available to premium users at a few euros per month, but free users can still have fun with Furk.
It's also possible to upload your own files and videos to the service, but Furk has another much more interesting trick up its sleeve - and it's available to non-premium users. Instead of just keeping the content on its servers for material requested by you, Furk keeps the content requested by everyone.
This means that Furk has a growing database of material culled from torrent sites, but offered via direct and immediate HTTP download. A search for "aXXo" shows hundreds of releases, mostly available for direct download. Think of it like Rapidshare, but with a BitTorrent backend.
"Speed for premium users is unlimited. All of the servers are on a 1Gps network and we have plenty of unused bandwidth," Furk's admin told TorrentFreak. "Free downloads are currently limited only by restricting the number of download sessions, so download managers can be used only with premium accounts."
However, even with no premium account, some impressive speeds can be achieved. We managed decent transfers from The Netherlands, Russia, and the US, before finally maxing out a 20mbit Hungarian connection. It remains to be seen if these speeds can be maintained once the masses start hitting the service - probably not, since there needs to be something to draw users to the premium service, but time will tell.
Virgin and UMG to Offer Unlimited Music Downloads
Excerpted from T3 Report
Virgin Media and Universal Music Group (UMG) have announced plans to bring a brand new, groundbreaking digital music service to the UK. The service will allow you to stream, download, and keep an unlimited number of tracks and albums from Universal's entire back catalog.
Incredibly, Virgin has managed to awaken the music biz to a notion that has eluded it for almost a decade. Where Napster, Kazaa, LimeWire, BitTorrent, Spotify, and countless others have made only incremental progress, somehow Branson's crew has compelled a major record label to answer the growing demand for online music with an offering that seems both sensible and generous.
Virgin Media and its customers stand to gain as well - unauthorized file sharing is increasingly seen as major problem for Internet service providers (ISPs), where precious bandwidth is being hogged up by digital music infringers, not to mention all the legal ramifications associated with it. By going legit, Virgin can set aside resources to support its service and educate music lovers about how to find their favorite tunes legally.
There'll be no restrictions on what you download - the songs are yours to keep, permanently; they'll be compatible with any MP3 device, from portable media players to computers to mobile phones to games consoles; and you can download as much as your fingers can manage for as long as your subscription is in place.
So, the big question is "how much?" Unfortunately, Virgin and Universal have yet to decide, probably meaning that the deal is still being ironed out. Virgin, however, does promise that there'll be an "entry level" offering, which will be cheaper but come with a download limit. Plus, it's in talks with the other big labels and many of the independents so that you'll get a wider selection of tracks once the service launches.
Economists Say P2P File Sharing Fuels Art
Excerpted from The Register Report by Austin Modine
A pair of economists have released a report arguing that file sharing doesn't stifle the creation of music, films, and books. On the contrary, they say, weaker copyright protection has benefited society.
Felix Oberholzer-Gee of Harvard University and Koleman Strumpf of the University of Kansas recently published a working paper at Harvard Business School asserting the benefits of Internet infringement.
While the study concedes that infringement may harm some business models, it says the technology hasn't killed the incentives behind artists and entertainment companies to produce new works. And that, the paper says, is the real point behind copyright.
For example, the United States Constitution states the intention of copyright law is "To promote the progress of science and useful arts, by securing for limited times exclusive right to their respective writings and discoveries." So the paper claims a litmus test for copyright should be whether progress or art flourishes or flounders in the age of P2P.
Two considerations seem particularly important. First, as copyright weakens, the effective price of music, movies, and books falls and consumer willingness-to-pay for complements increases. If artists derive income from these complements as well, the overall incentives to produce new works might not decline. For instance, as music becomes effectively available for free, the price of concerts, a complement to music, is likely to rise, and artists who earn income from concerts might not be hurt by a decline in music sales.
While album sales have generally fallen since 2000, the number of albums being created has exploded. In 2000, 35,516 albums were released. Seven years later, 79,695 (including 25,159 digital albums) were published. Even if file sharing were the reason that sales have fallen, the new technology does not appear to have exacted a toll on the quantity of music produced. Obviously, it would be nice to adjust output for differences in quality, but we are not aware of any research that has tackled this question.
Similar trends can be seen in other creative industries. For example, the worldwide number of feature films produced each year has increased from 3,807 in 2003 to 4,989 in 2007. Countries where film infringement is rampant have typically increased production. This is true in South Korea (80 to 124), India (877 to 1164), and China (140 to 402). During this period, US feature film production has increased from 459 feature films in 2003 to 590 in 2007.
