Distributed Computing Industry
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In This Issue

P2P Weblog

MGM v. Grokster

Mark Cuban

Industry News

Data Bank

Techno Features

Anti-Piracy

April 4, 2005
Volume 8, Issue 7


Welcome Jillian Ann & Scooter Scudieri

Please warmly welcome Jillian Ann and Scooter Scudieri to the Content Group. We look forward to providing valuable services to these newest DCIA Members and supporting their contributions to commercial development of the distributed computing industry.

Jillian Ann is a "create-a-holic." She has successfully built and managed multiple careers as an independent film actress, internationally in-demand model, and now as a recording artist with her critically acclaimed debut release "Neverland."

According to music journalist Daniel Slaten, "Neverland conjures up an emotional maelstrom. The driving force behind the music on this release is Jillian Ann's voice, which ranges in tone from child-like innocence to barely suppressed rage."

Anna Maria Stjärnell adds, "Jillian Ann's music is ethereal yet strong. Her voice is appealing and smooth. She is one of a kind."

Never one to follow the pack, Jillian Ann has also pioneered the use of Internet technology as a means of disseminating her work, and is now a leading-edge innovator of peer-to-peer (P2P) technology as a sales and promotional tool. Her website is consistently in the top 100,000 most visited sites, and hers was the cover story of MIT Technology Review's dedicated P2P issue.

Scooter Scudieri operates as the first full-service musician of the 21st century, producing, composing, performing, and distributing all his music without the help of an agent, manager, or record company. He has built the largest independent following of any artist over the Internet.

With his laptop in one hand and guitar in the other, Scooter Scudieri combines high-tech, high intensity, and a mobilized pro-active fan base to promote his music around the globe. He is a soldier on the frontlines of a music revolution. He believes new web-based P2P technology has opened the door for reform, positive change, and growth for the antiquated music business model.

Scooter Scudieri's bold attitude is rivaled only by his artistic integrity. His music has an enlightened character and straightforward attitude that offers a powerful affirmation of the human spirit.

Scooter Scudieri's success is reflected in his many awards including two Telley Awards, and a Golden Web Award in 2004. He was selected as 2003's Best of the New Writers by the Song Writer's Hall of Fame, for which his song "The Usual" was placed on Volume One: Best of the Songwriters Hall of Fame compilation CD.

SML Launches "Send a Song" P2P E-Mail

A new breed of file sharer is emerging who is granted rights to redistribute music and is rewarded for the effort – encouraged by the artists and their labels.

This is possible as a result of the innovative application of digital rights management (DRM) through DCIA Member Shared Media Licensing's (SML) WeedShare distribution model.

Legions of independent content providers (ICPs) and dedicated music ambassadors are now busily promoting this system that rewards those who actively help distribute Weed audio files.

Companies like 96decibels.com have also quietly begun to provide complementary Internet applications that harness WeedShare's technology.

Donald Bly of 96decibels.com said, "WeedShare is the perfect platform for innovation. We can build upon its win-win-win philosophy, which ensures that everyone is treated fairly, from the artist to the distributor to the fan."

96decibels.com recently launched "Send a Song," an e-mail marketing channel available exclusively to artists who have opted into the WeedShare digital distribution system. Send a Song is quickly altering the landscape of digital music distribution and broadening the reach of the WeedShare system.

Over 86,000 music-tracks are currently "weedified" and being made available through 96decibels' Weed Music Directory. For information on services available to webmasters, artists, fans and investors, visit http://www.96decibels.com.

Report from CEO Marty Lafferty

Digital Hollywood Spring (DHS) producer Victor Harwood can be very proud of this year's highly successful conference for senior executives of the entertainment and technology sectors.

DHS, held last Wednesday through Friday at Loews Santa Monica Beach Hotel in Los Angeles, CA was well-attended and energized, featuring multiple sessions on digital rights management (DRM) and peer-to-peer (P2P) super distribution of special relevance to the DCIA.

DCIA Member Good Witch Records' Glenda Benevides entertained at the newly added OnDemandies Awards, connecting with intimacy and openness to the standing-room-only audience. Glenda demonstrated that she can create a powerful mystique with her amazing four-octave vocal range and make an unparalleled emotional impact with her songs.

The DCIA-moderated "Next Generation P2P" panel featured Digital Containers' Chip Venters, INTENT MediaWorks' Glenn Martin, Jun Group's Mitchell Reichgut, MasurLaw's Steve Masur, P2P Cash's Tom Meredith, Seamless P2P's Luke Rippy, and ZeroPaid.com's Chris Hedgecock.

BigChampagne provided industry metrics. Nearly 75% of file formats redistributed on P2P today are audio. At over 13%, video is the fastest-growing format and is largely at a college-student early-adopter phase, with 18-24 year-olds representing the largest demographic segment.

