April 25, 2005
Volume 8, Issue 10
Welcome New Member Skype
Please warmly welcome Skype to the Operations Group. We look forward to providing valuable services to this newest DCIA Member and supporting its contributions to commercial development of the distributed computing industry. Skype is the global peer-to-peer (P2P) telephony company that is changing the telecommunications world.
As the FCC's then-Chairman Michael Powell told Fortune Magazine in February 2004, "I knew it was over when I downloaded Skype. When the inventors of Kazaa are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it's free--it's over. The world will change now inevitably."
Skype aims to delight consumers by offering free, unlimited, high-quality voice-calls via its next-generation P2P software. Skype's mission is to provide a simple, reliable, and friendly communications tool "that just works." The company aims for people to communicate with friends, families, and colleagues more flexibly, more cost effectively, and with better sound-quality than ever previously imagined.
"The idea of charging for calls belongs to the last century. Skype software gives people new power to affordably stay in touch with their friends and family by taking advantage of their technology and connectivity investments," says Skype CEO & co-founder Niklas Zennstrom.
Last week Skype announced SkypeIn and Skype Voicemail, two new premium services available in the latest download versions of Skype software for Linux, MAC OS X, Pocket PC, and Windows platforms. Meanwhile basic Skype continues to be free to download and free to use.
SkypeIn provides an affordable alternative to costly mobile phone roaming charges with SkypeIn personal numbers. SkypeIn customers can receive inbound calls to their Skype client from ordinary fixed telephones or mobile phones while they travel worldwide. Skype Voicemail enables users to manage incoming voicemail messages, making their Skype usage more ubiquitous.
The new premium offerings coincide with another major milestone for Skype: the 100 millionth download of its software. Skype has now enabled more than 7 billion high-quality minutes of talk time for Skype users worldwide, further establishing Skype as the feature-rich communications choice of cost- and quality-conscious users.
SkypeIn and Skype Voicemail complement Skype's first premium service, SkypeOut, which allows global calling to public telephone numbers for local rates. More than 1.2 million people are now using SkypeOut.
With the combination of SkypeIn and SkypeOut, users have new flexibility to expand modern communications and share those interconnection benefits with non-Skype users. Skype eliminates communications billing surprises by offering all premium services on a pre-paid basis. Subscriptions for both services are available in the Skype Store at www.skype.com.
Trymedia Systems Gets Games
Codemasters and WorldWinners last week announced agreements with DCIA Member Trymedia Systems, a secure digital distribution service provider and operator for downloadable games.
Codemasters is bringing the PC edition of its acclaimed stealth action title "Second Sight" to Trymedia's global game distribution network.
The game will be available for download on more than 300 leading portals, retailers, and peer-to-peer (P2P) software programs around the globe. Also available is a free fifteen-minute trial download to give consumers a quick look at the game before purchase.
Matt Davies, Codemasters' Business Development Manager, said, "Distributing the full game via Trymedia's network is an important step to allow us to reach an even wider audience for this great title."
"We are excited to add 'Second Sight' to our network of downloadable games," noted Alex Torrubia, co-founder and CEO of Trymedia. "We know it will be a success and look forward to working with Codemasters in the future."
WorldWinner, the leader in online game competitions, announced that more than two dozen skill-based games are now available at www.trygames.com, allowing gamers to compete against others in online game tournaments for bragging rights as well as cash and prizes.
Additionally, WorldWinner's skill-based games will soon be added to Trymedia's global game distribution network.
"Trymedia has created one of the largest game networks with nearly 1,000 titles catering to a wide range of casual and core gamers," said Stephen Killeen, President & CEO of WorldWinner. "Distributing through Trymedia's network will allow us to further expand WorldWinner's reach to millions of gamers in more than 30 countries worldwide."
"Skill-based games are very popular with game consumers around the globe," added Trymedia's Torrubia. "Combining WorldWinner's leading content portfolio with our powerful distribution provides even more gaming options to consumers."
Report from CEO Marty Lafferty
 On Tuesday, the US House of Representatives passed HR 357, " The Family Entertainment and Copyright Act of 2005" (FECA), by voice vote. The identical measure, S 167, similarly passed the US Senate in February.
