June 13, 2005
Volume 9, Issue 5
Alston & Bird and BMG Direct
Aydin S. Caginalp and Renee Brissette, partners of DCIA Member Alston & Bird, LLP, represented BMG Direct in the recent acquisition of Columbia House DVD and Music Club, in a deal valued at approximately $400 million.
Aydin and Renee are engaged in a broad spectrum of media transactions, having handled the acquisitions of Zomba/Jive and Pearson TV, the sale of barnesandnoble.com, as well as joint ventures leading to the establishment of AOL Europe and Lycos Europe, in addition to licensing of content libraries and digital rights management (DRM).
Brightpoint in Skype Deal
Brightpoint reached a deal to distribute DCIA Member Skype Internet calling services. Plainfield, IN based Brightpoint said it will focus on promoting Skype through university bookstores, hot spots, copy/shipping retailers, mall kiosks, and wireless network operator customers.
Skype lets users download software and make free calls via the Internet to other Skype users. The company, started by the founders of Kazaa, which is distributed by fellow DCIA Member Sharman Networks, also sells services that connect Skype users to conventional phone networks.
Clickshare Grows Customer Base
DCIA Member Clickshare Service Corporation, a leading online subscription-management, card-processing, and access-control service provider, has added its first international publisher and two additional US newspapers to its growing customer base.
The Asian Banker, based in Singapore, will use Clickshare for access-control and subscription management for its website. This fast-growing banking group, founded in 1996 by entrepreneur and journalist Emmanuel Daniel, provides consulting services and runs an annual Far East banking conference.
Oklahoma's third-largest daily, the Lawton Constitution, will use Clickshare for subscription-access to its website, and the Massachusetts-based Daily Hampshire Gazette will use Clickshare to link online usage to its print subscriber database, offering the web as a value-added service for print subscribers while realizing added revenue from web-only subscriptions.
File Size on P2P Nets Explodes
Excerpted from Forbes Report by Lisa DiCarlo
The average size of files being shared over peer-to-peer (P2P) has more than doubled since 2002. It's a fact that reflects the types of media being digitized and shared, and is likely to give content owners fits, as they realize that more of their intellectual property is being shared online.
In May 2002, the average file size being shared on P2P was 3.22 megabytes, or about one song. Today it's 8.92 MB, big enough for several songs or a short video clip. Now people are digitizing movies, TV shows, games, and other video.
The statistics come from DCIA industry data resource BigChampagne, which tracks usage patterns and trends in P2P. Researchers there say that at any given time in the US there were 8.6 million simultaneous users swapping files on P2P in April 2005, up from 7.6 million last year.
In April 2005, video files related to FOX's "The Simpsons," "American Idol," and "Family Guy," were the top three, followed by ABC's "Desperate Housewives" and FOX's "The O.C."
Broadcasters are increasingly looking to the fat profit margins of DVDs (about 50%) to bolster the return on ratings-challenged TV shows. "Family Guy," which had a P2P audience of 204,000 in April, has been a big hit on DVD. It has sold more than 3 million box sets at $50 a pop.
File-Sharing Levels Robust in Europe
Excerpted from Digital Music News Report
File swapping appears to be gaining strength in Europe, according to Jupiter Research. P2P file sharing has now become a routine activity in England, Germany, France, Sweden, Italy, and Spain. The Jupiter survey canvassed 3,500 users, with 15 percent indicating regular use of P2P to distribute and receive music. Spain appeared to have the highest levels, with 26 percent indicating frequent P2P downloading. The trend is being propelled by increased broadband usage among Europeans, according to the report.
Results from P2P surveys can be difficult to gauge. While Jupiter maintains the confidentiality of its results, many participants simply err on the side of caution. According to one top analyst, "Consumers are file sharing, but not answering surveys about file sharing."
That makes understanding the P2P phenomenon more difficult, with most users maintaining a low profile. Meanwhile, Jupiter revealed some interesting data on per capita music spending in various European countries, with British buyers spending an average of 52 euros ($63) annually.
Report from CEO Marty Lafferty
 We proudly welcome Softwrap, A Matter of Substance, and Digital River (please see articles that follow) and look forward to providing valuable services to these newest DCIA Members and supporting their contributions to the distributed computing industry.