The economists say what needs to be empirically measured is whether income from complementary products offset the decline in income from Internet infringement. They do claim there's "clear evidence" that income from complements has risen in recent years. Similarly, a fraction of consumer electronics purchases and Internet-related expenditures are due to file sharing.
The paper concludes that file-sharing technology has weakened copyright protection, but the policy discussion surrounding it has been "overly narrow," focusing on the legality of new technology and whether or not declining sales in music are due to infringement.
"Copyright exists to encourage innovation and the creation of new works; in other words to promote social welfare," the paper states. The question to ask is thus whether the new technology has undermined the incentives to create, market, and distribute entertainment."
The paper ends by noting that because the music industry - the biz with the largest purported impact from infringement - has more than doubled the amount of recordings produced since 2000, it's hard to argue that file sharing has lowered the incentives to create new works.
A copy of the working paper can be found here.
Twitter is The Revolution
Excerpted from Birmingham Weekly Report by Kyle Whitmire
In the waning days of the Bush Administration, rumors ran rampant that the White House was plotting another front in the War on Terror - regime change in Iran. Such a fight could come in many forms, or so it was told. Maybe invasion. Probably an air strike carried out by Israel. No matter, something was underfoot to bring the Persians down a notch or two.
Whether any of that was true hardly matters anymore. What's apparent today is that from San Francisco, CA, we unleashed a far more potent force on Ahmadinejad and his followers, and that secret weapon was Twitter.
Yes, as has been explained many other places already, the political winds blowing through Iran have been fanned by little bluebird wings, 140 characters at a time. What has been a toy for online narcissism here in the United States is a weapon of mass instruction in the Middle East. Social media - Twitter, Facebook, SMS, YouTube, and Friend Feed - are winning a war no officials here meant to declare.
If that seems silly to you, then you need to take a second look. Because if Twitter and Facebook can abet a political insurgency in Tehran, is it really a stretch to imagine something similar happening in Birmingham or Montgomery, AL?
Last year, social media were crucial to putting Barack Obama in the White House. Facebook founder Chris Hughes left his company to lead Obama's new media strategy. When Obama finally got to Washington, DC, he fought his own advisers to keep his Blackberry. Senator John McCain, a candidate who didn't use e-mail, got beaten by YouTube. Since then, however, McCain has learned to Twitter, too.
Still, I'm sure there are plenty of you who still think Twitter is a fad, the Pet Rock of the 21st century. Or you might realize that social media are somehow important but you find them unapproachable or alien. Either way, I'm telling you now, this is incredibly important, with the potential to alter media, capitalism, and even representational democracy.
Clay Shirky's Here Comes Everybody is the veritable Bible of social media, and I encourage anyone with an interest in what's coming next to read it. Before the Internet, communication technology mostly fell into two categories, Shirky argues. First, there were tools of conversation - letters, the Pony Express, the telegraph, the telephone. Second, there were tools of broadcast - books, newspapers, radio, TV. Either a tool was good for two people exchanging information back and forth, or it was good for sending information in one direction to a large audience.
The Internet does both of these things at the same time. Or as Shirky put it recently in a speech at the State Department, it is as if when you buy a book the printing press now comes with it. All this seems obvious once you think about it, but the effects are potentially tremendous.
For as long as we've been practicing democracy in this country, two components have made it cost-prohibitive for most people to participate: the cost of organizing and the cost of spreading a message. In the past, these have been things institutions alone could accomplish, be they special interest groups, lobbying firms, or political parties. Organizing took phone banks, flyers, PA systems. Broadcasting a message took advertising on radio, in print, and on TV. All of these things cost a lot of money.
Increasingly, though, they don't. The momentum of the Internet is this: Things that used to be difficult, impossible, or expensive are becoming cheap, easy, and eventually free.
Politicians Fail to Grasp Peer-to-Peer
Excerpted from NY Times Report by Eric Pfanner
It was the French equivalent of former US Senator Ted Stevens' description of the Internet as "a series of tubes," which made him the subject of endless mockery on the web.
In a video shot for an online news site, French legislators were asked whether they were familiar with peer-to-peer file-sharing technology. "No," one lawmaker responded, rolling his eyes. "I speak French. Excuse me."
While France has often prided itself on its contrarian approach to information technology - remember the Minitel? - the response summed up the ham-handedness of the latest digital initiative by the French government. The video appeared this spring, at the height of debate about a plan by President Nicolas Sarkozy to set up a government agency to disconnect persistent copyright infringers from the Internet.