This bill includes five proposals carried over from the 108th Congress: the Artists' Rights and Theft Prevention Act (ART), Family Movie Act, National Film Preservation Act, National Film Preservation Foundation Reauthorization Act, and Preservation of Orphan Works Act, combined after the collapse of the failed Induce Act.
It criminalizes unauthorized use of video cameras to record motion pictures in movie theaters and to make pre-released commercial works available for distribution, legalizes technology such as ClearPlay's that enables skipping objectionable material in recorded works, reauthorizes the Library of Congress to conduct film preservation for educational purposes, and allows libraries to copy works in the last 20 years of their copyright term that are not otherwise reasonably available.
In well-meaning introductory comments about this legislation, Senator Orrin Hatch emphasized that it will help parents control what kids watch, and Congressman Lamar Smith likewise stressed that it would help protect children. ClearPlay CEO Bill Aho was justifiably thrilled with its passage.
In terms of impact on the distributed computing industry, Electronic Frontier Foundation's (EFF) Fred von Lohmann told Wired News, "Compared to proposals like the Induce Act, the provisions of this bill are much less dangerous to innovation and the public's rights."
Other observers have not been as sanguine, however. Declan McCullagh protested in CNET News, "The bill is written so broadly it could make a federal felon of anyone who has even one copy of a film, software program, or music file in a shared folder and should have known the copyrighted work had not been commercially released. Stiff fines of up to $250,000 can also be levied. Penalties would apply regardless of whether any downloading took place."
Indeed this drastically lowers standards for copyright prosecutions in the online environment and puts onerous burdens on consumers who will essentially need to stay current on the release status of all commercial works. One pundit even opined that, "Every citizen will be required to subscribe to Billboard and Variety out of self-preservation."
Richard Menta complained further in MP3 Newswire, "Congress has passed a law that gives the entertainment industry what it wants, the power to send file sharers to prison for a long time.
Remember all those Fiona Apple Fans who are sharing her latest album that Sony has refused to release? These fans number in the millions. If Bush signs this bill every one of those individuals; children, mothers, grandparents, even the teenagers of a few of our Congressmen, will be subject to a prison sentence of three years and fines of up to $250,000.
It gets worse. They don't even have to share the files online, just have possession. The media conglomerates have already proved they will abuse this power to the full extent that they can get away with.
If the media industry ran the railroads 75 years ago, there would be no airplanes today. Airplanes would have been outlawed by Congress as a disruptive technology because it robbed the railroads of clients. Today, a two hour flight from New York to Chicago would still be an overnight train ride."
Thomas C. Greene objected most strenuously in The Register, writing that "Congress confuses file sharing with manslaughter. Making a movie available electronically prior to its release can now result in a three year sentence.
The bill also calls for three years in cases where a person is caught recording a movie in a theater with a camcorder - and six years for a second offense. It also indemnifies theater operators against all criminal and civil liabilities arising from detaining suspects "in a reasonable manner." (Welcome to movie jail.)
Since involuntary manslaughter brings, on average, anywhere from 0 to 36 months' incarceration, one might well question the morality of going harder on those who trade files than on those who negligently cut short the lives of fellow citizens. But the 109th Congress is about nothing if not morality, and it understands well the essential sacredness of the nation's ruling cartels.
Previously, criminal laws protecting copyright had been designed to target major, organized bootleggers doing serious damage, not individuals swapping files. The new legislation is designed to broaden the law to where almost anyone can now be treated as a criminal. And since we have seen the entertainment cartels using the civil courts to conduct a vendetta against file sharers in hopes of chastening them overall, one can expect that the same examples will be made of small fry using these new, quite Draconian, criminal sanctions as well."
Sovereign Artists' New Release
"Here Come The Choppers!" the new CD from Loudon Wainwright, was released by DCIA Member Sovereign Artists last week. The 21st album from the singer-songwriter extraordinaire and wayward chronicler of life, "Here Come The Choppers!" is a breathtaking journey through the emotions of everyday (and not so everyday!) life as only the eyes of Loudon can see it.
Loudon Wainwright is a poet, an actor, a singer, a songwriter, a social commentator. He has appeared on "M.A.S.H." and "Ally McBeal," and has been featured in "Big Fish" and "The Aviator." Loudon will also appear in the forthcoming Cameron Crowe film, "Elizabethtown," starring Orlando Bloom and Kirsten Dunst.
