August 8, 2005
Volume 10, Issue 1
P2P Volume Hits New High in July
Excerpted from Digital Music News Report
Volume on peer-to-peer (P2P) networks continued to increase for the month of July, according to DCIA industry data resource BigChampagne.
The latest monthly data shows an average simultaneous user base of nearly 9.5 million users globally, and 6.9 million in the US. The global figure represents a 6.8 percent jump over the previous month, and a 25.1 percent increase over monthly figures from one year ago.
In the US, the year-over-year increase is more substantial, at 33.3 percent. Average simultaneous users provide the most accurate measure of P2P activity, with other measurements like total number of files often erroneous indicators of volume.
The increase is notable during a summer month, a time when computer and Internet usage often dips. According to BigChampagne figures from last year, overall simultaneous user totals remained level during the summer, part of a multi-month plateau that started in May and did not increase until September.
An increase in broadband connections may be keeping more people inside. That also appears to be powering an increase in paid music downloads, with total units now approaching 200 million in the US. Please click here to view a diagram related to this article.
V2 Music Signs with Audible Magic
Audible Magic (AM), a Los Gatos, CA based provider of acoustic fingerprinting technology that is used to identify music tracks in file-sharing environments, announced last Tuesday that DCIA Member V2 Music, Virgin Group's record label, has agreed to register its songs with the AM database.
AM has previously signed EMI, Sony BMG, and Universal to its service, which will be employed by the re-launching P2P file-sharing service iMesh using payment services solutions from DCIA Member Javien.
Personal Computers Rule
Excerpted from eMarketer Report
The personal computer is rapidly replacing other consumer electronics appliances as the primary at-home communications and entertainment device.
According to a BURST! Media survey of 13,000 web users aged 14 and up, the old devices may soon become obsolete. Entertainment that used to be accessed on a number of separate appliances is increasingly being played on the computer.
In fact, two out of five (39.1%) users under 24 say the Internet is the primary way they listen to music – and another 9.3% say it will be in the future. One-third (31.2%) say the Internet is the primary way they play games, with 11.6% saying it will be in the future.
And younger users are more likely than all other age segments to use the Internet to play music and games. They use the Internet more to watch movies and other video programming, too.
"Computers are displacing many household entertainment appliances. Along with VoIP and streaming video, this is just the beginning of a centralization of most communication and entertainment functions in the home into a single appliance," says Chuck Moran of BURST! Media.
Beyond entertainment, the IPC is also becoming an increasingly important source of information. Four out of five (80.0%) respondents say they use the Internet to find information that will help them at home – such as health news and recipes. Fully, 45.9% say the Internet is the primary way they gather information at home – and another 13.9% believe it will be in the future.
Report from CEO Marty Lafferty
 As previously reported, the DCIA has embarked on three areas of new activity and cordially welcomes participation of qualified non-members in addition to our now more than fifty (50) DCIA Members.
Specifically, these new areas comprise the development of: 1) a comprehensive best practices regime based on analysis of the Supreme Court opinion and concurrences in the MGM v. Grokster case; 2) a promotional program highlighting licensed content P2P distribution, appropriate software usage, and protection of children online; and 3) a technology solution initiative that emphasizes a combination of 'offensive' tactics (e.g., placement of DRM-protected and other licensed files at top of search results) with 'defensive' tactics (e.g., conversion of unauthorized files into licensed quality-controlled versions) that have long-term viability.
Please click here for details about the first of these, the MGM v. Grokster Response Working Group (MGRWG), which has as its goal to define a set of best practices for the distribution of P2P software with the object of promoting its use in ways that do not infringe copyright.
The initial structure of MGRWG's work product, subject to further development by the group, features four proposed parts: advertising guidelines, protection mechanisms, business models, and tracking studies. Please sign-up at mgrwg@dcia.info. DCIA's Best Practices leader, Elaine Reiss, will contact participants with a working-group-plan outline next week.
Please click here for details about the second of these areas of activity, the "NEW VOICE OF P2P" concert tour, which champions artists who use P2P file sharing for licensed distribution of their works, encourages proper use of P2P by consumers, and underscores the obligation of responsible users to help protect children online. P2P PATROL and ASACP's award-winning cpHotline.org will be beneficiaries of this effort.
Headlining the cause, with a powerful multimedia finale, is DCIA Member Scooter Scudieri, and growing out of the tour will be an online contest for participants and fans to produce the most creative multimedia music videos/remixes from concert coverage plus added original content.
Beneath the Noise (BTN) – a marketing and concert promotion firm specializing in college events – is producing the tour. To find out more, please contact nvp@dcia.info.
This week, we highlight the third new area of DCIA activity, fostering the development of an overarching technological approach for protecting copyrighted works being redistributed by current and future P2P software applications, which emphasizes an optimal combination of 'offensive' and 'defensive' tactics that have long-term viability.