The proposal, approved by Parliament last month after an earlier setback, was shot down last week by the country's highest judicial review body, the Constitutional Council, which ruled that it violated constitutional guarantees of free speech and the presumption of innocence. Only a court of law is entitled to sever Internet connections, the council ruled.
The decision was a big setback for the music and movie industries, which wanted other countries to follow the French lead and impose similar systems, called "three strikes" because cutoffs would have been preceded by two warnings to copyright cheats.
It is particularly bad timing for Britain, where the government is to set out its digital strategy this week. It has indicated that it favors a softer approach. According to reports, the government wants to slow infringers' web connections, making it hard to share big media files, rather than cutting off access.
Had the French law been cleared to go into effect, it might have provided some cover for the British government. Now Britain will serve as a test of how far the authorities can go in their efforts to protect copyrighted material.
Every new effort to crack down on file sharing seems to embolden groups devoted to an unfettered Internet. The European Parliament has consistently maintained that Internet access is a fundamental right, at a time when communications, commerce and culture are shifting into the digital realm.
After Sweden tightened its anti-piracy laws and sentenced to jail the founders of a site called The Pirate Bay (TPB), the popularity of a political group dedicated to free file sharing soared. The Pirate Party has won a seat in the European Parliament, and similar groups are springing up elsewhere in Europe.
What all this shows, if more evidence was needed, is that an anti-infringement strategy based largely on enforcement is bound to fail. In the United States, the recording industry has "backed away" from a legal campaign against file sharers, realizing that suing its biggest fans is not a great marketing strategy. Now the US music and movie industries say they are moving to make more licensed content available.
In Europe, such efforts have generally lagged. Yes, online media sites like the BBC's iPlayer, which allows users to watch television programs from the previous week, are hugely popular. But you can't watch the iPlayer outside Britain because of complicated rights restrictions.
In France, meanwhile, the government recently moved to reduce to four months the legally mandated "window" between the release of a movie in cinemas and on home video. That is down from six months for DVDs, and seven-and-a-half months for video-on-demand (VOD). But it is still a long time, during which infringement flourishes.
Other European countries have similar windows in an effort to protect cinemas and moviemakers who rely on subsidies derived from box-office sales. People are still going to the movies. But when they stay home, they are increasingly turning to infringing sources, rather than waiting several months to watch the latest movie.
If consumers can figure out peer-to-peer, perhaps it is time for lawmakers to do the same.
The Entertainment Industry Plays a Sour Note Online
Excerpted from eMarketer Report
Three pillars of the entertainment industry - music, movies and videogames - are facing economic challenges due to the disruptive influences of digital distribution.
"The music industry was knocked off balance by the emergence of the MP3 in the late 1990s and has not recovered, and Hollywood's two core businesses, box-office receipts and DVD sales/rentals, have stopped growing," says Paul Verna, eMarketer Senior Analyst and author of the new report, Digital Entertainment Meets Social Media.
"And while the sales of videogame consoles and software titles remain relatively strong, the industry's future is shifting to digital distribution and ad-supported models."
To take music as an example, spending on CDs and other physical sound carriers dwindled to $5.8 billion in 2008, down 60% from a peak of $14.6 billion in 1999.
"In 2009, the US recording industry will mark 10 consecutive years of declining CD sales," says Mr. Verna.
US sales of recorded music will drop to $5.52 billion by 2013. This downward trajectory will extend a pattern that began in 2000, when physical sales started to decline after rising dramatically during the heyday of the CD.
"Online will experience healthy growth, mobile will trend slightly downward, and physical will continue to plummet at accelerating rates," says Mr. Verna. "Unfortunately, the sum of online and mobile will not compensate for losses in physical, but it will slow down the rate of those losses to a 2.9% drop in 2013."
An NPD Group survey revealed a nexus between music and social media, finding that the percentage of US teens who downloaded or listened to music via social networks increased from 26% in 2007 to 46% in 2008. Many music fans are now gravitating to social sites via iPhone applications.
"Clearly, this is a period of experimentation for the music business and social media," says Mr. Verna. "The next step for these services will be to broaden their offerings into a user experience that straddles platforms and devices."
Check out the new eMarketer report, Digital Entertainment Meets Social Media.