Produced by Lee Townsend and recorded at Mad Dog Studios in Los Angeles and The Factory in Vancouver, B.C., "Here Come The Choppers!" features an unparalleled assemblage of musicians including Bill Frisell on electric guitar, Greg Leisz on lap and pedal steel guitar, mandolin and electric guitar; David Piltch on acoustic and electric bass and Jim Keltner on drums and percussion.
The release of "Here Come The Choppers!" is accompanied by tour dates in the US and internationally.
Indie911 Launches Online Store
DCIA Member indie911's new online store is up and running and ready for The Ultimate Survival Guide to the New Music Industry: Handbook for Hell, The All Access Passport CD-ROM, indie911 membership, as well as newly added Music Business Registry A&R Directory, and The Indie Bible by David Wimble.
All items are available at a discount by purchasing indie911's Ultimate Survival Kit. Keep an eye out as more indie911 approved resources are added in the future. Check out the necessary resources to help navigate the tumultuous waters of the music business. Take me to the store!
Consumer Disclosures Update
According to DCIA Best Practices leader Elaine Reiss, "With respect to consumer disclosures, our goal is to regularly and systematically provide information in clear and understandable language. All DCIA Members who distribute peer-to-peer (P2P) software have now complied with the first phase of our plan to do so. We are moving ahead to implement phase two and develop phase three."
Phase one features a prominently displayed message-box on the home-pages of websites for , iPeer, Kazaa, MyPeer, and TrustyFiles, that reads, "Click Here for Important Information about Using P2P Software Safely."
Users who respond are linked to a customized P2P Software User Advisories page, such as this example from industry leading Kazaa Media Desktop distributed by DCIA Member Sharman Networks, which provides information regarding five items identified by law makers as potential risk areas for consumers.
It also encourages users to, "Read the important Consumer Alert concerning P2P software from the US Federal Trade Commission." An example of the kind of advisory found on this page is as follows:
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"Copyright Infringement Liability - P2P technology makes it possible to share all kinds of information. Some information is protected by copyright, which means that you generally need the copyright owner's permission before you make it available to other P2P users. Popular music, movies, games, and software are often protected by copyright.
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Copyright infringement can result in significant monetary damages, fines, and even criminal penalties. Some copyright owners have filed civil lawsuits against individuals that they believe unlawfully distributed large numbers of copyrighted songs.
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Click here for information about how to use this P2P software application to minimize or avoid copyright infringement."
Phase two includes further improvements in communications regarding copyrighted works, such as a notification with premium advertising-free versions of P2P software that "Purchase of this software is not a license to upload or download copyrighted material."
Phase three will involve input from US Congressional staff on a more comprehensive program to regularly and conspicuously remind users that their software is active, simplify end user license agreements (EULAs), add elements from the originally proposed P2P Software Risks, and make additional enhancements.
For participating firms to invest the considerable effort, time, and money required to introduce and maintain the fully realized disclosures regime, it is important to have an understanding with appropriate governmental authorities that this work will be deemed satisfactory.
Coming Events of Interest
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P2P PATROL Spring Meeting – P2P PATROL (Peer-to-Peer Parents And Teens React On Line) will hold its quarterly working session for participating law enforcement and private sector representatives Tuesday May 3rd at 9:30 AM.
DCIA Member SVC Financial Services will host this meeting at its HQ in San Francisco, CA. For more information, please contact sari@dcia.info.
The P2P PATROL initiative, a voluntary collaboration of technology companies and government agencies, offers programs focusing on education, deterrence, and enforcement for combating online pornography, and operates the P2Ppatrol.com website.
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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.
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Digital Media Conference – Mark your calendars! The 2nd Annual Digital Media Conference is now set for Friday, June 17th at the Hilton McLean in Tysons Corner, McLean, Virginia. This is a must-attend event for media, entertainment and technology businesses, educational institutions, and government agencies involved in the digital distribution of media, including information, education & entertainment products. More than 300 digital media industry decision-makers and policy-makers attended the 2004 conference, which was co-sponsored by the DCIA. Consumer Electronics Association (CEA) President & CEO Gary Shapiro will give the opening keynote at the 2005 event.
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