We are encouraged by industry news reports that demonstrate advances in various aspects of commercial development.
On the other hand, unsettled court cases around the world underscore that we still have a long way to go to achieve full-scale adoption of the P2P distribution channel by major entertainment interests.
Indeed, with the decisions of the US Supreme Court and the Australian Federal Court pending, as we've previously noted, forward progress on licensing and content protection issues that remain our greatest challenges can be frustratingly slow.
Nor will this situation immediately be relieved by the courts' judgments, which will assuredly unleash a new round of divisive and acrimonious legislative activity exacerbated, as we've already observed, by distorted smear campaigns now being instigated by well-financed Hollywood interests.
For all of that, it is an exciting and challenging time to participate in our industry's development, and we cordially extend this last-call invitation to DCINFO readers to join us at the DCIA Summer 2005 Meeting.
Our quarterly meeting will take place this Thursday, June 16th, from 7:00 PM to 9:00 PM at the Best Western Tysons Westpark, McLean, VA – on the eve of this year's Washington Digital Media Conference, which once again will be held at the nearby McLean Hilton.
The DCIA meeting is open to non-members. It will focus on advancing commercial solutions for entertainment distribution via P2P during the second half of 2005.
We plan to open the meeting with a recap of the relevant arguments in key litigation now moving through the courts, conducted by knowledgeable experts who have participated in these cases or otherwise represented principal parties along the way.
Our purpose is not to score the debate or handicap odds – most observers have conceded that P2P technologies are here to stay and that what is needed now are new business models to harness them. Our interest is in discerning from these arguments what kinds of solutions will be acceptable to leading proponents on each side.
We will then move to examine two sets of case studies involving early work that has been initiated in file-sharing distribution of entertainment content, which demonstrate the greatest promise for leading to a turnaround of the P2P distribution channel for major labels and studios.
The first set will exemplify those that have been undertaken by P2P software developers and distributors, and their agents, who will personally highlight their experiences to date.
The second will exemplify those that have been introduced by content creators or rights-holders, who will likewise personally describe what's working so far and what more needs to be done.
Finally, in what should be the most valuable and stimulating part of our meeting, we will invite a discussion of new concepts and solutions that may not have been tried yet, with a diverse panel of industry experts representing opposing interests, who will react to recommendations and provide open-and-honest feedback from their perspectives.
We strongly encourage participants at our meeting also to attend the Digital Media Conference Friday at the nearby McLean Hilton. Attendance at our meeting will be at no charge to registered conference attendees, and DCIA Members can register for the conference at a substantial discount.
Please contact Karen Kaplowitz, DCIA's Member Services leader at 888-890-4240 or karen@dcia.info to find out more about Membership in the DCIA or to register for the DCIA Summer 2005 Meeting taking place this Thursday evening at the Best Western Tysons Westpark.
Softwrap Joins the DCIA
Please warmly welcome Softwrap, Ltd. to the Operations Group.
Softwrap's mission is to provide turnkey software sales and distribution solutions for software developers, authors, and publishers. The company's state-of-the-art e-commerce and electronic software distribution (ESD) technologies provide their partners with timely and easy software distribution and reliable payments.
Softwrap is a complete digital marketing and distribution system that manages the entire buying and selling process of software. This is the world's first complete solution for software authors and distributors who wish to securely distribute and sell their software over the web. It is the virtual equivalent of "shrink-wrap."
The company protects products from piracy and allows developers to offer free trials, cross-selling, and upgrade options to their end-users. The Softwrap technology also automates the registration, sales, and billing of software over the net for single and multi-user licenses. The evolution of this technology has given birth to three offerings:
Softwrap GO, a digital rights management (DRM) solution for licensees, is strategically designed to adapt to a multitude of uses and makes for the perfect all-round ESD tool.
Softwrap LIVE, a complete end-to-end solution for authors/publishers looking to distribute their software via digital means. LIVE offers a seamless experience for end-users ensuring revenues are maximized.
Softwrap ACTIVE, a multi-task retail solution which adds high security product activation to on-the-shelf software packages. ACTIVE allows for viral sales through users sharing the retail disc as well as offering customer data to authors/publishers for cross-selling and up-selling opportunities.