ISPs Welcome Digital Britain's P2P Strategy
Excerpted from Billboard Business News Report by Andre Paine
The UK music biz may not have been impressed with the lack of a "three-strikes" strategy in the government's Digital Britain report, but Internet service providers (ISPs) have welcomed the proposals.
In its response to the June 16th report, the Internet Service Providers' Association (ISPA) states that it agrees, "it's preferable that the market is left to develop new approaches to content distribution, but that the creative industries themselves need to act and provide attractive content packages for online distribution."
The government said that technical measures could be introduced if educational warning letters do not have a significant impact on reducing unauthorized file sharing after a year, with a 70% reduction targeted.
In its statement, the trade body added, "ISPA is pleased that the government has ruled out legislating to force Internet companies to disconnect persistent sharers of unauthorized files; a response that ISPA believes would be a disproportionate sanction against users. This is a view that is also held by consumer groups in the UK and further endorsed by the European Parliament and a judgment in the Constitutional Council in France."
ISPA also welcomed the framework whereby action can be taken against repeat infringers through existing legal channels. "I am pleased that the government has taken the position advocated by ISPA that unlawful online copyright infringement should be reduced through offering viable legal alternatives," said Secretary-General Nicholas Lansman.
"ISPA will assess in more detail the obligations on ISPs being proposed, but supports the use of existing legal channels to bring targeted civil action against repeat infringers. ISPA doubts the effectiveness of technical sanctions and would urge that the initial proposals be given every chance to succeed before such sanctions are considered."
Band Praises P2P for Helping Artists Discover Music
Excerpted from Zeropaid Report
This month marks the 10th anniversary of the birth of Napster, and Seattle-based Fleet Foxes made some choice remarks recently to the BBC that add fuel to its importance.
Record labels continue to make the same tired, and frequently dispelled argument that a single unauthorized download equals a single lost sale and frame their anti-P2P discussion accordingly. Not often discussed is the positive impact that file sharing has on some of the actual artists and musicians who make up the industry.
Fleet Foxes' singer Robin Pecknold praises file sharing for having made it easier for musicians like him to discover music that he otherwise would never have heard of or been exposed to."As much music as musicians can hear, that will only make music richer as an art form," says Pecknold.
"I think we're seeing that now with tons of new bands that are amazing, and are doing way better music now than was being made pre-Napster."
He makes the interesting point that emerging artists have grown up in an era where almost any album can be found using P2P. Unlike previous eras where musical influences were limited to an almost physical exposure, be it by record, CD, or concert, today one can find and listen to almost any album ever created from virtually anywhere at anytime thanks to file sharing.
"That was how I discovered almost everything when I was a teenager - my dad brought home a modem," he said. "That was how I was exposed to almost all of the music that I love to this day, and still that's the easiest way to find really obscure stuff.
"I've discovered so much music through that medium. That will be true of any artist my age, absolutely." Pecknold even makes a point to call those artists who criticize file sharing "petty."
"I've downloaded hundreds and hundreds of records - why would I care if somebody downloads ours? That's such a petty thing to care about," he adds. "I mean, how much money does one person need? I think it's disgusting when people complain about that, personally."
With artists like Prince leading the charge against unauthorized file sharing, it's interesting to note that most are pre-Napster bands, artists that didn't benefit from the musical exposure that file sharing provides, and so are perhaps unfit in many ways to criticize it.
It should also be pointed out that Nine Inch Nails (NIN) frontman Trent Reznor is a file sharer, and said as much while mourning the loss of BitTorrent tracker site OiNK along with everybody else back in 2007.
Fans are only downloading music because they love the music. It may be unethical if they don't contribute to the band financially, but doesn't that sort of taint what it should really be about?
Pecknold calls himself an artist, and rightly criticizes anti-file-sharing musicians who demand that everybody pay a fee if they wish to enjoy their work.
EMI Sues Streaming Music Service Grooveshark
Excerpted from Digital Media Wire Report by Mark Hefflinger
Major record label EMI has filed a copyright infringement lawsuit against Grooveshark, a site that streams free music from all four major labels, All Things D reported.
Launched in 2006, Florida-based Grooveshark initially offered a P2P file-sharing application, but has since switched its focus to providing a free streaming music service.
In a statement published by All Things D, Grooveshark said that it has been in licensing talks with EMI for the past year, but that the label "chose to abandon the template we've built with the help of other major copyright holders and opted for their traditional intimidation tactic of filing a lawsuit as a negotiating tool."