This will be accomplished by a request-for-proposal (RFP) process, and we are grateful for the input of all who have made preliminary recommendations as to how to structure and manage this effort.
The scope of this RFP will encompass open specifications for the registration of copyrighted works to be authorized for digital distribution via various file-sharing technologies and, in the section focusing on of 'offensive' tactics: the entry procedures for such works by rights holders and their agents into initial distribution and the process definition for their redistribution by P2P software application users in ways that promote their acceptance and maintain the integrity of the original files.
The section focusing on 'defensive' tactics will encompass: the identification procedures for such works entered by consumers or unauthorized third parties not only into initial distribution, but also for works already being redistributed without authorization, and the process definition for replacing these files with or reconstituting them or portions of them into quality-controlled licensed versions of the works, while respecting privacy and fair-usage rights.
Finally, the section on integration will encompass linkages and published protocols for each tactic to enable other entities to voluntarily participate in any or all parts of what will be an open and modular system. For more information, please e-mail rfp@dcia.info.
You Say You Want a Web Revolution
Excerpted from Wired Report by Ryan Singel
Software experts say recent innovations in web design are ushering in a new era for Internet-based software applications, some of the best of which already rival desktop applications in power and efficiency. That's giving software developers a wide open platform for creating new programs that have no relation to the underlying operating system that runs a PC.
Evidence of this evolution has been popping up everywhere in recent months, with examples that include Google's Gmail service, Amazon's A9 search engine and NetFlix's DVD rental platform. All highlight a dramatic rethinking of web applications, using a programming technique dubbed AJAX (for asynchronous JavaScript and XML) that significantly improves how web pages interact with data, for the first time rivaling programs that run natively on the desktop.
"For a user it is fundamentally different – it feels like a real application," said Rael Dornfest, CTO for O'Reilly Media. AJAX overcomes a severe limitation in traditional web interfaces, which must reload anytime they try to call up new data. By contrast, AJAX lets users manipulate data without clicking through to a new page.
Web developers are creating AJAX code libraries and conventions to ease the burden of making applications that speak several computer languages. Even Microsoft is getting into the game, albeit with hooks that aim to keep it tethered to its Windows OS. The company recently announced it is developing its own AJAX toolbox, called Atlas, for web developers who use Microsoft's ASP.NET technologies to build websites.
Perhaps the best known example of AJAX is Google Maps, whose improbable drop shadows and absurdly movable maps spread shock and awe among web developers in February.
Jesse James Garrett, a co-founder of the Adaptive Path consulting firm gave AJAX its name in an influential essay. "The deep trend here is that we are really starting to figure out what the web is good for," he explained in an interview with Wired News. "This is the web coming into its own as a medium for software applications."
Open Media Network Adds Content
Open Media Network (OMN), a free, online public service network launched in April, announced last week that it has added programming from more than 25 independent television and radio station providers.
"The public broadcast industry is moving well ahead of many traditional broadcasters in using the Internet and broadband to reach new viewers," said Mike Homer, OMN's Chairman and co-founder. "They are quickly embracing OMN to distribute their locally-produced content to global audiences."
OMN also includes online content in an ever-expanding collection of movies, podcasts, and video blogs. OMN offers users a simple TV-style program guide and automatic background deliveries of favorite scheduled programming. Content producers can easily add their programming to the network, with unlimited free delivery of their shows while fully protecting their producer copyrights. Through the service, consumers are able to view the content on multiple devices, including PCs and iPods today and televisions and cell phones shortly.
New OMN features include various kinds of audience voting, allowing viewers to participate in the organization, rating, and ranking of the programs. Now featuring tags, or keywords for each content item, viewers can search and browse for new programs, as well as organize content that has been found and viewed. OMN users can also review programs, rank, and attribute a parental guidance rating.
OMN is powered by Kontiki, which provides secure delivery of content libraries for a range of companies. Kontiki's grid delivery technology speeds the distribution of video and music files by allowing participants to share unused bandwidth on their computers and servers. There are already over 20 million users of Kontiki's technology today.
Freenet: Anonymous P2P by Year's End
Excerpted from BetaNews Report by Ed Oswald
A group of developers on Wednesday said a new software tool that will allow for the swapping of files over the Internet would be available before the end of the year.
The Freenet Project is creating what is called a "darknet," where the computer user will remain anonymous while transferring files. The system is also set up much like the Internet, meaning it is decentralized and practically impossible to shut down.
The group released its latest test version of the software on Wednesday morning, but urged only experienced testers to try it out, as it is neither "user-friendly nor secure at this point."
The project flies in the face of a recent decision by the United State Supreme Court, which made P2P file services responsible for the actions of their users if they encourage illegal behavior. With the darknet client, there is no way to find the true identity of the downloader.
Ian Clarke, who heads the Freenet Project, said that the group does not intend to encourage copyright infringement with the new software. But Clarke added that having both freedom in communication and following copyrights is not possible, as "the two are mutually exclusive."