British-based Softwrap is a wholly owned subsidiary of WrapTech, Ltd. Softwrap is represented in North America, Europe, Africa, Asia, Australia, and New Zealand, ensuring global distribution for its business partners' software, which include Eidos, Grassgames, Logique Eclectic, Midas Interactive Entertainment, Nikita Interactive, Paragon Publishing, Phoenix Games, Poikosoft, Reflexive Entertainment, TimeAcct Information Systems, Ulead, WareSoft Software, and fellow DCIA Member Grokster. For further information please visit www.softwrap.com.
A Matter of Substance
Please warmly welcome A Matter of Substance / Omnimedia to the Content Group.
The leading concept behind A Matter of Substance (AMOS) spawned out of a sincere and creative attempt to make the world a better place. The character of AMOS is the synthesis of its two founders Ohad Maiman and Eytan Rockaway coming together from diverse backgrounds in philosophy, art, and TV/film.
The two have come to compliment each others' fields of interest and expertise, constructing a company poised to structure and handle traditional investment ventures balanced with a true and passionate interest in securing a stage for expressive and creative avant-garde voices striving to better our world.
AMOS has turned its creative solutions capability to the field of project development in the entertainment industry. Building on the synergy and cross-marketing of its main fields of operation, music, film, and TV, AMOS has become a dynamic out-of-the-box entertainment entity, ever-searching and implementing new ways of developing, producing, and distributing cutting-edge content.
AMOS Music is a full service record label serving the interests of artists and the integrity of the music industry. Its mission is to create, develop, produce, and distribute music, all under one roof. AMOS Music has gathered an assemblage representing today's hottest and most talented musical artists, writers, and producers. Its marketing and promotion staff is connected both to standard industry channels as well as the independent route taking advantage of online and new media communities.
AMOS Films is an artist-welcoming studio that encompasses motion picture production and distribution. It is a non-traditional production house, priding itself on the principal of listening to any idea, and often choosing to take a riskier, original, thought-provoking direction.
AMOS TV is a production house that encompasses TV programming and development as well as TV distribution and syndication. It is about the reality of being a fascinating person in a remarkable situation. It does not take part in the worrisome tabloid reality craze infecting the networks and our collective consciousness these days.
Finally, the AMOS Creations division deals with the cutting-edge of the independent voice. It has evolved into a young NYC-centered community of artists that come together for projects they believe in. This ideal environment is one where actors, directors, writers, producers, performers, and artists find venues to showcase their talent. For more information, please visit www.amatterofsubstance.com.
Welcome Digital River
Please warmly welcome Digital River, Inc. (NASDAQ: DRIV) to the Platform Group.
Digital River, a global leader in e-commerce outsourcing, builds and manages online businesses for more than 40,000 software publishers, manufacturers, distributors and online retailers. Its multi-channel e-commerce solution, which supports both direct and indirect sales, is designed to help companies of all sizes maximize online revenues as well as reduce the costs and risks of running an e-commerce operation.
The company's comprehensive platform offers site development and hosting, order management, fraud prevention, export controls, tax management, physical and digital product fulfillment, multi-lingual customer service, advanced reporting and strategic marketing services.
The company recently launched Web Tycoon, a program targeting businesses and entrepreneurs that allows them to launch an online store and immediately sell an array of products from Digital River's catalog of thousands of software and digital products.
"We have amassed what we believe is the world's largest catalog of software and digital products," said Joel Ronning, Digital River's CEO. "By offering our Web Tycoon partners access to thousands of titles in our catalog, they have a ready-made product set that they can sell without standard inventory requirements. In addition, Web Tycoon expands visibility and generates incremental revenue on a worldwide basis for publishers whose software is sold online."
Also this Spring, Digital River launched the new Adobe Stock Photos service. Working with Adobe Systems, the company built the international e-commerce infrastructure for the new stock photography service available in Adobe Creative Suite 2 applications. Digital River is processing the online orders from the new Adobe Stock Photos service where consumers can purchase more than 230,000 royalty-free images from well-known stock photo companies.
"By leveraging our reliable technology infrastructure and international e-commerce expertise, we can help companies of all sizes increase the efficiency of their online businesses and expand global sales channels to drive revenue," said Dave Alampi, Digital River's vice president of marketing.