"We hope that EMI Records eventually follows the lead of the many forward-thinking labels we are already working with, who would rather get their artists exposure and a fair share of our revenue than block content access and force customers to unlicensed networks," the company said.
To date, Grooveshark has not announced licensing deals with any of the three other major labels, but did sign a licensing deal with classical label Naxos in 2007.
The Pirate Bay Launches Ipredator VPN
Excerpted from NewTeeVee Report by Janko Roettgers
The guys behind The Pirate Bay (TPB) have officially announced the beta test of their virtual private network (VPN), dubbed Ipredator, which makes it possible to use BitTorrent anonymously. All traffic will be encrypted as well.
Ipredator costs $7 per month, and will initially only be open to 3,000 lucky beta testers. Another 180,000 potential users have signed up for invites, however, and the TPB team has promised to let all of them in within a month. That's a pretty lofty goal, however, and one has to wonder whether Ipredator will really be able to meet its users' expectations.
Ipredator was originally announced back in March as a reaction to Sweden's recently enacted new copyright laws, which are based on the European Union's Intellectual Property Rights Enforcement Directive (IPRED). The new laws force ISPs to hand the subscriber details of suspected file sharers over to rights holders.
Of course, that only works if you can identify the IP addresses of those file sharers in the first place, which is where Ipredator comes in. The service promises to mask users' IP addresses through a VPN server. To outsiders, it will look like all Ipredator users are coming from the same block of IP addresses, no matter where in the world they are actually located. Ipredator promises to "store no traffic data," so it would be impossible to figure out who actually shared specific files through the service even if its servers got confiscated.
The idea to shield file sharers through such a VPN isn't exactly new. There are probably a few dozen companies already offering VPN or proxy services, and a number of them specifically target BitTorrent users with names like SuperchargeMyTorrent, TorrentFreedom, or TorrentPrivacy. However, most of these services cost more than Ipredator; indeed TorrentFreak calculated a while back that "a reputable VPN service, offering fast transfer speeds and unlimited transfers costs around $10 to $20 per month."
Undercutting the competition with a cheap introductory offer can be a good way to gain market share, but the service could prove too popular for its own good if too many video-hungry BitTorrent users max out its bandwidth. And this wouldn't be the first time a pirate-run VPN can't handle the pressure of the Bittorrent-loving masses. Swedish VPN provider Relakks made a big splash three years ago when it announced its service as "the world's first commercial darknet."
Relakks even got an endorsement from the Swedish Pirate Party. This led to 21,000 users signing up within the first week - and countless complaints about dropped connections, slow transfer speeds, and bad customer service. A TorrentFreak writer eventually reported on the so-called "rise and fall of Relakks," and The Pirate Party has since parted ways with the service. We'll have to wait and see whether Ipredator's offering will fare any better.
Two Losses, $1.9M in Hole, Still Defiant
Excerpted from Minneapolis Star Tribune Report by Alex Ebert and Curt Brown
Chasing her 10-month-old son around her Brainerd, MN home was exactly the therapy Jammie Thomas-Rasset needed Friday. She was still reeling one day after a federal jury slapped her with $1.9 million in damages in a music file-sharing case that thrust the 32-year-old mother of four into the national spotlight.
"There are times I can't handle it and I break down," Thomas-Rasset said. "But no matter how bad you feel, you can just look into the face of a baby and they'll make you smile -- they're so innocent and sweet."
Still defiant despite the hefty damages and planning to appeal, Thomas-Rasset insists she, too, is innocent even though she has lost twice now to a coalition of record companies.
"They are the ones who basically tried to extort money out of me for something I didn't do," she said, although she concedes she can see how the jurors reached their decision.
"I will fully admit the evidence is stacked against me," she said. "To any layperson sitting out there, it was my user name and my computer."
But until the companies accused her of illegally downloading and distributing 1,700 songs, Thomas-Rasset said she never heard of the online file-sharing networks that lawyers say she used.
"I didn't share music on Kazaa, I didn't download songs on Kazaa and I never heard of Kazaa before this lawsuit," she said.
Thomas-Rasset owns more than 300 CDs and acknowledges she likes 60 of the artists whose music she is accused of sharing, including Green Day and Linkin Park. She said she's never heard of others, including Morbid Angel and Covenant, that came up in court.
She testified that a former boyfriend and her older children might have done the downloading. But while thousands of other alleged online music sharers settled out of court, Thomas-Rasset said "my stubborn spirit" and financial reality sent her up against music industry lawyers.