A recent poll taken by the Pew Internet and American Life Project showed that 19% of current music and video downloaders, or about 7 million US adults, say they have downloaded files from someone else's iPod or MP3 player.

About 28%, or 10 million people, say they get music and video files in e-mails and instant messages. Clearly file sharing is a phenomenon larger than P2P software program usage alone.

But the P2P universe represents the single greatest opportunity for licensed content distribution. RIAA estimates indicate that 200 times more music tracks have been acquired on P2P than on iTunes since Apple started selling music online.

Steve Masur began by describing MasurLaw's success helping clients develop P2P file-sharing business models for specialized music genres, such as dance music, which has had neither mainstream CD retail distribution nor radio promotion. He said the "long-tail" marketing effect is beginning to take hold in the P2P distribution channel, and entrants need to take an opportunity-based instead of a fear-based approach.

Mitchell Reichgut added that fully 50% of Internet traffic is now P2P, and shared that the Jun Group's stunning triumph with its first-ever original P2P video series "The Scene" was in part attributable to its proprietary techniques for seeding the P2P environment through IRC, usenet, and FTP "top-sites." He advised attendees to gear business models to consumer file-sharing behavior, rewarding users with cool new ad-supported content, and to exploit what has emerged as truly a new mass medium.

Glenn Martin cited INTENT MediaWorks' accomplishments in bringing major advertisers to the P2P channel to sponsor emerging artists' works by tapping into the paid-search model, and echoed Mitchell's point about meeting users where they are, not where one may want them to be. Monetizing content can be accomplished without changing consumer behavior, and added-value components as well as viral marketing techniques are critical.

Chip Venters said that Digital Containers' patented P2P DRM can make a-la-carte sales of entertainment content as secure in the P2P environment as in centralized-download stores. He went on to say that P2P can be very effective in selling physical as well as digital goods, and combining them into new offerings like digital collectors' items with links to merchandise, and proclaimed that P2P represents a marketplace of 200 million consumers that is so far woefully underserved.

Tom Meredith described P2P Cash as a payment solution that can integrate with any DRM platform, providing a uniquely decentralized approach at a very low-cost, and able to touch every end-point with consumers. He said that while waiting for major entertainment companies to adopt the P2P distribution channel, P2P Cash has developed interesting alternative usages such as a virtual slot machine, working with the world's largest slot machine manufacturer.

Luke Rippy brought Seamless P2P's perspective from its work outside the entertainment sector, providing P2P software applications to government agencies, educational institutions, and Fortune 500 companies. He said that using P2P for collaborative research projects is growing very rapidly, and recommended that entertainment adoption be allowed to progress at a natural pace without legal obstacles.

Chris Hedgecock of ZeroPaid.com said P2P has grown to be a very widely accepted collegiate phenomenon, and the entertainment industries must step up now to legitimize it with new business models. It would be a terrible tragedy to the upcoming generation of young Americans if innovation were driven offshore by litigation or legislation that attacks P2P and overturns the Betamax doctrine.

During audience Q&A, the observation was made that, for independent musicians who have embraced P2P, their release windows have expanded, but most panelists also seemed to concur that the motion picture industry unfortunately is adopting the same ineffective and destructive patterns of responding to P2P as the major record labels. What is needed is for the majors to adopt new business models that take advantage of file sharing, the most efficient distribution channel ever conceived.

INTENT Introduces MyPeer Software

DCIA Member INTENT MediaWorks last week released a new peer-to-peer (P2P) software program that supports family-friendly music and videos exclusively. INTENT's MyPeer application operates on public networks and allows only authorized copyrighted content to be redistributed.

"The industry has been waiting for a solution that is family friendly for redistributing music and movies," said Les Ottolenghi, Founder & CEO of INTENT MediaWorks.

"Parents know their kids go to the Internet for downloading, and want it to be safe and include media that promotes positive values. INTENT has come up with such a solution," added Ottolenghi.

MyPeer is available for download immediately. The software can scan thousands of computers per minute and facilitate the discovery and delivery of authorized family-friendly files.

"A family-values P2P client is an amazing achievement. Our company has successfully tested the software, which works by including only the files that approved users submit with a general-audience rating," noted Narsi Narasimhan, PhD, CEO of Paalam Technologies.

"MyPeer provides a much needed family-friendly option for parents and their kids," added Al Smith President of BlackSmith Productions, a New York based media producer and partner of INTENT MediaWorks.

"MyPeer allows BlackSmith to rollout positive, non-debasing music to families through cause- and faith-based organizations," said Smith. "In the next ninety days, BlackSmith plans to distribute MyPeer to over 50,000 members of such organizations."

MyPeer is available for testing and licensing by contacting INTENT MediaWorks at info@intentmediaworks.com.

The Argument for P2P

Excerpted from Online Spin Report By Jim Meskauskas

Peer-to-peer (P2P) computing has become the coolest application in the Internet Age since the browser itself. It has made real what the Internet promises to do and how it will deliver on those promises. No one could have foreseen just how immensely popular P2P would become.