Founded in 1994, Digital River is headquartered in Minneapolis, MN with offices in major US and European cities. For more details about Digital River, please visit the corporate Web site at www.digitalriver.com or call 952-253-1234.
Childnet International's Guide
Excerpted from Digital Music News Report
Internet-based charity Childnet International has launched a global campaign to educate parents about file-sharing software along with other music download outlets. Childnet has prepared a pamphlet entitled "Young People, Music, and the Internet – A Guide For Parents About P2P, File Sharing, and Downloading" to be distributed in the coming months in 19 countries worldwide.
The pamphlet's goal is to inform parents on the general aspects of copyright, explanations of how P2P services work, and dangers of illegal file sharing. It also sketches out tactics parents can use to protect their families against liability by ensuring safe and legal Internet use. Pro-Music, an IFPI-backed organization, is a major supporter of Childnet and has actively endorsed the initiative.
This initiative follows a survey, which revealed that, while 84% of 9-19 year olds who use the Internet download music, only 10% of parents know how to do so. Childnet CEO Stephen Carrick-Davies said, "Parents need to get up to speed with what their children are doing online, and this simple and clear advice should help them engage with their children, guide them appropriately, and help them enjoy music safely online."
Coming Events of Interest
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Boucher Fundraiser – Bill Bailey of XMPAC and Michael Petricone of CEAPAC invite you to honor Congressman Rick Boucher at a special cocktail party event on Tuesday June 14th from 7 PM to 8:30 PM at XM Satellite Radio headquarters in Washington, DC. Make checks for $1,000 per PAC or $500 per person payable to "Boucher for Congress." Please call Melissa Barker at 703-907-4320 for more information.
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Institute of International Education – The US Department of State co-sponsors "Adapting Concepts of Intellectual Property to Accommodate New Technology" for the benefit of a delegation of government officials from various Latin American nations on Thursday June 16th from 2 PM to 4 PM at IIE headquarters in Washington, DC. The DCIA will present our industry's viewpoint on the impact of current IP laws on innovation and the use of new technologies.
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DCIA Summer Meeting – The DCIA will hold its Summer 2005 Meeting on Thursday evening June 16th from 7 PM to 9 PM, at the Best Western Tysons Westpark in McLean, VA. This meeting will focus on advancing commercial solutions for P2P distribution of entertainment content. A light buffet dinner will be served. Non-Member Registration Fee: $100. No charge to registered Digital Media Conference delegates. Please contact DCIA Member Services leader Karen Kaplowitz at 888-890-4240 or karen@dcia.info for more information.
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Digital Media Conference – The 2nd annual Washington Digital Media Conference is set for Friday June 17th at the Hilton McLean in Tysons Corner. 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. Featured speakers this year include DCIA Member representatives Les Ottolenghi, CEO of INTENT MediaWorks, Tom Meredith, CEO of P2P Cash, Marc Freedman, CEO of RazorPop, Russ Reeder, CEO of RightsLine, Internet Rock Star Scooter Scudieri, Phil Corwin, US lobbyist for DCIA Member Sharman Networks, and DCIA Best Practices leader Elaine Reiss.
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DRM Strategies Conference – Jupitermedia's comprehensive event on digital rights management business and technology issues will be held July 27th-28th at the Puck Building in NYC. This is a must-attend for those involved in content security in both consumer media distribution and information security. The conference will feature leading industry figures who will introduce the fundamentals of DRM, shed light on future DRM directions, and provide incendiary debate on today's controversial issues of online piracy and digital copyright.
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Kagan's Digital Media Summit – The theme of this year's conference, which will be held on September 12th-13th at the Four Seasons / Mandalay Bay in Las Vegas, NV will be "New Opportunities For Monetizing Content." The DCIA will participate in the panel entitled "MIXING MEDIA'S POTION: Content Security Plus E-Commerce Fulfillment and On-Demand Delivery."
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Technology Law Institute – A Digital Media Rights panel will be featured September 20th at the Headquarters of the State Bar of Georgia, in downtown Atlanta, GA. Kilpatrick & Stockton's James Trigg will moderate with speakers Miles O'Brien from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
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