"I just don't have a couple grand to throw away and I didn't do this," said Thomas-Rasset. Please click here for the full report.
Woman Wins Fight Against Music Biz
Excerpted from Nashua Telegraph Report by David Brooks
A Hudson, NH woman won her fight with the recording industry over alleged unauthorized music downloads, thanks partly to a report from a Dartmouth professor that cast doubt on whether her computer was involved.
Mavis Roy, of Hudson, had been sued in federal court last year by four record labels who claimed she downloaded 218 songs, although Roy said she didn't have a computer in the house at the time.
Her fight drew national attention because students and faculty at the Franklin Pierce Law Center volunteered to help defend her. In a release Friday, the Law Center claimed victory in the settlement, under which the case was dismissed with no payment made by either side.
This is in contrast to a high-profile decision earlier in the week in a similar case in Minnesota, MN where a $1.9 million settlement was handed down against a woman who downloaded just 24 songs.
"The hours and hours of hard work that were done on my behalf were amazing," Roy wrote in a thank-you letter to the school. "I could barely read the paperwork without getting a headache."
About 15 music-downloading suits have been filed against individuals in New Hampshire, most of them college students. Roy's case was filed by the RIAA on behalf of record labels UMG, BMG, Interscope, and Motown. They claim that on April 24, 2007, at 5:51 AM, she "downloaded or distributed" 218 songs from Lionel Ritchie, Jay-Z, the Ruff Ryders, and other artists.
To be specific, the suit said that somebody at the Internet Protocol (IP) address 75.68.28.28, using the file-sharing program Bearshare over the P2P network Gnutella through a connection with Comcast, obtained the songs without authorization, and that Roy "was identified as the individual responsible for that IP address at that date and time."
Key to the defense, Pierce Law School reported, was an analysis by professor Sergey Bratus of Dartmouth College that punched holes in this identification. Among other things, Bratus said that records known as traceroute logs used to connect Roy and the IP address were flawed.
This, he argued, made it impossible to say whether the computer involved was Roy's or another computer pretending to be hers, a process known as "spoofing," or whether it was another computer infected by malware that was distributing songs without its owner's knowledge.
The case began when Roy received a letter from the record companies' attorneys in July 2007 directing her to a website where she could settle the matter via credit card.
Because Roy says she didn't have a computer in her house at the time of the downloads, she ignored the letter and follow-ups, assuming they were a scam - until a summary legal judgment was placed against her.
In July 2008, she met with the Franklin Pierce Law Clinic, which agreed to take on her case as part of its interest in intellectual property (IP) law. It worked in conjunction with the Civil Practice Clinic at the school, which takes on pro bono (low-cost or free) legal work.
"I am still unsettled that record companies are able to treat upstanding American citizens this way, invading people's privacy and accusing people of things that don't even make sense." Roy wrote in her thank-you letter. "It is such a sad waste of the court's time."
Recording Industry Faces Class Action
Excerpted from Consumer Affairs Report by Jon Hood
The recording industry, which has been suing tens of thousands of consumers for copyright infringement, is getting a sample of the flip side. A New Jersey woman has countersued the big record labels, charging them with extortion and violations of the federal anti-racketeering act.
Michele Scimeca sued the RIAA, charging that by suing file swappers for copyright infringement and then offering to settle instead of pursuing the cases, the RIAA is violating the anti-racketeering statutes, which are normally applied to gangsters and organized crime.
"This scare tactic has caused a vast amount of settlements from individuals who feared contesting such a large institution and, having fallen victim to these actions, felt forced to provide funds to settle these actions instead of fighting," Scimeca's attorney, Bart Lombardo, wrote in documents filed with a New Jersey federal court. "These types of scare tactics are not permissible and amount to extortion."
The RIAA has been suing ordinary consumers for hundreds of thousands of dollars, accusing them of infringing the recording companies' copyrights by sharing music files over the Internet. It filed its latest batch of suits, against 531 people, last week. A total of nearly 1,500 have been sued so far. About 380 have settled out of court, usually by paying thousands of dollars.
In San Francisco, CA computer user Raymond Maalouf is preparing to fight back. His daughters used Kazaa to download music.
In court documents, Maalouf's attorneys noted that downloading through Kazaa was openly discussed at Maalouf's daughter's school by teachers, and they downloaded songs used in classes. That should be a protected fair use of the music, the attorneys said.
Coming Events of Interest
Digital Media Conference - June 25th in Tysons Corner, VA. With 400+ 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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