The development of Freenet's darknet calls into question whether unauthorized file sharing can ever truly be stopped. The project's Web site says, "Freenet's aim is to allow two or more people who wish to share information, to do so," and in an anonymous manner.
Success in battle against illegal abuse of P2P has only been possible with the help of Internet service providers handing over the identities of their users. With Freenet, that would be impossible, thus throwing a wrench into the current methods of curbing illicit downloading.
A Culture of Freedom
Excerpted from Online Spin Report by Shelly Palmer
There has been so much written about what should and should not be free on the Internet: free speech, free music, free files, free games - you'll notice that the operating word here is free.
The NY Times quoted Ross Anderson last week talking about his first foray into P2P, involving an Internet user accessing a 're-mailer' to post church documents anonymously on online bulletin boards. "I had not the slightest idea back in 1996 that music would be an application," he said. "I was motivated by the fear that some of the freedom we'd got from Gutenberg's invention of cheap printing might be lost."
Very altruistic indeed! But the Law of Unintended Consequences has a particularly wry sense of humor. And, remember, a file is a file is a file. So where are we?
'Darknets' (a concept brought to the fore by J. D. Lasica's wonderful book: Darknet: Hollywood's War Against the Digital Generation) are, for lack of a better way to describe them, private P2P networks. In theory, you have to know someone already in the network to gain entry. So now we have a new issue: Private P2P networks that have to be discovered, infiltrated, and then attacked from the inside to be shut down.
If you think that making a P2P network private changes anything about the users' ability to infringe on copyright, think again. "There is nothing special about a private P2P network." says DCIA Member and copyright expert Bennett Lincoff. "Unauthorized distribution of the music or other copyrighted works involved constitutes copyright infringement whether the distribution takes place on an open, public P2P network, a subscription P2P network, or on a private P2P network," Lincoff continued.
"There is no exemption in the copyright law for unauthorized distribution over private networks and there is nothing in the fair use doctrine that would allow participants in a private P2P network to escape liability."
I've heard the phrase, 'culture of freedom' very often of late. Although it is used differently by different people, the extreme view is that everything should be free. On the other hand (an iron hand in a velvet glove) are the rights holders who have built extremely successfully businesses on the back of the copyright laws - they don't think that anything should be free.
For years, we have lived in a marginally balanced state between these two extreme views. We have, to use another favorite analogy, lived in a world of glass doors with locks. Real criminals can easily break the glass and gain entry. However, honest (even semi-honest) people will be deterred by the lock and the social and ethical understanding that a locked door means that you should not enter.
If files are files, then in computer terms: text, music, movies, graphics, and photos are indistinguishable from one another. Could our need for copyright protection actually put our freedom of speech in jeopardy? Should laws that govern the use of files be different than that laws that govern commerce in physical goods? Has technology commoditized creativity? Is a collective creativity more important and more valuable than individual creativity?
What is a 'culture of freedom?' Where is the line between your freedom and someone else's freedom to take what you create or what you own?
Coming Events of Interest
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Music Industry Summit – August 9th-10th in San Francisco, CA. If your business involves creating music content, sales, recording, services, distribution, mobile and wireless, marketing, or management, you can't afford to miss Music 2.0. Attendees include record label executives, music managers, artists, professional service providers, software developers, wireless carriers, entertainment companies, device makers, manufacturers, and developers. DCIA Member Shared Media Licensing President John Beezer is a featured speaker.
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Future of Music – September 11th-13th in Washington, DC. Since 2001, the FMC Policy Summit has played host to over 500 stellar panelists and speakers including musicians, business leaders, scholars, policymakers, legal experts, and advocates. Widely praised by advocates and industry alike, FMC's events have gained a reputation as a kind of Geneva where all sides in any number of contentious music industry fights can get together and play nice for a few days.
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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." DCIA Members receive a 50% discount on registration. Please contact DCIA Member Services leader Karen Kaplowitz for more information at 888-890-4240 or karen@dcia.info.
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Digital Hollywood Fall – "Transforming the Entertainment Industry." Scheduled for September 19th-21st at Loews Santa Monica Beach Hotel in Los Angeles, CA. The preeminent digital media and entertainment conference in the country. This year featuring a series of special University Project workshops. The DCIA will moderate "Track I: Next Generation P2P Music and Film - DRM, Paid for Pass-Along and Other Legal Distributed Computing Models and the Entertainment Industries." DCIA Members are also planning to host entertainment.
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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 Renay San Miguel from CNN, Kevin Lapidus from YellowBrix, and Marty Lafferty from the DCIA.
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Internet Telephony Conference & EXPO – DCIA Member Skype CEO and founder Niklas Zennström will deliver the keynote address at this major conference at the Los Angeles Convention Center, CA October 24th–27th. His address, which will be delivered live from London via Internet Telephony Videoconference, will take place Tuesday, October 25th at 12:15 PM PT. Click here to register for the show.
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