The recording industry, always late to the party with respect to new media, was again tardy to the game of digital distribution of music. The movie industry, strangely enough, was also terribly clumsy about its attempts to deal with the digitization and decentralization of content distribution.

But both industries seemed certain that as the 10,000-pound gorillas they could bide their time and the masses would wait. Both industries were caught with their pants down, arrogance around the ankles. The reflex reaction, once their feet were untangled, was to sue.

It has always seemed strange that an industry that relies so heavily on the youth market to stay in existence would do something to so completely alienate that market. Authenticity and innovation has always been what attracts the youth to any cultural phenomenon, be it pop culture or subculture. To choose to do battle against millions and millions of music lovers seems an odd strategy for the music industry to adopt.

The case now before the courts is whether or not the means by which some artistic content is accessed should be allowed to exist. P2P software providers are targets because the methods of access to cultural products are not currently under the control of the businesses that the methods those tools enable exist on.

The Copyright Act of 1976 does not allow for the reproduction and redistribution of copyrighted works for commercial gain. It is less clear on the issue of non-commercial distribution. Sections 107 and 108 of the act will be what are used as a fulcrum for arguments being made by both sides, as these sections speak to reasonable use of noncommercial reproductions of copyrighted material.

What is interesting is that these sections (Sec. 108 (c), in particular) also address the issue of "if the existing format in which the work is stored has become obsolete." There are those who would argue that the record or tape cassette format fall under these auspices.

When tape cassette recorders found their way to the market, the music industry tried to fight the format by introducing the non-recordable format of the 8-track. The cassette won out because the people wanted it and because it worked better. The music industry had to finally give in to the cassette. Did the industry encounter more "piracy" with the advent of tape cassette recording? You bet. But most of it was legal piracy.

The law states that an individual can reproduce a copyrighted item and redistribute it as long as it is not for a commercial purpose. I can tape a song and give it to my friends; as long as I do not sell it, it is legal. With cassettes, sure, fewer albums were sold, but suddenly a whole lot of cassettes were sold, and for the first time the masses had access to portable prerecorded music.

Lawrence Lessig, in his book "Free Culture" argues that large media companies are seeking to use both technology and the law to control the means of creativity. The media companies have argued that they are simply seeking to protect the rights of those who create cultural product to be fairly compensated for it. Lessig writes, "A free culture is not a culture without property, just as a free market is not a market in which everything is free."

P2P is here to stay, whether we like it or not and I would argue that most people do, indeed, like it. The question is whether or not the law can distinguish between motives of use; that is to say, am I using P2P for the explicit purpose of curtailing compensation for cultural product or to access cultural product for the purpose of cultural engagement?

Are creators free to create without permission of the powerful or the creators of the past, as Lessig puts it, or will the law move in a direction that will always leave new artists seeking permission from those who have come before for the right to create?

Coming Events of Interest

  • Justice Talking – On April 5th NPR's debate format show taped in front of a live audience at the National Constitution Center in Philadelphia, PA will be discussing digital copyright, the MGM V. Grokster case, P2P, music sampling and more.

  • Copyright and Internet Intermediaries – The management of intellectual property in the online environment poses significant opportunities as well as challenges, and raises high stakes as the value of online transactions, both authorized and unauthorized, increases.

    Internet intermediaries, which may include Internet service providers (ISPs), file-sharing software distributors, auction sites, and portals that enable these transactions, are at the center of global debate involving complex policy, legal and business issues.

    The World Intellectual Property Organization (WIPO) is sponsoring a seminar to help obtain a better understanding of these issues on April 18th at its headquarters in Geneva, Switzerland.

    The seminar is designed to provide a forum for discussion among international experts and business leaders, academics, government delegates and policy makers.

  • Cyberlaw in the Supreme Court – On April 30th, the Stanford Law Center for Internet and Society will host a discussion entitled "Cyberlaw in the Supreme Court."

  • CONNECTIONS Digital Home Conference – This executive marketing conference, to be held May 11th-13th at the Hyatt Regency near the San Francisco Airport in Burlingame, CA combines Parks Associates' market and consumer expertise with insights from key industry strategists to provide a comprehensive analysis of current and future "Digital Living" technologies.

    DCIA Members Digital Containers' CEO Chip Venters and Trymedia Systems' SVP Gabe Zichermann will be featured speakers.

    Parks Associates' research shows that roughly one-third of all US households now have broadband access and nearly 20 million have a home network. The combination of these solutions is changing the paradigm for access to mainstream music, movies, television programs, and games. Currently one-third of all Internet households listen to online radio stations each month, and a comparable number download music files. Likewise, 10% of all Internet households access on-demand video content each month.

Copyright 2008 Distributed Computing Industry Association
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